November's mid-term elections brought significant change to the makeup of Congress. Democrats won control of the Senate thanks to tight victories in races in Montana and Virginia, and also seized control of the House of Representatives for the first time in 12 years by picking up 29 seats.
With the White House in Republican hands for at least another two years, however, there was a sentiment in the days after the election that there will be few major policy changes during the upcoming Congress, despite both sides saying all the right things about bipartisanship.
Personal politics aside, that is probably a good thing, according to many remodelers. “The balance of power creates kind of a gridlock,” says Joan Stephens, president of Stronghold Remodeling, in Boise, Idaho, and president of the National Remodeling Foundation. “Keeping the status quo is positive” for remodeling, she says, given the healthy condition of the current market.
“Conventional wisdom has it that the stock market likes this division of power,” says San Francisco remodeler Paul Winans, “because it's likely nothing will get done.” Without the fear of change — and with a strong economy — consumers will be more open to spending money. “Homeowners will start doing the things they want — like a nice kitchen — as opposed to things they need,” Winans says.
That's not to say that legislators will sit idly until the 2008 election. There are a number of issues that have an impact on the housing and building industries that are likely to come up in the 110th Congress. Certain of those items were debated in the last legislative session, and according to some analysts, now have a higher probability of being acted upon.
Immigration. A hot issue during the 2006 session, immigration reform stalled when the House of Representatives refused to acquiesce to President George W. Bush's demands for a guest worker program, and the White House was equally unyielding. It culminated in the signing of the Secure Fence Act, a border security measure that has met with mixed reviews. Supporters say it's the first step toward immigration reform, while detractors remain skeptical of its practicality.
Either way, immigration is an issue that is almost certain to be revisited in the 110th Congress, as President Bush has not backed down from his strong stance on the guest worker program. Although such a program is not a strictly partisan issue, the turnover of several House seats formerly occupied by Republicans who were in favor of stricter regulations suggests that the new makeup of Congress is a more positive climate for making progress with immigration reform. “There is greater alignment between Congress and the president,” says Everett Collier, a San Francisco remodeler who is the current president of the National Association of the Remodeling Industry (NARI).
That's positive news for the building industry, which already relies heavily on immigrant labor and still faces labor shortages. Proponents say that a guest worker program would acknowledge that dependency while making it easier to identify which workers are in the country legally. A bill passed by the House in 2006 — met with strong opposition by business advocates, including the National Association of Home Builders — would have increased the liability of business owners found to be employing illegal immigrants. That provision played a large role in the 109th Congress' failure to pass comprehensive immigration reform legislation.
Flemington, N.J., remodeler Roy Bryhn adds that immigrant labor benefits homeowners, too. “It lowers the cost of getting work done,” he says. He notes, however, that that's only t rue if the workers are here legally, paying taxes, and contributing to the system.
Affordable housing. As of press time, standing committee assignments for the upcoming Congress had not been made. It was widely believed, however, that Rep. Barney Frank (D-Mass.) would chair the House Financial Services Committee. Frank has said that the creation of affordable housing is a priority. Another key chair could be Rep. Charles Rangel (D-N.Y.), who was expected to head the House Ways & Means Committee. Rangel authored the Low Income Housing Tax Credit. A newsletter published by the American Homeowners Grassroots Alliance and the American Homeowners Foundation credits that program with financing 90% of the nation's affordable housing.