Bipartisan legislation introduced in the Senate last month would help to close the homeownership gap for low income households by increasing the supply of affordable homes for sale, according to the nation’s home builders.
“S. 859, the ‘Community Development Homeownership Tax Credit Act,’ “would help provide affordable workforce housing and it is good for the economy,” said National Association of Home Builders President David Wilson, a custom home builder from Ketchum, Idaho. “Each year it would produce 50,000 new and rehabilitated homes, generate $6 billion in development activity and create 120,000 new jobs.”
The bill was introduced by Sens. Rick Santorum (R-Pa.), John Kerry (D-Mass.), Gordon Smith (R-Ore.), Debbie Stabenow (D-Mich.), Wayne Allard (R-Colo.) and Paul Sarbanes (D-Md.)
Modeled after the Low Income Housing Tax Credit program for rental housing, the measure is designed to increase homeownership opportunities by helping to bridge the gap between the cost of developing affordable housing and the price that buyers can afford to pay for a home in many lower-income neighborhoods.
The homeownership tax credit is included in the Bush Administration’s 2006 budget, and is a vital component of President Bush’s ambitious agenda to swell the homeownership roll of minority households by 5.5 million over the next decade and to create 7 million more affordable homes over the same period.
By providing investors with a credit of up to 50 percent of the cost of constructing a new home or rehabilitating an existing property, the homeownership tax credit would spur the production of affordable housing by making it economically viable for development to go forward in inner cities, struggling suburbs and isolated rural areas.
“This important measure would allow the private sector and community-based groups to meet the serious shortage of affordable housing in many low-income and minority communities,” said Wilson. “NAHB encourages every senator who wishes to help more working families to achieve the American dream of homeownership to support this bill.”