NAHB’s new take on the MID

The National Association of Home Builders, which for years has lobbied for the mortgage interest deduction as a way to spur home ownership and home building, is changing its tune and advocating a more flexible policy.

Earlier this month, amid rising sentiment in Washington for tax reform -- and with many reformers circling the mortgage interest deduction provision with a red pencil – the home builder lobbying group dropped its insistence on maintaining the Mortgage Interest Deduction.   

The NAHB says it will continue to advocate for policy that provides some kind of incentive for homebuilding in the tax plan, but it doesn’t necessarily have to be a mortgage interest deduction.

Speaking at the recent ProDealer Industry Summit, the NAHB’s Chief Economist Robert Dietz, brought up the topic of the M.I.D. in his housing market forecast. He explained adjusting the organization’s position is akin to keeping up with the times and keeping a seat at the table.

“You’ve got to move and keep up with where the debate is,” Dietz said. “If you say, ‘no,’ all the time, you’ll be ignored.”

Dietz added that adjusting its hard position on the MID presents an opportunity for the association and the industry to think creatively. “We want to reward home ownership,” he said. “But it doesn’t have to be in the form of an itemized deduction.”

The recently revealed framework for tax reform included by Republicans included a proposal that would preserve the Mortgage Interest Deduction. However, it would also double the standard deduction for filers, removing the incentive to itemize and claim the mortgage interest deduction.

While the NAHB has softened its defense of the MID, the powerful lobbying arm of the National Association of Realtors has not.

Separately, the National Lumber and Building Material Dealers Association also has not changed its policy of promoting a preservation of the deduction. However, the NLBMDA is in the process of reviewing its policy agenda and seeking input from members.