NAHB Sounds Legislative Alert on Tax Credit Extension
With the expiration of the $8,000 first-time home buyer tax credit just weeks away, NAHB last week stepped up its “Revive Housing, Restore America” campaign, asking association members to participate in a grassroots push for 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 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 the path to recovery.
In the first year, NAHB estimates that an extended and expanded home buyer tax credit would:
- Create nearly 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
- 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.
NAHB Testifies on Tax Credit
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,” Crowe said.
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.
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.”
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.”
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 are staying in continuous contact with House and Senate congressional leaders to encourage action on this front.
For more information on the ongoing grassroots effort to extend and expand the tax credit, e-mail Nick Gentile at NAHB or call him at 800-368-5242 x8542.
For more information on legislative developments on Capitol Hill, contact Greg Brown x8421.
Testimony photos by Morris Semiatin