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The Real Deal
Ownership of a home could be a reality
Realtors throughout the nation are embarking on a new and promising partnership to help make the dream of homeownership a reality for those who find it out of reach, especially households living in low-income areas.
One of the major roadblocks for these would-be homeowners is that the cost of developing new or rehabilitated housing often exceeds the price at which homes can be sold, according to the National Association of Realtors.
The association is one of 26 housing and community development groups that have joined together to work on a solution to the critical problem. The groups have formed the Community Homeownership Credit Coalition to push for the enactment of a homeownership tax credit proposed by the Bush administration that would help increase the supply of affordable homes for sale.
The community homeownership tax credit is designed to help bridge the gap that exists between the cost of developing affordable housing and the price at which these homes can be sold in many lower-income neighborhoods. Available through a competitive allocation program administered by state agencies, the program would provide investors with a credit of up to 50 percent of project costs for eligible home rehabilitation or construction.
The program is intended to encourage new construction and substantial rehabilitation of homes for sale to low- and moderate-income families in economically distressed areas. Modeled on the Low-Income Housing Tax Credit, the community homeownership tax credit was first proposed by President Bush during his presidential campaign and was included in the administration's fiscal year 2002 budget proposal.
The coalition hopes to increase the quality and quantity of affordable homes for sale. In addition, the coalition believes the community homeownership tax credit will make home development and rehabilitation more financially feasible, and this translates into better communities and more families enjoying the benefits of homeownership.
Realtors have long been committed to making the dream of homeownership a reality for every American. The initiative will help to further the goal espoused in the1949 Housing Act of "a decent home and a suitable living environment" for all Americans.
Housing and real estate traditionally drive the economy, creating millions of jobs and generating billions of dollars in wages and tax revenues each year. The real estate industry makes up 14 percent of the Gross Domestic Product, contributing $1.4 trillion to the U.S. economy every year.
Coalition members include CEOs for Cities, Coalition for Indian Housing and Development, The Enterprise Foundation, Fannie Mae, Freddie Mac, Financial Services Roundtable, Habitat for Humanity International, Housing Assistance Council, The Housing Partnership Network, Local Initiatives Support Corporation, The McAuley Institute, Mortgage Bankers Association of America, National Association of Affordable Housing Lenders, National Association of Counties, National Association of Home Builders, National Association of Local Housing Finance Agencies, National Community Development Association, National Council of State Housing Agencies, National Association of Realtors, National Cooperative Bank/NCB Development Corporation, National Council of La Raza, National Hispanic Housing Council, National Housing Conference, Stand Up for Rural America, the U.S. Conference of Mayors and United Way of America.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.siliconvalley-realtors.org. Send questions on any topic to jnewton@jnpr.com.
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Saratoga, California Since 1955
