WHAT IMPACT DO HOUSING SUBSIDIES AND TAX INCENTIVES HAVE ON HOMEOWNERSHIP RATES AND HOUSING MARKET DYNAMICS?
DOI:
https://doi.org/10.53555/eijbms.v10i1.171Keywords:
Housing subsidies, Tax incentives, Homeownership rates, Market stability, AffordabilityAbstract
Housing subsidies and tax incentives are key determinants of the housing market and homeownership, affordability, and stability within the housing market. In this paper, the effects of these policy instruments are discussed, concerning the experiences of the United States, European countries, and India. It explains how the LIHTC and the mortgage interest deduction have created a demand for housing and homeownership with a focus on the rate among the affluent. However, these policies have also brought about their impacts such as skewing of property prices and markets. As much as rent control measures are intended to ensure that the cost of renting is kept low, they have restricted the development of new units and made long-term affordability even worse in cities like New York and San Francisco. The study also aims to identify the need for proper and properly directed policies to improve the provision of affordable homes while at the same time avoiding the manipulation of the price and discouragement of investors in funding rental housing. This paper contributes to the existing literature by identifying the roles of supply, demand, and government policies and how they can be utilized to better calibrate housing policies to achieve a stable and fair population for all population groups.
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