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Tax Policy and the Heterogeneous Costs of Homeownership


  • Kelly Bishop
  • Jakob Dowling
  • Nicolai V. Kuminoff
  • Alvin Murphy


The real economic cost of homeownership depends on an intricate system of taxes and subsides that vary over time and across the United States. We incorporate the key features of this system into a framework for measuring the annual user-cost of housing and we use it to document how housing costs and subsidies varied over time, across space, and with household demographics in 2016-2017. Then we examine how the Tax Cuts and Jobs Act of 2017 subsequently reduced subsidies and increased the relative cost of housing. We report how these changes varied by geography, homeownership, race, and voting behavior.

Suggested Citation

  • Kelly Bishop & Jakob Dowling & Nicolai V. Kuminoff & Alvin Murphy, 2023. "Tax Policy and the Heterogeneous Costs of Homeownership," NBER Working Papers 31824, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:31824
    Note: EEE PE

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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