The U.S. is facing an affordable housing crisis which has a major influence on the economy and livelihood of its citizens. This crisis is not only affecting individuals earning minimum wage but also high-income earners nationally.
The policies in affordable housing are more concerned with homeowners than renters when having a look at tax deductions. Taking into consideration the mortgage-interest deduction which was made in 1913 and the federal income tax, shows its survival of numerous updates to tax law due to the powerful real estate industry.
The annual federal tax expenditure is significantly more than the funding of all rental subsidies and public housing. It mostly benefits middle-class and wealthy homeowners. It comes down to the fact that the more expensive a home is the more benefits there are to a homeowner.
The rising costs of labor and materials mean affordable housing is expensive to build, causing taxes to go up. Homebuilders and construction companies charge a percentage on top of the starting cost of the labor and materials needed. Since 2008, the cost of raw materials has gone up 23.9 percent.
The restrictions on zoning are effective in fighting new construction and helps to suppress the housing supply. Limiting the height of new buildings makes construction more difficult and more expensive. The rise of these sorts of regulations has increased property values and has made it harder for workers to find opportunities by moving into fast-growing areas with high employment numbers.
As with public policy and labor material shortages, transportation is one more aspect of this crisis and will need to be taken into consideration in the search for a lasting solution in the affordable housing industry.