By Steve Zurier. Ballot initiatives that authorized bonds for affordable housing and school construction projects fared well in California, but that was about all that went well for builders in last November's elections.
High-profile sales and gas tax hikes that home builders supported for transportation projects in Virginia and Washington state were soundly voted down. Voters in Georgia nixed a constitutional amendment that would have added teeth to an existing law that provides incentives for developers to build affordable housing. And voters in Louisiana agreed to repeal the mortgage interest deduction for state income taxes.
In one of the great surprises nationally, 55 percent of the voters in Northern Virginia blocked a measure that would have funded an estimated $5 billion in transportation projects by hiking the 4 1/2-cent-per-dollar sales tax by a half-cent. A similar measure to raise the sales tax one cent in the Hampton Roads, Va., region was defeated by 62 percent of the voters.
Builders in Northern Virginia supported the Citizens for Better Transportation, a group that raised $2.5 million to get the sales tax passed. The group raised money from home builders, Realtors, banks, and technology companies.
Although the tax hike was defeated by an unlikely coalition of environmentalists and anti-tax groups, sales tax proponents say the voters were not sending an anti-sprawl message. "This was not an anti-sprawl vote,'' says Jim Williams, executive vice president of the Northern Virginia BIA. "This was a vote that said, 'Richmond, we do not trust you with any more money.'"
Williams argues that most of the sales tax money was earmarked for existing roads and that home builders supported the tax not because it would spur development, but more as a quality of life issue. He says builders are concerned that the traffic problems in Northern Virginia make it difficult for them to meet schedules, secure materials, and keep good workers.
Builders were also disappointed in Washington state, where business and organized labor interests raised $4.5 million to pass a nine-cent-per-gallon gas tax that would have funded $7.7 billion in road projects. Sam Anderson, executive officer of the Master Builders Association of King and Snohomish Counties, blamed the measure's defeat on anti-tax and anti-government sentiment. "It sends a terrible message to the global business community looking to locate here when we can't figure out how to solve our transportation problems,'' says Anderson. "If we don't have economic growth, people don't buy houses.''
Home builders got what they paid for in California. The California BIA raised $1.2 million for Proposition 47 and $600,000 for Proposition 46. Proposition 47, which passed with 59 percent of the vote, authorizes a $13.2 billion school bond. It also gives the state the ability to put a similar $12.1 billion measure on the ballot for 2004 without receiving approval from the state legislature. Proposition 46, which passed with 58 percent of the vote, is a $2.1 billion bond that will fund a number of state homeownership and rental housing programs.
Voters in Georgia turned down affordable housing measure Constitutional Amendment 2 by a 54 to 46 vote. The amendment would have allowed the state legislature to pass a law that would prohibit cities and towns from taxing the affordable housing tax credit, a practice that had become widespread since the tax credit originally passed a couple of years ago.
The HBA of Georgia supported the amendment in its in-house publication, and the Georgia Affordable Housing Coalition raised $80,000 to promote the measure. Jet Toney, a lobbyist for the coalition, says Amendment 2 was supported by every newspaper in the state except the Banner-Herald in Athens, Ga., but says the measure got lost in a conservative tide that saw Georgia voters elect Sonny Perdue its first Republican governor in 130 years.