The NAHBs powerful BUILD PAC could also take a hit if Leading Builders decides to form its own PAC. The NAHB reported raising nearly $1.2 million through the end of October, according to Federal Election Commission filings.
The decision to form Leading Builders comes after a public fight erupted in February between the big builders and the NAHB president. The dispute was triggered by a letter that Howard wrote to Speaker Nancy Pelosi (D-Calif.) questioning the NOL provision. Howard argued, at the time, that the tax measure could allow bigger builders to offload excess inventory for a tax benefit.
The measure, which passed in November, expands to five years the time that companies can use to offset revenue losses against profits. Companies can normally only carry back tax losses for two years under current law.
The measure will allow big builders, many of which are facing huge losses, to write off billions of dollars.
Some small builders have been opposed to the tax change, saying it could further depress the housing market if the big builders exploited the loophole to sell property for artificially low prices to generate a loss for tax purposes.
Still, Howards letter caused an angry response by big and small builders alike because members of the trade association were not consulted before it was sent.
After the NAHB was unsuccessful in getting the measure added to the economic stimulus bill this spring, the builders decided in May to take matters into their own hands and form a coalition, Homes for America Alliance.
Headed by Gear, the group quickly added lobbying muscle, hiring the C2 Group, Hecht Spencer & Associates, Patton Boggs, Polsinelli Shughart and Van Heuvelen Strategies to push the measure. Since June, the alliance has spent $410,000 on the lobbying campaign.
Industry lobbyists said they werent surprised by the large builders defection given the unworkable relationship that they have with Howard.
They absolutely cant work this out with Howard, one industry lobbyist said. They are where they are at because of one personality.
Still, the lobbyist says the biggest homebuilders may need the NAHB more than they realize.
Politically, as far as making an argument to Members of Congress, they want to hear from local homebuilders rather than corporate mega builders, the lobbyist said. Its the small guys that get the Members attention.