"Developer Alert" website's creator writes: Developer Billion Dollar Bailout Hidden in Stimulus Bill

Is it fair to dole out tax payer money to the industries that wrecklessly abandoned any common sense or good conscience for astronomical profits and personal gain?

There is plenty of blame to go around for the current financial crisis, but their is also plenty of borrowed bailout money now. Is it fair to dole out tax payer money to the industries that wrecklessly abandoned any common sense or good conscience for astronomical profits and personal gain?

I have been following this since the talk of any bailouts began last summer. I started a website called developeralert.org several years ago to keep tabs on all the insidious clandestine behavior of the building industry. This link is from last summer when the meltdown began... http://www.developeralert.org/indexmeltdown.html

This Politico article back in December outlines the Building Industry's (developer lobbyists) big push to shape this stimulus package. Look at what they were pushing back then: http://www.politico.com/news/stories/1208/16324.html.

"The $200-billion plan would provide home buyers with a credit worth up to $20,000 and would drop mortgage interest rates to as low as 3 and 4 percent next year. The plan is aimed at coaxing scared homebuyers back into the market."

Here is the quote from the New York Times on the tax credit being placed in the bill.

http://www.nytimes.com/2009/02/05/us/politics/05stimulus.html?_r=1&hp

"The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices, which caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in mortgage-backed assets."

Lawmakers gave them what they wanted.

Another KEY but very cloaked big benefit to developers is the ability to write-off losses for 5 years instead of 2. They tried to push this in the Housing stimulus in September but got so much blow back from citizens that they took it out. Now its back, hidden under the guise of helping ALL businesses.

"The legislation also would allow businesses to carry back net operating losses for five years, instead of the current limit of two years. This provision would generate cash through tax refunds for companies that now are losing money but previously were profitable."

So essentially the developers that raked in billions in profits now do not have to absorb their losses...we do. And it is my understanding that they now will get a HUGE check in the mail from the Federal Government for any taxes they paid for the passed 5 years during the boom on their profits.

Hmmm, so the National Association of HomeBuilders aka Developer lobbyists really have the answer to our problems? Didn't they cause the problem in conjunction with the banks? The developers built way too many lackluster tract homes and the banks made money so cheap and easy a homeless person could get a half million dollar loan and now they wonder why and how this happened?

And now they have successfully lobbied congress at a cost to us of over 18 billion dollars plus undisclosed billions in tax breaks (writing off losses for 5 years instead of 2) to puff up and already artificially inflated housing market. The unprecedented $15,000 tax break to home buyers is not for NEW home buyers....its for ANY home buyers. Make no mistake, the homebuilders have plenty of stock that they need to get off the market so they can get what's left of the banks money... fast.

Wasn't this the behavior that started this mess? We made it way too easy to get in to the housing market. Because once you are in its smooth sailing right? So lets solve the problem by seducing even more people to get into homes that they cannot afford. And don't worry because after this 1 trillion dollar stimulus plan there is a plan to rescue people from foreclosures so even if you get into a mortgage you can't afford we will protect you from getting kicked out. What do you mean with what money....with your money that we are going to borrow from you.

Am I the only person that doesn't think this makes any sense?

And really...what does a $15,000 tax break really do? Doesn't it just artificially inflate a market that is still too high. Doesn't it just open the door so people can get into something they cannot afford just like the irresponsible loan practices? The whole point of the free market is that we allow the market to find its own bottom. Wouldn't the 18+billion dollars plus the additional billions in loss write-offs be better spent creating jobs so people could afford the existing market prices?

Make no mistake, this stimulus bill is a bailout for the developers that walked away with billions in profits over the passed few years. And while you and I are broke and just trying to pay our bills they are getting million dollar checks in the mail from us for passed profits.

Is this really the right answer? I encourage everyone to write their senators and tell them to oppose this bill which throws billions of borrowed money into the pockets of the people that created this mess and encourages the same parasitic destructive behavior of the past 5 years. This is not the change Obama promised. http://www.senate.gov/general/contact_information/senators_cfm.cfm

I will leave you with this quote from the National Assn of HomeBuilders website regarding their lobbying power... "Ranked #11 on Forbes’ “Power 25” lobby organizations, NAHB staff works with Capitol Hill leaders to educate Congressmen on the importance of the housing industry. NAHB has the strength in numbers to defeat excessive regulations and defend affordable housing initiatives – saving Builder members time and money."

http://www.sandiegoreader.com/weblogs/ive-got-issues/2009/feb/07/develop...