Federal Tax Expenditures for Housing Total $1.6 Trillion from 2014-2018, Annual Mortgage Interest Deduction Costs Projected to Grow by $55 Billion.

The 2014 Budget includes a tax expenditure worksheet HERE. 

I pulled out housing related tax expenditures (broken out for corporations and individuals) and did some calculations in a 3 page legal sized worksheet on my SkyDrive HERE and embedded below. 

My worksheet starts with graph comparing growth in mortgage interest and LIHTC costs from 2012-2018, a table with all housing related tax expenditure costs begins in row 24; note that $$ in table are in millions so add 6 zeroes to a $100,000 entry =$100 billion.


Some observations:

1. Total housing tax expenditures for 5 years 2014-2018 are estimated at $1.6 Trillion, a growth of $106 billion annually/ 38%.
2. Mortgage interest tax expenditures are expected to grow by $55 billion annually from 2014-2018, reaching nearly $157 billion annually in 2018, a growth of 55%.
3. LIHTC expenditures are expected to grow by 9%/$770 million during the same period, reaching $9 billion annually in 2018.
4. Not included in tables, HUD's annual rental assistance cost is projected at $37.4 billion in the 2014 budget. (Except for LIHTC and SF and MF bonds, housing tax expenditures are not income targeted while HUD rental assistance is highly income targeted).

Originally created and posted on the Oregon Housing Blog.

Need Feedback on My Estimate: LIHTC Proposal in President's Budget Could Increase Oregon LIHTC by 18+%.

The 2014 proposed budget has a number of LIHTC proposals; search "LIHTC" in THIS budget document posted on the Novogradac web site for details. 

One of proposals is to allow states to cash in some of their volume cap to use for additional LIHTC with a ceiling of 7% of cap that can be transferred for LIHTC use.

Using my understanding of the formula in the budget document I project that Oregon could gain another $1.654 million in LIHTC by cashing in $25.93 million in volume cap.  (This seems highly doable as little of the cap is now being used). 

This would amount to up to an 18.7% boost in LIHTC for Oregon, using a projected current LIHTC allocation of $8.83 million.

My calculations are pasted in as image below; would VERY much appreciate any feedback OR correction of my assumptions: 

Originally created or posted on the Oregon Housing Blog.