Reforming the Mortgage Interest Deduction

As part of my commitment to addressing the housing crisis and ensuring every American has access to affordable housing, I believe we need to rethink the way the federal government supports housing through the tax code. The Mortgage Interest Deduction (MID) has long been a fixture of tax relief for homeowners, helping millions of middle-class families purchase and retain their homes. However, it’s clear that this deduction disproportionately benefits wealthier homeowners and often leaves renters and low-income Americans out in the cold.

While I do not support the outright elimination of the Mortgage Interest Deduction, as it remains an important tool for many families across the country, I instead propose a reform that strikes a balance between protecting middle-class homeowners and addressing the urgent need for affordable housing:

1. Capping the Mortgage Interest Deduction: I support implementing a cap on the deduction, ensuring that it remains available to the vast majority of middle-class homeowners, while limiting excessive benefits for higher-income earners. This will help ensure that the deduction serves those who truly need it and does not become a tax break for the wealthiest Americans.
2. Phasing Out the Deduction for Second Homes: The current deduction allows individuals to claim mortgage interest on second homes or vacation properties. I believe this is unnecessary, especially in the face of a national housing crisis. Phasing out this deduction for second homes will generate significant savings that can be reinvested in programs designed to help those struggling to afford housing.
3. Redirecting Savings to Affordable Housing Programs: The savings generated from capping the deduction and phasing out second home benefits should be reinvested into expanding Section 8 housing vouchers, affordable housing construction, and tax incentives for developers who build affordable housing units. These programs will ensure that more Americans, particularly low-income families, have access to safe, affordable homes.

This reform will help address the growing inequality in our housing system, where renters and low-income families face rising rents and limited affordable options, while wealthier individuals benefit from tax breaks for second homes. By capping the deduction and phasing out unnecessary benefits, we can redirect federal dollars to where they are most needed: creating and supporting affordable housing opportunities for all Americans.

With these reforms, we can ensure that the mortgage interest deduction continues to benefit the middle class, while also addressing the pressing need for affordable housing. This balanced approach will protect current homeowners, invest in housing for the future, and ensure that our tax system works for all Americans, not just the wealthiest among us.