Thursday, August 6, 2009

Isakson Criticizes Senate’s Refusal to Stimulate Housing Market by Expanding Tax Credit for Homebuyers

U.S. Senator Johnny Isakson, R-Ga., today criticized the Senate’s rejection of his amendment to stimulate housing demand and boost the economy by expanding the first-time homebuyer tax credit to a $15,000 tax credit for any buyer of any home. The Senate rejected Isakson’s amendment, which he sought to attach to the “cash for clunkers” bill, by a vote of 47 to 50.

Isakson then voted against final passage of the “cash for clunkers” bill.

“I’m disappointed in this vote on the homebuyer tax credit, because every American is suffering in this economy. Every American deserves for Congress to look for positive incentives to bring the housing market back, restore their equity, improve their values and return us back to a vibrant economy,” Isakson said. “The ‘cash for clunkers’ program demonstrates what I’ve known all my life, which is positive incentives cause positive results. The problem we have, though, is it was not the automobile market that disappeared first in America. It was the collapse of housing market.”

Specifically, Isakson’s amendment would have increased the maximum amount of the credit from $8,000 to $15,000 and expanded the current tax credit so that it applies to any buyer of any home, not just first-time buyers. The amendment also would have eliminated the income caps of $75,000 for an individual and $150,000 for a couple under the current tax credit so that there is no income limit for eligibility. The amendment would have extended the tax credit for one year from date of enactment and would have still allowed homebuyers to claim the credit on their 2009 tax return for purchases made in 2010. Finally, the amendment would have required the expansion of the tax credit ultimately to be paid for by stimulus funds.

Isakson’s amendment was endorsed by the National Association of Home Builders and the National Association of Realtors.

Isakson has pushed hard for a tax credit for homebuyers since January 2008 because he knows that it will work. In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.
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