Congress Gives Housing Some Stimulus, But More Is Needed
Congress approved a $168 billion economic stimulus package on Feb. 7 in an effort to help shore up housing and the economy.
“While we didn’t get everything we wanted in this bill, it does include important provisions that will help our industry,” said NAHB President Brian Catalde. “Our board of directors will meet next week in Orlando to outline the next steps that Congress and the Administration should take to build on efforts already undertaken to stabilize housing and avert a recession.”
Of note to the nation’s home builders, the stimulus package will allow the FHA to insure loans up to $729,750 for one year and provide a one-year increase in the cap on loans that Fannie Mae and Freddie can buy — also up to a maximum of $729,750.
“This will help get money flowing again for housing in high-priced markets,” said Catalde.
The stimulus package also contains provisions to spur business investments by providing a 50% bonus depreciation in 2008 and more generous expensing rules.
As the stimulus bill moved its way through Congress, NAHB lobbied non-stop in support of the broader Senate plan, which contained provisions to expand the mortgage revenue bond program and allow businesses to write off more losses. Other Senate provisions would have extended unemployment benefits and made more money available for home heating assistance for low-income households.
Ultimately, the final bill that cleared Congress omitted these provisions.
The Senate stimulus package supported by the nation’s home builders fell a single vote short of the 60 needed for passage on Feb. 6.
The Senate plan drew the support of all 49 Democrats and two Democratic-leaning Independents, as well as eight Republicans. Sen. John McCain (R-Ariz.) was the only senator who failed to show up for the vote. The final vote was 58 to 41 in favor of the bill. At the last moment, Senate Majority Leader Harry Reid (D-Nev.) changed his vote to a “no” in a procedural move that would let him bring up the measure again.
When Reid concluded that he could not find one more Republican vote to move the expanded Senate bill forward, he approved a deal with Senate Republicans to vote on the narrower House version after adding a provision to provide tax rebates for senior citizens and disabled veterans.
A Lobbying Blitz
In the week leading up to the Feb. 6 vote, NAHB advocated aggressively for the Senate stimulus package.
NAHB’s lobbying blitz on Capitol Hill included face-to-face meetings with wavering Senate Republicans and their staff members, as well as phone contacts and e-mail messages. The grassroots effort was mobilized through BuilderLink, with builders making thousands of contacts to their senators and urging them to support the stimulus package.
On the day of the Senate vote, the headline that appeared in the issue of The Hill read: “Senate Dems hope homebuilders will win GOP stimulus support.” The article quoted Sen. Kent Conrad (D-N.D.), who said that home builders supporting the Senate Finance Committee package were helping with lobbying calls to Republicans. “They’re making calls for us. They’re energized,” said Conrad. “That’s how serious this situation is … We’re talking about survival here, for many of these companies.”
As the stimulus plan went to the Senate floor, Jerry Howard, NAHB’s executive vice president and CEO, was interviewed by the Associated Press, Bloomberg and MarketWatch on the urgent need to pass the Senate package.
“Our lobbyists are up there on Capitol Hill on a 24-hour basis right now, doing everything we can in our power to try and get senators to support this. We will be disappointed in folks who don’t get behind it,” the AP story quoted Howard as saying.
To coincide with Senate consideration of its stimulus package, NAHB significantly ramped up its ad campaign, running ads for two weeks in USA Today, Roll Call, the Washington Post, the Washington Times, the Hill and the Politico.
The full-page ads called on Congress to raise the Fannie Mae/Freddie Mac conforming loan limit in high-cost markets for two years; link this change to overall GSE reform; and enact FHA modernization. The ads also called on the Senate to adopt the Finance Committee’s stimulus package, including key measures to allow businesses to carry back net operating losses for five years and to expand the mortgage revenue bond program.
While the stimulus package that was ultimately approved by Congress is an important first step, the NAHB Board of Directors will be considering a number of policy options next week at the International Builders’ Show in Orlando. These include further Fed interest rate cuts, a broad range of tax credits to stimulate home sales, GSE and FHA reform, expansion of the mortgage revenue bond program and allowing businesses to carry back net operating losses for five years.
For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421.