Housing Industry Lobbying Pays Off With Aid Extension

The Associated Press reports that government aid for the unemployed will be a boon for the real estate, construction and mortgage industries.

It's not a coincidence: Those industries' multimillion-dollar lobbying campaigns paid off yesterday when Congress passed $20 billion in tax cuts for homebuyers intended to spur the lagging housing market. The president signed the bill into law today.

The legislation, which was a part of a broader extension of unemployment benefits, will provide up to 20 weeks in additional pay to more than 1 million people who are near losing jobless aid or have already lost assistance.

The Center for Responsive Politics reports that realtors have spent nearly $14 million lobbying Congress this year, and the group rallied its 1.2 million members to contact lawmakers and urge them to pass the jobless aid extension.

According to lobbying disclosure reports, the Mortgage Bankers Association spent $658,000 lobbying Congress in the third quarter, much of which was spent pressing for the "Helping Families Save Their Homes In Bankruptcy Act." Likewise, the National Association of Home Builders spent $750,000 lobbying in the third quarter on a variety of issues.

From the AP:

Bill Killmer of the National Association of Homebuilders called the credit "a pretty powerful tool" in getting people contemplating in buying a house to "move to yes and be motivated" to close the deal. Like the Realtors, homebuilders have been citing the tax credit in their marketing campaigns, using the government subsidy to propel their "Buy now!" message.

Comments

[billobasher]

Here, see Bush encouraging more loans for homes to people with poor credit. The cflaim of the right that Bush "tried" to do something about this is nonsense.

http://www.youtube.com/watch?v=kNqQx7sjoS8&feature=related

[Scott1560]

Bush was a disaster, but he's gone and now we deal with the here & now.......­.....Anoth­er disaster.......

[billobasher]

Do these right wing tea baggers realize that it was their hero G.W. Bush that caused most of this mess? I mean, he was the father of the bailouts. It was BUSH who got on TV last October sounding desparate claiming that if we did not hand the banks 700 BILLION dollars that it would be 1929 inside of a week. It is Bush who bailed out AIG to the tune of almost 200 BILLION. It is Bush who handed GM and Chrysler their first 19 BILLION.

It is Bush who insisted on cutting taxes on the wealthy during war time. The first time in history this was ever done. It was Bush who touted "Fannie and Freddie" as a way for people with poor credit histories to own a home. It is Bush who wanted an "ownership society." It is Bush who inherited a 280 BILLION dollar yearly surplus when he took office. It is Bush who handed Obama a 1.3 TRILLION doller DEFICIT that did not even have the war costs included.

Where were the tea baggers before January 20th, 2009?

[duze]

COllecting their share of the stolen money.

[billobasher]

Had the "Free market" "capitalists' not failed so miserably, the government would not have to step in with these types of programs. You righties can thank your icon Ronnie Reagan for most of this. I will never forget when Reagan signed the "Garn St. Germain Act" in 1982. It lifted almost all government redtructions of the Savings & Loan Industry. Ronnie held this bill up in a Rose Garden ceremony ans said "This bill is a WINNER." All it did was cost the tax payers a trillion.

If you really want to blame someone, blame Reagan. His administration quit enforcing the Sherman Anti Trust Act. Ronnie let em get "too big to fail." His hero Milton Friedman was cheering him on. After Reagan, old man Bush, Clinton, Bush 43, all followed suit. Then all of it was dumped on the lap of Barack Obama. Now these same "free market" types are cursing Obama for trying to clean it up.

[billobasher]

The home buyer tax credit is a godo thing. Nothing drives property values down more than abandoned homes sitting on your street. 8,500 bucks is a drop in the bucket if it helps clear up all of this inventory. Tea baggers never grasp the big picture. It costs the tax payers less to give this tax credit to buyers than it does for the home to just sit there abandoned. I wonder how many of these right wingers have abandoned homes next to their home? How do they like what it does to their property values?

I have a godo friend, a school teacher in Ohio. She makes 56,000 a year. Her area outside of Columbus has slews of forclosures just sitting there. She purchased her first home for 137 K with the help of the 8,500 dollar tax credit. Her buying this home SAVED the tax payers money.

[billobasher]

Another tax giveaway in the real estate industry is the write off's given to landlords. They can depreciate their property for as long as they have it under current tax law. If they keep the property long enough, they end up essentially getting it for free.

You see these empty strip malls? Do not feel sorry for the owners of these places. They do just as well through the tax code as they do renting the place. Many of them ask for obscene rents so they do not have to rent it.

The real estate industry is one of the biggest corporate welfare recpients in our nation's history.

[billobasher]

No industry has benefitted more over the years from socialisim than realtors. The NAR is a Republican darling. They lobbied for every single piece of legislation making it easier to buy homes.

The home mortgage intrest deduction is nothing but a big government give away to home owners. Why can't you write off the intrest when you buy a car? When you charge a big screen TV?

[billobasher]

The tax payers have been subsidizing home purchases forever. It is called the home mortgage intrest deduction. This give away was pushed hard by the Republican National Association of Realtors. It is also why there will NEVER be a "Fair tax" or a "Flat tax" in this country. Too many industries benefit from the tax code.

Why should home owners get this write off when renters can not write off the same portion of their rent? The home mortgage decuction is one of the things that lured people into loans that they really could not afford as well. For decades it has boosted home sales and caused home prices to soar. That of course was before the roof caved in.

How much does the home mortgage intrest deduction add to the deficit every single year?

[StockMarkets]

No more bailouts. No more too big to fail. more effort needs to be done to make work. Instead, unemployment keeps climbing as well as the deficit. Tax cuts and toehr stupid gimmicks aren't the answer.

hat tip to http://financeopinionss.blogspot.com

[billobasher]

Stock Markets,

Did you tell your boy Bush and his man Paulson, "No more bailouts?" Where was your "outtrage?"

[artgurrl]

This makes me laugh. I live in Los Angeles and housing hasn't really come down to affordable levels. I don't consider an $8000 tax break for a middle class house in a middle class neighborhood that costs $500,000 to be much of an incentive.

[Peter007]

This program, which may cost 10 or 20 or 30 Billion dollars, will redistribute tax dollars to people in the top 20 or 30% of the income scale. Those making less than $45-50,000 / year will be subsidizing those people that are making $75,000 + a year. The people that can't afford to buy a house will be subsidizing those that already have a nice house. It's the "helicopter" theory of economics. You fly over the country and drop dollars from your helicopter, and those that gather the dollars are entitled to the money.

[we must be aware]

I think any group that has a strong lobby in Washington DC is going to get what they want. Now if only the average middle class could form a lobby that would be something!!

[Peter007]

The Realtor group is arguing that this program will raise the value of all homes in the US. That is correct. If it raises prices by 1%,a typical $200,000 house will appreciate by $2,000. Also, those toxic assets that the tax payers now own, will also appreciate. Maybe by the billions of dollars. The Realtors are claiming that this program will help approximately 150 million middle class people.

[ILibertine]

That lobby used to be called Labor Unions.

[yappnmutt]

i doubt anyone is rushing out to buy a home because .gov is going to pay the closing costs. people buying a house, however, would be silly to turn down free money. that's not really the point of the subsidy.

the real and intended effect of the subsidy is to prop up housing prices. all the studies about .gov subsidies have shown that the sudsidies actually raise the price of the whatever is being subsidized whether the subsidy is used or not. the cash for clunkers program was the latest example.

is this a good thing? no. it distorts the market. in this case, ironically, by not allowing home prices to fall to an affordable level(3 times median gross annual income) houses will remain unaffordable to a larger number of people.

[hypnotoad72]

Well, in "the new normal' I think only wages are allowed to drop. It's okay for costs to keep going up... at least until companies moan and blame consumers for not spending...

[ILibertine]

Although, with respect to propping prices, it can have another effect of stabilizing or appreciating one's current investment in comparison. Lots of things distort the market - financial houses & banks, interest rates, mortgagers and mortgagees. Even if the subsidy tends to inflate prices a bit, I'm not sold that it is altogether a bad measure and worthy as getting some aid down to the levels where it may be sorely needed. At least, the program (to my knowledge) does not stipulate that a sold property has to be incinerated so as not to remain available (like a used car). The real question for me is whether it fuels further assumption of unsound debt.

[ILibertine]

Programs for consumers thus far are primarily aimed at enabling more debt. I am writing to my representatives to suggest:

Similar credit to existing home owners toward payment upon mortgage principal, thereby reducing consumer debt, interest liability and improving net worth. Similar credit for the purpose of renovating one's existing property (reinvestment).

Aside from anguished howls at "socializing consumer debt", it might be a pleasant change from the hugely disproportionate corporate bent of such aid to date.

[hypnotoad72]

Agreed, and fanned.

Especially as the anguished howlers are clueless... :(

[tbone99]

People continue to be evicted due to foreclosure, and joblessness. yet the money is going to the relatively well off - that is, people with jobs and enough income to buy houses at discounted prices as well as the agents who sell them.

Obviously Obama and the Congress care nothing about anyone except those with money.
Those who are hurting obviously should just go live under a bridge or use a tent.

[texastrixie]

I feel for those who are in danger of losing their home because of joblessness. I even feel for those who are being foreclosed due to their weird mortgages. But the truth of the matter is that a large minority of these homeowners cannot afford their houses, even if the entire drop in the house's value is cut from the principal. The only way to get part of this backlog of inventory (foreclosed homes) is for them to be bought and sold to someone else. Anything that will get these houses off the market is fine with me.

[Peter007]

The loss of a home is usually tied to a job loss or massive reduction in income. Self employed people have varying levels of income over the years. In normal markets, people in financial trouble can sell their house and move to either a smaller home or apartment and leave with cash. When prices are falling, the situation become complicated and thats why there are foreclosures.

[Kache]

Over 40% of all jobs lost have been in the construction industry. If this takes homes off of the market and fuels construction of new homes - then the lobby money was well spent. The shame is that they had to lobby Congress to get this done.

[say what]

I think you Realtors need to check your math. There is NO connection to this and preventing a foreclosure. If someone paid $300k and its worth $250k, a buyers credit wont make that home sell at $300k. I do agree a lot a Realtors are Republicans. They argue against pork UNTIL it supports their industry. Pure hypocrisy.
-
We need to get out of the way and let these home prices find their own price. Frankly, if your math really worked, why would we ever get rid of the credit? Reason: because its a COST.

[Peter007]

This program does decrease foreclosures. Anytime you add a subsidy to any economic system, the prices rise. This subsidy does provide an incentive to buy a house. The more buyers in the market, the higher the prices. Foreclosures occur because the owner can't sell the house for the loan amount. Sometimes a 1 or 2% increase in the value of a house will allow a sale to occur rather than a foreclosure. Less foreclosures also mean higher prices. The same results could have been obtained by easing restrictions on lending and interest rates. The later method would be fairer and less complicated and not require a bureaucracy to implement.