Do You Live in Subsidized Housing? The Answer Might Suprise You…

What do you think of when you hear the words “subsidized housing?” A nice, big suburban home with a white picket fence?  …Didn’t think so.  For many people, “subsidized housing” is associated with decayed high-rise apartments, not well-manicured suburban homes. Similarly, most associate housing aid with low-income families, not more affluent ones. The numbers, however, tell a different story. As shown in Fig. 1, federal housing subsidies are disproportionately distributed to higher-income households.

Figure 1. Source: Hockett, McElwee, Pelletiere, and Schwartz. January 2005. The Crisis in America’s Housing: Confronting Myths and Promoting a Balanced Housing Policy

Observing the disparity in subsidies, Peter Dreier, Professor of Politics at Occidental College, has written:

Most Americans think that federal housing assistance is a poor people’s program. In fact, relatively few low-income Americans receive federal housing subsidies. In contrast, about three-fourths of wealthy Americans—many living in very large homes—get housing subsidies from Washington in the form of tax breaks.[1]

How is it that the biggest beneficiaries of subsidized housing are affluent households? Today, the federal government spends about four times as much subsidizing homeownership as it does rental affordability and most of those homeowner subsidies go to wealthy homeowners. How so? Government support for homeownership is primarily provided through tax subsidies like the mortgage interest deduction.[2][3] However, “over one-half (59 percent) of the mortgage interest deduction subsidy goes to the richest 10.2% of taxpayers,” which is why the deduction is also known as the “mansion subsidy.” [4]

In other words, “a wealthy corporate executive is more likely to receive a homeowner tax break—and to get a much bigger one—than a garment worker, a construction worker or a schoolteacher,” who is buying a home.[5]

In addition to the disparity between support for high income versus low income homeowners, others have objected to the imbalance between support for homeowners versus renters. Given that one-third of Americans are renters through choice or circumstance, Blogger Chris Bradford has argued that, “most people, I think, will acknowledge a general uneasiness with this disparity. It seems unfair for the government to spend 80 percent of its housing budget on the 67 percent of its households who own property.”

Now, homeownership is undoubtedly a laudable goal and should be vigorously supported. It is, after all, the centerpiece of the “American Dream,” and a home is often a family’s most important asset. Yet, common conceptions of “subsidized housing” stand in stark contrast to the fact that the government spends substantially more money on homeowners versus renters—while most of those benefits go to homeowners who are already well off.   “No one wants to eliminate existing homeowner subsidies for middle-class families,” writes Dreier,  “But the current system—which subsidizes the rich to purchase huge homes without helping most working families become homeowners—is in desperate need of reform.”[6]


[1] Peter Dreier. 2006. “Federal Housing Subsidies: Who Benefits and Why, ” in A Right to Housing: Foundation for a New Social Agenda. Rachel Bratt, et. all. Philadelphia: Temple University Press

[2] Ibid.

[3] An Overview of Federal Support for Housing. The Congressional Budget Office. November 3, 2009. <http://www.cbo.gov/ftpdocs/105xx/doc10525/HousingPrograms.1.1.shtml>

[4] Peter Dreier. 2006. “Federal Housing Subsidies: Who Benefits and Why, ” in A Right to Housing: Foundation for a New Social Agenda. Rachel Bratt, et. all. Philadelphia: Temple University Press

[5] Peter Dreier. “The Mansion Subsidy,” TomPaine.com. October 18, 2005. <http://www.tompaine.com/articles/2005/10/18/the_mansion_subsidy.php>

[6] Ibid.

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2 thoughts on “Do You Live in Subsidized Housing? The Answer Might Suprise You…”

  1. QUISIERA SABER SI YA ME ASIGNARON EL SUBSIDIO DE VIVIENDA POR EL GOBIERNO SOLICITADO EN LA URBANIZACION BALCONES DE LAS MERCEDES DEL MUNICIPIO DE EL CERRITO VALLE DE CAUCA

  2. POR FAVOR QUISIERA SABER SI YA ME ASIGNARON EL SUBSIDIO DE VIVIENDA POR EL GOBIERNO SOLICITADO PARA LA URBANIZACION BALCONES DE LA MERCED DEL MUNICIPIO DE EL CERRITO VALLE DEL CAUCA

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