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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (8820)	2/11/2003 7:23:53 AM
From: nextrade!	Read Replies (2) \| Respond to of 306849

Dividend Plan Called Threat to Affordable Housing By Sandra Fleishman Washington Post Staff Writer Tuesday, February 11, 2003; Page A04 washingtonpost.com A new coalition of nine national housing lobbies expressed concern yesterday that the Bush administration's proposal to eliminate taxation of stock dividends would undermine the country's most successful program producing and rehabilitating affordable housing. The low-income housing tax credit gives investors a dollar-for-dollar reduction in taxes in return for investing in such housing. The dividend exemption could make all tax credits less attractive to investors and could move investment from tax-exempt government bonds to dividend-paying stocks, said some members of the group, which includes the National Association of Home Builders, the National Association of Realtors, the Mortgage Bankers Association of America, Fannie Mae and Freddie Mac. F. Barton Harvey, chairman and chief executive of the Enterprise Foundation, a major financer of affordable rental and for-sale housing, went further. The dividend exclusion could "unintentionally wipe out the most important rental housing production program in the country today," Harvey said. The National Low Income Housing Coalition and Democrats such as Sen. Edward M. Kennedy (Mass.) and Rep. Charles B. Rangel (N.Y.) have already criticized the dividend proposal. The nine groups came together yesterday to press for a new federal strategy on affordable housing. While reaffirming support for existing programs, the groups offered two new initiatives -- a homeownership tax credit similar to what President Bush has proposed for three years but never submitted a bill for, and a new national rental-housing production program. The groups indicated that they hope to work with the administration to protect the tax credit. A possible solution, said Harvey, would be to grandfather in congressionally mandated tax credits. "That wouldn't weaken the president's proposal, and there would be no double-dipping" by investors, he said. The Bush proposal links the amount of dividends that shareholders could receive tax-free directly to how much tax the corporation has paid. Any new programs seem to have little chance in the face of projected soaring budget deficits and domestic belt-tightening. But coalition members emphasized how the housing sector has almost single-handedly kept the economy alive and how building and rehabilitating affordable housing would help distressed communities and generate jobs, taxes and revenue. The group also stressed how the affordable housing problem is escalating not only for the poor but also for moderate-income households.