Money is Policy JRT Housing-Money 4-26lores | Page 12

number of public housing units has been on
a downward trajectory since the late 1980s
when it reached a peak level of approxi-
mately 1.4 million units. Many units are also
in need of basic maintenance and modern-
ization and are at risk of being dropped from
the existing inventory. 10
Congressional
appropriations for
As Figure F demonstrates, routine Congres-
sional appropriations for rental housing
have remained relatively flat in recent years,
as lawmakers have attempted to restrain
the growth of the federal budget deficit.
These budget pressures will likely continue
to be strong for the foreseeable future. In
contrast, the cost of tax expenditures for
homeownership is expected to steadily
increase (see Figure G), reflecting their
open-ended nature and the fact they are not
subject to Congressional review through the
annual appropriations process. For example,
the Congressional Joint Committee on
Taxation (JCT) estimates that the cost of the
mortgage interest deduction to the federal
government will rise from $59 billion in fiscal
year 2016 to $83.4 billion in fiscal year 2020.
rental housing have
remained relatively
flat in recent years,
while demand
for affordable
rental housing has
skyrocketed.
Federal spending on homeownership (70
percent of total housing spending) is dis-
proportionate to the percentage of house-
Figu r e H
Median Annual Household Income the Past 12 Months
by Tenure
(in 2015 inflation-adjusted dollars)
$68,797
$70,000
$53,889
$60,000
$50,000
$33,784
$40,000
$30,000
$20,000
$10,000
$0
Owners
Renters
National Median
Source:U.S. Census Bureau, 2011-2015 American Community
Survey 5-year estimates.
12
holds who are homeowners (63.7 percent).
Compounding this disparity is the fact that
the annual median income of renter house-
holds is less than half that of homeowner
households. The national median household
income now stands at $53,889, with the
national median for homeowners at $68,797
and for renters at $33,784 (See Figure H).
Who Benefits from Federal
Spending on Housing?
The two largest federal housing programs
are the mortgage interest deduction and the
deduction for local property taxes. Collec-
tively, in fiscal year 2017, they are projected
to cost the federal government nearly $97
billion in lost revenue, about double the
annual budget for HUD. The mortgage inter-
est deduction allows homeowners to deduct
interest on mortgages of up to $1 million,
including mortgages on second homes. For
purposes of the deduction, a home includes
a house, condominium, cooperative, mobile
home, house trailer, boat, or similar prop-
erty that has sleeping, cooking, and toilet
facilities. 11 The mortgage interest deduction
also allows homeowners to deduct inter-
est on up to $100,000 in home-equity debt,
even if these funds are used for non-housing
purposes. There is no cap on the amount
Money is Policy: How Federal Housing Dollars Are Spent