Monday Morning Briefing Letter - 06/09/2008 (Plain Text Version)

By Sandy Dunn, NAHB President and
Jerry Howard, NAHB Executive VP and CEO

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Calling on Congress to pass a temporary home buyer tax credit

along with other important tax measures to boost the faltering housing market and economy, NAHB First Vice President Joe Robson testified before the House Small Business Committee on June 5.

"House prices and inventories obviously are central to the outlook for the economy and the financial markets," Joe told the committee. "Policies that stimulate home purchases in the immediate future can pay huge dividends, and a temporary home buyer tax credit provides the most bang for the buck." Joe added that the recent revival of interest among prospective buyers suggests that temporary credits could stimulate a wave of home buying that could quickly reduce excess supply in housing markets and halt the dangerous erosion of house prices and mortgage credit quality. H.R. 3221, the American Housing Rescue and Forecosure Prevention Act of 2008, contains a provision that would provide a temporary, first-time home buyer tax credit of $7,500 for the purchase of any home used as a principal residence and closed on or between April 9, 2008 and April 1, 2009.

Joe also urged lawmakers to incorporate several other important tax provisions within their final housing stimulus legislation, including: expansion of the mortgage revenue bond program; modernization of the Low Income Housing Tax Credit; and expansion of the net operating loss deduction carryback. Read more in our press release or the next NBN Online. Contact: Scott Meyer, x8144.

NAHB Member Benefit: The home buyer tax credit within H.R. 3221 would increase home sales, which would cause inventories to fall and stabilize home prices and mortgage markets. NAHB is also urging Congress to consider options for increasing the size of the credit to maximize its impact and effectiveness.

Trumpeting the need for Congress to act now,

NAHB has stepped up our advertising efforts in publications on and off Capitol Hill with the aim of bringing our messages front-and-center in the public forum and promoting the passage of much-needed housing stimulus legislation prior to the July 4 recess. The latest ad (at right) is running in this weekend's (June 6-8) edition of USA Today. It's a call to action that focuses on the erosion of home equity that is depleting the retirement nest egg of many American families, to the tune of $426 billion last year alone. NAHB has been running other ads in inside-the-beltway publications, as well; to see all of the latest ad content, please visit www.nahb.org/congress. Contact Jay Shackford (x8406) for more information on NAHB's ad campaign. [return to top]

AD&C credit has tightened since last year,

says a study newly produced by NAHB Economics. A recent snapshot of builders and developers found that more than 80% of survey respondents have seen the availability of new credit for land acquisition and land development tighten in the beginning of this year compared to the second half of 2007. The survey also found that lenders have been making adjustments to existing loans and hurting businesses in several areas. First, for single-family construction loans, 34% of those polled said that lenders have ordered new appraisals. Of those who saw new appraisals ordered for their single-family building loans, 62% said they were asked to pay down part of the original loans and 49% were asked to put up additional assets as collateral; some were required to do both. Meanwhile, a quarter of all respondents said that lenders required new appraisals on their multifamily construction loans. Of the 62% of survey respondents who had loans outstanding from a financial institution for land acquisition, 30% were asked to pay down part of their loans out of concern for declining land values. Of the 66% of respondents with outstanding loans for land development, 31% were asked to pay down part of their loans. Last week's edition of NBN Online contains further details on the study; please contact Gopal Ahluwalia (x8480) for more information.

NAHB Member Benefit: Following up on this survey, a group of NAHB leadership and members have met with the Federal Reserve Board and other banking regulators to discuss our concerns and caution against regulatory overreaction that may unnecessarily reduce the availability of capital for new housing production. [return to top]

Policies that state and local governments can pursue

to stimulate investment and growth and boost area economies are the subject of a newly published NAHB online research guide. The guide explains some of the tools that state and local governments have at their disposal to address the unique economic conditions in their communities. It includes an overview of each policy tool, plus talking points and case studies on how state and local governments have used these policies to encourage economic growth. These tools have been divided into the following categories: foreclosure prevention and mortgage assistance; tax credit programs; reductions and waivers for impact fees and development fees; streamlining the regulatory process; and infrastructure finance options. It is NAHB's hope that state and local policy makers, business leaders, builders and developers, community activists and stakeholders will work together to enact some of these proposals to help businesses and families. The economic stimulus proposals are available to NAHB members at www.NAHB.org/economicstimulus. Contact: Blake Smith, x8583. [return to top]

Info to prepare you for the EPA's new lead paint rule

is now available on NAHB's Web site. Published in the Federal Register on April 22, the so-called "Lead: Renovation, Repair and Painting Rule" will take effect in April of 2010 and govern the work of professional remodelers in homes where there is lead-based paint. NAHB's guide, entitled "Lead Paint: EPA's Final Rule on Remodeling and Renovation," explains the circumstances under which the rule applies, remodelers' responsibilities and procedures under the rule, and what exemptions are possible. This information, as well as additional articles and links to resources on the lead paint rule, can be downloaded from www.nahb.org/leadpaint. Contact: Mat Watkins, x8327.

NAHB Member Benefit: Our latest member resource explains that remodeling companies working on structures covered by the EPA rule are responsible for educating their customers, creating safe containment areas and using disposable drop cloths, using lead-safe work practices, cleaning up, verifying site cleaning, obtaining training and certification for the appropriate workers and keeping records of applicable remodeling jobs. Review or download our new resource document here. [return to top]

The EPA's newly proposed Construction General Permit

for stormwater discharges may not go into effect in time to avoid a gap in coverage when the previous permit expires on July 1. The EPA only recently released its proposed Construction General Permit (CGP) and is accepting comments on it until June 16, so the timeline is rather tight. CGPs regulate the discharge of stormwater from construction sites that disturb at least one acre of land, and from sites smaller than one acre that are within a common development plan. The permit requires construction site operators to implement stormwater controls and develop plans to prevent sediment and other pollutants from running off construction sites. This is a National Pollutant Discharge Elimination System (NPDES) permit issued under the authority of the Clean Water Act, and applies in states and other jurisdictions where the U.S. EPA is charged with issuing stormwater discharge permits. Those areas include Massachusettes, New Hampshire, New Mexico, Idaho, Alaska, the District of Columbia, most of the U.S. territories and most Indian Country lands. The remaining states issue their own NPDES permits in accordance with Clean Water Act regulations, which direct the federal government to give permitting authority to states that meet certain requirements. (These states are required to ensure that their programs are consistent with the federal version when the permits come up for renewal.)

The EPA's latest proposal would accept permits issued by Qualifying Local Programs, which are usually run by cities, counties or other local governments. However, the new permit process makes no revisions to clarify the obligations of builders constructing a single home on a single lot, and it does not reference a proposal aimed at making that clarification that was submitted by NAHB in November. Currently, NAHB is continuing to discuss with the EPA a court-mandated proposal to add Effluent Limitation Guidelines (ELGs) to the CGP program. We oppose this plan on the grounds that construction site effluents are not in the same class as pollutants from factories and power plants that are subject to these guidelines. Read more in NBN Online.

NAHB Member Benefit: NAHB and the Associated General Contractors of America have intervened in the Ninth Circuit Court of Appeals in the case of Natural Resources Defense Council v. EPA to defend the agency's action NOT to issue ELGs for the construction industry. A hearing on this case is scheduled for July 17. Contact: Calli Schmidt, x8132. [return to top]

News from the Building for Boomers & Beyond Symposium:

NAHB Recognizes 50+ Housing Icons at National Boomers Conference

Top Communities Honored at Best of 50+ Housing Awards Gala

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