Legislature considers ways to jump-start home building

Georgia lawmakers are considering tax breaks for home builders, developers and home buyers in an effort to help the housing market recover.

One idea is to not tax, or tax at a reduced rate, vacant houses and lots.

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Under another proposal, a home buyer’s taxable income might be reduced. The amount has not been determined, but lawmakers are looking at a range of $2,500 to $5,000.

A third approach would be to simplify home building regulations and thus reduce builder costs.

The Joint Economic Development Committee, made up of House and Senate members, will be exploring all three approaches. In its first meeting of the new session Thursday, the committee briefly heard testimony from home building and homes sales representatives, and formed subcommittees to study tax breaks and regulation reform.

“We’re in a real mess,” said Rep. Ron Stephens (R-Savannah), the commitee co-chairman.

The committee’s mantra is “recover Georgia first,” the other co-chairman, Sen. Chip Pearson (R-Dawsonville), said.

“Some state has to recover first,” Pearson said. “We want it to be this state.”

Home-sale closings in metro Atlanta were down 44 percent during the third quarter of 2008 and housing starts fell 67 percent, according to Metrostudy, the real estate research company.

The 22 counties Metrostudy tracks also have about 148,000 vacant lots — a 117-month supply. Some housing experts say the market is in a depression.

“Builders are not asking for a bailout. We’re just asking for the ability of people to buy homes,” said Kurt Cannon, president of the Home Builders Association of Georgia.

Cannon said a home builders study showed that 196,000 construction-related jobs were lost from the end of 2006 to October 2008. That translates into $11 billion in lost payroll, and $2.8 billion in lost taxes and fees, he said.

Deron Hicks, lawyer for the home builders association, urged lawmakers to look at reducing impact fees, which are charged to pay for expanded infrastructure and services. Impact fees for road construction should be eliminated, he said.

Hicks said local governments use state regulations as a starting point for adding more regulations, increasing costs and the time spent on projects. The state should require more uniformity, he said.