The mortgage interest deduction (MID) represents the federal government’s largest housing subsidy. The MID is surrounded by significant debate... » More

The mortgage interest deduction (MID) represents the federal government’s largest housing subsidy. The MID is surrounded by significant debate regarding its equality and effectiveness. Opponents of the policy argue that it favors the rich, while supporters see it as a vital housing stimulus. The focus of this project is to provide a case study to use as complimentary evidence to the current literature, which is largely conceptual and policy based. To do this, the project is rooted in analyzing the 2007 IRS income tax data for San Diego County. Through examining six diverse communities, the study found that the MID is not a subsidy for the rich and is widely used in the middle-income ranges. The MID-based literature largely predicted that the policy produced exclusivity in housing. However, this study found that widespread geographic inequalities and isolation of the poor are more to blame for the policy’s equity concerns than inherent flaws within the MID.

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