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Housing: An Economic and Political Force

October 9, 1995

NEW YORK (AP) _ If you must find one area of agreement among disputatious Americans, count on housing. More housing, better housing, more affordable housing _ housing for the poor, minorities, newlyweds, singles ...

To millions of Americans, houses are more churches than castles, places of worship and deliverance into the good life, and God help the flat-taxers and others who tamper with owner prerogatives such as the tax deductions.

What’s the point of all this? To demonstrate the potential and actual political power of housing’s advocates.

Ever alert, the housing people are eager to offer surveys showing homeowners are voters more often than not, and that they support their schools, are civic volunteers and that generally they stay out of jail.

Occasionally someone complains that homeowners are treated too tenderly _ that, for example, too much of the nation’s resources are tied up in housing and that the money might better be spent elsewhere _ but they get nowhere.

Housing is sacred, and it probably has something to do with the fact that the nation is one of immigrants surprised to find they could buy a house with little down, thereby getting a foot on the first rung of the economy.

Edifying and admirable, to be sure, but there are more material reasons for all the interest in housing _ for the never-ending reports on new permits, starts, mortgage rates, prices. It’s money. Housing keeps it moving.

And how! _ as the National Association of Home Builders is happy to relate, to wit:

The building 1,000 single-family homes generates 1,759 worker-years of employment in construction and construction-related industries; $45.7 million in wages, and $18.8 million in federal-state-local tax revenues.

It really adds up. For example, from 1987 to 1991, 6.69 million new houses and apartment units were built, creating 2.03 million average annual worker-years of jobs, and generating $53 billion in wages each year.

Oh how the money spreads. Each 1,700-square-foot single-family house requires 9,726 board-feet of lumber, 4,614 square feet of sheathing, 243 square feet of plywood, 55 gallons of paint, 302 pounds of nails ...

All this gives you some idea of why housing is a formidable factor in the economy, and why those who live by it are a powerful force in politics. You must concede that housing’s defenders know their stuff.

They can tell you, for example, that a new homeowner in the first 12 months after buying will spend an average of $6,500 to furnish, decorate or improve the surroundings, thus contributing to local and national economies.

They can cite Bureau of Labor Statistics for their contention that new homebuyers spend about 11 percent more of their income during the 12 months following purchase than homeowners who have not moved.

They can name retailers and trades people who benefit: landscaper, deck maker, decorator, and furniture outlet, TV shop, appliance store, and the local garage, since car expenses rise for a few weeks after homebuying.

So what’s the point? This: that tax reformers and budget cutters have a huge obstacle in any attempts to cut the income tax deductibility of home mortgage interest. Real and estate and building groups will lead the defense.

The point isn’t whether the deduction is economically justified or fair or unfair to nonowners. It is to demonstrate the challenge tax reformers confront in seeking what voters seem to demand, which is a tax reformation.

End Adv AMs Wednesday, Oct. 11

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