In an astonishing slap at Congress for what it called inaction in the face of a worsening housing crisis, the National Association of Home Builders has decided to cut off its political contributions to federal candidates.
The move came after lawmakers left several priorities for the ailing industry out of the $168 billion economic stimulus package approved by Congress last week.
In a statement, NAHB President Brian Catalde said the group’s political action committee would “cease all approvals and disbursements … until further notice.”
NAHB has long been one of the country’s most powerful trade associations, and its PAC one of the wealthiest, distributing more than $1 million to federal candidates in 2007.
“This extraordinary action was taken because the NAHB BUILD-PAC Board of Trustees felt that over the past six months Congress and the Administration have not adequately addressed the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward,” Catalde said.
“Housing and related industries account for more than 16 percent of the Gross Domestic Product,” Catalde said. “More needs to be done to jump-start housing and ensure the economy does not fall into a recession.”
NAHB officials declined to elaborate on the decision. In a blast e-mail announcing the move, Joe Stanton, the group’s top lobbyist, said the PAC and its 150-member board of trustees unanimously agreed to it on Tuesday.
One source close to the industry described homebuilders as “just furious” that Congress did not include key incentives for the industry in the stimulus.
“This may seem precipitous, but it’s the actions of a very angry group of people,” the source said. “Nobody does anything because of a PAC check, but homebuilders are significant because they’re in every state and the industry is in immense trouble.”
Housing starts plunged to a 16-year low in December as the persistent slump in the credit market prompted banks to tighten mortgage lending to home buyers and builders to cut back on construction.
Homebuilders welcomed Congress back to work last month by ramping up a lobbying campaign for relief in the stimulus bill.
They pushed for lawmakers to extend the net operating loss carry-back period from two to five years. That would have allowed homebuilders suffering through the subprime mortgage meltdown to balance expected losses against recent profits. The provision was included in the Senate Finance Committee version of the bill but not in the final package.
The group also wanted lawmakers to expand the mortgage revenue bond program, allowing state and local governments to issue tax-free debt to finance mortgages at below-market interest rates. The finance panel proposal expanded the program by $10 billion, but it likewise was left out of the final bill.
Homebuilders also lobbied lawmakers to extend a higher loan limit for mortgage giants Fannie Mae and Freddie Mac, and link the move to a regulatory reform of the institutions that have languished for years. Congress did neither.
They also pushed a pair of tax credits for home buyers and a modernization of the Federal Housing Administration that failed to attract interest on Capitol Hill.
One veteran fundraiser called NAHB’s decision to completely turn off its PAC spigot “unprecedented, as far as I know.”
“I just have not seen it,” the fundraiser said. “I’ve heard it in terms of, ‘We’re not giving to fill-in-the-blank.’ But I don’t remember anyone ever saying, ‘We’re not giving, period.’”
The PAC disbursed a total of $1.29 million in 2007, finishing the year with $1.37 million left in the bank, according to the Federal Election Commission. In his e-mail, Stanton wrote “it currently ranks among the top six trade association PACs in the nation.”
A tally by the Center for Responsive Politics ranks it the 17th-most generous fund overall among corporate, trade association and union PACs. That analysis, which does not include its contributions to leadership PACs or party committees, found that the homebuilders account favored GOPers with 55 percent of its donations last year.
The homebuilders currently are huddled in Orlando, Fla., for the International Builders’ Show, the industry’s largest annual trade show and exhibition.