The mortgage interest deduction is one of the most expensive federal tax preferences. Supporters claim it stimulates homeownership, which creates broad benefits to society beyond the benefits received by owners. But the case for these external benefits is unproven and the deduction is an ineffective way to promote homeownership. Instead, it provides an incentive for middle-income and upper income people to acquire larger and more expensive homes than they otherwise would. A uniform credit for interest or first home purchases would be a more effective subsidy for homeownership. The deduction, however, should be phased out gradually to minimize market disruption.
At A Glance, the Housing Finance Policy Center's monthly chartbook, provides timely metrics on the state of the housing market and examines public policy's role in housing finance. March's issue includes a new analysis of mortgage insurance activity comparing FHA and private mortgage insurance fees.
Under the Bloomberg administration, New York City built a system for moving chronically homeless individuals off the streets and into permanent housing by restructuring the contracts for homeless street outreach, developing alternatives to shelter for the chronically homeless, and, in partnership with New York State, creating thousands of supportive housing units for people experiencing or at risk of homelessness. Additional progress relies on continued focus on permanent housing placements among street outreach providers and increased investment in supportive housing. This brief is one in a series examining selected social service initiatives undertaken during the Bloomberg administration.
The Bloomberg administration's efforts to improve New York City's homeless services included creating a new homelessness prevention model, overhauling the shelter intake and eligibility process for families, and developing a temporary rental assistance program. While the administration made substantial progress in addressing homelessness, some shelter policies were criticized by homeless advocates and received negative media attention. Today, despite successes with homelessness prevention and rehousing, the city's shelter population is the largest it has ever been, and the shortage of affordable housing is worsening. This brief is one in a series examining selected social service initiatives undertaken during the Bloomberg administration.
The total number of purchase mortgages originated in 2012 is considerably less than half of peak levels, and down 44% from the 2001 levels. The authors estimate that a large portion of the drop-as many as 1.2 million loans in 2012 alone-can be attributed to low credit availability, and find that African American and Hispanic borrowers have been disproportionately affected by the credit box tightening.
The Federal Housing Administration (FHA) is taking new steps to encourage lenders to extend credit to first-time homebuyers and other traditionally underserved borrowers. Jim Parrott explains the problem that has constrained FHA lending in recent years and how the FHA is attempting to solve it.
If you have gotten a mortgage lately, the odds are good that it is backed by taxpayers. Indeed, the government supports nearly nine out of 10 loans made today. Few think this is a good situation, but addressing it will be more difficult than simply getting the government out of the way, as many assume.
The Affordable Care Act (ACA) has created new opportunities for health and human services programs to integrate eligibility determination, enrollment, and retention. Using two large microsimulation models—the Transfer Income Model, Version 3, and the Health Insurance Policy Simulation Model—we find considerable overlaps between expanded eligibility for health coverage and current receipt of human services benefits, particularly with Earned Income Tax Credits, the Supplemental Nutrition Assistance Program, and the Low-Income Home Energy Assistance Program. In an appendix, we identify specific data sharing strategies that seek to increase participation, lower administrative costs, and prevent errors.
This paper looks at alternative rental assistance programs that fall somewhere between HCVs and emergency assistance, a program that could target families with housing instability whose incomes are very low, but not extremely low. This would allow HCVs to serve extremely low income households, but offer alternative to waiting for emergency assistance. The paper begins with an overview of federal and local rental assistance programs and their incapacity to address the growing need for affordable housing. Then, it reviews the existing literature on alternative forms of rental assistance. Finally, it outlines the recommended components for a demonstration to rigorously test the impacts of one alternative assistance program: a flat, shallow subsidy. This paper is sponsored by the What Works Collaborative, a foundation-supported partnership that conducts timely research and analysis to help inform the implementation of an evidence-based housing and urban policy agenda. The What Works Collaborative has funded a handful of incubator projects that complete the first steps toward larger-scale research projects that can be funded in the future. The goal of this incubator project is to outline a proposed demonstration to test alternative rental assistance programs to help families afford housing and decrease residential instability.
The February 2014 edition of At A Glance, the Housing Finance Policy Center's monthly chartbook, provides timely metrics on the state of the housing market and the role of public policy in housing finance. This month’s issue includes a new series on loan product type composition over time, illustrating the prevalence of 30 year fixed-rate, 15 year fixed-rate, and adjustable-rate mortgages.