Appraising the Federal Impact on the Shape of America's Communities

A new report released by Smart Growth America evaluates the federal government's influence on America's real estate sector. With $450 billion in subsidies per year, it's clear "the communities we’ve constructed weren’t built on market demand alone."

Emily Badger discusses the findings of "Federal Involvement in Real Estate," the vital new report released today by Smart Growth America that explores the extent to which the U.S. real estate sector is "heavily influenced by direct and indirect government intervention."

"Smart Growth America’s report counted 50 federal programs that lean on the real estate scales in some way, whether through tax credits like the home mortgage interest deduction, loan guarantees through the Small Business Administration or Federal Housing Administration, or grants for low-income housing," notes Badger. The report did not account for investments by Fannie Mae and Freddie Mac or federally owned real estate. Nor did it assess spending on infrastructure, from highways to water treatment, that have a substantial impact on real estate location and viability. 

What's clear in the aggregate is that the United States is unclear in its real estate investment policy: "Some programs seem to have outlived their original intent, while others are now working at cross purposes with today’s market demand." Despite no discernable overall strategy, "it’s clear that the federal government has favored many types of development at the expense of others." For instance, says Badger, "[t]he government dramatically favors homeowners over renters. Its support is heavily skewed toward single-family homes over multi-family developments....The mortgage interest deduction – a program first created in 1913 with the ostensible aim of boosting homeownership – curiously encourages investments in second homes."

Smart Growth America stops short of making qualitative judgements about the programs its report details. But in trying to start a conversation about the federal footprint in real estate, the study's implicit criticism "isn’t that Uncle Sam intervenes, but that he intervenes ineffectively." 

"Are we really achieving what we want?" Geoffrey Anderson, the president and CEO of Smart Growth America asks. "And do we even know what we want to achieve?"

Full Story: How the Federal Government Dramatically Skews the U.S. Real Estate Market

Comments

Prepare for the AICP* Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $245
AICP CTP Storefont Display

The first online AICP* CTP exam prep class

Are you ready to take the AICP* Certified Transportation Planner exam?
Priced at $245 for May exam!
Women's t-shirt with map of Los Angeles

City T-Shirts for the ladies!

Women's Supersoft CityFabric© Fashion Fit Tees. Now available in six different cities.
$24.00
Book cover of the Guide to Graduate Planning Programs 4th Edition

Thinking about Grad School?

New! 4th Edition of the Planetizen Guide to Graduate Urban Planning Programs just released.
Starting at $24.95