(BUSINESS WIRE)--The Georgia housing industry called on Congress January 7 to address the housing crisis that is at the root of the nation’s recession. Rick Porter, owner of Richport Properties, Inc.; Kenny King, president of Kingsland Corp.; and Kurt Cannon, owner of Rabun Builders, Inc. and the president of the Home Builders Association of Georgia, urged Congress to enact bold measures that will stimulate the housing market and, in turn, revive the local, state and national economies.
“Housing is central to our economy and is an engine of production that can lead us out of the recession,” said Porter. “But it is crucial for Congress to enact a major stimulus package to stop the decline in home values, stem the tide of foreclosures, stabilize financial markets and re-ignite consumer demand.”
To get the Georgia economy moving again, the housing industry is urging Congress to support enhancements to the home buyer tax credit and provide below-market, 30-year fixed-rate mortgages for home purchases.
Specifically, the legislation should include:
1. A 10 percent tax credit for all qualified home buyers capped at 3.5 percent of FHA, Freddie Mac or Fannie Mae loan limits (equaling $10,000 to $22,000 depending on geographic market). All primary home purchases through December 31, 2009, would be eligible. Repayment would be required only if the home was sold within three years. And the credit would be available at closing, making it easier for buyers to use it as a downpayment;
2. A below-market, 30-year fixed-rate mortgage for home purchases. The second component of the stimulus plan would provide qualified home buyers with 30-year fixed-rate mortgages at 2.99 percent interest on contracts closed until June 30, 2009 and 3.99 percent interest on closings between June 30 and December 31, 2009; and
3. Continued measures to reduce foreclosures and keep people in their homes.
The housing industry representatives cited a similar plan with both a tax credit and a mortgage rate subsidy that was enacted in 1975 when the nation was also in the midst of a recession. That successful stimulus plan jump-started the depressed economy, and the effects continued in communities across the country long after the measure expired.
“We’ve been in business for about 20 years, and we’re currently working on a project of 23 units which we began back in 2005,” explained Kenny King, president of Kingsland Corp., out of Snellville. “In all my years in home building, this project is probably our best product in our best location, but in this market, we can’t turn the units over. We sold three in 2007, and only four in 2008 – we’ve got 16 left and we don’t know how we’ll sell them. Consumer confidence is basically ‘zero.’ We need stability and confidence brought back to the housing market to end this extended recession.”
Kurt Cannon, owner of Rabun Builders, Inc., from Clayton, and the current president of the Home Builders Association of Georgia, builds second-home and retirement properties. “Our business is basically just shutting down. Last year we only did 25 percent of what we should have done, and now we are finishing up projects without any others lined up. Over the past three months, I’ve talked to between 70 and 80 builders around the area, and I keep hearing the same story over and over again. Builders with high credit ratings, with decades of good credit, current on their payments, are suddenly told by their banks that they have to pay off their loans in 10 days or the bank will foreclose. Of course, they end up foreclosing and the bank just ‘fire-sales’ the neighborhood. It’s the same story all around. We must stop the bleeding.”
“When the housing industry is in a crisis, the entire community is affected,” continued Porter. “Retailers, manufacturers, service providers and even the local government are affected. Most important, local residents suffer.”
“Three million home building-related jobs across the country have been lost as a result of the slowdown in housing production, which represents $145 billion in lost wages and $4.9 billion in lost purchases,” said National Association of Home Builders (NAHB) economist Bernard Markstein. “Deterioration in these jobs has now spilled over into virtually all sectors of the U.S. job market and the economies of states like Georgia.”
"We are leaving no stone unturned in our efforts to convince Congress to quickly enact a robust housing stimulus program. There’s no question that stopping the decline in home values and restoring demand for housing is the fastest and most effective way of reviving the economy," Porter said.
The housing leaders in Georgia are part of a new coalition called Fix Housing First, consisting of more than 600 organizations, home building companies and manufacturers advocating for this major stimulus package to stem the decline in home values, stabilize financial markets and re-ignite consumer demand. To learn more about Fix Housing First, go to www.fixhousingfirst.com.
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