Bennett: Turn The Housing Market Around

If we want to maintain Idaho's timber industry, we need to fix the housing market in this country

Email this story to a friend

Description

Bennett: Turn The Housing Market Around

Brett Bennett is the vice-president of family-owned Bennett Lumber Products in Princeton, Idaho
June 25, 2009

If we want to maintain Idaho's timber industry, we need to fix the housing market in this country.

Idaho's forest products industry, as anyone who lives here knows, has faced many challenges throughout our history. For the last few decades, our major challenge has related directly to log supply. Most of the mills in Idaho rely heavily on Forest Service lands for our raw materials. There are plenty of logs out there, but the political will to go and get them and clean up the forest is lacking. Now, with the implosion of the housing market, we're facing a challenge from the demand side as well. People aren't buying Idaho lumber like they were a few years ago, so there is no incentive to go into the overstocked, unhealthy federal forests and thin them out. In the meantime, production is being cut, jobs are being lost, the forests get more and more crowded and unhealthy, and Idaho's rural economies (and the families that rely on them) are suffering.

If we want to maintain Idaho's timber industry, we need to fix the housing market in this country. The home-building industry plays a critical role in America's overall economic health, and its recovery is key to our nation-wide economic revival. The depth and pace of the current plunge in we are experiencing in the housing market cannot be overstated. We have not only dropped from the highs of almost 2 million single family home starts in 2005we have also dropped far below the long term historical average of approximately 1.5 million new starts annually.

The impact on those of us who make wood building products has been especially devastating. When the financial crisis hit, and the housing market began its freefall at the beginning of 2006, it took with it more than just banks and home-owners. It also took away the jobs of 182,000 workers across the United States who manufacture lumber and building materials products which represent one-half of the cost of a new home. Locally, our industry is an incredibly important contributor to Idaho's economy, employing more than 13,000 people and generating $3 billion in annual sales. Unfortunately, most of the mills in Idaho are running at greatly reduced capacity, if they are running at all. Some well-run mills, which have survived previous downturns and the unreliable supply of Forest Service timber, simply won't be able to hang on until the recovery begins.

Both President Obama and Congress have taken recent steps to stem the flood of foreclosures as part of the housing market recovery. These efforts are important and must continue but should be coupled with increased efforts to restore the housing market, which is the root of our country's economic problems.

In the recent stimulus bill, Congress extended the current, $8,000 first-time home buyer tax credit through the end of 2009 and eliminated the repayment requirement if the home is held for two years. This tax credit for first-time buyers is a good start and has driven the recent uptick in existing home sales and new housing starts. However, first-time homebuyers only account for 43 percent of the housing market. This tax credit must go further to cover all primary home purchases so we can solidify and further these recent gains by encouraging the other 57 percent of prospective home buyers to purchase a home. Congress should act quickly to get prospective homebuyers back into the market.

Both the Congress and the Administration are discussing different programs that would better utilize Fannie Mae and Freddie Mac to provide fixed low-interest loans to qualified buyers. These too, would have a positive effect on helping the housing market rebalance in the face of the current economic realities.

None of these options are easy or inexpensive, but housing is interconnected to so many other sectors of our economy that its recovery will have a powerful multiplier effect, not only for wood products, but for the hundreds of communities and workers who manufacture lumber and wood products. We will certainly feel a positive impact in Idaho's wood products industry if we can get people buying homes again. This recovery will then enable purchases of consumer goods and the many services Americans have decided to forgo based on the drop in their home values.

We urge Congress and the President to not leave the job half finished. Idaho's beleaguered lumber and wood industry can't wait much longer for the recovery to begin. We must move quickly and complete the work needed to get housing sales and new home construction growing again.

Brett Bennett
Princeton

Brett Bennett is the vice-president of family-owned Bennett Lumber Products in Princeton, Idaho. Founded in 1939, Bennett Lumber produces the finest quality lumber products available while practicing sound land management and responsible stewardship of resources. Among the top 90 lumber producers in the nation, Bennett Lumber is sold throughout the United States and Canada, as well as overseas.

Additional Information

Web Site: http://www.lataheagle.com/full.php?sid=6252¤t_edition=2009-06-25

Category: Forestry>Policies and Politics

Region: Idaho

Ad Running: 6/26/2009-6/26/2011

Ad Posted: 6/26/2009 10:10:38 AM

Ad Viewed: 377 times

Create your
Buy & Sell Ad