From Green Blizzard:

Studies by economist at Marquette University have shown that because of this residential real estate t:ax incentive, people are buying a BIGGER residences – probably more than they need. 

Lane reports that Hanson and his colleagues calculated that tax-code subsidies increase the average home size 11 percent to 18 percent above what it would have been without them, depending on location.  In the Washington, D.C. metro area, the average home size would have been 1,424 square feet smaller without these subsidies, the Hanson study estimates.

This study shows that tax breaks increase home size roughly between 10-20%.

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