WASHINGTON — Buying a home has long been considered a cornerstone of the American dream. Sen. Tammy Baldwin, D-Wis., said she wants to help more Wisconsin residents achieve it.
“I’m committed to helping make sure that more Wisconsinites can find a home and grow roots in their home communities,” Baldwin said.
She introduced legislation that would provide first-time homebuyers with a tax credit up to $15,000. To be eligible, buyers would have to meet certain income guidelines and the homes would have to meet price criteria. In addition, the purchase would have to be financed through a federally backed mortgage loan.
“To have a down payment that’s adequate to become a first-time homeowner is a big deal,” Baldwin said. “And this refundable tax credit may make the difference in many instances, if we can pass it into law.”
According to new data from the Wisconsin Policy Forum, the median sales price of a home in the state spiked 53.3% from 2017 to 2022. The average household income hasn’t kept up, increasing by less than 20% during that time frame.
The problem is bigger than Wisconsin, which is why President Joe Biden addressed it during his State of the Union speech. He proposed a $10,000 tax credit for homebuyers and said he wants to address the housing shortage across the nation.
“The President is making historic investments in this budget proposal to help increase supply, including a $20 billion Housing Innovation Fund to encourage local governments and states to innovate in the creation of affordable housing,” said Tom Perez, senior advisor to the president.
Rep. Scott Fitzgerald, R-Juneau, sits on the House financial services committee, which deals with issues pertaining to housing and the economy. He said Baldwin’s bill takes the “wrong approach” to address the housing crisis by “failing to address supply.”
“Unfortunately, this legislation would increase demand for starter homes, which are already in short supply, thereby driving up prices,” he wrote in a statement to Spectrum News. “Further, many of the beneficiaries would have been able to buy a home without the credit, further reducing its impact and wasting finite government resources.”
Fitzgerald said federal policymakers should be focusing on increasing supply.
“This can be accomplished directly by lowering the costs of materials needed for construction and expanding the workforce of skilled trades,” he said. “It can also be accomplished by encouraging the production of non-site-built housing options, such as manufactured housing.”
Baldwin acknowledged that this bill could be paired with others to have a greater impact.
“I think that, combined with tactics to make sure that our housing stock isn’t gobbled up by out-of-state, private equity firms, etc., that this is a tool that really helps working families be able to realize their dream of homeownership in their home communities,” she said.
It’s unclear how far the legislation, and other bills introduced by Democrats in Congress to address rising housing costs, will go, given that Democrats have a narrow majority in the Senate and Republicans control the House.