Last week, Minnesota Congressman Keith Ellison re-introduced the Common Sense Housing Investment Act for 2015 in the U.S. House of Representatives. The bold proposal would convert the mortgage interest deduction (MID), long considered untouchable yet highly regressive, to a non-refundable tax credit. The federal tax dollars saved would be directed to programs for lowest-income renters.
The proposed bill, H.R. 1662, would extend a mortgage interest tax break to over 19 million American households who currently receive no benefit from the MID because they do not itemize their taxes. The bill would also cap the amount of home mortgage eligible for a tax break at $500,000, down from the current $1 million cap. Most households with a mortgage would receive an equal or larger tax benefit as a result of the proposed conversion.
H.R. 1662 would direct $200 billion saved over ten years to the National Housing Trust Fund, the Public Housing Capital Fund, Section 8 and the Low Income Housing Tax Credit program.
In Minnesota, more than 150,000 renter households earn less than $20,000 per year and pay more than 30 percent of their income on rent. Yet nationally, only one in four low-income households eligible for federal housing assistance currently receives it due to limited funding. H.R. 1662 could dramatically reduce homelessness and the number of low-income households struggling to make ends meet due to the high cost of housing.
Rep. Ellison’s bold, yet sensible approach to reforming the mortgage interest deduction is vitally important for Minnesota, especially with low vacancy rates and rising rents. This proposal would simultaneously help moderate income families buy their first homes. -- Chip Halbach, MHP's Executive Director
Among national groups that have recommended reforming the mortgage interest deduction are: George W. Bush’s Advisory Panel on Tax Reform, The National Commission on Fiscal Responsibility and Reform, The Bipartisan Policy Center Debt Reduction Task Force, and The Bipartisan Housing Commission.
2015 will be the third year in which Rep. Ellison has introduced the Common Sense Housing Investment Act. The bill currently has five co-sponsors. This proposal is supported by the national United for Homes campaign, of which MHP is a member.
