Following our rant earlier this month, we were interested to see the article in the Sunday Times business section weighing in on the topic of the deductibility of mortgage interest:

It has long been an article of faith among policymakers that homeownership produces a big beneficial spillover to society at large. In the 1920′s, Herbert Hoover said a family that owned a home had “a more wholesome, healthful and happy atmosphere in which to bring up children.” Franklin Delano Roosevelt said that “a nation of homeowners is unconquerable.” The government’s use of tax incentives to encourage homeownership has a cost, however. The mortgage interest deduction and other subsidies will cost the government roughly $716 billion in lost taxes over the next five years, the president’s tax panel said. And the subsidy distorts incentives to invest, pulling money into housing from other parts of the economy. So, are Americans getting value for their money?

While there seems to be some agreement that home ownership is desirable, there are those that feel that we may be oversubsidizing it and that the subsidy may be having an adverse effect on inner cities where it could be widening the gap between rich and poor.
Buy a Home and Drag Society Down [NY Times]