Labor Unions' Cash Infusion Stimulates St. Louis Home Sales
Anthony Foote and his wife were hoping to buy a new home, but were having trouble making the numbers work. Then the builder offered them $10,000 to close the deal.
“If it hadn’t been for that, we might still be number crunching," says Foote. "It came right on time and helped everything go smoothly.” They closed in February and plan on moving in to their newly built home this summer.
The money didn’t come from the builder, it came from local labor unions. Their aim is to help stimulate demand to boost sales to create work.
John Stewart oversees the program for the Carpenters District Council of Greater St. Louis. “Actually partnering with the developer home builder to help them reach their goal of selling houses paid off for us because our guys work on 90 percent of the homes built in this area.”
Eight local builders and nine unions joined forces to create a stimulus program for new home buyers. It is thought to be the only program of its kind in the country. The unions, which include independent business owners such as carpenters, plumbers, cement masons and electrical workers put up $600,000 from their industry advancement programs to fund the stimulus.
The incentives were for 2 percent of the purchase price, ranging from $2,000 to $10,000 at closing, and were offered beginning Super Bowl Sunday weekend. The program, called “Neighborhoods Built by Your Neighbors,” was first-come first-served, and the money went quickly. Builders credit the program with helping close 120 homes in February, worth a total of $30 million dollars.
The Carpenters union started with one builder in the fall, and then the other unions and builders joined to expand the program early this year. The money comes from individual members; about 20 cents for each hour worked goes into the fund. The industry recovery fund started 10 years ago collects about $1 million each year.
One of the participant builders, McKelvey Homes, says the program was a shot in the arm. "This program got us off to our best start in nine years," says McKelvey CEO Jim Brennan. "Last year, we sold three homes in February, this year 12, totaling more than $4.5 million."
Builders say the homes sold led to 84 full-time jobs. Brennan says buyers responded enthusiastically to the funds offered by the third party. “There were a limited amount of funds, but it was a rousing success, we are hopeful they will do it again.”
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