Syracuse.com: Use tax reform to expand affordable housing in CNY (Commentary)
By Sharon Sherman
During the Syracuse mayoral campaign, all the candidates spoke of the need to do something about the lack of affordable housing in this community but funds are necessary to do so. Members of Congress should use the once-in-a-generation opportunity of tax reform that is in front of them now as a means of addressing the affordable housing shortage in Syracuse and in communities in Upstate New York and across the country. One of the clearest means to do so is by reforming the mortgage interest deduction (MID). Many people believe that the MID is a tax benefit for the middle class, but it is actually the nation’s largest housing subsidy and one of the largest handouts to wealthy households in the U.S. tax code.
MID costs $70 billion per year, and 75 percent of that investment goes to the top 20 percent of income earners nationwide. Further, 15 percent of the MID expenditure goes to the wealthiest 1 percent of homeowners! Few of the wealthy 1 percent of homeowners live in Upstate New York. Only 51 percent of mortgage holders even claim the MID, because most middle- and lower-income homeowners do not earn enough money to itemize their tax returns and instead take the standard deduction.
Meanwhile, research from the National Low Income Housing Coalition (NLIHC) indicates that in Syracuse there are only 28 rental homes exist for every 100 of the lowest income households, which is to say that an adequate number of affordable rental homes simply does not exist. In addition, nationwide only one out of every four eligible households receives assistance through a federal low-income housing program, due to decades of severe budget cuts. NLIHC research also shows us that 76 percent of the lowest income renters in Syracuse spend more than half their limited incomes on rent–due both to the shortage of affordable housing and the inadequate funding for housing assistance programs–making them significantly more likely to experience eviction and, the worst cases, homelessness.
At the Greater Syracuse Tenants Network, we work to improve the lives of low-income renters and preserve affordable housing in our communities — in Syracuse and across Central New York. That’s why we are proud to endorse the United for Homes (UFH) campaign, which proposes rebalancing our federal housing investments in favor of those with the lowest incomes by modifying the MID. The campaign proposes lowering the portion of a mortgage eligible for tax relief from $1 million to $500,000 and converting the deduction to a tax credit. Lowering the cap to $500,000 leaves 99 percent of mortgages in Onondaga, Oswego and Madison counties untouched, and converting to a tax credit creates a new tax benefit for 1.2 million low- and moderate-income homeowners in New York state who currently do not qualify for MID benefit.
Over 10 years, this proposal would generate more than $241 billion in deficit-neutral federal revenue, which we propose using to expand low-income, affordable housing programs such as the national Housing Trust Fund and rental assistance programs that serve people with the greatest need. New York state alone would reap $31 billion from that savings!
The Republican tax bill introduced in Congress last week includes a proposal to lower the portion of mortgages eligible for MID tax benefit from $1 million to $500,000 — an essential piece of the proposal we support under United for Homes. However, the proposal would use that money for the wrong purpose. What Congressional leaders miss, however, is the fact that expanded investment in affordable housing programs is critically needed — in Syracuse, across Central New York, and throughout the country. The money we currently invest in housing through the MID must stay in housing by being used to boost low income affordable housing programs. It is unacceptable and a non-starter to use savings found from MID reform to offset tax cuts for billionaires and corporations.
We urge our members of Congress — including Rep. John Katko and Sens. Charles Schumer and Kirsten Gillibrand — to use federal tax reform wisely, as an opportunity to take seriously the housing needs of our most vulnerable neighbors and fellow residents. Not to benefit the rich but to help the poor in our community.
By adjusting the priorities of how our federal government invests in housing, we can end homelessness and housing poverty once and for all. Solutions exist to America’s most pressing challenges — all that’s missing is the political courage to implement them.
This article was originally published on November 10, 2017 at: http://www.syracuse.com/opinion/