Amidst Unprecedented Housing Demand, Blumenauer Introduces Legislation to Support First-Time Homebuyers
As home sales and prices continue to surge across the country, first-time homebuyers are struggling to break into an unprecedented housing market. Today, U.S. Rep. Earl Blumenauer (D-OR), a senior member of the House Ways and Means Committee, alongside Rep. Jimmy Panetta (D-CA), introduced new legislation to support these buyers with a first-time homebuyer tax credit.
By creating a refundable tax credit of up to $15,000 for the purchase of a home, the First Time Homebuyer Act will incentivize housing stability and generational wealth-building opportunities for low- and middle-income Americans, particularly amongst historically marginalized communities.
“As housing prices and demand continue to rise to historic levels, we need to do more to create opportunities for those who’ve been locked out of homeownership by creating incentives for first-time homebuyers,” Blumenauer said. “This legislation is just one element of the big, bold housing agenda that we are promoting to combat the housing affordability crisis and address centuries of overtly racist and discriminatory housing policies that have left massive wealth, homeownership, and opportunity gaps between white communities and communities of color.”
“The goal of homeownership is out of reach for too many families, as housing prices rise on the Central Coast and throughout California, even in this pandemic. The homeownership gap especially impacts families of color, who for too long have been disproportionally deprived of building wealth through homeownership. Families need help purchasing their first home, so they can fully achieve the American dream,” said Congressman Panetta. “Our First-Time Homebuyer Act, which I am proud to introduce with Congressman Earl Blumenauer, will provide a tax credit of up to $15,000 for the purchase of a first home, to help more families, and especially families of color, reduce the wealth gap.”
In Portland and communities across the United States, many renters are unable to save for the purchase of a new home. Saddled with student loan debt, high rents, and stagnant wages, there is a growing share of low- and middle-income Americans who can’t afford to buy their first home.
The barriers are particularly high for communities who have been denied homeownership opportunities for generations, taking away families’ opportunity to accumulate wealth through homeownership. Homeownership rates among Asian American and Pacific Islander communities are more than 10 percent lower than those for white communities. Homeownership rates for Black and Latinx communities are more than 20 percent lower than those for white communities. While homeownership rates for white, Latinx, and Asian American households have increased modestly in the last 20 years, the homeownership rate for Black American households was nearly identical in 2020 as in 1996.
Blumenauer’s First Time Homebuyer Act will create a refundable tax credit worth up to 10 percent of the purchase price – or $15,000 – for the purchase of a home. Taxpayers may elect to treat the purchase of their home as occurring in the prior taxable year to receive the credit sooner.
Families eligible to take the full credit are those who have not owned or purchased a home within the prior three years before the purchase, have incomes at or below 160 percent of their area median income, and purchase a home at or below 110 percent of their area’s median purchase price.
A $15,000 first-time homebuyer tax credit was a key campaign promise of President Joe Biden.
Such a tax credit has been proven to support first-time buyers. The 2008 Housing and Economic Recovery Act included a temporary first-time homebuyer credit which was claimed by nearly 1.5 million households to assist in their purchase of a home.
“Congressman Earl Blumenauer has always been a champion of affordable housing, and NAHRO deeply appreciates his tireless efforts on this issue, including the introduction of the First Time Homebuyer Act of 2021. The refundable tax credit proposed in the bill would increase homeownership among low- and moderate-income Americans, especially those from marginalized communities with historically low homeownership rates,” said Sunny Shaw, president of the National Association of Housing and Redevelopment Officials. “As part of its larger Diversity, Equity, and Inclusion Policy Framework, NAHRO supports efforts to fund equitable homeownership programs, and the First Time Homebuyer Act of 2021 would build wealth within communities that face systemic exclusions in the housing market. We look forward to the bill’s evolution and progression.”
Full text of the First Time Homebuyer Act introduced today by Blumenauer can be found here.