The US economic prosperity has received much impetus from policies that have been promoted home ownership. Programs including the Homestead Act, the GI bill and the creation of federal mortgage credit institutions have made it possible for Americans of all races, creeds, color and sex to become homeowners. It is in the national interest to encourage home ownership for several reasons.
Programs like these have provided a tremendous return on our government and taxpayer’s investment. For most homeowners home equity represents a substantial portion of their net worth. For most homeowners the largest portion of that home equity is due to appreciation. Accumulation of substantial net worth through home ownership means homeowners are less likely to need financial support from federal or state agencies either before or after their retirement.
In addition home ownership creates substantial social benefits. Home ownership contributes to a sense of community and social stability, and is a substantial contributor to the growth and stability of the middle class. Homeowners are more likely to feel a vested interest in their communities, and support efforts to make the communities better places to live for all residents. For these reasons strongly pro home ownership housing policies should be protected and expanded.
Our nation should expand cost effective programs to assist all except wealthy citizens to attain home ownership in the earliest opportunity. Both the successes of the Homestead Act and the GI bill should be reviewed for ideas for new or modified programs that will better and more effectively serve today’s citizens who would otherwise not be able to own a home. For example, surplus federal cards and buildings should be more fully utilized as potential vehicles for moderate and low-income citizens. The HUD Homesteading program should also be expanded.
We should avoid the creation of tax barriers to home ownership, especially those barriers that make it more difficult for those of low and moderate income to attain home ownership. For this reason AHGA urges the repeal of the tax on American Homeowners. AHGA testimony in opposition to the tax on American Homeowners.
A national housing policy should also encourage and provide incentives for middle class home ownership because such a policy is a very cost effective allocation of economic resources. At the same time the policy must recognize a need to balance services to both middle and lower class citizens. For example, federal mortgage credit institutions (FNMA, GNMA and FHLMC) serve both audiences. They have both statutory targets regarding service to low-income multifamily housing needs and an obligation to seek to return profits to shareholders (who, as a result of increased participation in equity markets by the middle class are increasingly likely to be homeowners). Both middle and lower class homeowners mutually benefit from a balanced approach by government-sponsored enterprises (GSEs). Funding for GSEs should be expanded so that more loans can be made to both classes of homeowners, which will enable GSEs to both attain their statutory targets for assisting low-income homeowners while simultaneously expanding the availability of GSE services to middle class homeowners and returning reasonable profits to homeowner and non-homeowner investors.
Both HUD and nonprofit organizations such as AHF and AHGA and community based agencies must work both to educate and assist low and middle income homeowners so that our nation’s investment in expanded home ownership creates the maximum possible return on the taxpayers dollar. For that reason federal and state agencies should expand their fundraising or community-based agencies to provide counseling services to renters and homeowners faced with displacement, maintenance and other owner/occupancy issues. These same organizations must also continue to educate the executive and legislative branches of federal and state governments to the need to support home ownership programs. Government and nongovernmental organizations should also focus on improving housing for the elderly and disabled and assuring that housing policy discriminates against no segment of the population.