PORTLAND, Ore. (KOIN) — Oregon’s nearly century-old mortgage interest deduction is inequitable as it primarily favors wealthy homeowners, according to an audit released by the Secretary of State’s Office.
Wealthy, white homeowners in urban counties reportedly benefit the most from the MID, which Oregon taxpayers can claim on their state and federal taxes.
The audit claims the MID will cost the state more than $1.1 billion from 2021 to 2023. The tax expenditure is reportedly the largest dealing with housing in Oregon’s budget.
“Every dollar spent keeping seniors and working families in their homes or helping renters stay housed has been scrutinized and debated by lawmakers,” said Secretary of State Shemia Fagan. “Meanwhile billions of dollars just walk out the backdoor with no questions asked. I can’t think of a worse example of waste and systemic inequality than that.”
According to the audit, high home prices, limited funds for down payments and credit issues are the largest factors contributing to the lack of homebuyers in Oregon.
Further, the state is ranked as the ninth-lowest state nationally for the homeownership rate. The U.S. Census reports only 64% of Oregonians owned a home at the end of 2020.
“The affordable housing crisis is squeezing families across Oregon while the state’s largest spending on housing primarily flows to wealthy homeowners in the metro area. That is indefensible,” said Fagan.
Auditors recommend the Legislature make changes to the MID to ensure its equitable, along with reviewing the policy periodically.
This was the first audit done since the MID was first established in 1923.