Affordable-housing awards -- and a debate point
Two local nonprofit developers won awards this week for their work on affordable housing in challenging times.
Homes for America, based in Annapolis, was named developer of the year by the Housing Association of Nonprofit Developers, which focuses on work from Baltimore to Richmond. Homes for America was honored for building three apartment communities for seniors on top of purchasing and fixing up two affordable-housing properties -- despite the deep freeze on financing.
Greater Baltimore AHC won an honorable mention in the "Affordable Housing Development" category for pulling off the rehabbing of a deteriorating Section 8 complex in Baltimore even as the financial crisis unraveled their original financing plans. (Read more about the MonteVerde Apartments project here.)
FDIC Chair Sheila C. Bair, speaking at the awards ceremony, suggested that the government has too long focused on homeownership at the expense of affordable rentals. Add up mortgage interest deductions, local property tax deductions and exclusions on capital gains from home sales, and "the taxpayer subsidies for homeowners are about three times the size of all rental subsidies and tax incentives combined," she said.
"In fact, you can argue that this huge subsidy for homeowners has helped push up housing prices over time, making affordability that much more of a problem for the very groups you're trying to serve," she added, according to the prepared text of her remarks. "I think we need a better balance. Sustainable homeownership is a worthy national goal. But it should not be pursued to excess when there are other, equally worthy solutions that help meet the needs of people for whom homeownership may NOT be the right answer."
Most homeowners taking the mortgage deduction would probably deny in angry terms that they're getting government subsidies, but of course a tax break is money in the bank.
As the country tries to figure out how to reshape mortgage markets, financial controls and the like, here's a discussion point for you: Should the federal government be incentivizing homeownership at all? If so, how?