NMHC, NAA Ask Lawmakers to Exercise Caution in Implementing New Economic Stimulus Actions
- Nov 13, 2008
Washington, D.C.–The National Multi Housing Council (NMHC) and National Apartment Association (NAA) Joint Legislative Program Lawmakers is warning lawmakers who are under political pressure to “do something” to stimulate the economy and stop the slide in housing prices to act carefully and reject proposals that could do more harm than good. According to NMHC and NAA, a new $22,000 homebuyer tax credit, which has been talked about recently, is a bad idea. The legislation overturning the ban on seller-financed downpayment programs and calls for a federally financed interest rate buydown on mortgages, could also do harm to the housing industry, according to the two groups.”We understand the desire of lawmakers to bolster the economy and stem the tide of foreclosures, but these actions will not stimulate the economy or stop house prices from falling further,” NMHC and NAA said in a joint statement. “They are simply bailouts for the for-sale housing market, the very sector of our economy that helped trigger the global economic crisis.””The only issue a homebuyer tax credit addresses is the oversupply of single-family houses, which is something best left to the marketplace—-not taxpayers—-to correct.” The two groups argue that oversupply situations happen in every industry, and the housing industry will recover with or without Congressional action, just as it has in past oversupply situations. “The government should not be using taxpayer dollars to sustain inflated housing prices. When prices return to market levels, buyers will return. Such a resettlement will not only restore affordability to the housing sector, it will also put it on a much stronger footing going forward,” the groups say.NMHC and NAA are arguing that if buyers need a $22,000 incentive to come back to the market, then homebuilders should absorb that cost through lower prices, not through taxpayers.”Finally, homebuyer incentives do nothing to stimulate the economy. They don’t create jobs and won’t encourage more housing production. They simply use tax dollars to help builders move them off their balance sheets,” the housing groups say.They are also suggesting that the potential return of federally financed zero down mortgages would increase the number of owners who are underwater in their mortgages. “In the process, they lay the groundwork for another wave of mortgage defaults and foreclosures,” concludes NMHC.