The Home Mortgage Interest Tax Deduction Is by Far America’s Largest Housing Subsidy

I remember being down at the Department of Housing and Urban Development one time to talk housing and urban development with some Housing and Urban Development officials, and one of them made the point to me that far and away America’s biggest housing policy measure is outside their jurisdiction. The reference was to the tax deductibility of mortgage interest on owner-occupied homes, which is a much larger subsidy than anything else the federal government hands out.

In the mental siloing of issues, the home mortgage interest tax deduction tends to go into “tax policy” while low-income rent vouchers go into “housing policy” but the tax code is actually one of the main ways we do social policy in the United States.