When the last issue of Modular Housing News was written, there seemed to be no relief in sight. Home sales are sluggish, new housing starts continue to decline, and commodity prices continue to put pressure on not just the housing market, but are a drag on overall economic conditions. Whether or not you think the threat of recession is perceived or real, if you are in the modular housing business you no doubt are feeling some negative effects of a slowdown.

Luckily, however, we do have a couple of reasons to be optimistic as modular builders.

The first reason is H.R. 3221, the Housing and Economic Recovery Act of 2008 (the Act), which President Bush signed into law earlier this year. While some of the effects won’t take effect for several months, the Act will certainly provide some relief to our industry and provide the entire marketplace an economic boost. The Act contains two tax provisions that are notable.

The first provision is a first-time homebuyer incentive that provides homebuyers with an interest-free loan of ten percent of the home’s purchase price up to $7500. The homebuyer will be required to repay the loan to the federal government over a 15 year period in equal installments. The credit is phased out for taxpayers with adjusted gross incomes above $75,000 ($150,000 for joint filers). This tax credit is available for first-time homebuyers purchasing a principle residence and runs through June 2009.

The second tax provision provides a standard deduction for real property taxes to assist homeowners who do not itemize their income tax returns. These homeowners may claim an additional standard deduction of up to $500 ($1,000 for joint filers) regarding state and local real property taxes. This provision applies to the 2008 tax year only.

The second reason we have to be optimistic looking ahead is that despite the current challenges, we all know the market will pick up again, and I am confident the modular industry is going to be well positioned to engage more builders and developers when that time comes, especially in regards to Green Building. The green building movement is continuing to pick-up interest in the face of continued rising energy costs. The NMHC, along with MHI and MHRA, is aggressively pursuing the development of a Green Building Certification program, based on the NAHB/IRC Green Building Standard, specifically for factory home builders. While we all know building a home the modular way makes environmental sense, the Green Building program will provide us with an excellent platform from which to market our homes to both consumers and builders. The Green Building Consortium is making excellent progress, and if you are a member and not yet engaged in this project, I encourage you to do so.

The NMHC has done a lot to help improve the industry, both legislatively and from a market development perspective. With this in mind, it is a crucial time and all industry members should be involved with the association. The increased pressure on homebuilder to remain competitive in the marketplace has never been greater and the modular housing industry needs to continue to satisfy consumers as well as make modular homes as the desired home of choice. The NMHC can help achieve this and more.

I welcome your thoughts and comments. I can be reached at rlyons@pennlyon.com

Roger Lyons
Chairman, National Modular Housing Council