26 Housing & Community Development Groups Form Community Homeownership Credit Coalition
January 23, 2002
WASHINGTON, D.C. ? Twenty-six housing and community development groups have come together to form the Community Homeownership Credit Coalition to push for the enactment of a homeownership tax credit proposed by the Bush administration that would help increase the supply of affordable homes for sale.
The community homeownership tax credit is designed to help bridge the gap that exists between the cost of developing affordable housing and the price at which these homes can be sold in many lower-income neighborhoods. Available through a competitive allocation program administered by state agencies, the program would provide investors with a credit of up to 50 percent of project costs for eligible home rehabilitation or construction.
The program is intended to encourage new construction and substantial rehabilitation of homes for sale to low- and moderate-income families in economically distressed areas. Modeled on the Low-Income Housing Tax Credit, the community homeownership tax credit was first proposed by President Bush during his presidential campaign and was included in the administration?s fiscal year 2002 budget proposal.
"Despite our recent economic prosperity, the dream of homeownership remains elusive for too many American families, especially those with lower-incomes," said Martin Edwards Jr., president of the National Association of RealtorsÒ . "Immediate action is needed to increase the quality and quantity of affordable homes for sale. The community homeownership tax credit will make home development and rehabilitation more financially feasible, which will go a long way toward enhancing communities and helping lower-income Americans get their piece of the homeownership pie. As RealtorsÒ , we?re committed to helping make the dream of homeownership a reality for every American."
"Homeownership is essential to a balanced strategy to rebuild communities," said Michael Rubinger, president and CEO of the Local Initiatives Support Corporation, which has invested $4 billion through nonprofit low-income community development organizations. "The community homeownership tax credit will fill the critical financing gap that until now has thwarted the construction and renovation of homes in inner cities, struggling suburbs and isolated rural areas. We are confident the credit will succeed based on our experience with the Low Income Housing Tax Credit, which has mobilized private investment in more than a million rental apartments since 1987."
"This initiative would help open the door to homeownership for thousands of families who now live at the edge of affordability. It is another step toward achieving the national goal of providing a decent and affordable home for every American, and we proudly stand with our industry colleagues in support of it," Bruce Smith, president of the National Association of Home Builders, said
"The Mortgage Bankers Association of America is pleased to join the Community Homeownership Credit Coalition to support enactment of a homeownership tax credit that will spur the production of affordable housing for low- and moderate-income families. This nation should avail itself of every possible tool to bring homeownership to the widest range of Americans," said MBA's Chairman James M. Murphy, CMB.
"The National Association of Counties endorses the concept of a homeownership tax credit designed to provide homeownership opportunities for low and moderate income families. Homeownership gives families a stake in their communities and increases the stability and vitality of neighborhoods. Local elected officials support legislative efforts towards this goal," said Javier Gonzales, NACo president and county commissioner for Santa Fe County, N.M.
"Habitat for Humanity International is pleased to join so many partners in homeownership to endorse the community homeownership tax credit. This credit will bring new resources to areas where the cost of building and rehabilitating homes places them beyond the reach of low and moderate-income families. This proposal will not only result in the creation of more affordable housing, but will strengthen families and the communities in which they live," David Williams, chief operating officer of Habitat for Humanity International, said.
In spite of overwhelming needs, very little new construction or substantial rehabilitation of owner-occupied homes occurs today in lower-income communities. The major reason is that the cost of developing such housing typically exceeds the maximum feasible sales price of the property in lower-incomes areas. No developer will invest capital and no lending institution will make loans that cannot be supported by the market value of the home. The goals of the community homeownership tax credit are to enable development to go forward, help revitalize economically distressed communities and increase the rate of homeownership in lower-income areas.
Coalition members include CEOs for Cities, Coalition for Indian Housing and Development, The Enterprise Foundation, Fannie Mae, Freddie Mac, Financial Services Roundtable, Habitat for Humanity International, Housing Assistance Council, The Housing Partnership Network, Local Initiatives Support Corporation, The McAuley Institute, Mortgage Bankers Association of America, National Association of Affordable Housing Lenders, National Association of Counties, National Association of Home Builders, National Association of Local Housing Finance Agencies, National Community Development Association, National Council of State Housing Agencies, National Association of RealtorsÒ National Cooperative Bank/NCB Development Corporation, National Council of La Raza, National Hispanic Housing Council, National Housing Conference, Stand Up for Rural America, the U.S. Conference of Mayors and United Way of America.
Source: Community Homeownership Credit Coalition