From Robert Reich on housing

[Crewleader]

More than half the new households formed in the next six years will be renters rather than homeowners, according to a new report by the Urban Institute. But there aren’t nearly enough rental units to keep up with demand. The result will be low vacancy rates and higher rents, alongside stagnant incomes. Renter incomes are on average only 70 percent of homeowner incomes.

Homeowners get a huge windfall from the federal government that renters don’t get. It’s called the home mortgage interest deduction. Costing at least $70 billion a year, it’s one of the largest federal tax expenditures, but most of it goes to higher-income households who generally could afford a home without assistance: Last year, almost 80 percent of it went to homeowners with incomes above $100,000. So why not limit the deduction to $20,000 a year per homeowner, and use the savings for a tax credit for all renters of 10% of their rental costs?

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[Warpy]

1. People struggling to own condos in NY and Boston and anywhere on the west coast

would find that incredibly parsimonious. One size doesn't fit all, especially in real estate.

At some point, the whole thing will have to get messy. Then people in Mississippi who paid $750,000 for a 3,000 square foot monstrosity will get jealous because somebody living in a glorified closet in San Francisco for the same money is getting a better break.

But yes, either they're going to have to restrict it to one residence or they're going to have to cap it. Too many fat cats are gaming the system with their multiple pleasure palaces.

Renters' rebates have already been part of the Mass. tax code for decades and have worked well to alleviate part of the burden of urban living on renters. That part will work beautifully.

[yeoman6987]

2. I think it all even out really

Homeowners do get a tax break but it goes to property taxes and home insurance. I have done both rent and own and renting is way cheaper by a long shot.

[Warpy]

3. That depends on your market

Rents were rising here, so I bought a cheap fixer as a hedge. Rents exceeded my PITI within 2 years, so it's been a good deal. The mortgage deduction was a yearly windfall, not really vital but nice when I needed to do a large repair, like getting the stucco redone on the exterior.

[ret5hd]

4. Wait wait wait...

Let's wait to see what brooklynite has to say about this.