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Research Focus

The Spatial Distribution of Housing-Related Tax Benefits in the United States (Working Paper #367)
Joseph Gyourko & Todd Sinai

Key Conclusions

1. The paper estimates the tax subsidy to owner-occupied housing across the United States.

2. The subsidy from the current tax code is very large -- $164 billion according to 1990 Census data, amounting to $2800 per owner and $1815 per household.

3. The spatial distribution of the subsidy across states is very skewed. California is the biggest subsidy recipient by far, receiving 25 percent of the nationwide subsidy while being home to only 10 percent of the nation's owners.

4. The spatial distribution of the subsidy is very more skewed when one analyzes it across metropolitan areas. Only 10 percent of metropolitan areas receive average subsidy amounts in excess of mean cost per household if the program were self-financed. These very high subsidy areas lie along the California coast and Amtrak's Northeast Corridor running from Washington, D.C., to Boston, MA. There are almost no high subsidy recipient areas in the interior of the country.

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