Several groups in Oregon urged for a reform on the state’s mortgage interest deduction program to cater to more middle- and lower-income homeowners.
The coalition claimed that the state’s housing subsidy mostly benefits those whose income falls under the top 20%. In terms of dollars, these people account for more than 60% of subsidies. The Oregon Center for Public Policy (OCPP) believes that this should be addressed, especially at a time when the state is going through a serious housing problem.
The OCPP is part of the Oregon Opportunity Network that lobbies for affordable housing and low-income services in the state. The coalition endorses a bill that would impose a cap on mortgage deductions and ensure equal distribution of benefits to each home owner.
The proposal is still in the planning stages, yet one of its key points includes excluding high-income people from the deduction and prohibits claims for a second property. The elimination of deductions for second homes, however, won’t affect properties for rent.
That’s because landlords and rental property management companies like Real Property Management in Portland, Salem or other cities are entitled to a different system for deductions on rental housing.
Still, the Oregon Association of Realtors responded to the proposal and said that the current deduction mirrors federal tax law in its implementation. The association cited the policy being an incentive for homeownership as the reason behind its argument.
In Portland, unsuccessful home sale transactions in 2016 reached a 13.5% failure rate. This placed the city among the top 10 metropolitan areas in the U.S. with highest percentage of failed deals, according to date from Trulia.
The information indicated growing trend that can spell trouble for still recovering property markets nationwide. Millennials account for a majority of first-time buyers, who are more prone to experience a failed acquisition, as lower inventories propel home prices that make it difficult for them to secure financing a close a deal.