$15,000 Housing Tax Credit Added to Senate Stimulus Bill
The Senate spent the full week deliberating on the economic stimulus package and is expected to hold a vote on its stimulus legislation later today or over the weekend. Thanks in large part to the efforts of our entire federation, the bill includes an expanded home buyer tax credit in the amount of $15,000 available to anyone buying a principal residence. The tax credit would apply to all purchases occurring within a year after the bill is signed into law and it is a true tax credit. It would not have to be repaid.
After the home buyer tax credit amendment passed, Sen. Joe Lieberman (D-Conn.), a co-sponsor of the amendment along with Sen. Johnny Isakson (R-Ga.), issued a press release quoting Connecticut builder Greg Ugalde and citing NAHB statistics on how the tax credit would boost economic activity.
The Senate bill also includes several other provisions that will help small businesses and bolster the housing market. The legislation would:
- Increase bonus depreciation and Section 179 small business expensing;
- Allow a five-year carry back for net operating losses and for general business credits, including the Low Income Housing Tax Credit and the $2,000 new energy efficient home credit;
- Provide $2 billion in gap financing for the Low Income Housing Tax Credit;
- Extend the New Markets Tax Credit; and
- Provide an Alternative Minimum Tax patch for tax year 2009.
As this issue of Washington Update went to press, the Senate had not yet debated two amendments that NAHB designated as "key votes" because of their importance to the housing industry. The first amendment, offered by Sen. Maria Cantwell (D-Wash.), would allow investors to accelerate the Low Income Housing Tax Credit (LIHTC) by up to 20 percent of the total credits per year for each of the first three years of the 10-year credit period. The remainder would be taken on a straight-line basis for the last seven years of the credit period. In a letter to all senators urging support of this plan, NAHB said that this would "result in substantial new investment by making the return to the investor much more attractive, thus reinvigorating the stalled LIHTC investment market caused by the overall crisis in the financial sector."
The second amendment, sponsored by Sen. Patty Murray (D-Wash.), would permanently reinstate the loan limits for the Federal Housing Administration, Fannie Mae and Freddie Mac that fell dramatically on Jan. 1, 2009 in many communities across the country. The current maximum loan limit is $625,500 and the Murray amendment would make permanent the 2008 loan limits of $729,750. NAHB told senators that approving the Murray amendment would be an important step to address the housing crisis by injecting much needed credit liquidity into markets throughout the country.
Earlier this week, we received a setback when the Senate struck down an amendment by Sen. John Ensign (R-Nev.) that would create a mortgage rate buy down of 4 percent to 4.5 percent for new and refinanced mortgages through the end of 2010. Prior to consideration, NAHB sent a “key vote” letter to all Senators urging passage of the Ensign amendment. However, a procedural budget point of order was raised and Senators voted 62 to 35 not to waive the budget rules on the amendment. Therefore, the amendment was killed before it had a chance to be voted on.
Once the Senate bill is approved, it will go to a House-Senate conference to be reconciled with the House version. Lawmakers are still hoping to get a final bill to President Obama by the end of next week. We need to keep the pressure on to ensure that the final package to emerge includes the full $15,000 home buyer tax credit and other housing priorities that will put housing and the economy back on the right track.
A Collective Effort
NAHB has been able to get this far thanks to the collective efforts of the entire federation. Working with local and state HBAs, NAHB this week continued its broad grassroots outreach in support of provisions to address the crisis in the housing market. EOs from across the country arranged for groups of builders to visit their local congressional offices and push for policies that will stimulate housing demand.
Local media in several states picked up on this message. A group of Virginia builders who visited and held rallies at the local offices of Senators Jim Webb (D-Va.) and Mark Warner (D-Va.) in support of a robust home buyer tax credit received favorable news coverage from NBC affiliate WWBT-TV in Richmond and Petersburg. KELO-TV reported on home builders in Sioux Falls, S.D. who urged their congressional delegation to support an expanded home buyer tax credit. Builders in Seattle and Columbus, Ga. also received TV coverage on their efforts to urge Congress to help the housing sector and show how bad the industry is hurting.
To help builders prepare for their visits, NAHB’s members-only Web site provided talking points, economic data, press documents and other resources. Builders who were unable to visit the local offices of their federal lawmakers were encouraged to call 1-866-924-NAHB (6242) and urge them to support any amendment to enhance or expand the home buyer tax credit. Several hundred calls were logged from builders in every state. And congratulations to Robert Brown, president of the Baldwin County HBA in Fairhope, Ala., who had a letter published this week in the Mobile Register calling on Congress to fix the underlying housing problem in order to put the economy back on the path to growth and prosperity.
Public Relations Push
On the public relations front, NAHB ran a week-long series of ads in Roll Call, The Hill, Politico, Congress Daily and CQ Today calling on Congress to enact a stimulus package with a more significant home buyer tax credit to get the economy moving again.
To get our message directly out to the media, NAHB President Jerry Howard conducted several interviews on our lobbying efforts and the need to tackle the housing crisis head-on by advancing housing stimulus proposals. He spoke with AP, USA Today, U.S. News and World Report, Bloomberg, National Mortgage News, ICIS News and Builder Magazine and conducted a live one-on-one radio interview with Jerry Doyle, whose show is carried on 240 radio stations nationwide.
In addition, NAHB Chief Economist David Crowe participated in a forum on Capitol Hill regarding alternative solutions that are needed to address the ongoing foreclosure epidemic and the nationwide loss of home equity. Crowe said that an enhanced and expanded tax credit is needed to stabilize the housing market.
NAHB also updated our federalhousingtaxcredit.com Web site to highlight Senate inclusion of the $15,000 home buyer tax credit in the stimulus package and to urge consumers to call their members of Congress and support this provision when the bill goes to a House-Senate conference.
As we enter the home stretch of the legislative process, it is imperative that we don’t let up. Keep up the pressure on your lawmakers. Once the Senate passes its stimulus bill, put the word out to all of your members and urge them to call their Representatives and Senators at 1-866-924-NAHB (6242) and deliver the following message to the House and Senate conferees: Do not take any steps to weaken or water down the $15,000 home buyer tax credit as it now stands in the Senate bill. A truly robust tax credit offers the best chance to revive housing and the economy. It will help reduce excess inventory, stabilize home values, mitigate foreclosures, bolster consumer confidence and spark the activity the economy needs to stop shedding jobs and begin creating them. A Legislative Alert will be sent out shortly that will have more details.
In the interim, anyone interested in joining our grassroots campaign on the stimulus package should contact Molly Murray at 800-368-5242, x8282. To learn more about the legislation, contact Greg Brown at x8421.
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