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Stand Up For Housing Foundation For Recovery

July/August 2008 Issue of Michigan Builder

The housing industry is a linchpin in Michigan's economy. As we are all aware, home sales and building activity have declined dramatically in the past three years. Homeowners have seen their home values decline. Consumer spending and confidence have eroded as the negative ripples of the sub-prime mortgage crisis have worsened our economic situation.

In 2005, 54,721 housing starts in Michigan generated an estimated $10 billion in income. Since that time, statewide residential building permits have dropped more than 70 percent, slashing residential construction's contribution to Michigan's gross domestic product almost in half...and eliminating 69,000 jobs directly related to the homebuilding industry.

It is time for action. As a result of our regional economic forums, the Michigan Association of Home Builders (MAHB) has worked with a diverse, bipartisan group of lawmakers, other state leaders and MAHB members to craft a bold legislative initiative that we believe will provide an immediate stimulus to Michigan taxpayers, the state economy and the housing industry.

Our plan, called Stand Up For Housing: Foundation for Recovery, calls for action on six key issues that will encourage the sale of existing homes, as well as remodeling and building efforts across the state. These include:

Pop-Up Tax (HB 4440 and HB 4441) provide a temporary moratorium on the so-called Pop-Up Tax. This will keep taxable values from spiking and provide an immediate incentive for the sale of existing homes by not saddling a buyer with a property tax bill higher than the prior owner of the property.

Homestead Exemption (HB 5334) provides a pro-rated exemption to a person who acquires and occupies a home for which an exemption was not already on the tax rolls May 1. Our state currently punishes buyers who purchase existing 2nd homes for their primary residence or who build a new home after May 1 (by applying a higher non-homestead tax rate).

Deferment of Assessments (SB 1247) would exempt new construction in a residential development from property tax until the structure becomes occupied. So called spec homes and development property are currently taxed at a full non-homestead rate. The bill would correct this disincentive for new investment.

MBT Reform (SB 1217 and HB 6031) clarifies the Michigan Business Tax to allow builders to deduct the cost of building materials, which was the intent of the original legislation passed last year.

Real Estate Transfer Tax Reform-this soon to be introduced legislation would stimulate home sales by exempting the first-time transfer of a newly constructed home from the state real estate transfer tax.

Energy Efficiency-these forthcoming bills would provide income tax credits for homeowners who make energy efficiency improvements or who make other green renovations or additions to their homes. Similar credits would be provided to those buying or building a certified green home.

It is vital that the state legislature take immediate action to pass this stimulus plan and send it to Governor Granholm prior to summer recess. Every home sold, every home remodeled and every home built as a result of these measures will repay our communities, our schools and our state for years to come. They provide a vital piece of Michigan's foundation for economic recovery. And you can help. If you receive a call to action from MAHB on any of these bills, please call your legislator and express your support.

It's time to Stand Up For Housing in Michigan!

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