Op-ed: Christie No Friend of Homebuilders

Daily Record
By Louis D. Greenwald
Jul 27, 2010

The facts are simple.

Home sales in New Jersey fell 23 percent in May and 27 percent in June. Those numbers are even scarier considering those are typically busy times for the real estate market.

Home construction has plummeted.

Our unemployment rate stands at 9.6 percent.

As we saw painfully across our country, our economy relies heavily on the real estate industry. When it's strong, our economy is strong. When it's weak, our economy is weak. It's that simple. New Jersey's economy is no different.

That's why, as New Jersey struggles to emerge from the worst economy since the Great Depression, I introduced legislation to create a New Jersey Homebuyer Tax Credit program. It was a sensible way to revive our economy and put people back to work. It was widely praised and backed by both Democrats and Republicans. It passed the Senate 38-0 and the Assembly 67-8. Everyone agreed it was the shot in the arm New Jersey's economy needed.

Well, almost everyone.

Only one person failed to understand the value of this program, and unfortunately that person was Gov. Chris Christie, who vetoed the bill last week.

This veto showed an alarming lack of understanding of how the tax credit works, and I fear that lack of understanding will put New Jersey's struggling economy in a tailspin.

Consider:

According to the National Association of Realtors, the real estate industry accounts for more than 20 percent of New Jersey's gross state product. And when a home is sold in New Jersey, income generated from real estate related industries and expenditures such as furniture and appliances totals nearly $40,000.

That equals higher revenues for the state, including increased sales and income tax collections that will be more than enough to cover the $33 million per year cost of this 3-year tax credit program. As a matter of fact, the tax credit would create an estimated 18,150 jobs, bringing in more than $500 million in state income tax revenue.

But under this veto, we will most likely continue to see dips in home prices and a continuously slow housing market, problems that will seep into our larger economy.

Under the bill, tax credits would be allowed for up to $15,000 or 5 percent of the home purchase price, whichever is less. The total credits available would be capped at $100 million, with $75 million allocated for purchases of newly constructed homes.

Now, who builds a house?

They don't, after all, come from magic beans or wishing upon a star.

Carpenters, bricklayers, pipefitters, electricians and other construction workers are among those who build homes who are now out of work. Recent figures show New Jersey has lost more than three times as many construction jobs as the rest of the nation.

This bill could have been put them back to work. This veto ensures more of them will hit the unemployment line.

But it's not just construction workers.

When people buy homes, they typically go shopping. They need furniture, decor, flooring and appliances. This helps retailers keep and create jobs, while generating tax revenues to keep our economy humming. Stats show 70 percent of our economy is consumer driven, and housing sales and the accompanying spending are a key driver of that spending.

This bill could have encouraged more such spending. This veto ensures less of it.

Christie often notes how he's a fan of Bruce Springsteen.

When New Jerseyans question why Christie would veto bills such as this tax credit, or legislation to protect women's health care, provide health insurance for working families or give property tax relief to senior citizens, they can find an answer in one very particular Springsteen lyric that simply says, "Well sir I guess there's just a meanness in this world."

Louis D. Greenwald, a Democrat from Voorhees, represents the 6th District in the New Jersey Assembly.