Calling green building “the next evolution in residential construction,” the National Association of Home Builders (NAHB) told Congress last month that the best way to help small home builders promote residential energy efficiency and sustainability technology in home construction is by extending tax incentives for new energy-efficient homes.
Testifying before the House Small Business Committee, Michael Hodgson, president of the Stockton, Calif.-based energy consulting firm ConSol, said these incentives dovetail with the normal supply and demand for home construction.
“A tax credit program leaves important production decisions in the hands of builders, buyers and homeowners and does not require expensive administrative oversight that is usually associated with a mandate,” he said.
Under current law, builders who construct a home certified to achieve a 50 percent reduction in energy use are eligible to receive a $2,000 tax credit. That credit is set to expire at the end of this year, and although pending legislation in the House and Senate would extend it, there is still no agreement between the two chambers over the appropriate budgetary offsets.
“Unless Congress can end the political debate and extend this credit soon – with or without offsets – it will be a tremendous loss for my business and will eliminate the only federal incentive for efficiency in new homes,” said Hodgson.
He also urged Congress to increase the dollar amount of the credit, because achieving the 50 percent threshold required by statute is costly, especially for small builders.
Hodgson said that the housing industry is committed to the advancement of green building techniques that reduce energy consumption, improve indoor and outdoor air quality and conserve water and natural resources in both new and existing homes – all hallmarks of the NAHB National Green Building Program.
“NAHB members are leaders in the green building movement and were active on this effort long before the recent media interest in climate change and global warming,” he said. “In fact, NAHB will be hosting its 10th annual National Green Building Conference in New Orleans this month and has consistently been ahead of the curve in promoting and developing energy-efficient and environmentally friendly construction techniques for the mainstream home builder.”
NAHB and the International Code Council are awaiting final approval by the American National Standards Institute for the National Green Building Standard. The goal is to offer local jurisdictions an “off-the-shelf” green building program for all new homes and remodeling projects that is consensus-based and truly green, but flexible, said Hodgson.
“Green building means making intentional decisions that positively impact energy efficiency, resource conservation and indoor environmental quality throughout the entire design and construction process,” said Hodgson. “Green means doing the right thing for the builder, the home owner, and, most importantly, the environment.”
With the economy teetering on the edge of recession, Hodgson also called on Congress to move quickly to enact a housing stimulus package that will jump-start housing, save jobs and restore consumer confidence.
Specifically, NAHB urges Congress to include the following tax initiatives in the bill:
• A temporary home buyer tax credit. Hodgson noted that a provision in House bill H.R. 5720 could shore up home prices by stimulating sales and reducing excess inventory in housing markets.
• A net operating loss deduction carryback expansion. Allowing companies to carry back net operating losses beyond the current two years would help all hard-hit businesses — including financial institutions and manufacturers — to weather the economic storm, make their payrolls and emerge from this downturn in a position to grow.
• Expansion of the mortgage revenue bond program. This would help struggling home owners seeking to refinance their loans and would be especially useful for communities trying to avoid a wave of foreclosures or an extreme excess of inventory.