Rep. Ellison Introduces the Common Sense Housing Investment Act


WASHINGTON, D.C. – March 27, 2015 – (RealEstateRama) — Rep. Keith Ellison (D-MN) reintroduced today the Common Sense Housing Investment Act (H.R. 1662) to make it easier for middle class and working families to find affordable rental housing and benefit from homeownership.

“Working Americans who put in long hours should be able to afford a place to sleep and food to eat every night,”Rep. Ellison said. “The Common Sense Housing Investment Act provides a more generous tax benefit for more working families with mortgages and makes a significant contribution to addressing the rental housing crisis. It would enable 16 million more current homeowners with a mortgage to receive a bigger tax break. It also makes a significant contribution to the gap of 7 million affordable rental homes needed for extremely low-income families. In Minnesota, more than 6 in 10 renter households earning below  $50,000 a year paid more than 30 percent of their income for rent. The Common Sense Housing Investment Act creates opportunity for every hard-working family, making our communities and stretching the paychecks of working Americans.”

“With 14,000 Minnesotans homeless each night, it is time for the Common Sense Housing Investment Act,” Liz Kuoppala, Executive Director, Minnesota Coalition for the Homeless, said. “We know that when children are stably housed they do better at school; when workers are stably housed, they do better at work.  Housing stability strengthens families and entire communities.  We applaud Congressman Ellison’s leadership.”

“Rep. Ellison’s bold, yet sensible approach to reforming the mortgage interest deduction is vitally important for Minnesota,” Chip Halbach, Executive Director, Minnesota Housing Partnership, said. “Where 1 in 8 Minnesota households are paying half or more of their income for housing. This proposal would support renters struggling to meet their basic needs in the face of high and rising rents, while simultaneously helping moderate income families buy their first homes.”

The bill realigns the mortgage interest deduction to better benefit families who need it most by converting the mortgage interest deduction to a 15% flat rate tax credit on interest paid on mortgages up to $500,000. The bill expands the tax benefits for more homeowners, while giving working families, people with disabilities and the elderly better access to rental homes. 

By converting the mortgage interest deduction to a 15% credit, 60 million homeowners would receive the tax credit, up from 43 million, according to the Tax Policy Center. Because the mortgage interest deduction requires homeowners to itemize their tax deductions, less than half of all homeowners currently deduct interest on their mortgage. Converting the deduction to a credit would benefit all those paying mortgage interest.  The bill also lowers the deductible cap on allowable interest paid on a mortgage from $1 million to $500,000. It retains the allowance for home equity lines of credit and allows second homes within the $500,000 capon mortgage interest paid. These changes are phased in over five years.

The bill would generate more than $200 billion in revenue over ten years, which would help provide critical resources to address the national rental shortage. The government spends nearly four times as much on homeownership compared to investments in rental housing, and nearly half of all rental housing pay more than 30% of their income for housing. The shortage primarily affects people under 25, the elderly, people with disabilities and low-income families. The bill invests the new revenue in expanding the Low Income Housing Tax Credit, Section 8 rental assistance and the public housing capital fund, and provides a source of permanent funding for the National Affordable Housing Trust Fund.

More than 1,900 national, state and local organizations have endorsed better targeting the mortgage interest deduction and using the savings to fund the National Housing Trust Fund. George W. Bush’s Advisory Panel on Tax Reform, The National Commission on Fiscal Responsibility and Reform (Simpson-Bowles), the Bipartisan Policy Center Debt Reduction Task Force (Domenici-Rivlin) and scores of economists and academics have recommended converting the mortgage interest deduction to a mortgage interest credit. The Bipartisan Housing Commission also recommended the conversion and keeping the savings to address the rental-housing crisis.


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