Governor Talks up $10,000 Homebuyer Tax Credit in Bakersfield – Tuesday, February 16th 2010

Governor Schwarzenegger’s Tuesday speech in Bakersfield, CA focuses on his proposed $10,000 Homebuyer Tax Credit

Well, he’s hitting the road again with some pretty hard hitting talk about making the $10,000 homebuyer tax credit a reality for potentially 20,000 California home buyers.

Following is the video posted on the Governor’s website as well as all of the important excerpts regarding the credit from his speech….if you’re a “cliff notes” person like me 🙂

Governor makes his case that the tax credit will create jobs

So everyone got hit with this and this is why last year the legislature, Democrats and Republicans, came together when we did our budget and there was a huge problem that we had there, which was a $60 billion deficit. But part of that, to solve that problem, we also created and extended a homebuyer tax credit. And that homebuyer tax credit really was very helpful, because it immediately started creating some action amongst the home sales. As a matter of fact, the traffic going through the Towery Homes increased by 500 percent and people were buying homes again and 44 percent of those that bought homes from Towery used that tax credit. So as you could see, that we saw the action immediately and people got back to work, unemployed Californians got jobs again. But then, of course, it ran out and then you saw the drops again in the sales.

But it’s very important to recognize that when we do a stimulus, like that for home sales, that that has a chain reaction, a domino reaction. Homebuilders began pulling permits again and the subcontractors began again to hire people. As a matter of fact, the framers, the roofers, the carpenters, the plumbers, the electricians, the people that pour cement, the steelworkers, everyone got a job right away again.

So this is why it is so important to do that and this is why we are once again offering this tax credit and to do an extension. My proposal is to extend the tax credit of up to $10,000 for the purchase of new and existing homes. We will offer a total of $200 million. The first package was $100 million; that ran out very quickly. The second package is $200 million. We want to get people off the fence, we want to get them into the sales office. We want them to buy a home and be part of the American Dream and be part also of the whole job creation movement.

Senator Roy Ashburn chimes in with his support

And so Governor Schwarzenegger has set a high mark, has set the tone, for creating jobs in our state and the home purchasers tax credit is a very important element. When we enacted the tax credit last February more than double the tax revenue was generated than the tax credits offered. Just think about all of the jobs that are created by the craftspeople who do the concrete work and the framing and the roofing.

But more than that, when the families, real Californians, move into these homes, they purchase furnishings and they purchase wall coverings and they purchase all those elements that turn a house into a home and all of that activity creates more jobs for more Californians.

So it is all about the economy of our state and the job creation and that’s why I’m very pleased that the Governor has allowed me to carry the tax credit that he is proposing this year, $200 million, a $10,000 tax credit to real Californians who purchase a home, connecting real Californians with home ownership and a stake in the California economy.

Now, we introduced this as an urgency measure, under the emergency session and yet no action in Sacramento. So my message here today is, legislators in the Assembly, in the Senate, let’s get busy. Let’s not just talk about jobs for Californians, let’s do it. And we can begin right now by passing that homebuyers tax credit.

John Young, chairman of the California Building Industry Association reflects on the last credit

Thank you, Senator. You know, many things have been said and the jobs are number one. In our industry we’ve lost approximately 90 percent of our workforce in the last three years, so the creation of this homebuyers credit is essential. In 2009 my company used this; our traffic doubled and our sales doubled. And we sell to a lot of homebuyers that are first-time homebuyers, so the young families were able to buy their first home. And think about how important that is, that they will not have to go out of state to buy their first home, that they can buy a home because of this tax credit, affordable home prices and also affordable interest rates.

So we implore, at CBIA — which stands for California Building Industry Association — to have our lawmakers enact this homebuyer’s tax credit as soon as possible. It’s that important. We, in our industry, want more jobs, we want to hire our trades. When we build a home we hire about 30 types of different trade contractors. Think about that, how many people are employed by building a home. And not only that, the jobs don’t go overseas, they don’t go to another state — they’re right here, because the real estate is here. They have to build a home, it’s in California and it creates such an economic advantage to our local markets.

Questions from reporters about the tax credit

QUESTION: The expansion would also go to existing homes, whereas in the past it was new homes. Is that going to help us with our foreclosure problem? We’ve got so much in our inventories —

GOVERNOR: Well, this is not specifically about foreclosure. What this is about is that people can go and afford homes and people go and get inspired again to go and start looking at home sales and start getting interested in it and, you know, to basically stimulate and get going again. Because like I said, it has a domino effect, the whole thing, which is that as soon as people start ordering homes, or getting interested in homes, we build more homes. And when we build more homes we put all of those people to work. And then when they have jobs — as you know, jobs is not just about having a job. Having a job is about, you know, being able to make a living and to provide for your family and to provide for your kids and to feel like that you’re wanted and needed and you feel productive and so on. So having a job is much more than just having a job. And also, you can afford then to go out and to buy things, which is again something that stimulates the economy.

There was much more where this came from, and you can read the entire speech at the Governors site, but basically this was a tax credit love fest that seemed to breath new life into the public attention that Schwarzenegger
is trying to bring to this Job Stimulus initiative.

We’ll keep ya posted if we hear more on the subject….for now, I’m more optimistic that this thing will survive deficit scrutiny arguments and may actually get some legs under it.

We just have to wait and see.

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