How American Homeownership Fosters Inequality

Since it hit the shelves, Matthew Desmond's Evicted has introduced readers to those on the extreme losing end of the housing crisis. Desmond's sociological approach continues in this piece, which goes into how the mortgage tax deduction came to be and how it augments American inequality.

Criticized by some for focusing on predatory landlords and letting comfortable homeowners off the hook, Desmond touches on that issue here. The statistics tell a story of gaping inequality: "The average homeowner boasts a net worth ($195,400) that is 36 times that of the average renter ($5,400)." Desmond goes on to lay out a sordid history for homeownership. "It is difficult to think of another social policy that more successfully multiplies America's inequality in such a sweeping fashion."

The deduction, which Desmond sees as a form of welfare for those who don't need it, has innocuous origins. "The MID came into being in 1913, not to spur homeownership but simply as part of a general policy allowing businesses to deduct interest payments from loans. At that time, most Americans didn't own their homes and only the rich paid income tax."

Desmond argues that policies like the G.I. Bill, intentionally exclusionary by race, cemented the deduction into one pillar of a system that rewards the homeowner and penalizes renters.