Ever wonder why there is not enough affordable housing in functional locations? (At S/PI we call this housing “affordable and accessible.”) For an important part of the answer look no farther that the federal subsidy for the very rich.
According to the bipartisan Joint Committee on Taxation the federal direct subsidy to homeowners is now $116 billion per year. That is up from the $100 billion that we estimated at the time The Shape of the Future was completed. We noted in 2000 that the vast majority of the subsidy goes to those at the top of the economic food chain.
There has been no change in the last half-decade. The top ½ of 1 percent of those filing for federal housing subsidy receive 22% of the benefit. At the bottom, 10% of the tax payers get only 4% of the benefit. Those are the ones that need help. So do most of the 30% of the households who do not own a house and so do not qualify for any meaningful subsidy.
According to columnist Kenneth R. Harney, the current administration has taken these subsides “off the table” for code writers who are trying to “streamline” of the IRS code. The 2006 “more-money-for-Iraq” budget removes those wasteful subsides of the less well to do such as the dismantled “community” programs.
Like the indirect subsidies from Fannie Mae, Freddie Mac and others, the direct tax subsidies on shelter go, by-in-large, to support houses that are the wrong size and in the wrong location. (“Affordable But No Bargain,” 15 June 2001 and “The Housing Dilemma,” 14 July 2003 at db4.dev.baconsrebellion.com )
