Housing is a struggle for many Americans, especially Millenials and Gen Z. Housing supply is limited, and so prices have risen to the point where many families have to either live far away from their jobs to get something they can afford, or they are priced out altogether.
Increasing Home Ownership
States and cities are working hard to provide housing for their residents, and the results are mixed. We should continue to pursue supply-side strategies to produce more housing, especially near public transit stations in large cities and suburbs to reduce the need for single-car commuters. We can do more, however, by also working on the demand side.
The American Solidarity Party espouses an economic philosophy of distributism, where goods and economic opportunities are spread to all Americans instead of being concentrated in the hands of a few. To that end, I propose a tax on individuals and corporations that own more than one residential property. The tax would be based on the combined market value of the properties, and the rate would increase significantly with the number of properties. This would discourage (though not eliminate) people from buying second or third homes or from living off the rent of those who need a home and can't afford one. It would give new home buyers a leg up in the market, and it would distribute more houses and create more wealth for more families. That's the America I want to live in.
Fairness to Renters
If you could ask only one question to determine whether a given person was a "have" or a "have not" in our society, the best question to ask is, "Do you own your home?" As such, we don't need tax incentives to encourage home ownership. The mortgage interest deduction is one such incentive. When a homeowner makes a mortgage payment, some of it is paid back to the homeowner by reducing the principal, while the rest is interest. The government then allows the homeowner to deduct the interest from their income.
For renters, however, every rent payment, even 30 years from now, is 0% principal and 100% interest. Because it isn't a mortgage payment, however, they get no tax deduction. How is this fair? The effect is to increase the wealth of homeowners, who are already the "haves," while doing nothing for renters. This is not solidarity; this is not working toward a more just and equitable society.
There are two solutions to make this right: (1) create a similar tax deduction for renters, or (2) remove the mortgage interest deduction. We saw during the pandemic that, as stimulus packages increased the bank accounts of lower-income people, landlords often responded by raising rents. So a renter's tax deduction would only wind up lining the pockets of landlords. Furthermore, the mortgage interest deduction has a similar effect, since home buyers typically don't put the savings from the mortgage interest deduction towards other things. Instead, they use it to increase their budget for their home purchase in the first place, meaning that it's typically the banks that ultimately benefit from this misguided policy. Also, it results in a slight inflation of property values. Therefore, the only rational course is to eliminate the mortgage interest deduction.
Of course, many new home owners have already made this calculation when purchasing their home. To avoid disruption, the mortgage interest deduction should be phased out over a 10-year period: the first year, homeowners can deduct 90% of what they would have otherwise claimed, the second year 80%, and so on.
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