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NAHB Testifies on Home Buyer Tax Credit, Other Housing Priorities
With the expiration of the $8,000 first-time home buyer tax credit just weeks away, NAHB this week mobilized our grassroots network (see second story) and engaged in a multi-pronged approach targeting members of Congress, the media and general public in our ongoing effort to extend and enhance the program.
At the request of the Senate Banking Committee, NAHB Chief Economist David Crowe on Oct. 20 testified before the panel on the need for Congress to act quickly to extend the home buyer tax credit for another year and make it available to all buyers of a principal residence in order to create jobs and boost the economy. “Not only will builders soon be losing one of their most effective selling tools when the $8,000 federal housing tax credit expires on Nov. 30, they are also facing significant challenges that threaten to derail the fragile housing recovery before it even has time to take root,” he told lawmakers. “Strict mortgage underwriting and low appraisals are making it difficult for a willing buyer to complete the sale, and terms and credit availability for builder acquisition, development and construction (AD&C) loans are extremely tight. The bottom line is that housing and the economy are at a critical crossroads.”
Sen. Johnny Isakson (R-Ga.) testified at the hearing in support of extending the tax credit through June 30, 2010, expanding it to a wider circle of principal home buyers and doubling the current income eligibility phase-outs to $150,000 for single taxpayers and $300,000 for married taxpayers filing a joint return. “It will thaw the current freeze in the move-up market, which must recover if we are to return to a viable market,” he said. Senate Banking Committee Chairman Chris Dodd (D-Conn.) is working with Isakson to attach this proposal to a bill that would extend unemployment benefits. “The credit is set to expire in five weeks. But the work of stabilizing the housing market won’t be done. We still need to use every tool at our disposal to try and fix this problem,” Dodd said.
It is also possible that senators may seek to vote on a separate home buyer tax credit extension plan to add to the unemployment bill. The situation remains fluid and NAHB continues to closely monitor developments on Capitol Hill.
At the same hearing, HUD Secretary Shaun Donovan said that the Administration was still weighing the “costs to the taxpayer” before deciding on whether to support extending the tax credit. However, Donovan said there is “clear evidence” that allowing the tax credit to expire on Nov. 30 could have “some negative implications” for the housing market.
The day before Crowe testified, NAHB, along with the National Association of Realtors and the Mortgage Bankers Association, sent a letter to the Obama Administration seeking a 12-month extension of the home buyer tax credit and to expand the program to include all purchasers of principal residences. “Our fragile economy is just beginning to show signs of recovery,” the letter said. “We should not jeopardize that recovery by letting this tax credit expire. The home buyer tax credit is helping hundreds of thousands of Americans realize the American dream, and it is creating thousands of jobs that rely on housing. Problems in the housing industry led us into a global recession, and housing incentives can help lead us out of the recession.”
For more information, contact Greg Brown at 1-800-368-5242, ext. 8421.
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Grassroots Mobilization Focuses on Tax Credit
NAHB stepped up its “Revive Housing, Restore America” campaign to coincide with our testimony before Congress. While Chief Economist David Crowe was representing NAHB on Capitol Hill, an e-mail was sent out to all members of the NAHB federation asking for a grassroots push on the extension and expansion of the home buyer tax credit.
Members are encouraged to log on to www.capitolconnect.com/builderlink to send a letter to their individual lawmakers or call 1-866-924-6242 (NAHB) and urge their senators and representative to extend and expand the home buyer tax credit to create jobs, reduce foreclosures and excess housing inventories, and to push housing and the economy on a glide path to recovery.
In the first year, NAHB estimates that an extended and expanded home buyer tax credit will:
- Create more than 350,000 jobs;
- Spur an additional 383,000 home sales;
- Increase housing starts by 82,000;
- Generate $16.1 billion in wages and salaries and $12.1 billion in business income; and
- Yield tax revenues of $8.4 billion for the federal government and $3.2 billion for state and local governments.
Click here to read a one-page analysis of the NAHB tax credit proposal.
In less than a week, we have sent more than 5,350 e-mails to more than 400 members of Congress and logged 150 calls. For more information on the grassroots effort, contact Nick Gentile at ext. 8542.
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Bipartisan Coalition Seeks Tax Credit Extension
In an encouraging sign that NAHB's message is gaining traction, 165 bipartisan members of the House signed on to a letter calling for extension of the home buyer tax credit that was delivered to House Speaker Nancy Pelosi (D-Calif.) and Minority Leader John Boehner (R-Ohio) on Oct. 21. Reps. Joe Courtney (D-Conn.) and Ken Calvert (R-Calif.) spearheaded the letter, which said: “The federal government has pursued many avenues to ensure our economy can recover from the worst recession of our lives. Few efforts, however, have been as successful as the incentive given to first-time home buyers.”
The letter did not endorse any specific approach regarding extension and expansion of the credit, but stressed that Congress must act quickly. “While many of us have our own ideas of how to improve or expand the home buyer tax credit, we can all agree that action is urgently needed on the credit before it expires at the end of November.”
While this is certainly a positive development, much work remains to make this a reality. There are still lawmakers in the House and Senate who are reluctant to act, particularly unless Congress imposes offsetting tax increases or spending cuts. NAHB lobbyists remain in continuous contact with House and Senate congressional leaders to encourage action on this front and our grassroots continue to deliver the same message to their lawmakers -- Extending and expanding the home buyer tax credit is necessary to move housing and the economy to higher ground.
For more information, contact Greg Brown at ext. 8421.
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House Panel Examines Tax Credit Fraud
The House Ways and Means Oversight Subcommittee on Oct. 22 conducted a hearing concerning fraudulent use of the $8,000 first-time home buyer tax credit. While no bombshells emerged from the hearing, Subcommittee Chairman John Lewis (D-Ga.) introduced the Homebuyer Tax Credit Improvement Act, legislation he said will help ensure that the IRS has the tools and authority it needs to prevent abuse of the credit.
“This tax credit is an important resource for families seeking to purchase a home and a vital part of our economic recovery efforts. We must ensure that we are administering the credit accurately and strike a balance between issuing timely refunds of the credit and protecting federal resources,” said Lewis.
Initial indications are that the bill is relatively benign, marginally adding to paperwork requirements to purchase a home while doing nothing to discourage legitimate home buyers from seeking the tax credit.
NAHB continues to monitor the situation closely. Further, we have prepared a “press holding statement” if the media should inquire about this issue. The statement from NAHB President and CEO Jerry Howard says that the nation’s home builders strongly support IRS efforts to root out wrongdoing and applaud Chairman Lewis for introducing legislation that would guard against future fraud without hampering the ability of qualifying buyers to access the tax credit. It also says that a “few bad apples must not be allowed to tarnish a program that has helped to mitigate the foreclosure crisis and place housing and the economy on the road to recovery.”
For more information, contact Greg Brown at ext. 8421.
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Wall Street Journal and USA Today Ads Target Tax Credit
With members of Congress now seriously considering whether to extend and possibly expand the home buyer tax credit, NAHB is working to build on this momentum. In conjunction with our lobbying and grassroots efforts, we ran two separate advertisements this week targeted at Capitol Hill and the general public and continue to take our message directly to the media.
The first full-page ad is a joint effort with the National Association of Realtors that appeared in the front section of USA Today and the Wall Street Journal on Wednesday, Oct. 21. The message is simple and straightforward: Extending and expanding the home buyer tax credit will create nearly 350,000 jobs, inject $28 billion into the U.S. economy and generate $12 billion in additional tax revenue. It’s time for Congress to help put America back to work.
Reporting from the New York Stock Exchange, CNBC reporter Bob Pisani held up the ad to the camera and said, “One big thing they're talking about down here, extending the first-time home buyer tax credit. Look at this, a full-page ad in the Wall Street Journal from the Realtors and the National Association of Home Builders urging Congress to extend and put a new form of the first-time home buyer tax credit through.”
To bolster this message to Congress, NAHB, the National Association of Realtors and the Mortgage Bankers Association for the past several weeks have been running a series of joint advertisements in the Capitol Hill publications Roll Call, Politico, CQ Weekly, the National Journal and The Hill with the message, “Congress: Don’t Let America’s Real Estate Recovery Expire.”
To further generate public interest, our consumer-focused Web site at www.ReviveHousingNow.com urges potential buyers to contact their lawmakers and ask them to extend the home buyer tax credit.
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Consumer Financial Protection Bill Raises Concerns
After several weeks of consideration, the House Financial Services Committee voted this week to support the creation of a new Consumer Financial Protection Agency (CFPA) that would regulate a host of financial products, including residential mortgages. The 39-to-29 vote on the bill (H.R. 3126) prevailed largely along party lines, with two Democrats voting against the measure and only one Republican supporting the new agency. Chairman Barney Frank (D-Mass.) has indicated that he will bring a bill to the House floor sometime in November after combining this bill with a host of other financial regulatory reform proposals that have been considered by the committee this year.
Prior to the markup, NAHB sent a letter to every member of the committee expressing strong reservations over the impact that the creation of a new agency dedicated solely to consumer protection might have on today’s impaired housing credit markets and on the cost and availability of mortgage credit for qualified buyers.
During consideration of H.R. 3126 in committee, a large number of Republican amendments aimed at addressing concerns over certain provisions in the bill were defeated. However, a handful of amendments responding to issues specifically cited in NAHB’s letter did prevail. While some progress has been made, fears remain that the regulatory powers of the new agency are overly broad and ill-defined, to the possible detriment of access to consumer credit.
NAHB will continue to track this legislation closely as the final financial regulatory reform package is crafted by Chairman Frank and the House leadership in the coming weeks. For more information, contact Scott Meyer at ext. 8144.
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