6.7 Fair Housing

Access to a mortgage is a critical economic event in the life of an individual or family.  It makes possible a financial and personal investment in a community and allows for building equity over time that may be borrowed against for further economic advancement steps, such as college tuition or renovation of property.  The US tax structure is designed to reward homeownership, with significant tax deductions for mortgage interest and real estate taxes and, in the case of rental housing ownership, repairs and improvements as well.  Even second homes qualify for tax deductions. The federal subsidy to homeowners is one of the largest “tax expenditures” (funds not received by the federal government because of a tax break). More Americans build their wealth by owning homes than by owning stocks.  According to results from the Federal Reserve’s Survey of Consumer Expenditures, 69% of households own their own homes, while only 21% directly own stocks.  As stock market values began to decline in late 2000, investors looked to the residential real estate market as a secure investment, bringing more liquidity to the market, increasing the availability of mortgage funds, but also decreasing the quality of mortgage underwriting standards. So-called “sub-prime” mortgage lending increased dramatically, especially in traditionally underserved neighborhoods.