Another Stimulating Proposition

Yesterday, in a show of bipartisanship, the Senate passed a 10% tax credit (capped at $15,000) for purchasing a home. The bill was presented by Republican Georgia Senator and former real estate agent Johnny Isakson. Sen. Isakson referenced the homebuyer tax credit during the recession of 1974 - then $2,000 - remarking:

“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”

This points out just how integral a housing market is to employment. It's not just construction workers who are pinched by stagnant home sales; designers, real estate agents, material suppliers, home inspectors, title companies, and all involved in the cycle of housing our citizenry take a hit.

And, I know from experience that it is supremely challenging to build an affordable home these days. Add some progressive innovation, let's say a solar electric system, and phantom costs of getting the contractor, and for that matter the architect (including this one) "up to speed" on the technology comes into play.

Fifteen grand would certainly compensate for the gap in the actual cost and market cost in the delivery of affordable housing. The cap at $15,000 is, I believe, a very wise move that supports the creation of reasonably sized and priced homes. A McMansion costing $1.5 million to build would only recognize a 1% savings, while a home costing $150,000 or less would realize the full 10%.

Read a NYT story on the program here.

Christmas Wish List

This week's newspaper column:

Lately, one economic indicator after another suggests that our nation is in the doldrums. Corporations on Wall Street - newcomers to the financial strain - are being bailed out right and left. American car companies are next in line. But Main Street has been feeling the pinch for quite a while with no relief in sight.

Amidst all the gloom and doom, talk has swirled about the need for some kind of stimulus package to right the economic ship. The last stimulus package passed by congress and signed by the president involved sending out tax rebate checks in hopes that people would run out and purchase big screen TVs, thus giving a shot in the arm to our consumer-based economy. Some people did just that. Some socked it away in savings. Many just paid down bills.

But that strategy proved to be unsustainable. Like a New Years’ sparkler that blazes and then dies out, the economic benefits were short-lived and now we’re back in the same fix – only worse. Credit markets have seized up, companies once considered invincible have gone under, and the country has lost almost two million jobs since the beginning of the year.

Recently elected federal officials of all stripes are “feeling your pain,” and chances are there will be some form of economic stimulus package passed into law soon after the new Administration is sworn in. But what form will that stimulus package take?

What would happen if, in lieu of dropping hundred dollar bills out of a helicopter at a football game, we as a society took that money and invested it in building a sustainable future?

Sustainability, by definition, is the act of fostering a built environment that is self-sufficient and self-perpetuating, is healthy and inclusive, and is more responsive to the human condition than it is to market conditions.

We have the technology and know-how right now live sustainably. What we do not have is the infrastructure.

Targeted support for sustainable projects such as solar and wind farms, the development of electric and hydrogen powered cars, and streets with sidewalks and bike lanes would start the process of weaning us from our current fossil-fuel based energy system. And tax credits for energy-efficient building retrofits and the installation of alternative energy systems on homes and commercial buildings would result in a decreased demand for large-scale energy production.

This conversion to a green economy will not be cheap. To paraphrase Everett Dirksen, ‘a hundred billion here, a hundred b billion there, and pretty soon you’re talking real money.’ But look what we’re spending now to prop up the current system.

Investment in sustainable infrastructure will result in the creation of millions of new green-collar American jobs and, in the process, bring about a cleaner, healthier living environment for us all. So the question is not ‘can we afford to go green’ but ‘can we afford not to?’