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Does the federal tax treatment of housing affect the pattern of metropolitan development?

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  • Richard Voith

Abstract

The U.S. tax code allows home owners to deduct mortgage interest and property taxes on their federal income tax forms. It also gives special treatment to the capital gains realized from the sale of owner-occupied housing. These advantages encourage investment in owner-occupied housing. But do these tax breaks have other, more far-reaching consequences? In this article, Dick Voith looks at how the tax code's special treatment of owner-occupied housing may affect metropolitan development

Suggested Citation

  • Richard Voith, 1999. "Does the federal tax treatment of housing affect the pattern of metropolitan development?," Business Review, Federal Reserve Bank of Philadelphia, issue Mar, pages 3-16.
    • Handle: RePEc:fip:fedpbr:y:1999:i:mar:p:3-16
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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/business-review/1999/march-april/brma99rv.pdf
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    References listed on IDEAS

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    1. Peter Mieszkowski & Edwin S. Mills, 1993. "The Causes of Metropolitan Suburbanization," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 135-147, Summer.
    2. James M. Poterba, 1991. "House Price Dynamics: The Role of Tax Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 143-204.
    3. Joseph Gyourko & Richard Voith, 1997. "Does the U.S. tax treatment of housing promote suburbanization and central city decline?," Working Papers 97-13, Federal Reserve Bank of Philadelphia.
    4. Joseph Gyourko & Richard Voith, "undated". "The Price Elasticity of the Demand for Residential Land," Zell/Lurie Center Working Papers 329, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
    5. Edwin S. Mills, 1987. "Dividing up the investment pie: have we overinvested in housing?," Business Review, Federal Reserve Bank of Philadelphia, issue Mar, pages 13-23.
    6. Richard Voith, 1999. "Does the tax treatment of housing create an incentive for exclusionary zoning and increased decentralization?," Working Papers 99-22, Federal Reserve Bank of Philadelphia.
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    Cited by:

    1. Dietz, Robert D. & Haurin, Donald R., 2003. "The social and private micro-level consequences of homeownership," Journal of Urban Economics, Elsevier, vol. 54(3), pages 401-450, November.
    2. John M. Quigley & Steven Raphael, 2004. "Is Housing Unaffordable? Why Isn't It More Affordable?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 191-214, Winter.
    3. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527, Elsevier.
    4. Haydar Kurban, 2006. "Federal spending and segregation in Chicago suburbs," The Review of Black Political Economy, Springer;National Economic Association, vol. 33(4), pages 49-61, March.
    5. Thomas J. Nechyba & Randall P. Walsh, 2004. "Urban Sprawl," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 177-200, Fall.
    6. Jordan Rappaport, 2005. "The shared fortunes of cities and suburbs," Economic Review, Federal Reserve Bank of Kansas City, vol. 90(Q III), pages 33-60.
    7. Harry W. Richardson & Peter Gordon, 2000. "Compactness or Sprawl: America's Future vs. the Present," Working Paper 8645, USC Lusk Center for Real Estate.
    8. Judith Yates, 2003. "‘The more things change?’ An overview of Australia’s recent home ownership policies," European Journal of Housing Policy, Taylor and Francis Journals, vol. 3(1), pages 1-33.
    9. Marsha J. Courchane & Judith A. Giles, 2002. "A Comparison of US and Canadian Residential Mortgage Markets," ERES eres2002_220, European Real Estate Society (ERES).
    10. Peter Gordon & Harry W. Richardson, 2000. "Transportation and Land Use," Working Paper 8648, USC Lusk Center for Real Estate.

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