Builders Get Support For Tax Credit
by Lew Sichelman
The Bush Administration has thrown its support behind a tax credit for builders that would bridge the gap between what it costs to build houses in lower-income neighborhoods and the price buyers in those neighborhoods could afford to pay. Modeled after the highly successful Low Income Housing Tax Credit, the vehicle by which most affordable rental properties are developed, the so-called Home Ownership Tax Credit would provide developers and investors with a tax credit of up to 50 percent of the cost of constructing a new house or rehabilitating an existing property in distressed areas. "The President has set a goal of increasing the supply of affordable housing by 7 million units over the next 10 years, and the tax credit would move us significantly closer to reaching that goal," Sec. Alphonso Jackson of the Department of Housing and Urban Development said at the National Association of Home Builders' annual convention this weekend. The credit is a long-time pet legislative goal of the influential NAHB. It is estimated that it would lead directly to the construction of as many as 50,000 more houses annually. The concept almost made it through Congress last year. It had bipartisan support, but a consensus could not be reached before lawmakers adjourned for the November election. Sec. Jackson told the NAHB board of directors that the President intends to work both sides of the aisle this year to enact the proposal, which was incorporated into the Republican platform and mentioned by Mr. Bush in his acceptance speech at his party's convention. Sec. Jackson's talk at the builders' conclave, which drew more than 100,000 to the Orlando Convention Center, marked the beginning of HUD's 40th anniversary year. The agency was born in September 1964. As the agency enters its milestone year -- and the administration begins its second term -- Sec. Jackson told the NAHB leadership that he is "energized by the opportunities ahead." In another major development at the meeting over the weekend, Countrywide Home Loans announced an expansion of its "We House America" initiative to fund mortgages to minorities and lower-income borrowers. When the program was first announced in 1992, it had a modest goal of $1.25 billion in loans to the underserved, who, in some cases, trail white Americans in home ownership by more than 25 percentage points. Over the next decade, higher goals were set and achieved. And most recently, in 2003, the target was raised to $600 billion in mortgages by 2010. Now, Countrywide, one of the nation's largest lenders, says it will fund a total of $1 trillion by the end of the decade. "We've already enabled 2.4 million low-income and minority families to secure homes," said Chairman Angelo Mozilo, who flew across the country from California to speak with the nation's housing press. "Our ultimate goal with this new challenge is to triple that number." Mozilo admitted that the objective is ambitious, but he said "there is no room for reticence or timidity." | 
