A $450 billion thumb on the scales of real estate
The federal government spends $450 billion a year for real estate loans and grants, largely toward single-family housing — and that's not even the total picture of how Uncle Sam influences the market. The report by Smart Growth America (SGA), Federal Involvement in Real Estate, excludes investments in transportation that greatly influence real estate, federally owned property, and even Fannie Mae and Freddie Mac loan guarantees. About 84 percent of spending surveyed by SGA goes to support single-family housing, and only 16 percent to rental (despite the fact that 35 percent of US households are renters). It also favors the rich over the poor and middle class in some ways (most of the benefit of the $80 billion mortgage annual interest deduction goes to higher-income households). SGA calls the federal programs "a finger on the scale" of the real estate market. Many of the programs are old, and should be reviewed to see if they favor current priorities, SGA says. “Federal real estate spending is stuck in the past,” real estate analyst Christopher Leinberger told reporters. “It’s not what the market wants today, it’s what the market wanted in the ’70s and ’80s and into the ’90s.”
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