Critical Role in Advancing the Build Back Better Plan
Louisiana REALTORS • November 19, 2021
Houses Passes Build Back Better Plan - Spares Real Estate Investment from Taxes
“Our advocacy operation is bipartisan and focused on the issues. Our goal was to ensure this legislation includes robust funding for affordable and fair housing and protects real estate investment from misguided and harmful new taxes,” says Shannon McGahn, chief advocacy officer for NAR.
Tax Provisions Spare Real Estate Investments
The House-passed bill is partially offset with new taxes on high-income individuals and businesses and new money for increased IRS enforcement, but the tax increases most likely to harm real estate investment were excluded.
“Some of the earlier tax proposals floated would have devastated the real estate sector, which makes up nearly one-fifth of the entire economy,” McGahn says. “This revised bill has no 1031 like-kind exchange limits, no capital gains tax increases, no change in step-up in basis, no tax on unrealized capital gains, no increased estate tax, no carried-interest provisions, and no 199A deduction limits.
The plan also includes an increase in the state and local tax deduction limit. The current $10,000 SALT deduction cap would be raised to $80,000 through 2030.
Historic Investment in Affordable Housing
The House-passed bill also includes a $150 billion investment in affordable housing, a key NAR priority and focus of its advocacy efforts for the past year.
In addition, House leaders added back several programs not included in the original framework announcement, including $12 billion to expand the Low-Income Housing Tax Credit and $6 billion for a new initiative, the Neighborhood Homes Investment Act. NAR is a supporter of both programs.
Under the revised bill, public housing and rental assistance get funding boosts. The bill would also create more than 1 million new affordable rental and single-family homes and invest in down payment assistance. The White House says the down payment assistance under the plan would allow “hundreds of thousands of first-generation homebuyers to purchase their first home and build wealth.”
The bill includes funding for the following programs in the housing section:
- $65 billion for formula- and needs-based public housing programs.
- $25 billion for the HOME Investment Partnerships Program to construct and rehabilitate affordable homes for low-income families, and $750 million for a new Housing Investment Fund to leverage private-sector investments to create and preserve affordable homes.
- $24 billion for housing choice vouchers and support services, including for individuals at risk of homelessness and for survivors of domestic violence and sexual assault.
- $10 billion to offer down payment assistance to first-generation home buyers, and $5 billion for a home loan program to subsidize 20-year mortgages for first-generation home buyers.
- $5 billion to address lead paint and other health hazards in housing for low-income families.
- $3.05 billion for the Community Development Block Grant program.
- $3 billion for a new Community Restoration and Revitalization Fund offering competitive grants to local partnerships led by nonprofits for accessible housing and neighborhood revitalization initiatives.
- $2 billion for rural rental housing to support new construction, the removal of safety hazards, and energy efficiency improvements.
- $2 billion for a new grant program to make energy efficiency upgrades to affordable housing.
- $700 million for the Fair Housing Initiatives Program and $100 million for the Fair Housing Assistance Program.
The National Association of REALTORS Plays a Critical Role
As negotiations continued in recent weeks, media reports suggested that housing provisions might be cut from the bill altogether.
In response, NAR CEO Bob Goldberg joined other housing leaders and key members of Congress at the U.S. Capitol Oct. 20 for a press conference calling for the inclusion of affordable housing provisions in the final bill.
”As a nation, we have to find ways to close the supply shortfall,” Goldberg said at the press conference. “Doing so will be particularly meaningful for lower-income households, millennials, and households of color.”
“We continued to press both publicly and privately for these provisions,” McGahn says.
“Affordable housing is the key to unlocking prosperity for millions of Americans currently excluded from the American dream. This investment is critical for closing the racial homeownership gap and addressing income disparity. It opens up homeownership for first-generation and first-time buyers.”
NAR’s latest consumer guide, “10 Tips for Unpacking Smartly After a Move,” was developed to help ease the burden buyers may feel when surrounded by boxes. For your clients on the cusp of a move, the guide suggests establishing a priority unpacking order, wiping down each room before unpacking, discarding boxes quickly, having garbage and donation bags at the ready, and more. Share the new guide along with the companion guide “10 Tips for Packing Smartly for a Move.” As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow up to two weeks for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: 10 Tips For Unpacking Smartly After A Move UPDATED : Multiple Listing Services Overcoming Roadblocks to a Sale or Purchase How Solar Impacts a Real Estate Transaction Navigating Interest Rate Shifts Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Check out the next consumer guide on identifying homebuying wants vs. needs.
Thinking about buying a home? Discover how homeownership can help build wealth, increase financial stability, and create lasting value.
From the Louisiana Department of Insurance: During a press conference today with Governor Jeff Landry, Insurance Commissioner Tim Temple announced that registration for the next round of the Louisiana Fortify Homes Program (LFHP) will open at 8 a.m. on Monday, June 1, and will include 3,000 grants. The registration period for this lottery will be open for three weeks, closing at 5 p.m. on Friday, June 19. During the press conference, Gov. Landry signed HB 1187 by Rep. Paul Sawyer, which will allow Louisiana Citizens Property Insurance Corporation to transfer $50 million in additional Katrina bond assessment funds to the LFHP. Combined with the $30 million in funding the program will receive through taxes and fees on insurance entities, the LFHP will receive a total of $80 million this year. “By lowering overall losses, we can reduce insurance and reinsurance costs, draw more insurers into the market, motivate existing companies to write additional policies and lower insurance premiums,” said Commissioner Temple. “That is exactly what the Louisiana Fortify Homes Program is designed to do.” The list of coastal parishes that are eligible to participate is expanding to include Acadia, Jefferson Davis and Lafayette parishes. Additionally, homeowners who live in the portions of Ascension, Calcasieu, Iberia, Livingston, St. Martin, St. Tammany, Tangipahoa and Vermilion parishes that were previously not included in the program will now be eligible to participate. A map showing the full list of eligible parishes is available on FortifyHomes.La.Gov . “Louisiana is the fastest growing state in the country for Fortified roofs, and that growth is not by accident—it is the result of strong support from Governor Landry and legislators like Chairman Talbot, Chairman Firment and Representative Sawyer, targeted program design, and a clear recognition that strengthening homes is one of the most effective ways to reduce insurance losses,” said Commissioner Temple. “At the end of the day, this program is about more than just roofs. It is about protecting families, it is about strengthening communities, and it is about putting Louisiana in a stronger position—both physically and economically—to face the challenges ahead.” To participate in the lottery, homeowners must register during the June registration period. Homeowners who registered for a previous round but were not selected must register again to participate. People who register on the last day of the registration period have the same chance of being selected as those who register on the first day, so there is no need to rush to register as soon as the period opens. When registering, homeowners will need to upload their homestead exemption, insurance policy declarations page that includes wind coverage, and flood insurance declarations page if the residence is in a flood zone. Homeowners who need assistance obtaining a copy of their homestead exemption should contact their parish tax assessor. Homeowners can contact their homeowners and flood insurance companies or agents for a copy of their policy declarations page. Homeowners are required to create a profile in the LFHP system before registering for the lottery and may do so by visiting the LFHP website and clicking the Login button. Homeowners who previously created a profile may use the same one for this and future rounds. Once the lottery registration period closes, the LFHP will randomly select 3,000 participants and send email notifications to registrants about whether they were selected to participate. These selection notices will be sent via email beginning on Monday, June 22. There are several program requirements that homeowners should be aware of before registering. Those interested in the program are encouraged to review eligibility information and frequently asked questions at FortifyHomes.La.Gov to determine whether their home meets the requirements for the program. If selected to participate in the grant program, homeowners will be financially responsible for having the home evaluated by a FORTIFIED-certified Evaluator as well as costs for the roof upgrade including permits, inspections and construction costs beyond the amount of the grant The LFHP provides grants of up to $10,000 for homeowners to upgrade their roofs to standards set by the Insurance Institute for Business & Home Safety. The program helps Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
