Date of Award


Document Type

Terminal Project

Degree Name

Master of City and Regional Planning (MCRP)


Planning and Landscape Architecture


Dr. Mickey Lauria

Committee Member

Dr. Barry Nocks


The Mortgage Interest Deduction is a federal tax incentive that was purportedly established to encourage homeownership in 1913 when all consumer interest was allowed to be deductable from personal income. The MID works by allowing individuals or households to deduct from their income the total amount of interest paid on their mortgages and home equity loans. Mortgages up to $1 Million and home equity loans up to $100,000 are eligible for the deduction and tax filers must itemize their deductions, as opposed to taking the standard deduction, in order to claim it. Essentially, the MID reduces the amount of tax liability for those who claim the deduction which supposedly makes owning homes more affordable. While the MID is considered to be a sacred cow by many, many scholars, economist and the like have conducted research that works to illustrate the deduction’s ineffectiveness and overall inequity. It is the intent of this research paper to discuss how the MID came to be and analyze its impacts. Through this discussion and analysis the paper will seek to prove the deduction’s ineffective and regressive nature and offer a policy proposal to reform the deduction. Whereas, any reform offered as a result of this research will first and foremost work to reduce the federal deficit while offering housing costs tax incentives that are more equitable in effort to increase housing affordability for all.