With the two-year extension of all of the 2001 and 2003 Bush-era tax cuts as its centerpiece, this week Congress approved a major tax-cut package negotiated by President Obama and top Senate Republicans that is designed to provide tax relief for all working Americans and spur job growth.

H.R. 4853 — The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 — cleared the Senate by an overwhelmingly 81-to-19 margin on Dec. 15 and was approved by the House a day later by a vote of 277 to 148.  President Obama signed the bill into law on Dec. 17.

Though imperfect, NAHB supported the legislation because it will provide a measure of stability for American working families and home builders.

The tax package — estimated to cost $858 billion over 10 years — includes several positive provisions for NAHB members. It will:

• Extend the 10%, 15%, 25%, 28%, 33% and 35% federal income tax rates through 2012. Had no action been taken, all of the marginal tax rates would have risen in January, with the top rate jumping to 39.6%
  
• Renew the expired estate taxes for two years at a rate of 35%. Adjusted for inflation, the first $5 million of an individual’s estate would be passed on to heirs tax-free and couples could exempt $10 million of their estate’s value.— While NAHB would have preferred to see the estate tax eliminated, this was the best proposal available. House Democrats failed in an attempt to lower the estate tax exemption to $3.5 million and impose a stiffer tax rate of 45% above that level. Except for the temporary repeal of the estate tax this year, the rate has not been less than 45% since 1931. Without congressional action, the estate tax would have returned in 2011 with a top rate of 55% for estates larger than $1 million for individuals and $2 million for couples.
  
• Provide an estimated 21 million middle-class households and small businesses relief from the Alternative Minimum Tax (AMT) through 2011. In 2010, individuals can exempt $47,470 ($72,450 for couples filing jointly) in income from the AMT. Those exemption amounts will increase to $48,450 and $74,450, respectively, in 2011.
  
• Maintain the current long-term tax rate on dividends and capital gains through 2012. Had no action been taken, the highest capital gains rate of 15% was expected to rise to 20% next year and dividend payments could have been taxed at a rate as high as 39.6% for top earners.
  
• Renew the New Energy Efficient Home Tax Credit (45L credit) for 2010 and extend it through the end of 2011. The section 45L tax credit is the only federal incentive available for efficiency in new home construction; about 10% of all new homes sold in 2009 qualified. The program provides $2,000 tax credits to builders and developers for the construction and sale of homes that achieve a 50% reduction in their energy consumption.
  
• Allow businesses to write off the full cost of capital investments (excluding residential and commercial buildings) after Sept. 8, 2010 and through the end of 2011. Normally, businesses would be required to depreciate those expenses over many years.
  
• Provide a 50% bonus depreciation in 2012. Under the American Recovery and Reinvestment Act of 2009, Congress temporarily allowed businesses to recover the costs of certain capital expenditures made in 2008 and 2009 more quickly than under ordinary depreciation schedules by permitting those businesses to immediately write off 50% of the cost of certain depreciable property (rental residential real estate, in general, is excluded) placed in service in those years. The new law extends the provision for 50% bonus depreciation through 2012.
  
• Extend the increased small business expensing limits through the end of 2012. Under the legislation, qualified businesses may expense up to $125,000 of property placed in service, and this amount is reduced dollar for dollar by the amount of property placed in service that exceeds $500,000.
  
• Extend the expensing of brownfields remediation costs through 2011.
  
• Eliminate the Pease itemized deduction phase-out through 2012. The Pease rule reduces the value of itemized deductions such as the mortgage interest deduction and the real estate tax deduction for upper adjusted gross income taxpayers.
  
•  Extend the tax deductions in the Gulf Opportunity Zone for an additional two years beyond the placed-in-service date.
  
• Extend the deductibility of Private Mortgage Insurance through 2011; however the existing adjusted gross income limitation of $110,000 remains.

The package would also:

• Extend unemployment benefits for an additional 13 months.
• Provide a temporary, one-year payroll tax holiday of 2% for all workers by cutting Social Security taxes from 6.2% to 4.2% on the first $106,800 of wages. This tax cut applies only to employees, not employers.
• Extend the college tuition and child care tax credits for two years.
• Extend an option allowing taxpayers to deduct state and local general sales taxes in lieu of state and local income taxes for those who itemize their deductions.
• Provide a marriage penalty relief extension through 2012. The bill ensures that the standard deduction for couples is exactly twice the amount for single filers.

Low Income Housing Tax Credit

Despite an intensive push by NAHB lobbyists, the tax cut package omitted a key provision championed by the association. It failed to include an extension of the Section 1602 “exchange” provision for the Low Income Housing Tax Credit (LIHTC) program that would allow state housing finance agencies to trade in a portion of their tax credit allocation for grant dollars to support local affordable housing.

In the days leading up to the vote, NAHB was in constant contact with lawmakers from both sides of the political aisle and sent a letter to the House and Senate leadership expressing strong disappointment “that a critical program for the Low Income Housing Tax Credit, the 1602 exchange, was excluded from the bill.” The letter called on Congress to restore this “job creating provision to H.R. 4853.” 

Smaller Tax Incentive for Energy Retrofits

At the same time, NAHB was calling on lawmakers to reverse last-minute changes to the Existing Home Retrofit Tax Credit (25C credit) that will greatly diminish its value.

Although H.R. 4853 does include an extension of the 25C credit through 2011, modifications were made reducing the credit value to its 2006-2007 levels of 10% of the installed costs with maximum credit for all qualified retrofits of $500. The legislation also reinstates lifetime credit caps that disqualify any home owner who has claimed more than $500 in 25C tax credits since Jan. 1, 2005, from any further credits. As a result, this offers little practical incentives for home owners or remodelers.

In its letter to lawmakers, NAHB said that the reduced benefits of the 25C tax credit for consumers who undertake certain energy efficient upgrades would “place thousands of remodeling jobs at risk” and urged lawmakers to adjust the 25C credit to its 2009-2010 levels, which allow taxpayers to claim up to $1,500 for installing eligible energy-saving retrofits in their homes. 

In the end, lawmakers acted to keep the plan agreed upon by the White House and Republicans virtually unchanged, because any moves to alter the package would have risked unraveling the tenuous deal altogether.

In the waning days of the lame duck session, NAHB continues to meet with lawmakers and explore other options for extending the LIHTC exchange and restoring the 25C tax credit to its previous levels and rules under the American Recovery and Reinvestment Act. However, as Congress looks to wrap up its work, there are likely few, if any, opportunities available to move these housing priorities forward. If not, NAHB remains committed to addressing these issues when the 112^th Congress convenes in January.

For more information on the tax package, see NAHB’s Eye on Housing blog.

To read the legislation, click here and enter H.R. 4853 in the box at the upper center of the page.

For more information, e-mail J.P. Delmore at NAHB, or call him at 800-368-5242 x8412.

The Federal Housing Administration announced on Dec. 8 that it was extending the recertification expiration dates for condominium projects that previously had received agency approval. Recertification is needed to allow homes in those buildings to be sold or refinanced with FHA financing.

The FHA in November of 2009 toughened rule standards for condominium approvals and required projects that were approved before October 2008 to submit new information by Dec. 7, 2010, or lose eligibility for FHA financing.

However, the extensions of current expiration dates are only until Dec. 31 for buildings initially approved between 1972 and 1985. Other projects — depending upon when they were initially approved — are set to expire next year as early as March 31 and as late as Sept. 30.

The 2011 International Builders Show is giving away huge deals and discoutns to make IBS even more beneficial to you! Come to IBS this year and bring back the resources, products and the latest updates and sessions info from the Show.

2011 IBS Multifamily Highlights:

The Economic Forecast and State of the Industry for Apartments and Condos on Thursday, Jan. 13 is one multifamily session you don’t want to miss. Join NAHB Chief Economist, David Crowe, and leading multifamily developers as they share their perspectives on the current state of the multifamily industry, and offer their expert opinions on what lies ahead.

The Capital Markets: Financing Outlook for Apartments and Condos, will give you an update on which capital providers are active in today’s market, their terms, the most attractive deals, and locations of interest. Industry experts will discussion a variety of strategies to achieve financing for your next multifamily project.

Maximizing Opportunities – The Acquisition of Existing Multifamily Properties
Many of the nation's leading developers have begun to dedicate more and more resources to acquiring existing apartment and condo communities in order to grow their portfolio. Find out how to analyze such opportunities that may emerge during a dislocated market.

New to the multifamily line-up is the Low Income Housing Tax Credit Roundtable. This event held in Apartment & Condo Central, is your chance to learn from industry experts about what types of housing are most successful in the affordable housing program. You will hear expert advice on planning new construction or rehabilitating an existing building, and the importance of finding the right management team.

Other Multifamily IBS Sessions to Consider:

What Apartment Renters and Condo Buyers Want – Marketing Strategies to Increase
Occupancy and Drive SalesWhat are today's multifamily renters and condo buyers looking for?  Find out what features your target buyers really want and how to make your community their final choice for housing. For those selling condos, you will receive a 12-point program that specifies what works and doesn't work in today's marketplace for launches and relaunches and tips to accelerate your sales program.

Gen Y and Multifamily Housing – A Perfect Fit.
The apartment industry has long anticipated the arrival of Generation Y, or Millennials, an image-conscious, tech-savvy demographic group that has entered the prime renter age. In this session, find out everything you need to know about Gen Y, including their preferences in design and amenities, and the best marketing channels to reach them.

Online registration still open..

Online registration to the 2011 NAHB International Builders' Show in Orlando next month is available through Sunday, Jan. 9. Onsite registration begins Jan. 10.

View the Multifamily Education Guide below.

--------------------------------------------------------------------------------------------------------------------------------------------------------
NAHB Finance Pavillion Provides a Direct Connection to Multifamily Lenders



Multifamily builders and developers looking for credit for residential construction projects will find a broad array of lenders at the NAHB Finance Pavilion during  IBS.

This special opportunity is open only to members who purchase the $50 Pavilion upgrade to their full IBS registration. Builders and developers can make arrangements in advance on the NAHB website at www.nahb.org/FinanceForum. Those planning to participate can put in basic information about their company and specific project funding needs. Financial institutions are completing a similar form.

Those who cannot attend IBS can still take advantage of the NAHB Finance Forum website. Like the Finance Pavilion, the NAHB Finance Forum seeks to connect builders and developers with sources of funding for new or existing projects. There is no cost for NAHB members to use the online Finance Forum.

--------------------------------------------------------------------------------------------------------------------------------------------------------

This year the NAHB International Builders’ Show is offering a new benefit for attendees: daily IBS Power Deals, exclusive offers from IBS exhibitors for steeply discounted services and products.

All IBS registrants will receive a daily e-mail with the Power Deal offer. Each deal is available for 24 hours and only to registered IBS attendees. Attendees can sign up for the offer; they receive a confirmation e-mail with the details and then visit the exhibitor's booth during the show to redeem it.

Each deal will begin at noon on the day it is sent out, and will end at 11:59 a.m. the following day. 

Visit www.buildersshow.com/powerdeal.

A combination of business strategy, philanthropy and unwavering commitment to each multifamily development earned the Michaels Development Company top honors as Multifamily Development Firm of the Year. The award was presented by the National Association of Homebuilders (NAHB) as part of the association's Multifamily Pillars of the Industry Awards last week.

“The achievements of Michaels Development are impressive,” said Charles R. Brindell, Jr., Chair of NAHB’s Multifamily Leadership Board and CEO of Mill Creek Residential Trust LLC. “That’s especially noteworthy given this difficult economic climate. This company’s success reflects the firm’s first-rate management, as well as its unwavering commitment to delivering quality, affordable housing.”   

The Development Firm of the Year Award honors excellence in multifamily housing development, financial performance, innovative development strategies and practices, and successful achievement of the company's vision and goals.

Michaels Development Company, a New Jersey-based firm, is ranked the most active and wide-ranging affordable housing developer in the nation, with 54 projects in development and a pipeline of 11,000 units. The firm's portfolio consists of 260 properties — approximately 33,000 units — in 27 states.

Since its founding, the company has raised more than $240 million in tax credit equity, and introduced market-rate-quality housing to low-income families across the country. With a focus on building self-sustaining communities, Michaels' projects include revitalized historic sites and transit-oriented, affordable apartment communities. Among the firm's many accomplishments was being the first affordable-housing developer to rebuild and reopen all of its housing sites in post-Katrina New Orleans in the Lower Ninth Ward.

Over the years, the firm completed 19 HOPE VI properties, playing a vital role in the effort to revitalize distressed public housing communities. It also is an industry leader in the privatization of sustainable and affordable military housing.

As a testament to Michaels' dedication to enhancing the quality of life of residents, Michaels Development Company offers educational scholarships to those who live in housing managed or owned by the company. All residents may apply, and the scholarships can be used towards higher education at any accredited college, university or vocational program in the country. To date, Michaels has awarded $2.4 million in grants, benefiting more than 1,100 students.

"We are gratified every day that we are able to give back to society by providing homes to thousands of people who would not otherwise have adequate housing, and we appreciate the industry's recognition of this important work by bestowing this prestigious award on our organization," said Michael Levitt, chairman and CEO of the Michaels Organization, who founded Michaels Development Company in 1973.

NAHB Multifamily's 2010 Pillars Awards recognized winners for excellence and superior leadership in 21 categories, including Property Management Company of the Year, won by Freeman Webb Inc., Nashville, Tenn.; and Community of the Year, won by The Heights at Park Lane, Dallas, developed by the PM Realty Group.

To see the virtual awards ceremony, complete with pictures and commentary, visit www.nahb.org/pillarsawards. For the full list of the winners, view this link.

.

The American Institutes of Architects (AIA) recently published their Design Trends Survey for the third quarter of 2010, concentrating on emerging  neighborhood and community design trends. The study showed that infill housing is a popular alternative to larger communities. This backs up many of the industries findings on multifamily housing and its ability to sustain itself during the economic downturn. Residents want to be within walking distance to shopping, work, transportation and recreation, which many multifamily communities already provide.

View the full survey results here.

Make a difference in a young person’s life by becoming a mentor for the Home Builders Institute’s (HBI) Construction-Coaching Opportunities to Reach Employment program (C-CORE).

C-CORE is looking for members of the construction industry to volunteer as mentors for 16 to 18 year-olds to help these young people as they transition to maturity, growth, advanced education and employment. The C-CORE program currently is in the southeastern and southwestern United States in the states of California, Nevada, Arizona, New Mexico, Colorado, Texas, Louisiana, Mississippi, Florida, South Carolina and Georgia.

About 17.6 million youth live in situations that diminish their ability to reach their full potential. Research has found that youth with mentors are 52% less likely to skip school, 46% less likely to start using drugs, and 27% less likely to start drinking.

Each mentor is matched with a group of three youth to spend as little as two hours a week helping and advising them in a supportive team environment with other HBI C-CORE mentors and members. HBI C-CORE provides volunteer mentors with training that explains their roles and responsibilities, gives them insight into how to build their mentoring relationships, and builds their skills in effective communication and problem-solving. Continued advice and resources are available after the initial training. Because building a trusting relationship between a mentor and a young person takes time, HBI asks that mentors commit a minimum of one year to the C-CORE program.

To learn more about the HBI C-CORE mentoring program, e-mail mentoring@hbi.org or call 863-557-5054. View more information on the program below. 

HBI C-CORE Fact Sheet

HBI C-Core Press Release

HBI C-Core Mentor Brochure

HBI C-Core Members Brochure

In conjunction with the NAHB Research Center, NAHB is seeking affiliated state and local home builders associations to host an in-person training program on fall protection in the residential construction industry. The training is funded through a grant provided by the Occupational Safety and Health Administration’s Susan Harwood Training Grant Program.

Aimed at small- to medium-sized builders, remodelers, trade contractors, supervisors and workers, the four-and-a-half hour seminar focuses on identifying fall hazards in residential construction, as well as providing student attendees with an understanding of the OSHA fall protection regulations and safe work practices to prevent fall-related injuries and deaths.

The seminar will teach participants how to:

• Recognize the most common fall hazards on residential job sites,
• Use safe work practices to reduce the risk of injuries,
• Comply with OSHA fall protection regulations that apply to the home building industry.
  

Each participant will receive:

NAHB-OSHA Fall Protection Handbook 
NAHB Fall Protection Video
NAHB-OSHA Scaffold Safety Handbook
NAHB Scaffold Safety Video
Other valuable safety and health materials

The training will begin in January and will be held at sites across the country. Local and state HBAs that are interested in hosting a fall protection training seminar can find out more about the guidelines for hosting, as well as more information on the program at www.nahb.org/fallprotectiontraining.

For more information, e-mail Tonia Green at NAHB, or call her at 800-368-5242 x8163; or contact Marcus Odorizzi, x8590.

JANUARY

MAY