The numbers we’ve seen recently reveal a small-business-dominated construction sector flat on its back. New housing starts for fourth quarter 2008 were down to just 550,000 units (on an annual basis) in December, just one-quarter of the 2005 level . And in January, housing starts sank to the lowest level since these numbers began to be tracked in 1959.
The stimulus package debate has itself stimulated innovative ideas to restore economic growth. One such idea was recently introduced by Edward Mazria, architect and executive director of 2030, Inc. His idea would stimulate the economy, provide affordable housing, advance energy independence, and create construction jobs. Mazria described it at a Feb. 18 panel at the National Building Museum in Washington, DC, called “For the Greener Good.” The plan would give those seeking to purchase a home or refinance their mortgage the choice of various lower levels of interest based on the level of reduced energy consumption they built into their home.
Mazria offered an example of how the plan would work:
“A homeowner with a current $272,300 mortgage with equity of $12,000, would have a mortgage balance of $260,300. At an interest rate of 6%, the current monthly mortgage payment would be $1,633. If this homeowner wants to qualify for the 2.5% interest rate, they will need to renovate their home to use 75% less energy than that required by code, immediately creating jobs and putting construction teams back to work. The cost of renovation would be approximately $51,250, which includes a solar system. The solar system would qualify for a $7000 tax credit. The cost of the renovation, minus the tax credit, would be added to the mortgage balance, so that the new mortgage is now $304,550. However, because of the significantly lower interest rate, i.e., 2.5%, the new mortgage payment is just $1203, a savings of $430 per month. With the additional monthly savings on energy bills of approximately $145, this homeowner would save a total of $575 per month.”
Where can I sign up?
Mazria believes that the federal cost of the plan over a two-year period would be repaid through the increase in the tax base resulting from 9 million jobs being created as a result of the new construction and renovation, as well as from the increased economic activity. Mazria calls his plan “The Two-Year, Nine-Million-Jobs Investment” or “The 2030 Challenge Stimulus Plan.” You can read more about it on his website.
—Kathryn Tobias