The 'governator' stumps for housing incentives
Gov. Arnold Schwarzenegger, appearing at a press conference just south of San Diego on Feb. 5, said the topic of his speech was the creation of new jobs to jump-start the local and state economy. But the setting -- a housing development under construction in Chula Vista -- and the local dignitaries -- representatives from the California Building Industry Association, the San Diego Building Industry Association, the San Diego Association of Realtors,and local home-building executives -- set the stage for the real topic of the governor’s speech.
“This area here has been hit hard by the foreclosure crisis, and we need to get people out there and buying the homes, that's the important thing,” Schwarzenegger said. “So we can build more homes, and we can put people back to work. And the great thing is that when we give tax incentives for home buyers, that has a rippling effect, a domino effect, because then all of a sudden builders begin pulling their permits. And we have seen that on that last year's tax credit, that builders began pulling the permits, and the subcontractors began hiring again. And that means that people go back to work, if it's the framers, if it's the roofers, if it is the electricians, if it is the carpenters, if it is the plumbers. Everyone gets a job right away again.”
Schwarzenegger was referring to the $10,000 tax rebate for new home buyers enacted by the California Legislature last year. The popular program went into effect in March 2009 but ran out of its $100 million allocation after five months.
Brookfield Homes, where Schwarzenegger delivered his speech, experienced a 300% increase in the sales of homes last year, and 70% of those buyers used the tax credit, according to figures provided by the governor’s office.
“But then, as soon as the money ran out, then you saw again a drop in the sales of homes,” Schwarzenegger said.
As part of his State of the State address last month, Schwarzenegger called for doubling the home buyer tax credit program to $200 million, which would allow both new home and existing-home buyers to claim a $10,000 tax credit. If the state legislature passes his proposal on May 1, the fund would provide consumers assistance to purchase an estimated 14,775 new homes and 5,700 existing homes. Other parts of Schwarzenegger’s jobs creation package is to expedite construction projects by streamlining regulations.