Rethinking the Federal Bias Toward Homeownership

33 Pages Posted: 22 Aug 2011  

Edward L. Glaeser

affiliation not provided to SSRN

Date Written: August 22, 2011

Abstract

The most fundamental fact about rental housing in the United States is that rental units are overwhelmingly in multifamily structures. This fact surely reflects the agency problems associated with renting single-family dwellings, and it should influence all discussions of rental housing policy. Policies that encourage homeowning are implicitly encouraging people to move away from higher density living; policies that discourage renting are implicitly discouraging multifamily buildings. Two major distortions shape the rental housing market, both of which are created by the public sector. Federal pro-homeownership policies, such as the home mortgage interest deduction, weaken the rental market and the cities where rental markets thrive. Local policies that discourage tall buildings likewise ensure that Americans have fewer rental options. The economic vitality of cities and the environmental consequences of large suburban homes with long commutes both support arguments for reducing these distortions.

Keywords: Cityscape, 2011, Housing, Multifamily

Suggested Citation

Glaeser, Edward L., Rethinking the Federal Bias Toward Homeownership (August 22, 2011). Cityscape: A Journal of Policy Development and Research, Vol. 13, No. 2, 2011. Available at SSRN: https://ssrn.com/abstract=1914468 or http://dx.doi.org/10.2139/ssrn.1914468

Edward L. Glaeser (Contact Author)

affiliation not provided to SSRN ( email )

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