Push low-income home purchases? Not again?

Mickey Kaus | Columnist

Not Again? Robert Lerman, one of the first post-Great Society liberals to argue for replacing welfare with work, thinks the government should  …  encourage low-income homeownership. Really?  Housing prices are low relative to rents, Lerman argues, which means

Americans can now lock in monthly housing costs that are low relative to their incomes and to their current rent and douse worries about rent’s inevitable climb over the next 30 years.

He proposes a voucher plan, paying for it–even saving a few billion–by eliminating the Low Income Housing Tax Credit, which encourages building more excess housing supply. But what happens if the housing market rebounds and renting becomes relatively cheap? What if  private bankers become willing to lend again? Do you think the program will then be abolished? …

P.S.: I’ve never completely understood why we should subsidize one particular good for the near-poor–housing–as opposed to some other good. If you want to make the working poor less poor, you could just increase the Earned Income Tax Credit. Keep it simple. Let them figure out what to buy.  Sure, homeownership can have a transformative effect. But so can the need to please now-finicky private bankers and landlords. … Suggested alternative approach: Just eliminate the Low Income Housing Tax Credit, and raise the EITC. If you put a few HUD bureaucrats out of work along the way, so much the better. …

Tags : affordable housing budget housing liberalism
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