The huge economic stimulus package that President-elect Barack Obama is expected to make a first order of business: What’s in it for remodelers?
Details of the package won’t be known until after Jan. 20, but there are indications that residential remodelers could benefit from energy-efficient tax credits for homeowners, repairs of distressed properties, and workforce training and job-creation initiatives.
As a starting point, Kermit Baker of the Joint Center for Housing Studies of Harvard University suggests looking to the Neighborhood Stabilization Program, which Congress authorized in July. Aimed at helping communities keep foreclosed or abandoned properties from bringing down real estate values, this $3.92 billion is being distributed by the U.S. Department of Housing and Urban Development. “Remodelers should work at the local level to develop ideas on how to use the money,” Baker says.
The stimulus package could enlarge that funding pool. In a proposal likely to hold sway with the new administration, the Center for American Progress (headed by Obama transition chief John Podesta) recommends earmarking another $5 billion in the first year alone for “the acquisition and rehabilitation of foreclosed and abandoned properties that blight neighborhoods and drive down house prices.”
That same proposal, aimed generally at stabilizing markets and stimulating the economy, also suggests $5 billion for “refundable residential energy efficiency tax credits,” $5 billion for “greening affordable housing,” and $100 billion for “green job creation,” which includes jobs involving renewable-energy installations, building retrofits, and a Clean Energy Corps.
Also notable for remodelers will be the stimulus package’s inclusion of tax cuts aimed at stimulating the economy. “The real benefit from all this may be to shorten the recession and get people spending on their homes again,” Baker says.
Mary Harris, executive vice president of the National Association of the Remodeling Industry, agrees that any economic incentives for people to remodel would boost the industry. And while welcoming of federal tax credits for “weatherization” initiatives, she notes some concern that “weatherization could undermine or postpone the more traditional kitchen/bath/addition project” that is more consistent with many remodelers’ business models.
Links to Relevant reports and Articles
Center for American Progress: “How to Spend $350 Billion in a First Year of Stimulus and Recovery.”
National Governors Association paper: “Economic Recovery: a Federal-State Partnership.”
United States Conference of Mayors report released Dec. 8, 2008: “Ready to Go Jobs and Infrastructure Projects.”
“Housing-Crisis Grants Force Cities to Make Tough Choices,” Wall Street Journal, Dec. 5, 2008.
The Nature Conservancy recommendations for updating and building green infrastructure projects and initiating environmental restoration projects.