Comments on: Bless Sheila Bair http://regulation2point0.org/2010/06/bless-sheila-bair/ Mon, 12 Mar 2012 20:28:53 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: Tim Iglesias http://regulation2point0.org/2010/06/bless-sheila-bair/comment-page-1/#comment-601 Tim Iglesias Thu, 08 Jul 2010 16:24:36 +0000 http://regulation2point0.org/?p=844#comment-601 Professor Stephanie Stern at Kent School of Law recently presented a paper at a national law conference on this issue in which she reviewed the available empirical literature. You are absolutely correct. The empirical evidence for the expected public benefits is not strong, though the picture is a bit complex. I'm not sure if she is planning to publish the paper, but it adds to the evidence-based skepticism about our huge subsidies for homeownership. Professor Stephanie Stern at Kent School of Law recently presented a paper at a national law conference on this issue in which she reviewed the available empirical literature. You are absolutely correct. The empirical evidence for the expected public benefits is not strong, though the picture is a bit complex. I’m not sure if she is planning to publish the paper, but it adds to the evidence-based skepticism about our huge subsidies for homeownership.

]]> By: Tim Brennan http://regulation2point0.org/2010/06/bless-sheila-bair/comment-page-1/#comment-598 Tim Brennan Thu, 08 Jul 2010 14:52:39 +0000 http://regulation2point0.org/?p=844#comment-598 It's important to add that the tax break for housing ownership isn't the mortgage interest deduction, since apartment owners can deduct that as well. The difference in tax treatment is that homeowners don't pay any taxable rent, while apartment dwellers do. Homeowners get this tax break even if they've paid off the mortgage or never had one, so the tax benefit could be much larger and potentially more regressive than the posting suggests. The theoretically optimal if politically and practically difficult remedy would be to calculate and pay tax on imputed rent less the expenses landlords can typically deduct. Advocates of promoting home ownership claim external benefits from the presumably greater incentives owners have to keep up the property and support community public goods. Is there much empirically to that? My intuition is that those putative benefits are either not large or attainable other ways, but anecdotally, local neighborhood civic associations, largely if not exclusively comprising homeowners, seem to favor restrictions on renters. It’s important to add that the tax break for housing ownership isn’t the mortgage interest deduction, since apartment owners can deduct that as well. The difference in tax treatment is that homeowners don’t pay any taxable rent, while apartment dwellers do. Homeowners get this tax break even if they’ve paid off the mortgage or never had one, so the tax benefit could be much larger and potentially more regressive than the posting suggests. The theoretically optimal if politically and practically difficult remedy would be to calculate and pay tax on imputed rent less the expenses landlords can typically deduct.

Advocates of promoting home ownership claim external benefits from the presumably greater incentives owners have to keep up the property and support community public goods. Is there much empirically to that? My intuition is that those putative benefits are either not large or attainable other ways, but anecdotally, local neighborhood civic associations, largely if not exclusively comprising homeowners, seem to favor restrictions on renters.

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