Utah Lt. Gov. Herbert eyes boost for housing

Utah Lt. Gov. Herbert eyes boost for housing
Stimulus » Existing homes may qualify for a sequel to the Home Run Grant program.

By Robert Gehrke, The Salt Lake Tribune

Lt. Gov. Gary Herbert said Tuesday he is considering a second round of state stimulus to the housing market, similar to the $6,000 Home Run Grant incentive to homebuyers that helped generate $376.7 million in home sales in the past three months.

"Housing led us into the recession and housing will lead us out," Herbert, a past president of the Utah Association of Realtors, said in a statement. He is expected to become governor should Gov. Jon Huntsman Jr. be confirmed as U.S. ambassador to China.

The specifics of the new stimulus program are still being worked out with a working group, led by Utah Housing Corporation CEO Grant Whitaker, that convened last week.

Jason Perry, Herbert's transition director, said the lieutenant governor wants to make sure any additional housing stimulus is specifically tailored to have the best possible impact.

Perry would not comment on specifics, but one possibility the group is considering would be a smaller grant that could be given to more people and could potentially include the purchase of existing homes. The Home Run grant was limited to purchase of a new, never-lived-in home.

Another option would use state funds to provide an advance on the $8,000 federal tax credit to first-time homebuyers, who would then have to repay the state when the federal money arrived.

Perry said that the governor would have the authority to implement the new program without further approval by the Legislature.

"This is something that is very high on our list of things to look at so we want [the working group] to do it with as much speed as possible, making sure we get it right," he said.

The Home Run Grant Program, proposed by Huntsman and approved by the Legislature earlier this year, used $10 million in federal stimulus money to entice prospective homebuyers into purchasing a never-lived-in home.

Twenty-one-year-old Brandon Taggart was renting an apartment in Layton but wasn't seriously considering buying a home until he realized that the state grant could make it affordable. Earlier this month, he closed on a townhome in the Daybreak development.

"The grant was pretty much what made me decide to even purchase a home," Taggart, who works in Provo, said Tuesday. "With the grants available, the home was in a price range [I could afford]."

An economic analysis of the program projected that it would create more than 7,200 jobs, generate nearly $240 million in wages and $20 million in property taxes.

In all, 1,652 grants were awarded, with the bulk of activity centering in northern Utah County and the south end of Salt Lake County.

"There's no doubt about it, at least in my opinion, that it was quite a successful program," said Kelly Matthews, chief economist for Wells Fargo Bank. "I believe it was quite a strong incentive and if they had a capacity to get some additional money, I think it would be well worth the effort to put another chunk in."

On average, the homes purchased with the grant sold for about $228,000, although 15 sold for more than $500,000 and one sold for more than $700,000. There was no cap on the value of the home, but the grants could only be used by buyers with a combined household income of $150,000 or less.