8 Urban Policy Ideas for Obama’s 2nd Term
America’s cities may not have been a focus of this year’s presidential campaign, but the economy certainly was. And all the evidence we have is that our urban areas, where some 80 percent of us live, are the true drivers of our economy. If the next president wants to find a way to jump start innovation and entrepreneurship, consumer spending, the housing market, and yes, the creation of jobs, focusing on policy areas that strengthen America’s cities is a no-brainer, regardless of party affiliation. (Or at least, it should be.)
And so below you’ll find eight of our favorite federal urban policy ideas, gathered in advance of Tuesday’s election results, that we now hope someone on President Obama’s team will print out and tape to their forehead. Heck, why stop there: you can do it, too! [NOTE: This has been updated slightly since it first posted Tuesday evening, to reflect the results of the election]
Reform and cap the home mortgage interest deduction and spend the savings on low-income housing. Currently, the federal government funnels about $35 billion a year in housing aid to families making more than $200,000 a year through the widely popular but counterproductive home mortgage interest deduction. Yonah Freemark and Lawrence Vale made a strong argument for creatively restructuring this housing aid in a recent New York Times op-ed:
The National Low Income Housing Coalition (N.L.I.H.C.), working with Representative Keith Ellison, Democrat of Minnesota, and more than 350 organizations nationwide, suggests reforming the deduction by converting it to a credit, capping eligible mortgages at $500,000 and using the proceeds to finance the National Housing Trust Fund.
This is a good idea: it would increase the number of middle-income families qualified for homeowners’ aid but reduce expenditures over all by cutting spending for the wealthy. Were about $30 billion in saved funds redirected to the poor, as the coalition proposes, federal funding for affordable housing could be almost doubled with no change in the deficit.