UPDATE 2-Bill would triple Calif. new-home tax credit funds
* Lobbyists pushing to triple CA home buyer tax credit
* Extension would maintain new-construction restriction (Rewrites first paragraph, adds analyst and executive quotes, background)
NEW YORK, May 13 (Reuters) - The amount of money available to fund California's $10,000 tax credit on new-home purchases would triple under legislation announced on Wednesday, but the bill's backers might struggle to get it passed.
The bill would increase to $300 million from $100 million money designated for the credit, which applies to newly constructed and previously unoccupied homes. The California Building Industry Association, a trade group that backs the legislation, said the original funding would otherwise run out by early summer.
"At the end of the day this bill is not just good for homebuilders, it's good for workers and it's good for home buyers. It's good for everyone. It's good policy," said Jose Solorio, a Democrat of Santa Ana and one of the bill's co-sponsors in the State Assembly.
The bill's backers tout its efficacy as a general economic stimulus, claiming that every $10,000 tax credit generates $16,000 of tax revenue.
The U.S. homebuilding industry has been struggling amid a nationwide slump rooted in the rampant risky mortgage practices of the housing boom and exacerbated by the recession and rising unemployment.
More recently, however, both homebuilding company executives and the industry's monthly and quarterly data have sounded a more positive note, describing thicker buyer traffic and moderating declines in sales that inspired a rally in homebuilder shares of 39 percent since early March's recent low as measured by the Dow Jones U.S. Home Construction Index .DJUSHB.
Several national builders have attributed some of the revival in the marketplace to a national mosaic of federal and state-level home buyer tax incentives, but they have singled out California's credit, the biggest and most precisely targeted to support new-home construction, for special appreciation.
Only first-time home buyers making less than $75,000 per person or $150,000 per couple can take advantage of a $8,000 federal tax credit included in the stimulus bill, for example, but the California credit is available on a first-come, first-served basis to any buyer of a new home.
Beazer Homes USA Inc (BZH.N) saw traffic increase 30 percent in California from February after the credit became available in March, the Atlanta-based builder told analysts during a recent conference call.
Standard Pacific Corp (SPF.N), which with 34.5 percent of its communities in California is the big builder most concentrated in the state, also pointed to the credit's salutary effect on its business during its most recent call.
"It's working," said Chief Executive Ken Campbell. "That's the good news. The bad news it has a funding limit."
GOOD POLICY?
Not everyone agrees with Solorio's glowing characterization of his bill, however. Continued...
