- Clustered Housing Cycles, Ruben Hernandez-Murillo, Michael Owyang & Margarita Rubio, FRB St. Louis Paper No. FEDLWP2-13-021.
- Crowding Out Effects of Refinancing on New Purchase Mortgages, Steven A. Sharpe & Shane M. Sherlund, FEDS Working Paper No. FEDGFE2015-17.
- The Determinants of Subprime Mortgage Performance Following a Loan Modification, Maximillian D. Schmeiser & Matthew B. Gross, FEDS Working Paper No. FEDGFE2015-06.
- Which Way to Recovery? Housing Market Outcomes and the Neighborhood Stabilization Program, Jenny Schuetz et al., FEDS Working Paper No. FEDGFE2015-04.
- Metropolitan Area Home Prices and the Mortgage Interest Deduction: Estimates and Simulations from Policy Change, Hal Martin & Andrew Hanson, FRB of Cleveland Working Paper No. FEDCWP1516.
- Regional Redistribution Through the U.S. Mortgage Market, Erik Hurst, Benjamin J. Keys, Amit Seru & Joseph Vavra, Kreisman Working Papers Series in Housing Law and Policy No. 25.
- Fewer Vacants, Fewer Crimes? Impacts of Neighborhood Revitalization Policies on Crime, Jonathan S. Spader, Jenny Schuetz & Alvaro Cortes, FEDS Working Paper No. 2015-088.
- Fundamental Drivers of Dependence in REIT Returns, Jamie Alcock & Eva Steiner.
Tag Archives: redistribution
Here Comes The Housing Trust Fund
HUD has published an interim rule in the Federal Register to governing the Housing Trust Fund (HTF). The HTF could generate about a half a billion dollars a year for affordable housing initiatives, so this is a big deal. The purpose “of the HTF is to provide grants to State governments to increase and preserve the supply of rental housing for extremely low- and very low-income families, including homeless families, and to increase homeownership for extremely low- and very low-income families.” (80 F.R. 5200) HUD intends to “open this interim rule for public comment to solicit comments once funding is available and the grantees gain experience administering the HTF program.” (80 F.R. 5200)
The HTF’s main focus is rental housing, which often gets short shrift in federal housing policy
States and State-designated entities are eligible grantees for HTF. Annual formula grants will be made, of which at least 80 percent must be used for rental housing; up to 10 percent for homeownership; and up to 10 percent for the grantee’s reasonable administrative and planning costs. HTF funds may be used for the production or preservation of affordable housing through the acquisition, new construction, reconstruction, and/or rehabilitation of nonluxury housing with suitable amenities. (80 F.R. 5200)
Many aspects of federal housing policy are effectively redistributions of income to upper income households. The largest of these redistributions is the mortgage interest deduction. Households earning over $100,000 per year receive more than three quarters of the benefits of that deduction while those earning less than $50,000 receive close to none of them.
So, the HTF is a double win for a rational federal housing policy because it focuses on (i) rental housing for (ii) extremely low- and very low-income households.
While not wanting to be a downer about such a victory for affordable housing, I will note that Glaeser and Gyourko have demonstrated how local land use policies can run counter to federal affordable housing policy. Might be worth it for federal housing policy makers to pay more attention to that dynamic . . ..
