Originally Posted by
mwilbert
The mortgage deduction costs vastly more than Section 8. But it doesn't affect homeowners equally.
First, you can only get it if you have a mortgage, so it privileges housing that you can get a big loan against [[new construction in an exurb) vs older housing in a declining or soon-to-be-declining neighborhood.
Second, it is more valuable to higher-income people, both because you can only get the deduction if you itemize, and you are more likely to itemize deductions if you have more income, and because the deduction is worth more to people who pay a higher tax rate.
Generally the effect is to subsidize new construction [[for obvious reasons usually in suburbs) vs existing construction, although it also subsidizes places with unusually high housing values and high-income residents, which includes some central cities.