Home ownership tax credit will open doors
Home ownership has long been the American dream, and fortunately many families have been able to achieve that dream. The rate of home ownership in the United States has risen steadily over the past few years. However, the dream of home ownership remains elusive for many working families, low-income families, families headed by women, minorities, urban dwellers and young families.Over the past four years, Congress and the president have pursued many initiatives to lower taxes and create opportunities to build personal wealth, including initiatives to create new homeowners.In 2003, 1.7 million Americans became homeowners, resulting in the current all-time high home ownership rate of 69.2 percent.For most families, a home is the most significant asset and the best means for securing a sound financial future. Home ownership allows families to accumulate wealth for education, to start a business and to take advantage of other economic opportunities. In fact, home equity is one of the largest sources of collateral for bank loans to start new businesses; children of homeowners score better in math and reading on academic achievement tests and enjoy higher graduation rates.While home ownership provides clear benefits to individuals and families, it also provides significant benefits to neighborhoods and communities: When you own your home you have a strong stake in the community. Studies have shown that homeowners have higher rates of participation in community organizations and civic activities.Homeowners also move less often and stay longer in their neighborhoods, promoting stability. These factors tend to lead to higher tax revenues and lower crime rates.I am committed to identifying and eliminating the barriers that prevent some families from becoming homeowners. Last year, I was pleased to work to enact the American Dream Downpayment Initiative.This initiative has provided communities across America with $160 million to assist low-income and first-time home buyers with down payment and closing costs. Because lacking the resources for a down payment represents one of the most significant obstacles to home ownership, the American Dream Downpayment Initiative will help hundreds of thousands of Americans overcome this obstacle and finally achieve the dream of home ownership.As chairman of the Subcommittee on Housing and Transportation, I look forward to finding additional ways to promote home ownership in America. The president has laid out aggressive goals for home ownership, including his challenge to create five-and-a-half million new minority homeowners by the end of the decade, as well as creating seven million new affordable homes over the next 10 years.We can begin to meet this bold challenge by enacting the proposed Home Ownership Tax Credit. This $2.54 billion, five-year proposal replicates the highly successful Low Income Housing Tax Credits, which have been the nation’s largest producer of affordable rental housing.The proposed Home Ownership Tax Credit creates a public-private partnership by offering home builders a tax credit of up to 50 percent of eligible project costs in exchange for building or rehabilitating affordable housing. Homes must be affordable to buyers who make less than 80 percent of the median income in their area, so the proposal will be especially helpful to working families, such as the families of nurses, teachers and firefighters. Best of all, this program would be administered by the states, resulting in very little federal involvement. Each state would be able to select projects based on its own needs and priorities. For example, some states may have the most severe affordable housing needs in urban areas, whereas other states might need affordable home ownership opportunities in rural or suburban areas. A few states, such as Colorado, may find help for housing needs in ski areas where ordinary people face daunting housing costs and are kept out of the market entirely. This proposal allows each state to determine how best to meet its individual requirements.I am looking forward to working in the 109th Congress on ways to make home ownership attainable for more Americans. This is a key to ensuring prosperity for our nation and for individual families in the years to come. Wayne Allard is a Republican and Colorado’s senior U.S. senator. He is from Loveland.
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