MEMORANDUM

DATE: October 16, 2009

TO: National Area Chairmen and State Representatives

FROM: Joe Robson, 2009 NAHB Chairman

cc: NAHB Senior Officers

RE: Revive Housing, Restore America Campaign Update

While interest is growing on Capitol Hill to extend and possibly expand the $8,000 first-time home buyer tax credit that is set to expire on Dec. 1, we still face headwinds from a number of lawmakers who are reluctant to act, particularly unless Congress imposes offsetting tax increases or spending cuts.

After Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) last week expressed willingness for Congress to move on the tax credit, we have seen encouraging developments in recent days. With rising unemployment a top concern among lawmakers, House Democratic leaders plan to convene a forum of economic experts next week to discuss how to spur job creation and economic growth. The home buyer tax credit proposal is expected to be in the mix.

Meanwhile, Sens. Johnny Isakson (R-Ga.) and Christopher Dodd (D-Conn.) plan to offer an amendment to extend and expand the home buyer tax credit to a House-passed bill that would extend unemployment insurance benefits. Though it is unclear if the Senate will act on this proposal, NAHB will be urging senators to approve the amendment if it comes up for a vote.

Reporting on the Isakson-Dodd plan, the Associated Press cited NAHB statistics that extending the credit for one year and expanding it to all buyers of a principal residence would spur 383,000 additional home sales create more than 347,000 jobs, generate $16.1 billion in wages and salaries and $12.1 billion in business income.

House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) says his panel plans to consider three more tax bills before the end of the year that address the economy, estate tax and tax extenders. The Bureau of National Affairs (BNA) reports that Rangel made it clear that whatever job creation or stimulus bill is considered will deal only with related extender provisions, such as the first-time home buyer tax credit.

The BNA publication said that Rangel’s Senate counterpart, Finance Committee Chairman Max Baucus (D-Mont.), remains undecided on whether to support a temporary extension of the tax credit. “We’re looking at it. There are competing arguments,” said Baucus.

Delivering Our Message to the Media

We continue to move aggressively in taking our message directly to members of the media and the public. This week, NAHB President and CEO Jerry Howard met with Wall Street Journal editors in New York to discuss how congressional action on the association’s “Revive Housing, Restore America” housing priorities will help move housing and the economy to higher ground. He also conducted a separate interview with a Washington, D.C.-based Wall Street Journal reporter on NAHB’s call to extend and expand the home buyer tax credit.

After Jerry’s meeting with the WSJ editors, Dow Jones Newswires published an article under the headline: “U.S. Home Builder Trade Group Predicts Tax Credit Extension.” The lead paragraph read as follows: “Officials at the National Association of Home Builders are confident that the first-time home-buyer tax credit will live beyond its looming expiration, though it remains unclear whether it will be expanded to include all home buyers.” A modified version of this story was posted the next day on the Wall Street Journal blog.

The Las Vegas Sun, home of Senate Majority Leader Harry Reid (D-Nev.), on Oct. 16 published an article about extending and expanding the home buyer tax credit that quoted Irene Porter, executive director of the Southern Nevada Home Builders Association. “I think it is important to extend it to everyone and not just first-timers,” said Porter. “There are many families who have owned a house in the last three years who would want to take advantage of it. If it was extended, it could be an important factor in the housing recovery.”

The Cincinnati Enquirer also ran a story on whether the home buyer tax credit will be extended that cited Brian Miller, executive vice president of the Home Builders Association of Northern Kentucky, who described the “ripple effect” that benefits local economies when consumers buy homes.

On Oct. 14, I was quoted in a CNN/Money article on the benefits of extending the $8,000 first time home buyer tax credit. “We estimate that this would increase home purchases by 383,000 in the next year and help mitigate the foreclosure crisis by whittling down inventory. This stimulus alone would create nearly 350,000 jobs over the coming year, which is exactly what the economy needs right now.”

NAHB this week conducted another in a series of regional media teleconferences to provide perspectives from builders in their local housing markets. Joined by NAHB Chief Economist David Crowe, Minnesota builder Monty Mraz and Illinois builder Ed Brady told how their businesses have suffered during this devastating housing and economic downturn and why Congress must act now to hasten a recovery by addressing NAHB’s housing priorities.

In addition, Jerry Howard and David Crowe conducted separate interviews with Bloomberg news about what the housing industry will look like in recovery and what is needed to get there.

A Renewed Grassroots and Lobbying Push

On Capitol Hill, NAHB lobbyists are in continuous contact with House and Senate congressional leaders and encouraging action on several fronts to achieve the goal of expanding and extending the home buyer tax credit.

NAHB’s joint ad campaign with the National Association of Realtors and the Mortgage Bankers Association on the need to extend the home buyer tax credit remains in full force. For the fifth straight week, ads ran in the Capitol Hill publications Roll Call, Politico, The Hill and CQ Today.

With less than six weeks left before the tax credit expires, our grassroots must redouble their efforts to make members of Congress know that action is needed now. Extending the tax credit for an additional year and making it available to all buyers of a principal residence would not only create hundreds of thousands of jobs, it would also help reduce foreclosures and excess housing inventories, stabilize home values and push housing and the economy on a glide path to recovery.

That is the message we need to convey as we continue to encourage all NAHB members to visit, call, write and e-mail their U.S. senators and representatives. We must keep sounding the call for housing in order to be ready for when Congress starts working on new tax legislation in the coming weeks.

The best way to get your message across – be it in a meeting, letter or phone call – is to speak in personal terms whenever possible. Whether you are discussing the tax credit, AD&C and appraisal issues, or NOL relief, relate how action in these areas will help your business to survive the current housing and economic downturn.

(Specific talking points on these four issues for those who visit their members of Congress can be found by clicking here.)

To make it easy for your builder constituents to get involved, encourage them to visit www.nahb.org/ReviveHousingNow as soon as possible. This one-stop site contains information to call or e-mail your members of Congress, talking points, banners for Web pages, print ads, op-ed letters that HBA presidents can send to their local newspapers, and more.

To generate public interest, our consumer-focused Web site at www.ReviveHousingNow.com urges potential buyers to contact their lawmakers and ask them to extend the home buyer tax credit.

Appraisal Groups Respond to NAHB Testimony

As you recall, last week I testified before the House Small Business Committee on a number of NAHB’s housing priorities, including the need to resolve a faulty appraisal process that has critical implications for the recovery of the nation’s housing markets. I told lawmakers that the use by some appraisers of foreclosed or other distressed properties as comparables without proper adjustments have been slowing home sales and unnecessarily driving down home values.

This week, appraiser organizations responded to my testimony. In a written response to the House panel, groups representing the appraisal industry recommended that mortgage lenders and financial institutions:

• Seek out the services of highly qualified appraisers for complex appraisal assignments.
• Recognize that sales concessions are as important as the condition of a property to the credibility and reliability of the appraisal.
• Provide sufficient time for the real estate appraiser to conduct the proper analysis of the subject property and comparables used.
• Promote communication between appraisers, builders and real estate agents.

This constructive response is an important step forward in resolving this important issue.