Few spheres of the economy are subject to more government intervention than the housing market. At the federal level, the mortgage interest deduction has historically been among the most costly tax expenditures. In addition, HUD provides subsidies for some 5 million housing units, home to just under 10 million people. The Low Income Housing Tax Credit, allocated by the IRS to states to distribute to developers, costs the Treasury another $9 billion annually. If all that weren't enough, zoning at the local level determines, in fine detail, what sorts of housing can be built and where. It should thus come as no surprise that there is not an adequate supply of housing for the full range of income groups, especially in the nation's most prosperous cities, where zoning often acts a brake on supply.
Unfortunately, two presidential candidates' proposals to make housing more affordable—one by Kamala Harris, the other by Cory Booker—will only distort the market more, offering little real help to the tenants who are the intended beneficiaries.
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