We’ve written often about the shortage of rental housing affordable and available to the lowest income Americans. This shortage complicates our national efforts to end homelessness, and makes it harder for the growing population of chronically underemployed workers to find decent housing they can afford.

A significant part of this real and serious problem is that federal housing policy does not adequately address the housing needs of lower income families and individuals. It’s about more than just the amount of money spent on HUD and USDA housing programs; it’s about how housing policy and tax policy combine to put tax dollars where they simply aren’t needed.

The mortgage interest deduction is a part of the tax code that allows some homeowners to deduct a portion of the interest they pay on their mortgage from their taxable income. The way the deduction is structured, the more money you earn, and the larger your mortgage, the bigger the tax deduction you will receive. According to the Office of Management and Budget, the mortgage interest deduction comes at a cost to the government of over $100 billion in 2013 alone. The entire HUD budget is less than half this amount.

But the problem isn’t just that one single subsidy to homeownership is larger than every other federal housing program combine. As this article in The Atlantic Cities shows, there is a geographic disparity in federal housing policy, as well. A small number of metropolitan areas on the coasts grab the majority of the benefit of the mortgage interest deduction, while those in the rest of the country benefit disproportionately little. To quote the article,

In 1999, the average subsidy per owner-occupied housing unit in the San Francisco/San Mateo/Redwood City metropolitan area was $26,385. In McAllen/Edinburg, Texas, on the other hand, it was $1,696. This is not the amount of interest these households deducted from their income on average. It’s the full amount they were able to save on their final tax bill (or, viewed from another angle, it’s the money the federal government didn’t receive as a result of subsidizing homeownership). About a third of this total directly comes from the mortgage interest deduction.

There is plenty of justification for making changes to federal housing policy generally, and to the mortgage interest deduction specifically. But the fact is, Americans love the mortgage interest deduction. We’ve come to value it so deeply that any discussion of making changes to it results in widespread fear that the government is trying to destroy the middle class.

It’s understandable that homeowners are protective of the mortgage interest deduction. Looking at the size of the savings our average San Francisco homeowner gained on her tax bill makes clear why: that’s a lot of money, and there are many people who could use a little more cash in their pockets right now. But the National Low Income Housing Coalition believes it is possible to rebalance federal housing policy and still retain tax benefits for the middle and lower-income Americans who really need it.

We propose a modification to the mortgage interest deduction that would make it available to all homeowners regardless of the amount of their mortgage, the size of their income or whether or not they itemize on their taxes. This proposal would also make mortgage interest tax breaks more available to homeowners in the wide swath of the country that isn’t benefiting much from the deduction right now. You can use our mortgage interest tax reform calculator to see how housing tax reform would impact your tax bill.

As an organization solely concerned with the housing needs of the lowest income Americans, we’re less interested in what our proposal would do for homeowners than in what it would do for low income renters. Our proposal would save the federal government around $30 billion a year that could be directed to programs that make housing affordable to extremely low income people. By funding the National Housing Trust Fund with savings from housing tax reform, we can accomplish the housing-related goals policymakers have for mortgage interest tax breaks while also addressing the pressing issue of homelessness. We think this is a win for the middle class, lower income people, and communities at large. Over 500 organizations from across the country agree.