NAHB Advises Congress Against Eliminating Housing Tax Incentives

Economists and politicians repeatedly tout the housing recovery as crucial to the country’s economic growth.  Congress is currently debating whether to maintain or eliminate a number of housing tax incentives that encourage Americans to buy or rent property.  The National Association of Home Builders (NAHB) waded into the debate last week, and urged Congress to keep the tax incentives in place.

The NAHB is most concerned about the Low Income Housing Tax Credit (LIHTC), which resulted in over 2 million affordable rental housing units since the program was established in 1986.  Robert Dietz, Assistant Vice President at the NAHB, praises the LIHTC as a program that helps low income American families afford rental properties, which is more important in today’s economy than ever before. 

According to US Census data, over 40 percent of renters pay at least 30 percent of their monthly income on rent, and are considered “rent burdened.” Dietz maintains that eliminating the program would increase the problem instead of offering a solution.

“The solution is not to eliminate the most successful affordable housing program in the country, but to provide it with the resources necessary to address the shortage of affordable housing options in our cities and towns.”

Congress is also reviewing the mortgage interest deduction as part of its housing and tax reform.  Dietz notes that contrary to popular belief, the majority of homeowners benefit from the deduction program, particularly those with large families.  Dietz says people with less equity and tight household budgets need all the monthly savings they can get.

“Given this demographic connection, NAHB believes that any policy change that makes it harder to buy a home, or forces young families to defer home purchases, will have a significant impact on wealth accumulation and the makeup of the middle class.”

Dietz argues that the programs help people to have a manageable standard of living, which increases the need for houses and rental properties.  As that need grows, new structures must be built, adding jobs to the economy, and millions in tax revenues paid to the government for social programs.  As a result, the NAHB will continue to lobby Congress to maintain the status quo.