Skip to main content

Analysis: The NY Times’ Slam on Homeownership

Phil Hall
May 15, 2017

Yesterday’s print edition of the New York Times Magazine featured the article “How Homeownership Became the Engine of American Inequality” by Matthew Desmond, a Harvard scholar and the author of the Pulitzer Prize-winning “Evicted: Poverty and Profit in the American City.” While the Times’ increasing shift to the political left in its sociopolitical coverage has become more pronounced since the debut of the Trump Administration, this article’s dramatic denunciation of the economic benefits of the mortgage interest deduction goes beyond mere liberalism into a near-Marxist attack on people that own private residential property. Rarely has a major U.S. media outlet been so vituperative in stirring up class warfare in a condemnation of people whose sole crime is exercising their legal rights within the U.S. tax code.
Desmond’s thesis insists that the mortgage interest deduction is a federal obscenity designed to aid the very rich at the expense of the very poor. “Wealth granted by a bizarre government subsidy is still wealth, and once people have it, they’d prefer to keep it,” he writes.
In a typical Alt-Left manner, Desmond frames his article through an artificially divisive spectrum by offering three Boston-area case studies categorized solely on racial boundaries: A white man “with brown hair down to his shoulders” who lives with his wife and nine-month-old son in a 985-square-foot condo, a divorced Latina mother of two struggling to meet the rent payments for their “small two-bedroom apartment,” and a Ghanaian immigrant who runs a technology consulting firm and lives with his college professor wife and four children in a four-bedroom, three-bedroom, 2,350-square-foot estate that cost $665,000. Desmond twice inserts childhood incidents from the Ghanaian man’s life where he was the subject of racist bullying. This has nothing to do with homeownership, of course, but it feeds into Desmond’s argument on why the mortgage interest deduction is responsible for “American inequality:” Because the racist policies of the Franklin D. Roosevelt New Deal programs, coupled with the spirit of Trump-era racial politics, disfigured how different demographics pursue the American dream.
Desmond also uses race to claim that more whites can access homeownership because their parents can give them down payment assistance by refinancing their homes. However, the Ghanaian case study in his article showed that individual first accessed homeownership through a program from the non-profit Neighborhood Assistance Corporation of America, while the white condo owner used the Massachusetts-based ONE Mortgage program to buy his property. This erases the notion that people of color are still being restricted from buying homes because they lack wealthy parents, or that whites are a bunch of Thurston Howell III’s who luxuriate in their familial wealth.
Oddly, since Desmond focuses on Boston-area case studies, the article makes no mention of the man who did more than any other elected official to level the playing field to enable a wider pursuit of homeownership for people of color: Massachusetts’ Sen. Edward Brooke, who was a driving force behind the Fair Housing Act of 1968 and the Equal Credit Opportunity Act of 1974. Brooke was an African-American who was also a Republican–one can assume that his exclusion from the article by Desmond was based on the latter consideration. This is particularly obvious when Desmond blasts the Trump/GOP tax reform proposal by claiming corporations would be the biggest winners in the plan–happily ignoring that the plan was primarily designed to stimulate the national economy by reducing the 30 percent U.S. corporate tax rate, which is the highest in the world and which is prime reason why so many corporations (particularly those that openly advocated Hillary Clinton’s presidential campaign) continue to park their profits overseas.
Throughout his article, Desmond tries to shame homeowners who were taking advantage of the mortgage interest deduction. He notes that homeowners have “benefits from tax breaks” that renters do not enjoy, as if they are profiting while the poor starved. However, he fails to mention that homeowners also have considerably greater expenses than renters: homeowner insurance, property taxes, flood insurance, property maintenance costs and, in the cases of condo and cooperative apartment residents, a variety of fees connected to being part of a residential development. And that doesn’t even go into other expenses connected with daily life–none of which are becoming less expensive.
Desmond then argues that the mortgage interest deduction is responsible for “inflating home values.” This is obviously a nonsense statement: the homeownership rate today is at its lowest point in a half-century and home values crashed during the Great Recession. No serious economist has credited this deduction with helping to boost home values in the post-recession years, which has been fueled by a myriad of other concerns.
Furthermore, Desmond points a finger at the National Association of Realtors (NAR), claiming that its $64.8 million spent in lobbying during 2016 is the sole reason for maintaining the mortgage interest deduction. “Of course, industry groups have a responsibility to their members, who enjoy profiting from a government subsidy that increases the prices of homes they build and sell,” he writes. NAR’s great power on Capitol Hill will come as a surprise to many in the housing industry, particularly since the real estate trade group was unable to stop the passage of the 2010 Dodd-Frank Act, which brought the largest burden of regulatory control to their industry in U.S. history.
Desmond also quotes President Barack Obama’s 2017 budget proposal, which “estimated that it would take $1 billion a year over the next 10 years to eliminate family homelessness in America.” The suggestion here is that the former president had the solution to fixing the nation’s economic miasma, but was thwarted.
But Desmond absolves the Obama Administration of playing any role in the evaporation of affordable housing–let alone the shrinkage of African-American homeownership, the deepening of poverty levels and the wage stagnation–that took place during his eight years in office. Even Obama’s Housing & Urban Development Secretary Julian Castro freely admitted that there was a “crisis” in affordable housing during that presidency that could not be blamed on George W. Bush’s administration. (Of course, Castro was no help at all, using his time in the housing spotlight to campaign for Hillary Clinton and build his national political profile while housing policy remained inert.)
Finally, Desmond gives the impression that it is the responsibility of all wealthy homeowners to pay more taxes to help the less wealthy obtain a place to live. He used Seattle as an example, noting that this city’s residents spent the last 36 years agreeing “to be taxed more to raise revenue for affordable housing programs.”
But what does Seattle have to show for 36 years of extra taxes for affordable housing programs? Last week, Zillow ranked Seattle as the ninth-worst market for first-time homebuyers, while a CNN report found the city “has had an inventory problem for about four years,” while “regulations and geographical barriers make it hard for builders to put up new homes.” Clearly, 36 years of high taxes did not bring about that golden goal of more affordable housing.
In “The Communist Manifesto,” Karl Marx wrote: “The theory of the Communists may be summed up in the single sentence: Abolition of private property.” While Desmond did not call for something of that extreme, his assault on the mortgage interest deduction betrays a contempt for a financial benefit associated with the ownership of private property. It also represents a new low for the New York Times–no serious publication should put that kind of axe-grinding silliness into print and pretend that it is journalism.

May 15, 2017
UWM Adds 'Control Your Price' To 'Game On' Pricing

New program provides 125 basis points in price enhancements for loan orignators.

Industry News
Jan 11, 2023
Rocket Pro TPO Relieves Brokers Of Credit Fee Burden

Will provided free credit reports to brokers if they get their loan closed with the Detroit lender.

Industry News
Jan 10, 2023
Former Employees Sue Rocket Mortgage Over OT Pay

Claim company failed to properly calculate & pay OT for working beyond 40 hours a week.

Jan 09, 2023
Judge Grants UWM Partial Win In Ultimatum Lawsuit

AML’s declaration that the ultimatum violated antitrust law survived.

Industry News
Jan 04, 2023
A&D Mortgage Launches Temporary Rate Buydowns

Offering 3-2-1 and 2-1 buydown options.

Industry News
Jan 04, 2023
Zillow: 2M Homes No Longer Require A Jumbo Loan

This is the result of FHA's update to the baseline conforming loan limit in high-cost areas topping $1 million.

Industry News
Jan 04, 2023