The new tax bill will affect many homeowners’ monthly housing costs, and curtail the incentive to buy instead of renting.
“It suggests a limit in the federal government’s willingness to subsidize ownership,” said Edward Glaeser, an economist at Harvard. “It’s also a reflection of just how expensive housing has become, and how it feels problematic to be using the tax code ... to encourage housing prices to rise further.” The New York Times reports that in the construction industry, by funneling more of the national debt and savings into construction, the government is hindering education and manufacturing, sectors with a bigger economic payoff.
For decades, the tax code has been filled with rewards for homeownership. Tax breaks encourage people to get into first homes and to trade up as they get older, building a national mind-set that you’re never quite middle class until you’ve qualified for a mortgage. It amounts to a vast social engineering project that assumes society is better off with owners instead of renters. But the tax bill making its way toward final passage is upending that premise.
