Not a High-Wire Act
Repealing the mortgage interest deduction would yank
the safety net from millions of Americans—not just the rich.
Al DelliBovi is president
of the Federal Home Loan
Bank of New York and served
as deputy secretary of the
Department of Housing
and Urban Development
from 1989 to 1992.
He can be reached at
Last summer, the nation was captivated by Nik Wallenda, the high-wire artist who successfully crossed
Niagara Falls on a tightrope. Millions tuned in to
watch the aerialist cut through the mist, avoiding
a single misstep during his record-setting journey.
It was a spectacular display of balance as Wallenda
walked along the thin, steady wire. This summer, all
eyes will be on Washington, where another sort of
balancing act will be performed: lowering the U.S.
deficit and balancing the budget. But in this debate,
it is vital that our policies continue to protect housing, the stable ground for so many Americans.
The economic benefits of a strong housing market are clear. Housing has contributed 17 to 19 percent to the national gross domestic product on average over the past four decades; it still accounts for
about 15 percent of GDP despite ongoing challenges
to housing markets around the country. And home
ownership remains the greatest tool for wealth creation our nation’s families have. For much of the past
25 years, approximately one-quarter of total house-
In 2007, 35. 2 million taxpayers claimed the
mortgage interest deduction, in line with those claiming
the three other major deductions.
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hold wealth has been the equity owners have in their
homes. While housing has long been a cornerstone
of our economy and a key driver of economic development and job creation, it is also the foundation of
strong families and healthy communities. A report
released in 2011 by the N;;;;;;; A;;;;;;;;;; ;;
R;;;;;;;® noted that home ownership had a significant positive correlation with community involvement, neighborhood stability, children’s educational
success, and even physical and psychological health.
It is important to keep these truths top of mind as
you build trusting relationships with clients.
The NAR paper stated that “home ownership has
been an essential element of the American dream for
decades,” and over this time, home owners across
the income spectrum have benefited from the mort-
gage interest deduction. There are those who would
have you believe that the mortgage interest deduc-
tion benefits only upper-income taxpayers, but that
is simply not true. An April 2013 study by the Hud-
son Institute, which analyzed individual income tax
returns in 2007, found that the greatest share of the
mortgage interest deduction lies not with the super
rich but with the middle class. More than half of
this deduction is claimed by households within the
$75,000 to $200,000 income range, and 22 percent
of the deduction went to households with incomes
between $50,000 and $75,000. Conversely, the top
5 percent of taxpayers account for less than 20 per-
cent of the deduction. When compared to deduc-
tions for charitable contributions, state and local
taxes, and property taxes, the importance of the
mortgage interest deduction is even more evident:
“Even in the lower half of the income distribution,
taxpayers benefit more from the mortgage interest
deduction than from the others.” And as for claims
that not all home owners can take advantage of this
deduction: In 2007, 35. 2 million taxpayers claimed
the mortgage interest deduction, in line with those
claiming the three other major deductions.