Commonwealth of Pennsylvania v. James T. Lynn, Secretary of Housing and Urban Development, 501 F.2d 848 (1974)

Citation: Commonwealth of Pennsylvania v. James T. Lynn, Secretary of Housing and Urban Development, 501 F.2d 848 (1974)
Parent Document: Commonwealth of Pennsylvania v. James T. Lynn, Secretary of Housing and Urban Development, 501 F.2d 848 (1974)
Jurisdiction: United States (federal)
Effective Date: 1974-09-25
Original Source: https://www.courtlistener.com/opinion/321083/commonwealth-of-pennsylvania-v-j... ↗

Full Text

893 chars

The reason that the subsidy increases with income derives from the formula by which it is calculated. The homeowner’s housing cost is limited to twenty per cent of his income so long as that does not create an effective mortgage rate of interest less than one per cent. Higher income families within the eligible group tend to purchase larger homes, and twenty per cent of their larger incomes not only buys more housing, it also attracts a larger and larger subsidy until they reach the one per cent effective rate plateau. Indeed, although the twenty per cent limitation more often applies to higher income families, for families at every income level it creates an incentive for builders to emphasize larger, more expensive homes, and for families to buy them because they are indifferent to additional cost below the point where they begin to share the burden of marginal price increments.

Other Sections in This Document (236)

Full Text