A dramatic drop-off in the construction of new houses in the state is the reason behind a new tax credit proposal for Illinois. As president of the Home Builders Association of Illinois, Terry Ruhland, the owner of Plum Creek Builders in Chillicothe, said it's time for Illinois to provide its own tax credit to homebuyers in the state.

A dramatic drop-off in the construction of new houses in the state is the reason behind a new tax credit proposal for Illinois.


As president of the Home Builders Association of Illinois, Terry Ruhland, the owner of Plum Creek Builders in Chillicothe, said it's time for Illinois to provide its own tax credit to homebuyers in the state.


"This would be a credit of $5,000 to $7,500 to any buyer, not just a first-time buyer," he said.


"Ten other states have already done it and a number are considering it," said Ruhland of tax credit proposals to jump-start the languishing home construction market.


Ted Schieler, co-owner of Homeway Homes in Goodfield who will take over for Ruhland as association president in December, said home construction has been in a downward spiral in recent years.


"In 2005, there were about 50,000 permits filed for single-family homes. In 2008, that number was down to 18,000. This year, the estimate is that we may have 7,000 permits filed," he said.


Schieler and Ruhland attended a reception for business leaders last week where they presented the tax credit proposal to Gov. Pat Quinn. "He seemed receptive. (Quinn) said, just get me the numbers," said Schieler.


"Our goal is to have the (tax credit) idea presented by the first of the year. We believe there's (legislative) support for such a measure," he said.


The incentive could help a lagging market, said Schieler. "Sales at Homeway Homes are down about 30 percent from last year," he said.


It also would provide an incentive for buyers, said Schieler. "Buyers (of a new home) are facing a struggle on the financing end. Unless they can put 20 percent down, they're out of luck," he said.


Bob Brady, president of Brady Homes in Bloomington, said the incentive that's provided up to an $8,000 tax credit to first-time homebuyers has boosted sales.


"It certainly has helped sell spec homes in central Illinois," he said, referring to Brady markets such as Peoria, Bloomington and Champaign. "Bourbonnais (near Chicago) remains very soft," he said.


"Over the past three years, quite a few builders have gone under. It's all about jobs in our industry. If people aren't working, they're not building new homes," said Brady.


"We're hoping they extend the (federal) tax credit. We're pretty confident they'll do that," he said.


Steve Tarter can be reached at (309) 686-3260 or starter@pjstar.com.