In the bestselling book Evicted, Matthew Desmond took readers to the poorest neighborhoods of Milwaukee and drew back the curtain on rising evictions of poor renters, especially single mother families, showing the human cost of income inequality.
In a May 9 New York Times article, Desmond digs deeper into the issue of inequality, this time looking at the impact of the mortgage interest deduction (MID). Desmond writes about the power of home ownership for individuals and families in building wealth, finding that the average homeowner has a net worth 36 times higher than the average renter.
Desmond goes on to note that the MID largest beneficiaries are affluent homeowners. Even though the MID can help lower- and moderate-income households access home ownership, it is affluent homeowners who receive the bulk of its benefit. He points out that renters reap no benefit from the deduction and are disproportionately poor.
As noted in the NC Housing Finance Agency’s State of Housing, rising housing costs and stagnant wages have resulted in most lower income renters spend more than half their income on housing costs. Desmond notes that nationally, at least one in four poor rental households spends more than 70 percent of their income on housing.