Lawmakers Aim to Extend First-Time Homebuyer Tax Credit
HOUSING
New London Day
Jeanne Amy
Boston University Washington News Service
10/20/09
WASHINGTON—Sens. Chris Dodd, D-Conn., and Johnny Isakson, R-Ga., called Tuesday for an extension and expansion of the $8,000 tax credit for homebuyers.
The law now covers only first-time homebuyers, but Dodd and Isakson want it to cover all homebuyers and would raise the income limits, significantly expanding eligibility for the credit.
“Whether they’re renting, hoping to own a home or looking to use their equity to build a more secure financial future, the American people need a stable housing market,” Dodd said in his opening statement at a Senate Banking, Housing and Urban Affairs Committee hearing on the state of the housing market.
The tax credit, implemented as part of the economic recovery package approved in February, is set to expire at the end of next month. Dodd and Isakson seek to extend the program to the end of next June.
Nearly two million first time homebuyers have already taken advantage of the credit, said Dodd, chairman of the committee.
But Housing and Urban Development Secretary Shaun Donovan expressed doubt about the need, testifying that the housing market is stabilizing. The administration, he said, tempered the decline of the market with federal programs such as Making Home Affordable and through the work of the Federal Housing Administration.
Isakson, in testifying before the committee, cited his 33 years of experience as a real estate broker. He said the tax credit has helped to stabilize the housing market.
“The one thing that we can reliably point to that’s made a positive change for the country is the tax credit, and it’s the smallest expenditure,” he said.
The proposed extension and expansion of the tax credit would cost $16.7 billion over five years. Isakson said he would work to come up with the funds to pay for it. “I think it’s our way out,” he said.
Diane Randall, executive director of the Hartford-based Partnership for Strong Communities, also testified, asking Congress to act immediately to spur the rental market rather than focusing solely on home ownership.
“The opportunities for Congress to intervene with solutions for the low-income rental market are immediate and can have dramatic benefits, not only for the nation’s economy but also for people who need the security of an affordable rental home,” Randall said in her opening statement.
Her recommendations ranged from renewing federal rental assistance to financing the National Housing Trust Fund. Describing Connecticut as “a wealthy state that nonetheless has deep pockets of poverty,” Randall said each local market has individual needs.
“Our organization hasn’t taken a formal position on this tax credit proposal,” Randall said in response to a question from Dodd. “As much as we try to help create a fix for homeowners, we’re creating a fix for renters as well. I would hope that we could do both.”
The tax credit issue is also building momentum in the House. Reps. Joe Courtney, D-2nd District, and Ken Calvert, R-Calif., led a bipartisan initiative to extend the $8,000 tax credit by writing a letter to the House leadership. The letter, with 165 signatures from members of Congress, will be delivered on Wednesday.
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