NATIONAL NEWS
SUPPORT CLEAN WATER AND CLEAR REGULATIONS The proposed new Waters of the United States (WOTUS) rule is an important victory for our members, but we need your help now. We need every builder, affiliate and associate to take action by contacting The Environmental Protection Agency and U.S. Army Corps of Engineers today and tell them NAHB supports this new rule. This revised rule will save time and money for home builders that rely on a predictable permitting process time. It will also protect our nation's waterways. Please send individual comments of support before April 15 and let regulators know that you support the new 2018 proposed definition on Waters of the U.S.
NATIONAL NEWS
Visit nahb.org/wotus for additional information on Waters of the U.S. Questions?
NAFTA PANEL ACCEPTS NAHB AMICUS BRIEF ON SOFTWOOD LUMBER DISPUTE In a positive development regarding the U.S.-Canada softwood lumber trade dispute, the NAFTA Binational Panel on March 25 granted NAHB’s motion to participate as an amicus (friend) in support of Canada’s challenge of the International Trade Commission’s (ITC) countervailing and anti-dumping duties on Canadian lumber imports into the United States.
The combined duties average more than 20% and increase volatility in the lumber market and harm housing affordability. The ITC and domestic lumber producers had filed objections to NAHB’s motion, but the NAFTA panel accepted NAHB’s memorandum supporting Canada’s challenge.
Moreover, with respect to the usefulness of NAHB’s information, the NAFTA panel rejected arguments from the ITC and U.S. lumber firms that counsel to the other parties were perfectly capable of incorporating NAHB’s information and perspective into their own arguments. Specifically, the NAFTA panel stated: “NAHB’s perspective is that of a coalition of purchasers that account for 80% of new home construction in the United States, the primary demand driver in the industry. This perspective is unique from that of the producers with respect to the issue of substitutability, where NAHB focuses its attention, and reflects NAHB’s specialized knowledge of the facts on the record.”
In its amicus brief, NAHB stressed that builders have specific preferences for Douglas Fir and Spruce-Pine-Fir (SPF) over Southern Yellow Pine (SYP) in certain instances, and specifically when framing homes. SYP is not nearly as suitable for wall framing because of its tendency to twist and warp, which causes the drywall to buckle. Moreover, there is not much substitution of species because builders use what works best for them based on specific applications.
In an official statement, NAHB Chairman Greg Ugalde said: “We welcome the opportunity to provide this unique home building perspective to this issue. It is our hope it will serve as an impetus for the United States and Canada to hammer out a long-term solution to this problem that will satisfy all sides — including domestic industries and consumers — that rely on softwood lumber for their economic well-being.”
NATIONAL NEWS
NAHB, REAL ESTATE GROUPS URGE CONGRESS TO OPPOSE CARRIED INTEREST BILL
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Building Buzz | May 2019
NAHB and more than a dozen other real estate industry groups have sent a joint letter to Congress urging lawmakers to reject the Carried Interest Fairness Act (H.R. 1735). “This misguided legislation would result in a huge tax increase on countless Americans who use partnerships in businesses of all types and sizes,” the letter stated. “It would discourage individuals from pursuing their business vision, encourage debt rather than equity financing, tax sweat equity invested in businesses and slow economic growth. These results would be particularly harmful to the nearly 8 million partners in U.S. real estate partnerships.”
H.R. 1735 would require carried interest to be classified as ordinary income rather than a capital gain. A carried (or promoted) interest is a profits interest in a business deal that is larger as a share of the total return than the share of the initial equity investment. Under present law, if the income paid out as the carry is a capital gain, then the carry is taxed at capital gains tax rates (in general, up to 23.8%). The false narrative surrounding the carried interest issue is that it targets only a handful of hedge fund billionaires and Wall Street executives. The carried interest legislation is far broader and would apply to real estate partnerships of all sizes – from two friends owning and leasing a townhome to a large private real estate fund with institutional investors. “Taxing carried interest at ordinary income rates would discourage the risk taking that drives job creation and economic growth,” the letter to lawmakers stated. “In short, H.R. 1735 would make it more expensive to build or improve real estate and infrastructure, including workforce housing, assisted living communities, and industrial properties, to name just a few. We urge you to reject the misnamed Carried Interest Fairness Act.”