Builders Forming Homeowners Lobby Group : Clout: Goal is to protect mortgage-interest deduction, other concerns. But some critics see future conflicts of interest.

This is a city rife with special interest groups. There are lobbyists representing the peanut industry, Alaskan loggers, smokeless tobacco, chocolate, locksmiths, Pizza Hut, the government of Togo, Reebok sneakers, Toshiba Corp. and prescription footwear.

Now the National Assn. of Home Builders (NAHB) is trying to organize a new voice in Washington--Homeowners of America--to represent the nation’s 62 million homeowners.

The group is still being formed. But its agenda is likely to include fighting any effort to reduce or eliminate the mortgage-interest deduction or the deductibility of state and local taxes, advocating a proposal to allow IRA withdrawals for first-time home buyers, opposing building and zoning code regulations that raise the cost of housing, and championing an array of issues that would improve housing affordability.

Besides a lobbying presence here and an education effort, Homeowners of America is considering offering members discounts on homeowner insurance and at furniture and home improvement retail outlets as well as home warranty programs.

Bob Bannister has worked for NAHB for 11 years. For the five years before that he worked for the National Assn. of Realtors (NAR).

“You’re in the lobbying business for years, and you realize they have lobbyists for everything imaginable, but a major group like homeowners doesn’t have a voice,” said Bannister, a senior vice president at NAHB. “They are the largest untapped constituency in the country.”

Indeed, several of the trade groups associated with the housing industry--insurers, realtors, lenders and builders--have been kicking the idea around for nearly a decade.

“It is a laudable goal, but our survey data just didn’t give us the idea that we should go ahead with it,” said Jerry Jaros, senior vice president of NAR. “We were afraid there weren’t enough nationwide issues out there that could activate, energize this constituency.”

Two years ago, a coalition of trade organizations representing the lending industry did provide seed money to start an organization called the Alliance for America’s Homeowners.

The group was narrowly focused to fight threats to the mortgage-interest deduction, but is now considering a broader agenda.

Before its own decision to try to organize homeowners, NAHB polled 25,000 people nationwide to determine the interest level. The results were overwhelmingly encouraging: 88% thought such a homeowners group would be a good idea, and 77% responded that they would be willing to join. More than 70% said the most important function of such an organization would be to provide representation in Washington.

When asked about their chief concerns as homeowners, a full 90% answered “affordability.” Two-thirds said they did not think their children would be able to buy a home comparable to their own in the future. Another 90% said they would fight any effort to reduce or eliminate the mortgage-interest deduction.

NAHB tentatively intends to launch Homeowners of America next January, with the publication of its first national magazine, fashioned loosely after the home builders own publication.

“The lobby is not organized to the point that we have come up with a menu of specific goals and objectives,” said Jack Shine, a builder and developer from Encino, Calif., and president of the soon-to-be Homeowners of America.

The new organization will have two main functions, he said: to serve as a voice for homeowners in Washington and to inform and educate its members.

“Home ownership is the ultimate investment most people make,” Shine said. “More than anything else, it has an impact on the quality of their lives. Issues like the environment, infrastructure, transportation are part and parcel of what makes up their neighborhoods.

“The federal and state governments have been able to ignore issues like transportation and schools, and all the other things that make up a community’s infrastructure because there is no constituency to remind them.”

Its membership goal is roughly 250,000 by the end of its first year. It will reach out to homeowners through its network of builders, by encouraging builders to present their customers with one-year memberships at the settlement table. There are roughly 1 million new homes sold annually.

NAHB also plans on soliciting memberships among the 800,000 participants in the builders’ home warranty program. After the first year, members would be asked to pay a $15 annual dues to keep it up and running.

One way Homeowners of America’s leadership will determine its future agenda may be by polling readers through a national magazine.

The organization will be run by a board of directors, chosen from “distinguished national figures,” Bannister said--past Presidents, businessmen, entertainers and homeowners.

NAHB is providing the initial $250,000 start-up funding for the new lobby and is negotiating with a sponsor for $1.5 million seed money to run the organization until it becomes self-sufficient through membership dues. It is also being set up with its own staff and offices, separate and independent of NAHB.

“But why would homeowners join anything the home builders are interested in?” Bannister asked, anticipating criticism. “Our goals are similar. We both want the best-quality housing at the lowest price possible at low interest rates.”

Still, some consumer groups and others are wary and question the propriety of a trade organization’s attempt to organize consumers:

“I think a lot of homeowners will view themselves as having interests similar to those of the home builders,” said Michelle Meier, counsel for government affairs with Consumers Union.

“But in terms of whether or not they will be able to represent the best public policy issues, I don’t think they will be able to because their major interest has to be profit and their own financial viability.”

Addressing the conflict of interest issue, Donald Campbell, staff director of the Senate Subcommittee on Housing and Urban Affairs, said: “I can’t see any inherent conflict, but that sort of thing would come up around specific issues.

“It will depend on how the leadership is organized. NAHB could have interests different from homeowners. But if the homeowners’ organization were not allowed to represent its own interests, it would wither on the vine very quickly.”

“The first question we were asked when we released some of our studies about the importance of the mortgage-interest deduction was ‘who paid for this stuff,’ ” said Gary J. Perkinson, director of the Alliance for America’s Homeowners.

“You have to divorce yourself. I am sure the builders are sincere, but they are misguided. I just can’t believe that when push comes to shove that the builders will let an ancillary group have a negative impact on the main group.”

The Alliance broke free recently from its initial supporters--the lenders.

But Jaros of the NAR downplayed possible conflicts. “Any large organization is like a family,” he said. “Its members will agree most of the time, but not all the time. You can still be a member of the family and not agree.”

Because the new organization isn’t up and running, NAHB is reluctant to discuss its possible bids for independence down the road. Other organizations begun by NAHB in recent years, such as the Home Owners Warranty Corp. and the Home Builders Institute are now completely independent entities today.

“It’s like raising your child and deciding from day one which college he will go to before you know how smart he is or what his interests are,” Shine said. “I can say that from day one, Homeowners of America’s income will be used to staff it independently from NAHB.”

Collins is a Washington writer who has covered real estate for several years and is co-author of the book “Selling Out,” which chronicles the impact of Japanese foreign investment in the United States.