Thursday, November 29, 2018

21 Oregon Housing Tax Expenditures 2019-2021: An Increase of $170 Million /8.6% to $2.1 Billion, With Homeownership Receiving 90% of Total.

The new 2019-2021 Oregon Tax Expenditures report HERE contains a number of housing tax expenditures. 

I identified twenty one tax expenditures and I subdivided those between homeownership (6) and rental housing (15).  

The sorted table I created is pasted below and shows that during the next biennium the total for housing related tax expenditures will reach $2.1 billion, an increase of $170 million/8.6%.  [As a frame of reference, the new Tax Expenditure report says there are a total of 368 tax expenditure items that total to $24.95 billion in the 2019-2021 biennium].

Home ownership related tax expenditures in the next biennium: 
  • Are projected to account for 90% of all housing related tax expenditures and 
  • The home ownership increase of $153.3 million is 9+ times the projected increase of $16.5 million for rental housing. 

Originally created and posted on the Oregon Housing Blog

Wednesday, November 28, 2018

New Oregon Tax Expenditure Report Out: $970 Million Mortgage Interest Deduction Expenditure Is UP $58.6 Million/6.4% from Last Biennium, Bucking Federal Decline in MID.

The Oregon Tax Expenditure report for 2019-2021 is out HERE.   

Here is a quick comparison of just one housing tax break, the mortgage interest deduction: 

  • The 2019-2021 Oregon estimated MID tax expenditure  of $970.3 million is up $58.6 million/6.4% from the 2017-2019 estimated expenditure of $911.7 million.  
  • Compared to the $929.9 estimated Oregon MID tax expenditure for 2015-2017, the $970.3 million MID 2019-2021 tax expenditure is UP $40.4 million/ 4.3%. 
  • As a frame of reference, the federal MID tax expenditure is projected to DROP by $35 BILLION/52% from FY 2017-FY 2021. [From $68 BILLION to $33 BILLION ]. See my earlier post HERE for more details on changes in federal MID expenditures). 

Originally created and posted on the Oregon Housing Blog

Monday, November 26, 2018

Comparison of 2017 and Latest 2020 Estimates: Federal Mortgage Interest Deduction Tax Expenditures Projected to Decline by $527 Billion/64% in 8 FY's From 2018-2025.

The US Treasury posts annual tax expenditures estimates HERE.  Their most recent report ("FY 2020") was posted in October and includes changes made as a result of tax reforms that began to take effect in 2018. 

I wanted to see how the latest tax expenditure estimate for the mortgage interest deduction [MID] compared to the estimate the Treasury made in FY 2017.  (I made no adjustment for inflation). 

I found:
  • In their FY 2017 report (before tax reform) the Treasury estimate showed cumulative FY 2018-FY 2015 MID tax expenditures of $817 billion
  • In the latest estimate the Treasury cumulative FY 2018-FY 2025 MID tax expenditure estimate is $290 billion, a decline of $527 billion or 64%. 
  • During this 8 year period the annual gap between the FY 2017 and the latest (FY 2020) MID tax expenditure projection increases each year, from $39 billion in FY 2018 to $82 billion in FY 2025. 
The first graph pasted below shows MID tax expenditures by FY and cumulative FY 2018-2025 expenditures from both the 2017 and 2020 Treasury reports; the second graph shows the annual and cumulative FY2018-FY 2025 difference between the two Treasury estimates (FY 2020 and FY 2017).

Originally created and posted on the Oregon Housing Blog

Tuesday, November 20, 2018

2019-2021: Oregon's Tax Expenditure for Mortgage Interest Deduction Would Need to Decline by $603 MILLION to Match the Recent Projected Rate of Federal Decline.

FY 2017-FY 2018: The Federal MID Tax Expenditure Was Projected to be Reduced by 55%/$46 Billion. 
The US Treasury has projected that the federal tax expenditure for the mortgage interest deduction declined from $83.1 BILLION in FY 2017 to $37.16 BILLION in FY 2018, a reduction of 55%/$45.94 BILLION. 

Oregon's 2019-2021 MID Tax Expenditure Would Need to Decline by $603 MILLION ($301 million+ per year) to Match the FY 2017-FY2018 Rate of Federal Decline in MID Tax Expenditures. 
  • The most recent (Dec 2016) Oregon Tax Expenditure report projected that the 2017-2019 Oregon tax expenditure for the mortgage interest deduction would be $1.0962 BILLION. 
  • To match the recent FY 2017-2018 55% rate of decline in tax expenditures for the federal mortgage interest deduction the 2019-2021 Oregon mortgage interest deduction tax expenditure would need to decline to $476.6 MILLION, a decline of $602.9 MILLION ($301+ Million per year).  
  • The new Oregon Tax Expenditure report will be out by the end of the month. It will be interesting to see how the projected Oregon MID tax expenditure for 2019-2021 differs from the projected rate of decline at the federal level. 

Originally created and posted on the Oregon Housing Blog

Thursday, November 8, 2018

Not all Oregon's Allocated 2,340 VASH Vouchers For Veterans Are in Use; Using All of Them Could Reduce Unsheltered Veterans by 60%.

My post earlier this week HERE noted HUD data shows that there were 1,363 homeless veterans in Oregon, and 763 of those veterans were unsheltered. (As one frame of reference there are 320,000+ veterans in Oregon, including me:). 

HUD reports HERE that over the years that has been a total of 2,340 VASH vouchers allocated to Oregon, including a new allocation of 249 VASH vouchers as recently as October.  

March 2018 data HERE suggests that Oregon only had about 86% of allocated VASH vouchers in use; the most recent dashboard HERE from Home Forward shows only 84% of their VASH vouchers were in use (and they received an additional allocation of 159 VASH vouchers in October). 

Using an assumption that an even higher 90% of all Oregon VASH allocated vouchers before October (2,091) were in use, this would leave 209 of the existing VASH vouchers currently unused. Adding in the 249 VASH vouchers received in October this would mean a total of 458 allocated but unused VASH vouchers.  Note: It is possible that some of those VASH vouchers have been allocated to projects now under construction and do not yet show up as being in use. 

At a recent per month HUD subsidy (HAP payment) rate of $548 for Oregon VASH vouchers, 458 unallocated VASH vouchers would represent $3 million+ in annual subsidy resource not currently being used. 

IF these EXISTING but unused VASH 458 vouchers could be put to use as permanently supportive housing this would reduce the current number of 763 unsheltered homeless veterans in Oregon by 60% to 305. (763-458=305). (305/763-1=60% reduction). 

I anticipate that the full utilization of VASH vouchers will be included in discussions at the OCHS sponsored November 15 Welcome Home meeting which is offering technical assistance to 10 select communities to help address veteran's homelessness.  

Originally created and posted on the Oregon Housing Blog