It’s said that hard times bring out the best in people, and after my year as NAHB chairman, I’m proud to say that applies to the NAHB as well.
Despite the worst housing market environment that we have ever seen, the NAHB scored what can only be described as extraordinary legislative victories last year and made significant progress on other vital issues.
Most important, through an intensive effort that mobilized the entire NAHB federation from the grassroots to the national leadership, we successfully convinced Congress to enact not one, but two, home buyer tax credits to stimulate the housing market and the larger economy.
Enacted in mid-February, the American Recovery and Reinvestment Act of 2009 included a tax credit of up to $8,000 for first-time home buyers and Net Operating Loss (NOL) tax relief for small businesses.
Later in the year, with the Dec. 1 expiration date for the initial tax credit looming, we successfully convinced Congress to extend the first-time home buyer credit and expand the program to provide a tax credit of up to $6,500 for repeat home buyers. The legislation also significantly increased maximum income levels for claiming the credits and extended NOL tax relief to businesses of all sizes.
The NAHB and its members fought very hard for these measures, and we think they will stimulate significant buyer demand. Almost 70 percent of all potential home buyers can now qualify for some form of the tax credit, which should translate into more activity across the board.
Two other key issues also demanded the NAHB’s attention last year. Despite an upturn in major housing indicators including starts and new-home sales, a severe lack of AD&C credit put a stranglehold on the industry and threatened to derail the fragile recovery. We sounded the alarm with regulators, urged Congress to take a stand, worked on setting our priorities for regulation of the financial system, and began devising new ways to help members connect with representatives from Wall Street, banking interests, and private equity lenders. We have made great headway, but there is still much to do, and ensuring member access to AD&C financing will continue to be a major priority for NAHB as we go forward.
Throughout much of the country, faulty appraisals are also a serious problem for builders. The use of foreclosures and other distress sales as comparables has resulted in appraisals that do not accurately reflect the market, and more than 25 percent of builders in an NAHB survey reported that sales had fallen through due to unrealistic appraisals.
There is still much to do, and efforts to ensure that appraisals are accurate and reasonable will also continue to be a major priority.
These issues are just the short list of important concerns that the NAHB addressed in 2009. Others include sprinklers in the ICC Code, green building and NAHB’s National Green Building Standard, helping members position themselves for the housing recovery, providing financial assistance to struggling HBAs, and immigration. The list goes on and on.
But the bottom line is that in the very worst of times, the NAHB proved again and again that it is not just the voice of the housing industry, but its heart and soul.