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Democrats: Expand federal role in housing

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Democrats: Expand federal role in housing

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Housing is unaffordable for too many people, and government can help, according to the Democratic Party’s platform. This is in contrast with the Republican platform, which promises to “scale back the federal role in the housing market.”

The Democratic Party and Hillary Clinton talk about expanding homeownership and also place a lot of emphasis on renters. So if you join the battle cry that the rent is too, um, darn high, the Democrats are speaking to you as they meet for their nominating convention this week in Philadelphia.

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What the platform says

The Democratic platform throws a jab at Donald Trump (“the Republican Presidential nominee rooted for the housing crisis”) before getting into the nitty gritty of affordability.

Democrats will also combat the affordable housing crisis and skyrocketing rents in many parts of the country, which is leading too many families and workers to be pushed out of communities where they work.

We will preserve and increase the supply of affordable rental housing by expanding incentives to ease local barriers to building new affordable rental housing developments in areas of economic opportunity. We will substantially increase funding for the National Housing Trust Fund to construct, preserve, and rehabilitate millions of affordable housing rental units. Not only will this help address the affordable housing crisis, it will also create millions of good-paying jobs in the process. Democrats believe that we should provide more federal resources to the people struggling most with unaffordable housing: low-income families, people with disabilities, veterans, and the elderly.

After that there’s a string of promises to, among other things:

  • “prevent displacement of existing residents, especially in communities of color,”
  • “reinvigorate housing production programs,” which I think means encouraging homebuilding,
  • fix public housing,
  • spend more on rental assistance programs,
  • end homelessness,
  • preserve the 30-year, fixed-rate mortgage.

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Clinton gets into details

The party’s platform is vague, but Clinton has been more specific. In a policy paper released in February, she suggested spending $25 billion on:

  • Matching grants up to $10,000 to go toward down payments for 1st-time homebuyers who earn less than area median income.
  • Anti-blight programs such as the Neighborhood Stabilization Fund.
  • Expanding housing vouchers to neighborhoods near better jobs and schools.
  • Making homeownership counseling more available.
  • Spending more to encourage cities “to implement land-use strategies that make it easier to build affordable rental housing near good jobs.”

Clinton advocates capping itemized deductions to 28% of the value of the deduction. This would increase income taxes for some high-earning homeowners with mortgages. The reason: There are 7 tax brackets, and the top 3 brackets have tax rates of 33%, 35% and 39.6%. Under Clinton’s plan, the people in these higher tax brackets could deduct only 28% of their mortgage interest from their taxes, instead of deducting 33%, 35% or 39.6%.

Finally, the Democrats’ platform doesn’t mention Fannie Mae or Freddie Mac, whereas the Republican platform calls for shrinking their size and role in the mortgage market.

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