The mortgage deduction has been sacrosanct in promoting home ownership since the Presidency of Herbert Hoover. That may be changing as Housing and Urban Development Secretary Shaun Donovan, pictured above, floated the trial balloon of eliminating or modifying the home interest deduction.
Discussing the housing crisis with reporters at a session sponsored by Third Way, a center-left think tank, Donovan offered some thoughts about whether housing policy had been too skewed toward promoting home ownership, given the number of foreclosures. A more balanced approach, he said, would also focus on the needs of renters and new ways to help them.
Asked whether the government should consider modifying the mortgage interest deduction, he made two points. He said that home ownership is a good thing but that officials may need to rebalance the incentives for owning compared to renting. He also said the president’s deficit reduction commission will be “looking broadly at a range of options.” This deduction, he added, is “a significant enough expenditure” that it will surely be looked at. via WSJ