[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                    ZONED OUT: EXAMINING THE IMPACT
                   OF EXCLUSIONARY ZONING ON PEOPLE,
                       RESOURCES, AND OPPORTUNITY

=======================================================================

                            VIRTUAL HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON HOUSING,
                         COMMUNITY DEVELOPMENT,
                             AND INSURANCE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 15, 2021

                               __________

       Printed for the use of the Committee on Financial Services
       
                           Serial No. 117-54
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-197 PDF                 WASHINGTON : 2021                     
          
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York           BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            ANN WAGNER, Missouri
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            ROGER WILLIAMS, Texas
BILL FOSTER, Illinois                FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio                   TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
CINDY AXNE, Iowa                     DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois                TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts       ANTHONY GONZALEZ, Ohio
RITCHIE TORRES, New York             JOHN ROSE, Tennessee
STEPHEN F. LYNCH, Massachusetts      BRYAN STEIL, Wisconsin
ALMA ADAMS, North Carolina           LANCE GOODEN, Texas
RASHIDA TLAIB, Michigan              WILLIAM TIMMONS, South Carolina
MADELEINE DEAN, Pennsylvania         VAN TAYLOR, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   PETE SESSIONS, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts

                   Charla Ouertatani, Staff Director
                  Subcommittee on Housing, Community 
                       Development, and Insurance

                  EMANUEL CLEAVER, Missouri, Chairman

NYDIA M. VELAZQUEZ, New York         FRENCH HILL, Arkansas, Ranking 
BRAD SHERMAN, California                 Member
JOYCE BEATTY, Ohio                   BILL POSEY, Florida
AL GREEN, Texas                      BILL HUIZENGA, Michigan
VICENTE GONZALEZ, Texas              LEE M. ZELDIN, New York
CAROLYN B. MALONEY, New York         TREY HOLLINGSWORTH, Indiana
JUAN VARGAS, California              JOHN ROSE, Tennessee
AL LAWSON, Florida                   BRYAN STEIL, Wisconsin, Vice 
CINDY AXNE, Iowa                         Ranking Member
RITCHIE TORRES, New York             LANCE GOODEN, Texas
                                     VAN TAYLOR, Texas
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    October 15, 2021.............................................     1
Appendix:
    October 15, 2021.............................................    31

                               WITNESSES
                        Friday, October 15, 2021

Cashin, Sheryll, Carmack Waterhouse Professor of Law, Civil 
  Rights and Social Justice, Georgetown University...............     4
Gallo, Dora Leong, President and CEO, A Community of Friends.....     7
Hamilton, Emily, Senior Research Fellow, Urbanity Project, 
  Mercatus Center at George Mason University.....................    10
Kahlenberg, Richard D., Senior Fellow, The Century Foundation....     5
Silverstein, Thomas, Associate Director, Fair Housing & Community 
  Development Project, Lawyers' Committee for Civil Rights Under 
  Law............................................................     8

                                APPENDIX

Prepared statements:
    Cashin, Sheryll..............................................    32
    Gallo, Dora Leong............................................    37
    Hamilton, Emily..............................................    43
    Kahlenberg, Richard D........................................    46
    Silverstein, Thomas..........................................    54

              Additional Material Submitted for the Record

Cleaver, Hon. Emanuel:
    Written statement of the National Multifamily Housing Council 
      and the National Apartment Association.....................    81
    Written statement of Prosperity Now..........................    85
    Written statement of Up for Growth Action....................    87

 
                    ZONED OUT: EXAMINING THE IMPACT
                   OF EXCLUSIONARY ZONING ON PEOPLE,
                       RESOURCES, AND OPPORTUNITY

                              ----------                              


                        Friday, October 15, 2021

             U.S. House of Representatives,
                           Subcommittee on Housing,
                             Community Development,
                                     and Insurance,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 12 p.m., via 
Webex, Hon. Emanuel Cleaver [chairman of the subcommittee] 
presiding.
    Members present: Representatives Cleaver, Velazquez, 
Sherman, Beatty, Green, Vargas, Lawson, Axne, Torres; Hill, 
Posey, Hollingsworth, Rose, Steil, and Taylor.
    Ex officio present: Representative Waters.
    Chairman Cleaver. The Subcommittee on Housing, Community 
Development, and Insurance will come to order.
    I now recognize myself for 4 minutes for an opening 
statement, and then I will recognize the ranking member of the 
subcommittee for 5 minutes.
    I am very much interested in this topic. I started out in 
my political career as a member of the City Council of Kansas 
City, and I served my second term on the City Council as the 
Chair of the Planning and Zoning Committee, and, of course, 
that is where I learned about how human beings act when you 
start dealing with zoning.
    Right now, we still have what we had back in the 1980s when 
I chaired the Planning and Zoning Committee in Kansas City, 
which is that everybody wanted everything that could be brought 
into a city, just not near their own home, and that created all 
kinds of problems, including problems of affordability. And 
right now, the price of housing is a national crisis, and many 
observers and experts believe this is worse than it has been at 
any point in our history.
    If you look at the data from the Census Bureau and the 
Department of Housing and Urban Development (HUD) in August of 
this year, the median sale price of new residential homes in 
the United States was about $390,000. That is an all-time 
national high. The price of housing has been pushed upwards, 
with upward pressure on rents, and the dream of homeownership 
has, of course, moved further and further away from the 
majority of the people who are now not homeowners.
    So across the entire country, we are having problems. And 
if you look at our first responders, they can no longer afford 
to live in the communities they protect, because far too many 
teachers and firefighters and police officers cannot afford to 
pay the real estate prices where they are living. Only one of 
the country's largest 50 metro areas, Pittsburgh, requires less 
than 30 percent of a starting teacher's salary for housing. 
From an economic lens, the affordable housing crisis is a 
supply-and-demand problem. The supply of housing, and 
particularly affordable housing, has not kept pace with the 
demand.
    Data from the United States Census Bureau and HUD also 
demonstrate that the most recent decade, extending from January 
2010 through November 2019, saw fewer housing units started--
and this is terrible--than any any decade since at least the 
1960's by a wide margin. And while the housing market is 
desperately in need of more new homes, the development of new 
homes in the lower end of the market, low-income and first-time 
homebuyers, has become particularly grim.
    We will get into this a lot more as we move along, but I 
would like to now recognize the ranking member of the 
subcommittee, Mr. Hill, for 5 minutes.
    Mr. Hill. Thank you, Chairman Cleaver. And thanks for 
convening this hearing. I appreciate the leadership of 
Chairwoman Waters and Ranking Member McHenry as well.
    Local zoning practices, especially in our largest cities in 
the country, are among the many government regulations that 
make it more expensive to find a place to live in the United 
States. In hearing after hearing in this committee, we have 
heard how housing affordability is ultimately about housing 
supply; there are simply more people who want to buy a home or 
rent an apartment than there are homes available. The same 
applies to the rental market.
    Artificial barriers and certain local development policies 
can make it even more difficult and expensive to build new 
houses or apartments, impeding the kind of market-driven 
behavior between buyers and sellers that could help bring the 
cost of housing down.
    Imposing new government mandates like inclusionary zoning 
and rent control, or increasing Federal housing assistance to 
subsidize down payments really doesn't do anything to address 
that underlying supply-and-demand imbalance in many markets. 
Instead, it shifts the costs of building new housing units to 
residents through higher rents, taxes, and Federal subsidies.
    Instead, I believe we should be looking at ways to 
incentivize localities with high housing demand to produce more 
units and make it easier and less expensive to build housing 
across that development process, from permitting, to planning, 
to construction. If homeownership is a bipartisan goal, then we 
ought to be looking at how housing regulations are making 
homeownership more unattainable for thousands of Americans in 
both rural and urban areas.
    I look forward to hearing from our witnesses today the ways 
in which the Federal Government can help ease some of these 
local regulatory and zoning barriers to lower the cost of 
building new housing units, and address some of the root causes 
related to housing supply.
    I thank my friend from Kansas City for his leadership, and 
I am proud, here in central Arkansas, to represent a market 
where the median home price is $156,800. We are at about $101 a 
square foot. Our property taxes are 0.68 percent. And so, we 
invite all of America to move to central Arkansas where housing 
is affordable, both for rental purposes and purchase purposes.
    And, again, I think you do have to approach this--and you 
know this from being a mayor, Mr. Chairman--about how it really 
is essential to give access, and I thought your discussion 
about different zoning characteristics on multifamily, small 
board of scale versus single family owner, of course, was 
constructive. But it is a complicated issue, and I look forward 
to the testimony today.
    I yield back.
    Chairman Cleaver. Thanks for your information, Mr. Ranking 
Member.
    I will now recognize the Chair of the full Financial 
Services Committee, Chairwoman Maxine Waters from California.
    Chairwoman Waters. Thank you very much, Mr. Chairman, for 
holding this hearing. This is very important.
    In America today, our ZIP Code preordains our access to 
jobs, homeownership, affordable rent, and a child's access to 
quality education. It began with enslaving, and later 
segregating, my ancestors, stripping our indigenous brothers 
and sisters from their land, and redlining people of color out 
of homeownership, and it continues today with restrictive and 
exclusionary zoning policies.
    Communities across this country continue to use zoning and 
local control as a dog whistle to preserve the racial 
residential segregation which contributes to the undersupply of 
housing. We must ensure that every family in America has access 
to the communities of their choice.
    I look forward to our expert witnesses for their testimony 
today. Again, I thank you for holding this hearing, and I yield 
back the balance of my time.
    I yield back.
    Chairman Cleaver. Thank you, Madam Chairwoman, for your 
comments today.
    We now welcome the testimony of our distinguished 
witnesses: Sheryll Cashin, the Carmack Waterhouse Professor of 
Law, Civil Rights and Social Justice at Georgetown University; 
Richard D. Kahlenberg, a senior fellow from The Century 
Foundation; Dora Leong Gallo, the president and CEO of A 
Community of Friends; Thomas Silverstein, the associate 
director of the Fair Housing & Community Development Project at 
the Lawyers' Committee for Civil Rights Under Law; and Dr. 
Emily Hamilton, a senior research fellow and the co-director of 
the Urbanity Project at the Mercatus Center at George Mason 
University.
    Our witnesses are reminded that their oral testimony will 
be limited to 5 minutes. You should be able to see a timer on 
your screen that will indicate how much time you have left, and 
a chime will go off at the end of your time. I would ask that 
you be mindful of the timer, and quickly wrap up your testimony 
if you hear the chime, so that we can be respectful of both the 
witnesses' and the subcommittee members' time.
    Ms. Sheryll Cashin, you are now recognized for 5 minutes.

 STATEMENT OF SHERYLL CASHIN, CARMACK WATERHOUSE PROFESSOR OF 
  LAW, CIVIL RIGHTS AND SOCIAL JUSTICE, GEORGETOWN UNIVERSITY

    Ms. Cashin. Thank you very much.
    I want to begin by associating myself with the comments of 
Chairwoman Waters, and my comments are in that spirit. I have 
spent nearly 3 decades grappling with U.S. segregation and how 
it produces racial inequality. My most recent book, ``White 
Space, Black Hood: Opportunity Hoarding and Segregation in the 
Age of Inequality,'' reflects these decades of examination. It 
argues that we have a system of residential castes in which 
government overinvests and excludes in affluent White spaces 
and disinvests and contains and, frankly, preys on people in 
high-poverty Black neighborhoods.
    These are the extremes of American residential castes, but 
everyone who cannot afford to buy their way into high-
opportunity neighborhoods is harmed by this system. The poor 
especially are systematically excluded from the opportunity for 
social mobility, no matter how hard they work to escape.
    Exclusionary zoning was first sanctioned by the U.S. 
Supreme Court in 1926, in which it endorsed the idea that even 
duplexes were, ``parasitic on single family homes and the 
people who live there.'' In ensuing decades, thousands of new 
suburban governments formed, enabling middle-class and upper-
class Whites to wield the zoning power to exclude certain types 
of housing, particularly rental apartments, and, therefore, 
exclude unwelcome populations.
    Fast forward to today, and where high levels of Black 
segregation persists, researchers have found that it was 
actively promoted by zoning laws that restricted density, and 
by high levels of anti-Black prejudice. According to a stunning 
geographically-mapped analysis recently produced by The New 
York Times, it is illegal on 75 percent of the residential land 
in many American cities to build anything other than a detached 
single-family home. That figure is even higher in many suburbs 
and newer suburban belt cities.
    A recent study released by an institute at UC Berkeley 
found that we are getting worse. About 81 percent of large and 
medium-sized metro areas were more segregated in 2019 than they 
were in 1990. The most persistent type of neighborhoods today 
are affluent White spaces and concentrated poverty 
neighborhoods, and the boundaries of these neighborhoods is 
hardening. That means it is harder to get into places of high 
opportunity and, frankly, it is harder to get out of the hood.
    The past and present of federally-backed segregation 
policies inform the legal and moral case for congressional 
action to disrupt exclusionary zoning. I cover that history 
quickly in my written testimony.
    Suffice it to say, intentional segregation of Black people 
in the 20th Century shaped living patterns for everyone. The 
infrastructure for maintaining segregation lives on: racial 
steering by REALTORS; discrimination in mortgage lending; 
exclusionary zoning; government-subsidized affordable housing 
that concentrates poverty; local school boundaries that 
encourage segregation; and continued resistance to racial 
integration by many Americans.
    So, in considering policy options, please first acknowledge 
that the main reason exclusionary zoning persists is the vested 
interests and expectations of people who live in poverty-free 
havens. In so-called blue California where Democrats are in 
charge, despite a grave housing and homelessness crisis, the 
State was only able to take the baby step of opening single-
family neighborhoods to duplexes.
    If Congress wants to disrupt nearly a century of 
exclusionary zoning, serious pressure and accountability are 
required. I recommend not just spending incentives to repeal 
exclusionary zoning, but pressure on localities to adopt well-
designed, inclusionary zoning ordinances, the best example of 
which is the highly successful mandatory ordinance of 
Montgomery County, Maryland. This extremely diverse, wealthy 
suburban county has no pockets of concentrated poverty, and 
poor children have more access to well-integrated schools 
because of it.
    In conclusion, I recommend that Federal housing, community 
development, and infrastructure funds should be conditioned on 
localities adopting inclusionary zoning ordinances that 
actually affirmatively further fair housing.
    Thank you.
    [The prepared statement of Ms. Cashin can be found on page 
32 of the appendix.]
    Chairman Cleaver. Thank you very much, Ms. Cashin, for your 
testimony.
    Mr. Kahlenberg, you are now recognized for 5 minutes.

STATEMENT OF RICHARD D. KAHLENBERG, SENIOR FELLOW, THE CENTURY 
                           FOUNDATION

    Mr. Kahlenberg. Good afternoon, Chairman Cleaver, 
Chairwoman Waters, Ranking Member Hill, and all of the members 
of the subcommittee. Thank you for holding this important 
hearing on exclusionary zoning. I am Richard Kahlenberg, a 
senior fellow at The Century Foundation, where I conduct 
research on housing and education policy.
    It is my testimony that local zoning policies that prohibit 
multifamily dwellings are driving up housing prices, fueling 
racial and economic segregation, and limiting the opportunity 
for millions of children and families to achieve the American 
Dream. There is much that Congress can do to fix this, 
including adopting a new economic fair housing act, which I 
will discuss in a moment.
    I call local exclusionary policies, ``the walls we don't 
see,'' because they are less visible to the public than other 
forms of discrimination. Most Americans today understand that 
it was wrong for White mobs to scream at young Black children 
trying to attend desegregated schools in the South in the 
1960's. Many of us know the Norman Rockwell painting of Ruby 
Bridges, a small Black child who had to be escorted by large 
FBI agents to her elementary school in New Orleans because 
White people objected to her presence based on the color of her 
skin.
    But in 2021, local governments continue to erect less-
visible walls that keep low-income and working-class families, 
many of them families of color, from living in safe 
neighborhoods with good schools.
    As Professor Cashin noted, in most American cities zoning 
laws prohibit the construction of relatively affordable homes, 
duplexes, triplexes, quads, and larger family units on three-
quarters of residential land.
    There are millions of modern-day Ruby Bridges whose lives 
are hurt by exclusionary zoning. I interviewed, for example, 
Kiara Cornelius, a low-wage single mother, who a few years ago 
was living in South Columbus, Ohio, and was looking for better 
schools, and a safer neighborhood for her kids. She told me 
that she did not allow her children to walk to their 
grandmother's house just a couple of blocks away because it was 
dangerous to do so. She drove them instead.
    Now, one might look at Ms. Cornelius's predicament and say 
that her exclusion from better opportunities was simply a 
reflection of the workings of the free market in housing, but 
in the Columbus suburbs, bans on construction of duplexes and 
triplexes and apartment buildings keep people like Ms. 
Cornelius zoned out by government's fiat.
    So, what can be done? In my written testimony, I discuss a 
number of possible reforms, including the committee's Unlocking 
Possibilities Program, which would represent one of the most 
significant Federal efforts to curtail exclusionary zoning in 
decades, and deserves strong support. But Federal carrots 
should be supplemented by Federal sticks to add heft to the 
effort at, by the way, a much more modest cost than incentive 
programs.
    In particular, Congress should create a private right of 
action, comparable to the one found in the 1968 Fair Housing 
Act, to allow victims of economically discriminatory government 
zoning policies to sue in Federal Court, just as victims of 
racial discrimination currently can. I call this proposal an 
economic fair housing act. The original 1968 Fair Housing Act 
was a monumental advance for human freedom and helped produce a 
30-percent decline in Black/White segregation since 1970. But 
at the same time, income segregation has more than doubled 
during this period. Part of the problem, as Harvard's Michael 
Sandel has noted, is that highly-educated elites may denounce 
racism and sexism but are unapologetic about their negative 
attitudes towards the less-educated.
    Now, for important historical reasons, being a class snob 
is not held in the same disrepute as being a racist. But in the 
context [inaudible] Black families and working-class families 
of all races are held in such low regard that the State is 
somehow justified in sponsoring laws that make it illegal for 
anyone to build the types of housing these families can afford.
    An economic fair housing act would make it clear that 
economic discrimination is wrong, whether or not it has a 
disparate impact on people of color, but the act would also 
reduce racial segregation by helping low-income plaintiffs of 
color who now face stiff evidentiary burdens under disparate 
impact law to prevail in court.
    Once again, thank you for this opportunity to discuss the 
ways to reduce barriers that artificially separate Americans 
and hurt our country.
    Thank you.
    [The prepared statement of Mr. Kahlenberg can be found on 
page 46 of the appendix.]
    Chairman Cleaver. Thank you very much.
    Ms. Dora Leong Gallo, you are now recognized for 5 minutes.

 STATEMENT OF DORA LEONG GALLO, PRESIDENT AND CEO, A COMMUNITY 
                           OF FRIENDS

    Ms. Gallo. Good afternoon, Chairman Cleaver, members of the 
subcommittee, and Chairwoman Waters. Thank you for this 
opportunity to testify today.
    My name is Dora Leong Gallo, and I am the president and CEO 
of A Community of Friends, a nonprofit affordable housing 
development corporation based out of California. We have a very 
specific mission of ending homelessness for people, 
individuals, and families affected by mental illness.
    In the past 33 years, we have completed 51 apartment 
buildings throughout Los Angeles and Orange County, including 2 
buildings in San Diego County, and currently, we operate 43 
buildings housing over 2,500 individuals, including over 600 
children.
    As a nonprofit organization serving people with 
disabilities, I have seen firsthand how government regulation 
and control of land use, through a process called zoning, can 
be used to both stimulate or slow down the development in 
communities and/or use to exclude certain people in populations 
from living in certain communities. And although local 
governments' authority to regulate land use is granted by State 
Governments, the development of affordable housing has 
inherently been a local process. For decades, zoning was 
controlled at the neighborhood level, but this trend has been 
changing, given the crisis many communities face with lack of 
affordable housing.
    And in the context of building supportive housing to end 
homelessness, A Community of Friends has often encountered 
opposition from community members using zoning and 
discretionary approvals to block housing for people 
experiencing homelessness, who are disproportionately people of 
color. For instance, in Los Angeles, 40 percent of those who 
are homeless are Black, yet Black people make up only 9 percent 
of L.A. County's population.
    Discrimination against people with mental illness is 
repeatedly couched in land use terms. This housing project is 
too dense. It is too out of character with the neighborhood. It 
has insufficient parking and will generate traffic. Cities 
frequently bow to the pressure to preserve the status quo, 
leading to continued discriminatory practices and continuing 
the racial inequities in housing.
    California's environmental review process further 
challenges supportive housing projects. California has the 
California Environmental Quality Act, known as CEQA, which was 
intended to analyze and mitigate the environmental harm of 
public projects. But it has been weaponized over the past 
decade to delay or stop affordable and supportive housing 
projects that require government approvals.
    Twice in 2018, A Community of Friends faced legal 
challenges on environmental grounds for 2 supportive housing 
projects for veterans that we proposed, even when, on one 
project, only 49 units were proposed in a site zoned for over 
100 units. We prevailed in both lawsuits, but the result was an 
almost 4-year delay on each project, a significant increase in 
costs as funding commitments were deobligated and construction 
costs increased, and dozens of homeless individuals and 
families, including veterans, were not able to access this 
affordable housing with onsite supportive services that the two 
projects could have provided.
    The Federal Government has a role to play in zoning reform. 
HUD should continue researching regulatory barriers and 
advancing solutions to overcome them. HUD's Regulatory Barriers 
Clearinghouse is a valuable resource for identification of 
barriers and solutions to housing productions and preservation.
    HUD should also continue its implementation of 
Affirmatively Furthering Fair Housing regulation and develop 
programs using a carrot-and-stick approach to ensure compliance 
with this provision of the Fair Housing Act of 1968.
    Congress also has a pivotal role to play. The Build Back 
Better plan pending before Congress includes the Unlocking 
Possibilities Program, which was previously mentioned. This 
grant program will incentivize local governments to improve 
housing strategies, reform zoning practices, and streamline 
local regulations. It will be particularly useful to small 
communities that may lack the resources capacity to conduct 
housing needs assessments and to develop those concrete steps 
necessary to eliminate barriers to produce affordable housing 
and advance fair housing.
    Additionally, Congress should propose legislation or 
regulations that link Federal funding to Affirmatively 
Furthering Fair Housing rules, consider Federal legislation to 
prohibit State and local governments from putting roadblocks in 
the way of increasing affordable housing and fostering 
inclusive communities, and make rental assistance universally 
available to households in need and to prohibit source-of-
income discrimination.
    Thank you for the opportunity to testify today. I look 
forward to your questions.
    [The prepared statement of Ms. Gallo can be found on page 
37 of the appendix.]
    Chairman Cleaver. Thank you, Ms. Gallo. Thank you very 
much.
    Mr. Thomas Silverstein, you are now recognized for 5 
minutes.

   STATEMENT OF THOMAS SILVERSTEIN, ASSOCIATE DIRECTOR, FAIR 
HOUSING & COMMUNITY DEVELOPMENT PROJECT, LAWYERS' COMMITTEE FOR 
                     CIVIL RIGHTS UNDER LAW

    Mr. Silverstein. Thank you.
    Chairwoman Waters, Chairman Cleaver, Ranking Member Hill, 
and members of the subcommittee, thank you for the opportunity 
to testify today regarding the harmful impact of exclusionary 
zoning, as well as strategies for mitigating those harms.
    My name is Thomas Silverstein, and I am the associate 
director of the Fair Housing & Community Development Project at 
the Lawyers' Committee for Civil Rights Under Law. The Lawyers' 
Committee is a national civil rights organization created at 
the request of President John F. Kennedy in 1963 to mobilize 
the private bar to confront issues of racial discrimination.
    Exclusionary zoning is a widespread practice that plays a 
significant role in the perpetuation of residential racial and 
economic segregation, and the housing affordability crisis. 
Although high-cost, coastal metropolitan areas garner the 
lion's share of the attention in conversations about 
exclusionary zoning, it is a nationwide problem, and some of 
the country's most extreme zoning restrictions are found in 
suburban jurisdictions in the Midwest and the Deep South.
    When we talk about exclusionary zoning, it is important 
that we be precise in our language. Although the roots of 
modern zoning are unquestionably in early 20th Century attempts 
to segregate communities, not all zoning restrictions are 
exclusionary in practice. Indeed some, such as provisions that 
prevent heavy-polluting industrial facilities from being sited 
near homes, can be salutatory.
    For others, including residential density restrictions, the 
context matters. Essentially, if such restrictions are 
preventing low-income people of color from moving to an area 
with high housing costs, then those restrictions are 
exclusionary. If, however, notwithstanding similar 
restrictions, an area is racially and ethnically diverse and 
housing costs are within reach for low-income households, those 
same restrictions are not perpetuating exclusion in practice.
    This distinction has ramifications for the policy debate 
about zoning at the Federal, State, and local levels. Working 
in collaboration with a broad coalition of civil rights, 
community organizing, and affordable housing groups brought 
together by the Alliance for Housing Justice, we developed a 
set of eight principles to guide Federal action around 
exclusionary zoning.
    We recommend that Federal action: one, focus on areas that 
are actually exclusionary; two, require an equity analysis to 
increase impact and avoid unintended consequences; three, 
prioritize the development of deed-restricted affordable 
housing, including units for extremely low-income households; 
four, evaluate municipalities' lending and land-use actions 
holistically; five, protect tenants from displacement; six, 
ensure that historically-disinvested communities of color have 
equitable access to Federal funds; seven, identify funding 
sources that will actually incentivize meaningful change; and 
eight, obligate municipalities to maintain data and report on 
their progress.
    Most of the recent proposals for Federal action around 
exclusionary zoning have involved carrots rather than sticks, 
and for such proposals, these principles are particularly 
important. With that said, a more forceful approach may be 
warranted due to the fact that the municipalities with the most 
exclusionary zoning are among those least likely to currently 
receive or to heavily rely upon Federal funds.
    Because zoning regulation and indeed residential 
construction activity are forms of economic activity that 
clearly have significant effects on interstate commerce, 
Congress' power to act is, likewise, clear.
    Additionally, the Federal Government has a strong interest 
in stopping exclusionary zoning from underlining both the 
efficiency and the efficacy of its investments in affordable 
housing development.
    While Congress determines how to address the problem of 
exclusionary zoning comprehensively, Congress should urge the 
U.S. Department of Housing and Urban Development (HUD), and the 
U.S. Department of Justice (DOJ), to make better use of their 
existing powers. HUD, through both its Fair Housing Act 
enforcement role, and its power as a grant administrator, can 
already take action to reduce exclusionary zoning by filing 
Secretary-initiated discrimination complaints, and by holding 
up localities' block grant funds over dubious civil right 
certifications, including those involving Affirmatively 
Furthering Fair Housing.
    DOJ has a special statutorily-defined role in investigating 
and bringing enforcement action under the Fair Housing Act to 
end exclusionary zoning. The DOJ is more powerfully-situated 
than are private plaintiffs to bring suit because it does not 
face the same barriers to establishing standing. Although there 
have been several successful lawsuits challenging exclusionary 
zoning over the years, standing doctrine has been the primary 
reason why such cases have not been more frequent and is, 
therefore, the reason why the Fair Housing Act has not had as 
much of a deterrent effect as it should.
    And the Lawyers' Committee for Civil Rights Under Law and 
the Alliance for Housing Justice stand ready to serve as 
resources to the subcommittee as it contemplates Federal action 
to address the critical problem of exclusionary zoning.
    Thank you for the opportunity to testify, and I look 
forward to your questions.
    [The prepared statement of Mr. Silverstein can be found on 
page 54 of the appendix.]
    Chairman Cleaver. Thank you very much.
    And now, Dr. Hamilton, you are recognized for 5 minutes.

 STATEMENT OF EMILY HAMILTON, SENIOR RESEARCH FELLOW, URBANITY 
      PROJECT, MERCATUS CENTER AT GEORGE MASON UNIVERSITY

    Ms. Hamilton. Thank you, Chairwoman Waters, Chairman 
Cleaver, Ranking Member Hill, and members of the subcommittee.
    I am Emily Hamilton, a senior research fellow at the 
Mercatus Center at George Mason University, where I am co-
director of the Urbanity Project.
    My remarks today will focus on three points:
    First, as this committee's leadership and other witnesses 
have said, local zoning rules needlessly increase the cost of 
housing for millions of Americans.
    Second, a Federal grant program targeted at the right 
localities can help alleviate these problems.
    And third, a Federal grant program can only succeed if 
funds are disbursed on the basis of housing market outcomes.
    To my first point on zoning and housing affordability, many 
local rules limit the amount of housing that can be built, and 
increase the cost of housing that is permitted. These rules are 
typically codified in a municipality zoning code. They include 
apartment bans, requirements that each new house sit on a large 
lot, and minimum parking requirements. Such rules increase the 
cost of building housing, particularly in places where land is 
expensive.
    Under current zoning policies, half of American renters are 
rent-burdened. For many families, there is too little left for 
other necessities once rent is paid. The percentage of renters 
who are rent-burdened has increased over the past decades, 
reflecting the rising cost of exclusionary zoning.
    To my second point on the importance of targeting the right 
jurisdiction for reform, Members of Congress from both parties 
have introduced bills in the House and the Senate intended to 
reduce exclusionary zoning, reflecting a growing bipartisan 
consensus on the need for land-use reform.
    Several proposals to date would target reform among 
Community Development Block Grant (CDBG) grantees. 
Unfortunately, CDBGs do not reach all of the localities that 
enforce zoning codes. In particular, many suburbs in high-wage 
regions where reform is most urgently needed are not 
entitlement communities. In order to effectively encourage 
zoning reform, any new program Congress considers creating 
should include all of the localities that enforce zoning rules 
as eligible grantees.
    And now, my final point on the importance of rewarding 
jurisdictions based on housing market outcomes. A successful 
zoning reform program must reward localities for the right 
outcomes, namely, permitting abundant housing construction. A 
proposal recently considered by this committee would, instead, 
fund planning exercises for potential reforms to exclusionary 
zoning. Sadly, past experience shows that plans to improve 
housing affordability often sit on local government shelves 
without actually leading to any zoning changes or to new 
housing.
    Other recent proposals in Congress would, instead, reward 
localities for adopting specific policies intended to improve 
housing affordability, such as increasing the amount of land 
where multifamily housing could be permitted, or reducing 
parking requirements.
    Although this approach is better, it still does not 
necessarily reward localities for actually making more housing 
feasible to build if, as often happens, localities make housing 
that appears legal to build on paper, difficult to build in 
practice.
    Instead of rewarding localities for promising to permit 
more housing eventually or for adopting policies that may not 
result in more housing construction on the ground, Congress 
could, instead, adopt a competitive grant program that ranks 
localities according to their housing market outcomes. Such a 
program would reward growth, with the most exclusionary 
localities receiving nothing.
    My colleague and I have developed one formula that could 
enable such a program by ranking high-demand localities 
primarily according to their rate of housing construction, and 
lower-demand localities primarily according to the prices of 
their new construction.
    In conclusion, the particulars of a grant program intended 
to encourage zoning reform would need to be debated, but a 
successful program must reward the correct metric in the 
correct jurisdictions, actual housing market outcomes in the 
localities that enforce zoning rules.
    Thank you. And I look forward to your questions.
    [The prepared statement of Dr. Hamilton can be found on 
page 43 of the appendix.]
    Chairman Cleaver. Thank you, Ms. Hamilton, and I would like 
to thank all of the witnesses.
    I now recognize the distinguished Chair of the Full 
Committee, Chairwoman Maxine Waters.
    Chairwoman Waters. Thank you very much, Mr. Chairman.
    I do have a question for Professor Cashin.
    Your recent book, ``White Space, Black Hood,'' focuses on 
Black/White residential segregation. When it comes to 
exclusionary zoning, should the focus be broader to include, 
for example, economic class and other racial and ethnic groups 
who are disproportionately locked out of housing opportunities? 
In many communities, the U.S. Census racial distinction of, 
``other,'' has been growing over the years and the residential 
[inaudible]--
    Ms. Cashin. I think I got the essence of the chairwoman's 
question, if you would like me to address what I heard.
    Chairman Cleaver. Let's wait just a second or 2 just to--
she froze, so maybe they will get it. I want to make sure she 
can hear your response, if possible.
    Well, we can move on and come back.
    Chairwoman Waters. Why can't they hear me?
    Chairman Cleaver. We can now.
    Chairwoman Waters. Okay. Thank you.
    Professor Cashin, I don't know if you heard my question. 
Let me give it to you again.
    Ms. Cashin. Thank you.
    Chairwoman Waters. Your recent book, ``White Space, Black 
Hood,'' focuses on Black/White residential segregation, but 
when it comes to exclusionary zoning, should the focus be 
broader to include, for example, economic class and other 
racial and ethnic groups who are disproportionately locked out 
of housing opportunities? In many communities, the U.S. Census 
racial distinction of, ``other,'' has been growing over the 
years, and the residential segregation between White 
individuals and those who racially identify as, ``other,'' has 
also been growing. What does this tell us about modern trends 
in residential segregation, and how policymakers should be 
viewing these issues?
    Ms. Cashin. The short answer, Madam Chairwoman, is yes, all 
groups can and should benefit from disrupting exclusionary 
zoning and putting serious pressure, particularly on high-
opportunity neighborhoods, to adopt inclusionary zoning 
ordinances where they actually build their fair share of 
affordable housing. But the title of my book and my analysis 
really underscores that the residential system of separate and 
unequal neighborhoods that we have was born of anti-Black 
prejudice, born of containing the more than 6 million great 
migrants who left the South.
    And so, it took 7 decades to create this structure, 
heavily-sponsored and initiated by the Federal Government. The 
containment of Black people, and the fear of Black people, is 
why we have persistent residential segregation.
    And I think we just have to be honest in acknowledging that 
history, acknowledging what we are up against in trying to 
disrupt it.
    Chairwoman Waters. Thank you very much.
    I had a conversation recently with a Member of Congress. I 
have a big housing bill inside the reconciliation bill, and in 
that, I have dedicated a significant amount of money for 
vouchers. And he said, ``You should not have that much money 
for vouchers because they can't spend them. There are not 
enough places for them to even acquire, and so you should 
reduce the amount.'' I said, ``No, we are going to build more 
affordable housing in the National Housing Trust Fund.''
    So what we are basically facing, I think, is where are they 
going to be able to build this additional housing, because of 
what we are talking about here today. And I think I have 
targeted about $36 billion for the National Housing Trust Fund 
in order to build more affordable units. But the question 
becomes, are we going to be stymied in our efforts to build 
more affordable housing because of this residential zoning 
discrimination?
    Ms. Cashin. God bless you. I hope you prevail, Madam 
Chairwoman.
    Chairwoman Waters. I am listening to you very carefully, 
and you are absolutely right. The government created this 
discrimination, and we have the opportunity to undo it. And it 
is going to take courage and it is going to take pressure on 
the locals and all of the homeowners' associations that 
organize around making sure that they are not exercising, ``Not 
in My Backyard (NIMBY).'' And so, it is going to be a lot of 
work. And, of course, we are going to be accused of trying to 
disregard residential neighborhoods where people have invested, 
and that all of these people coming in from the outside, people 
who don't look like us just cannot come to our neighborhoods.
    I will tell you, when you are in these fights, they turn 
the tables on you and us, and they call us racist. And so, it 
is going to be a lot of work.
    Thank you for being here today. And thank you for all of 
your knowledge on this subject. I appreciate you very much.
    Mr. Chairman, I yield back the balance of my time.
    Ms. Cashin. Thank you.
    Chairman Cleaver. Thank you, Madam Chairwoman.
    The Chair now recognizes the distinguished gentleman from 
Little Rock, Arkansas, Mr. Hill.
    Mr. Hill. Thank you, Mr. Chairman, again for the 
subcommittee, and it is an excellent panel with a lot of good 
perspective, and I am grateful for everybody's participation.
    Ms. Hamilton, I was very interested in your study and your 
formula idea, and your research shows how local zoning and 
regulatory decisions can raise the cost of new housing that I 
addressed in my opening statement. In the Baltimore-Washington 
region, for example, your research shows a price increase of 1 
percent per year in localities that have adopted inclusionary 
zoning policies.
    Can you explain that and give us some background, please?
    Ms. Hamilton. Thank you, Ranking Member Hill. I appreciate 
the question.
    I am not optimistic about the potential for inclusionary 
zoning to solve the problems of exclusionary zoning. Typically, 
inclusionary zoning relies on density bonuses that localities 
provide to developments that include below-market-rate units. 
The problem with using inclusionary zoning as a solution to 
exclusionary zoning is that the tool that gives these density 
bonuses their value is exclusionary zoning itself. Without 
underlying exclusionary zoning, inclusionary zoning would be a 
clear tax on new housing construction, and taxing what we are 
trying to see in more abundance is not the right policy. It can 
never undo the harms of exclusionary zoning.
    And as you said, I have studied inclusionary zoning in the 
Baltimore-Washington region. Montgomery County, Maryland, is 
often rightfully heralded as potentially the greatest success 
of inclusionary zoning, but even there, less than 4 percent of 
the housing stock is made up of inclusionary zoning units.
    So, this policy has never been proven to be a tool that can 
provide anywhere near enough housing abundance for those 
households who need it.
    Mr. Hill. Thank you. And I think that is a key point.
    You also mentioned, I think, a good point--and Chairman 
Cleaver and I have talked about CDBG issues before, as the 
committee is considering some things there--about entitlement 
cities that obviously get a direct CDBG allocation, but a lot 
of suburban cities, or peripheral counties to an urban area 
don't. They typically get CDBG passthroughs maybe from a State 
Government, and I say maybe.
    Can you talk about how your formula would adapt for that, 
for somebody who is not an entitlement city?
    Ms. Hamilton. That is correct. I would argue that instead, 
the correct universe of localities that should be eligible for 
a Federal carrot to reform exclusionary zoning should be all of 
the localities that are in the building permit survey conducted 
by the Census Bureau and HUD. Those are all of the localities 
that currently engage in land use planning and issue building 
permits, whereas CDBGs exclude, in particular, high-wage 
suburbs of high-wage regions. And this problem is the most 
acute in the northeast.
    Mr. Hill. Yes, that is something that came out in our CDBG 
hearing, where we had this pre-1940 housing stock issue that 
dates from the 1970's in the CDBG formula, which really doesn't 
reflect reality. At the time, we were looking at 1930 and 1940 
data, because we wanted to offer poorer cities some ability to 
improve housing stock. I get that. But now, we are 50 years 
later, and it seems to me a rule like that would absolutely be 
prejudiced against a city like Los Angeles, for example, whose 
1940 housing stock wouldn't reflect one iota to its 2021 
housing stock. So, that is very interesting.
    What cities do you think do a good job in getting housing 
practices to bring new developers, new users of land bank 
properties in urban areas? Do you have a city in mind that has 
done a good job there?
    Ms. Hamilton. That is not my favorite approach. Instead, I 
would highlight localities that have engaged with exclusionary 
zoning across broader areas of land, for example, Seattle's 
urban villages approach to up-zoning or minimum lot sizes in 
Houston.
    Thank you.
    Mr. Hill. Good. Thank you so much. That was very 
interesting, and I appreciate all of our panelists.
    Chairman Cleaver, I yield back to you. And, again, I have 
to put in my bid for no more online hearings. We were disrupted 
listening to our leader, the Gary Gensler hearing was a 
disaster, and the markup was challenging. So I want to urge my 
colleagues to support going back to in-person hearings.
    Thank you so much. And I yield back.
    Chairman Cleaver. Thank you, Ranking Member Hill.
    The Chair now recognizes the esteemed Representative from 
New York, Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman. And thank you for 
holding this important hearing on exclusionary zoning.
    I would like to address my first question to Mr. 
Silverstein. Residents and homeowners in the neighborhoods of 
East New York that I represent have been working with 
community-based organizations to form a community land trust.
    First, can you explain how community land trusts enable 
local residents to take ownership of buildings and homes in 
order to keep their neighborhoods affordable?
    And, second, can you please explain the importance of 
having community land trusts in place prior to any up-zoning to 
mitigate the risk of speculation and gentrification?
    Mr. Silverstein. Thank you, Congresswoman Velazquez.
    Community land trusts are a critical tool for producing and 
preserving long-term affordable housing. In a community land 
trust, typically for a period--the land is owned by the 
community land trust, which is an entity itself, usually a 
nonprofit, and subject to a 99-year ground lease. Individual 
units, which could be apartments or they could be single-family 
homes, it can vary based on the context, would be occupied by 
residents and subject to affordability restrictions. And this 
99-year ground lease structure can allow for the gradual 
accumulation of some home equity by residents so that wealth is 
built, but it also doesn't allow for unlimited accumulation in 
order to guard against speculation and rapidly increasing 
housing costs.
    And actually, the House Financial Services markup for the 
Build Back Better reconciliation bill includes significant 
funding for community land trusts.
    Ms. Velazquez. That is great.
    Mr. Silverstein. When you have zoning proposals to increase 
density in low-income communities of color either in a 
localized way or as part of the broader-based, re-zoning plan, 
you can, as an intended or unintended consequence, rapidly 
increase land values and home values in that neighborhood 
running the risk of displacement. That is part of why it is 
important to prioritize these up-zoning efforts in higher-
income areas. But if land is placed in a community land trust 
prior to re-zoning, then that 99-year ground lease structure 
provides a check against speculation and rapidly increasing 
prices, so that longtime community residents have the 
opportunity to benefit from the new investment that may be made 
in their communities, especially in places like East New York.
    Ms. Velazquez. Okay. Great. Thank you.
    And how can we, here at the Federal level, help encourage 
more communities and neighborhoods to form community land 
trusts?
    Mr. Silverstein. Absolutely. Thank you, Congresswoman 
Velazquez.
    I think there are a few key pieces. The first piece is 
funding. Certainly, additional funding for community land 
trusts is vital to the effort to grow a community land trust 
model, as well--and I am not an expert on this issue in 
particular, but through the Government-Sponsored Enterprises 
(GSEs) and the Federal Housing Administration (FHA), there may 
be some financing barriers that are more difficult for 
community land trusts or other shared equity models to navigate 
than for more traditional types of affordable housing, making 
it easier for community land trusts to access financing.
    And also, there is the question of the availability of 
land, so encouraging local governments to, for instance, deed 
tax foreclosed properties or other surplus land to a community 
land trust would be an important step to take as well.
    And then, of course, as is consistent with the subject of 
this whole hearing, you need the zoning to be appropriate for 
the type of housing, and even some small business development 
that the community land trust is seeking to engage in.
    Ms. Velazquez. Thank you so much.
    Mr. Chairman, I yield back.
    Chairman Cleaver. The gentlewoman yields back.
    The Chair now recognizes the distinguished Mr. Posey for 5 
minutes.
    Mr. Posey. Thank you very much, Mr. Chairman, and thank you 
for holding this hearing.
    To say I am very disappointed to hear one of our witnesses 
stereotype and blame REALTORS for creating a problem by 
steering is offensive and not accurate. REALTORS, of which I am 
one, adhere to a very strict code of ethics, a very strong code 
of ethics. If they don't do that, they are not REALTORS. I 
would ask the witness who made that statement if she would like 
to communicate with me offline and to provide me with some 
evidence of the steering that she claims was caused by 
REALTORS.
    Dr. Hamilton, I really like your concept of rankings. How 
would you rate programs that provide incentives for affordable 
housing within low- to moderate-income neighborhoods compared 
to those programs that rely on zoning reform and relocating 
families to new neighborhoods?
    Ms. Hamilton. Representative Posey, thank you for the 
question.
    I would argue that both pieces are important. On the one 
hand, exclusionary zoning reform is the first step toward 
allowing more abundant, lower-cost housing to be built; but on 
the other hand, that is not a sufficient policy to help the 
country's lowest-income households in the near term in 
particular. So, I think certainly subsidies to those lowest-
income households that can be used in those households' 
neighborhoods of choice are appropriate. But I would err on the 
side of granting beneficiaries the most freedom in determining 
where they would like to live that best meets their own needs 
and pointing out that any subsidies will go further in 
localities where exclusionary zoning is not a serious burden 
relative to those localities where it is a burden.
    Mr. Posey. Very good. Thank you.
    What should our priorities be if we want to have the most 
impact and accessibility to affordable housing?
    Ms. Hamilton. The barriers to housing construction vary 
widely across the country. In a dense old city, the most 
important barriers are very different than in a fast-growing 
suburb; but across the country as a whole, I would argue that 
minimum lot size reform is the most important reform to 
permitting more lower-cost housing to be built quickly. Parts 
of the country have lot size reforms that are severely out of 
line with what the market is currently providing. In New 
England, in particular, it is not uncommon to see 2-, or even 
5-acre lot-size requirements.
    Mr. Posey. Okay. Most simply put, making housing more 
affordable depends on lowering the costs of constructing new 
houses?
    Ms. Hamilton. That is right.
    Mr. Posey. Market prices of housing are determined at the 
new housing margin of the market. What should we do to reduce 
the cost of building new and single-family housing?
    Ms. Hamilton. Most importantly, addressing the regulatory 
barriers that without doing so, more Federal funding will 
simply increase the cost of the existing housing stock, without 
permitting that funding, as well as private funding to housing 
to go toward lower costs and a more abundant housing supply.
    Mr. Posey. We all want to assess the accessibility, 
especially low- to moderate-income families. Tell us what your 
research suggests are the best strategies to make affordable 
housing available for the lowest-income families.
    Ms. Hamilton. I mentioned Houston as a potential model 
earlier. No locality in the U.S. does everything right in land 
use regulation, I would argue. But Houston has a lot of lessons 
to teach other localities. They are widely recognized for 
permitting abundant green field development, which is true; 
but, additionally, Houston permits multifamily housing at a 
high rate. It has no areas of the City where local regulations 
prevent multifamily housing, and its minimum lot size reform 
that I mentioned earlier has resulted in the construction of 
tens of thousands of new townhouses, which are relatively 
affordable relative to single-family development in some of its 
highest-demand neighborhoods.
    Mr. Posey. Thank you. I really appreciate your detailed 
answers.
    And I see my time is about to expire, Mr. Chairman. Thank 
you again. I yield back.
    Ms. Hamilton. Thank you.
    Chairman Cleaver. The gentleman yields back.
    The Chair now recognizes the esteemed gentleman from 
Houston, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. I greatly appreciate 
the opportunity to be heard.
    I do live in Houston, and we do not have zoning in Houston, 
Texas, and while that can benefit a good many people, it also 
has a downside to it. I happen to have had the opportunity to 
serve as a judge of a small claims court, and we had persons 
who have had, unfortunately, structures erected on property 
near their homes that was not suitable. And when you don't have 
zoning, you then have restrictive covenants, and getting those 
covenants enforced can be quite challenging, especially for a 
person with a modest income.
    I am interested in hearing from some of our panelists about 
these restrictive covenants that are not enforceable. I am 
talking about those that can benefit a person, if you have one. 
In a good many places, the covenants are not enforceable 
because they have not been honored over the years and, as a 
result, you can't enforce the covenant.
    So, who would like to be the first to say a word about this 
problem that we have when we don't have zoning, and we cannot 
enforce covenants because of a lapse of activity over the 
years?
    Ms. Hamilton. Representative Green, I will offer a brief 
answer, since I have mentioned Houston. Certainly, Houston has 
seen the emergence of restrictive covenants, particularly in 
its single-family neighborhoods, in the absence of local 
zoning.
    Certainly, zoning does have benefits for those who don't 
want to see change in their neighborhoods as land prices rise 
and demand for housing increases as well. I would argue, 
though, that these benefits of zoning are outweighed by 
zoning's costs in terms of housing affordability and 
opportunities for people to live in the neighborhood or region 
of their choice.
    Mr. Green. You mention the lot size, and you mention that 
in Houston, we have done well with lot sizes. Since I live 
here, I guess my best evidence would be by experiences and what 
I have seen. Explain to me what you mean by the lot sizes in 
Houston, because I see still large acreage for single homes.
    Ms. Hamilton. Thank you, Representative.
    In 1998, Houston reduced the minimum lot size for 
development within its I-610 inner loop from 5,000 square feet 
down to 3,500 square feet and, in some cases, down to 1,400 
square feet, when specific requirements are met.
    And this has resulted in the construction of detached and 
attached townhouses in many of the city's neighborhoods, 
particularly those neighborhoods closest to downtown job 
centers. This has helped provide a lower-cost type of housing 
construction relative to large-lot single-family developments.
    Private covenants may remain a barrier to townhouse 
construction in plenty of parts of the City, but the reform 
that local policymakers implemented has, nonetheless, resulted 
in the construction of tens of thousands of new units that 
would have been impossible to build otherwise.
    Mr. Green. Since I have a bit of time left, and we have had 
a lot of excellent questions, I am going to go a little bit 
offline with this question.
    I see a lot of people just outside my window in my 
congressional office who have made their home the overpass. 
There are efforts afoot to relocate people from the overpasses, 
and there is always a movement to place them in a certain area 
if at all possible.
    What have you seen across the country in terms of helping 
people to move from the overpasses to someplace that we would 
call a home? How is that working?
    Ms. Hamilton?
    Ms. Hamilton. Thank you again, Representative.
    I would point out that homelessness is not highest in the 
parts of the country where poverty is highest. It is instead 
highest in parts of the country where exclusionary zoning rules 
are most binding. Subsidies and other interventions for 
homeless individuals are needed to help them in the near term, 
but, again, zoning is a relevant component.
    Mr. Green. Thank you.
    I yield back, Mr. Chairman. Thank you very much.
    Chairman Cleaver. The gentleman yields back.
    The Chair now recognizes Mr. Steil for 5 minutes.
    Mr. Steil. Thank you. Thank you very much, Mr. Chairman. I 
appreciate everybody being on the call and at the hearing here 
today.
    I think we have had a lot of good dialogue here about what 
is really driving up the costs and how we get Americans into 
housing and, in particular, what the role of zoning is in 
adjusting these costs. We often see that several of our biggest 
cities, Democratic-controlled cities, across the United States 
have really strict zoning rules and regulations that seem to be 
driving up the costs.
    And I think it is something that we don't spend enough time 
looking at and thinking about, when you look at the cost of 
housing in New York City and Los Angeles, and what the role of 
local regulation is on this, and what role these demand-side 
subsidies would have inside the overall cost of housing in the 
context of not really addressing the supply-side issue in many 
of our nation's largest cities, again, in particular, New York 
City and Los Angeles, which both have supply-side constraints 
on housing, often through local zoning requirements, coupled 
with some of the highest housing costs in the United States of 
America.
    Ms. Hamilton, as you may know, the Majority has passed 
about $300 billion in new housing spending through this 
committee, and most of the money would go towards demand-side 
subsidies. And, based on today's conversation, it seems pretty 
clear that the core problem that we are facing in the market is 
really this supply-side issue. In many places, supply is tight 
and limited by overbearing regulations that make this housing 
development uneconomical or, in some cases, actually 
impossible.
    Could you give us some insight into what would happen if 
the Federal Government just throws billions and billions of 
dollars more into the market on the demand side with limited 
supply?
    Ms. Hamilton. Thank you, Representative Steil.
    Certainly, that is a very real concern about expanding 
current Federal housing subsidies, is that, in particularly the 
most exclusionary regions, those subsidies will simply increase 
the cost of a relatively fixed stock of housing rather than 
leading to overall abundance and the opportunity for more 
people to live in the location of their choice.
    There are examples where we see Federal subsidies working 
well, leading to the construction of low-cost multifamily 
housing, from which the beneficiaries are intended to benefit, 
and that is a positive outcome. But it is not the norm, due to 
local exclusionary zoning rules. And it is not--
    Mr. Steil. Ms. Hamilton, this format is just terrible. I 
can't wait until we are in person again for all of our 
hearings. But let me dive in on that, because I think what you 
are bringing up is really important.
    There is a great study out there from 2018 which shows that 
regulations can add up to $93,000 of costs on a home, where a 
single-family home price is now maybe just under $400,000 in 
the median. And, effectively, all of these regulations and 
zoning function almost like a new tax on new housing, which 
moves us in the wrong direction.
    And one of the things I don't think we discuss enough is, 
who is footing the bill for this, right? Are certain groups 
uniquely impacted by what I call NIMBYism of all of these local 
zoning rules and regulations?
    Ms. Hamilton. Yes. Low-income households are those who are 
most burdened with the cost of exclusionary zonings. And to the 
extent that additional subsidies will increase the price of 
market-rate housing, which is what the vast majority of 
Americans of all income levels live in, additional--
    Mr. Steil. So, is it fair to say that some of our biggest 
Democrat-run cities that are putting in all of these 
regulations and controlling the supply are actually clobbering 
the low-income households? That is your take on this?
    Ms. Hamilton. Certainly.
    Mr. Steil. Yes. It is mine too. It is one of the big 
frustrations that I have here, is we only look at increasing 
demand-side money, spending taxpayer dollars from all across 
the nation, and really not addressing the supply-side issue in 
some of our biggest Democratic-run cities.
    You share that frustration, it sounds like, Ms. Hamilton.
    Ms. Hamilton. I do. Thank you.
    Mr. Steil. Could you maybe just add a little more, in 
particular on what we could be doing on the zoning side as it 
relates to this government funding, if you would?
    Ms. Hamilton. I would support a flexible grant program that 
gives our local policymakers wide freedom in what they spend 
the grant money on--that is nonetheless defensible purposes. 
Because the purpose of these grants is to encourage regulatory 
reform, not to fund specific programmatic outcomes.
    Mr. Steil. I appreciate that.
    Cognizant of my time, Mr. Chairman, I appreciate you 
holding today's hearing, and I will yield back.
    Chairman Cleaver. I thank the gentleman for his questions.
    Let me just make a correction for the record.
    In 2019, Newsday published the, ``Long Island Divided'' 
series. It was an exhaustive, 3-year investigation into racial 
discrimination in home buying on Long Island. And they deployed 
actors to conduct fair lending testing, which involved the use 
of hidden cameras. Many of you may have seen this on TV. They 
recorded meetings with real estate agents. And this is one of 
the many fair housing testing investigations.
    And it confirmed longstanding findings over the decades 
showing that in nearly a quarter of the tests--24 percent--
agents directed Whites and minorities into different 
communities through house listings that had the earmarks of 
steering--the ``unlawful sorting of homebuyers based on race or 
ethnicity.'' That is a direct quote.
    The Chair now recognizes the eminent Representative from 
Ohio, Mrs. Beatty.
    Mrs. Beatty. First of all, let me say good afternoon, and 
thank you, Chairman Cleaver, and thank you, Ranking Member 
Hill.
    My first question is for Ms. Cashin. Historically, zoning 
has been used by city and local governments as a tool to 
segregate Americans. And that segregation got us into parts of 
towns that were known as Black neighborhoods or wealthy 
neighborhoods or even Jewish neighborhoods, et cetera. Remnants 
of racial and ethnic discrimination persist in cities today and 
communities all around the country. And that is what we are 
hearing today.
    And from these discriminatory zoning and segregation 
policies of the past, the Civil Rights Act has outlawed 
intentional discrimination. But how do our current zoning 
policies and other local housing ordinances remain a tool for 
discrimination and segregation, in your opinion?
    Ms. Cashin. Thank you, Congresswoman, for that question.
    Racial exclusionary zoning was struck down by the Supreme 
Court. So, obviously, even though many exclusionary zoning 
ordinances, when they were passed, were animated by anti-Black 
prejudice and continue to be, they use racially neutral tools 
to exclude people who cannot buy very expensive, large-lot, 
large homes.
    You can zone, particularly in newer communities, only for 
large-lot, expensive housing. You can require certain types of 
materials. You can have nothing in your zoning code that 
provides for multifamily living, not even market-rate 
apartments, right? And, now, all of these ostensibly racially 
neutral things disproportionately exclude people of color.
    Mrs. Beatty. Okay. Thank you.
    Mr. Silverstein, while zoning reform and redevelopment can 
expand housing opportunities for low- and middle-income 
Americans, if the right safeguards are not in place and the 
right incentives are not in place, it can exacerbate the lack 
of affordable housing and lead to gentrification.
    What are some of the things that the Federal and local 
government [inaudible] affordable instead of building more 
luxury condos like we are seeing in Washington, D.C., and here 
in Columbus, Ohio?
    Mr. Silverstein. Absolutely. Thank you for the question, 
Congresswoman Beatty.
    I think there are a few pieces of this. First, to the 
extent that localities are taking on zoning reform specifically 
in response to Federal incentives or requirements--and Congress 
is designing those Federal incentives and requirements--it 
should be clearly baked in that the purpose of the zoning 
reform is to increase the supply of deed-restricted affordable 
housing.
    That does not mean that there wouldn't be any market-rate 
housing, some of which may be luxury housing produced as a 
result in addition, in the context of a mixed-income 
development. There is certainly a place for that, and those 
market-rate units could help cross-subsidize affordable housing 
units in addition to being paired with a subsidy. But, 
basically, at the level of policy design, you absolutely want 
to make sure that your overriding purpose is on creating more 
affordable housing.
    Second, there is an enforcement side to this. If a 
jurisdiction is engaging in targeted up-zoning that is 
predictable, and is likely to cause displacement, that, just as 
much as exclusionary zoning, raises questions about Fair 
Housing Act compliance. HUD and DOJ have an enforcement role to 
play in looking at those types of practices. And, certainly, 
that is something that I think you can--
    Mrs. Beatty. I am going to have to interrupt, because my 
time is almost up, but I get the gist of it, and I want to 
thank you.
    As we look at Build Back Better, in light of what most of 
the folks have said who have testified, and also from the 
questions from my colleagues on both sides of the aisle, a lot 
of this confirms what Chairwoman Waters has been saying: We 
need to make sure that, as a top priority, housing is well-
funded in these packages that we are going back on the House 
Floor and we are voting for. We must not cut those dollars. We 
must include housing at the highest amount in both of our bills 
when we come back on reconciliation and infrastructure.
    Thank you, and I yield back.
    Chairman Cleaver. The gentlewoman yields back.
    The Chair now recognizes the notable Representative John 
Rose for 5 minutes.
    Mr. Rose. Chairman Cleaver, and Ranking Member Hill, thank 
you for holding this hearing. And thank you to our witnesses 
for your time and your expertise on this Friday afternoon.
    The supply of homes for sale at the end of August 2021 
totaled 1.29 million units, down 1.5 percent from July, and 
down 13.4 percent from August of last year, according to the 
National Association of REALTORS.
    Housing supply is failing to keep up with the demand, and 
it is resulting in dramatically higher prices for homes. 
Therefore, it is critical that we have affordable housing 
options for families across the nation.
    In Tennessee's Sixth Congressional District, which I 
represent, 12.9 percent of total occupied housing units are 
manufactured homes. Manufactured housing is the most affordable 
homeownership option available nationwide for minorities, 
underserved and low-income borrowers. According to U.S. Census 
data, 90 percent of new homes under $75,000 are manufactured 
housing.
    Dr. Hamilton, many cities and towns ban manufactured homes 
as a permitted use in residential zones and relegate them to a 
special overlay zone in one small area of the community. This 
often eliminates affordable homeownership in areas of 
opportunity in that community.
    At the Federal level, how can we encourage communities to 
expand zoning, including manufactured homes, to increase 
affordability, especially in areas of opportunity near good-
paying jobs, high-quality schools, and other amenities?
    Ms. Hamilton. Thank you, Representative Rose. I certainly 
agree on the importance of manufactured homes as one piece of 
the solution to permitting abundant low-cost housing.
    Some States have taken an approach of requiring their 
localities to permit manufactured homes on all residential lots 
across the State, Nebraska being one example. But I would argue 
that State policy or Federal policy intended to increase the 
availability of manufactured homes needs to go further, 
addressing rules like minimum lot-size requirements that make 
manufactured homes often not make sense, when the differential 
between the lot and the cost of the house is too large to be a 
logical market outcome.
    Mr. Rose. You mentioned the size of the lot. And I want to 
ask a follow-up question, but let me stay on point here for a 
second.
    Statute requires HUD, when allocating grant money like CDBG 
or HOME Program funds to communities, to ensure those 
communities have manufactured housing considered as part of 
their affordable housing plans. HUD has not utilized this part 
of the law, and many communities exclude manufactured housing 
in their zoning plans. This eliminates a potential rich source 
of affordable homeownership for many parts of the country.
    How can HUD compel communities to include manufactured 
housing in their comprehensive housing plans?
    Ms. Hamilton. HUD could certainly go further to act on that 
language. But I would argue that real change must come from 
Congress and members of this committee changing the statutes 
that HUD works with to provide them with more teeth to compel 
local zoning reform.
    Mr. Rose. Very good.
    I mentioned that I want to get your opinion on a 
situation--we see a lot of people moving to Tennessee from 
higher-cost areas like California and the Northeast. And one of 
the land use planning issues that is maybe particular to 
Tennessee, although maybe other rural States face this, is that 
in Tennessee, you can avoid local planning commissions if the 
lot sizes that you subdivide property into are 5 acres or 
larger.
    Tennessee has another curiosity--they require a 50-foot 
access strip to a public road. And it creates a situation where 
we are seeing some very difficult subdivisions happening, where 
you have these 50-foot strips making their way back into larger 
tracts of property.
    Have you seen that problem? And what is your opinion about 
the long-term implications of this land that is divided into 
these very narrow strips for access purposes, and for purely 
meeting the zoning requirement?
    Ms. Hamilton. Representative, that is an excellent example 
of the interaction of the many regulations that local 
governments enforce sometimes leading to outcomes that just 
don't make sense and constrain housing construction as a 
result. That is why I would focus on rewarding housing-market 
outcomes rather than specific policy changes.
    Mr. Rose. Thank you.
    I see that my time has expired, Mr. Chairman, so I yield 
back.
    Chairman Cleaver. The gentleman yields back.
    The Chair now recognizes the celebrated Representative from 
California, Mr. Vargas, for 5 minutes.
    Mr. Vargas. Thank you very much, Mr. Chairman. I love to 
celebrate any party we celebrate.
    I want to thank you and the ranking member, Mr. French 
Hill, a good friend, and especially Chairwoman Maxine Waters, 
because I think that this is a very, very important issue, the 
affordability of housing, but it is also a very complicated 
one, just to be frank.
    I was on the San Diego City Council for about 7 years, and 
I sat on two committees mostly: the Public Safety Committee; 
and the Land Use and Housing Committee. And on the Land Use and 
Housing Committee, I got to know a little bit about San Diego 
and how it is built.
    Every city is different, but basically we are constrained 
by--you can't go south because it is a different country; it is 
Mexico. You can't go west because it is the ocean. East, 
interestingly, you bump into mountains, and it is very 
difficult and expensive to build into mountains. And going 
north, you hit Camp Pendleton, which is a military base, and we 
like it and we don't want to change that. We need to train our 
Marines there.
    So you are really constrained in this area, and almost all 
of the available land for development is used. Now, you have to 
have density, and I think density is very, very important. That 
is where, of course, zoning comes in.
    But we have had some experiments here that have gone very 
badly. For example, I think everyone tried to do the right 
thing back in the 1960s and said, the center part of the city, 
an area that was a little bit older, with housing that was over 
50-years-old, we are going to allow for the change in zoning, 
and allow up to 6 units in a single-family neighborhood. And, 
of course, they thought it would be a great idea because it was 
fairly close to the downtown, there were transportation 
quarters there, and there was also housing, but the housing was 
dilapidated. It needed some changes because it was 50-years-
old. But they thought it was a good idea.
    What happened was, instead, you got a lot of people who 
came in and did what they called the, ``Huffman Six-Pack.'' 
They bought the single-family house, they basically scraped it, 
and they built the ugliest possible square box with six units 
there. In the front, instead of having grass and a place to 
park, it was all cement, and you just simply parked your car. 
And it destroyed those neighborhoods. It really did.
    I was on the Public Safety Committee, and I can tell you 
that most of the problems that we had in those neighborhoods 
was what came out of those Huffman Six-Packs. So, they changed 
the zoning again not to allow that, which was too bad, because 
I think it really was the character of what they built--not the 
density, but what they built. They built it as cheaply and as 
badly as they possibly could just to squeeze money out of it.
    Now, we are building areas with much more density than 
that, much more than six units, and it is done right. They 
don't just scrape the front yard. You had one area; you park 
underneath the building. You go up a number of spaces. It is 
more expensive to build like that, but it is a better building.
    Anyway, I mention that because it is not so easy just to 
simply change, and it is not always racism either. 
Interestingly, in this neighborhood, most of the people are 
people of color. So, they are not against people of color 
moving in. They are just saying, don't build, like they built 
before, those Huffman Six-Packs. It destroyed the neighborhood.
    Does anyone have a comment on that?
    Because, again, I believe in density. I think density is 
good. But you can't just build the crappiest possible building 
there, because it does destroy those neighborhoods.
    How about Professor Cashin? Any comment on that?
    Ms. Cashin. Can you hear me?
    Mr. Vargas. Yes. Absolutely.
    Ms. Cashin. Okay. Part of the reason why I support strongly 
encouraging communities to adopt their own inclusionary zoning 
ordinance is that it can be tailored to their individual 
circumstances. In the process of doing that, hopefully all of 
the constituencies in the community get to participate in 
shaping what that looks like. It is not for the Federal 
Government to say what it should look like.
    But the point is that communities, and, yes, including a 
lot of Democrat-run cities, need to get going on a vision of 
inclusion, where people of all colors, races, and economic 
circumstances can live together more densely and more 
affordably.
    I love the idea of creating more micro-housing, and 
allowing manufactured housing to come in. But strongly 
incentivizing, enforcing Affirmatively Furthering Fair Housing 
(AFFH), putting pressure on localities to innovate and build 
cities and communities of the future that include and work for 
everyone.
    Mr. Vargas. My time is up. And I agree with you. The only 
thing is, I think the product is important too, what you build. 
Because if you build a crappy building, that does, in fact, 
create problems for everybody, especially if you want to create 
more density.
    And, again, Vienna is one of the most dense places in the 
world, and it is the most livable city. Density is good; it 
just has to be done right.
    Thank you very much. I yield back, Mr. Chairman.
    Chairman Cleaver. The gentleman yields back.
    The acclaimed Floridian, Mr. Lawson, is now recognized for 
5 minutes.
    Mr. Lawson. Thank you, Mr. Chairman. And I want to thank 
you for having this hearing. And I want to thank the panel for 
being here today. It is a very important issue.
    In only 12 counties in America can a full-time worker 
earning State or Federal minimum wage afford a one-bedroom 
home. According to this report, in no State at all can a person 
earning minimum wage afford a two-bedroom apartment. 
[inaudible] Have another detrimental effect, delaying 
homeownership, long the symbol of the American Dream.
    In my district in Duval County, in order to afford a 
moderate two-bedroom home, renters need to earn $18.62 an hour. 
That is $10.53 more than the State minimum wage and about $2 
more than what the average renter in Jacksonville earns.
    Ms. Gallo, putting the minimum-wage issue aside, how can 
localities better encourage development to increase the 
production of affordable units targeting extremely low-income 
households?
    Ms. Gallo. Thank you for the question.
    This is the reason why demand programs are just as 
important as supply. Because the income level for many 
communities is exactly as you quoted in the, ``The Gap'' report 
from the National Low Income Housing Coalition, which many of 
us read and assess and develop programs from and recommend 
policies to.
    Supply and demand are both complicated issues, and you 
cannot address one without the other. What you are referring to 
is when people's incomes are so low, there have to be programs 
to provide opportunities for people to pay just 30 percent of 
their income for rent. So, the voucher program is critically 
important.
    At the same time, there needs to be programs to increase 
the production of housing so that supply is not so constrained 
that the cost continues to go up. And that is where--I think 
one of the Members talked about it--billions of dollars going 
to construction is absolutely necessary.
    The Low Income Housing Tax Credit Program is one very key 
program that can facilitate the development of affordable 
housing for people at the extremely low-income housing level. 
In fact, over its history, it has developed millions--I think 
it is 3 million--units across the country.
    So, I would encourage the Members of Congress to continue 
to pay attention to those programs. There are various proposals 
before you that would increase the allocation of tax credits to 
develop extremely low-income housing. And then, keep the focus 
on the Housing Voucher Program and being able to provide those 
vouchers universally to everyone who needs them.
    Mr. Lawson. Okay. Thank you very much.
    And, as a follow-up, Mr. Silverstein, can zoning reform 
alone resolve affordability and equity concerns?
    Mr. Silverstein. Thank you, Congressman Lawson.
    No, zoning reform on its own cannot resolve the 
affordability crisis, and it certainly can't do so in a way 
that centers racial equity.
    Zoning reform is one critical piece of a broader strategy. 
It has to be strategic and targeted in how zoning reform is 
crafted. And it also has to be paired with actual investments 
in subsidized housing, such as those included in the Build Back 
Better reconciliation package.
    And I would say quickly on one point, the investment in 
Housing Choice Vouchers is not, strictly speaking, just a 
demand-side measure. Most new affordable housing that is built 
to reach extremely low-income households includes Housing 
Choice Vouchers that have been project-based.
    So, I don't think that we should buy into a strict 
dichotomy between Housing Choice Vouchers as a demand-side 
program and the other investment as being supply-side. Housing 
Choice Vouchers can play on both sides of that line.
    Mr. Lawson. Okay.
    With that, I yield back, Mr. Chairman.
    Chairman Cleaver. The gentleman yields back.
    The Chair now recognizes the notable New Yorker, Mr. 
Torres.
    Mr. Torres. Thanks, Mr. Chairman.
    The United States has been and continues to be zoned for 
segregation. Exclusionary zoning produces and perpetuates 
housing segregation by race and class, which in turn produces 
and perpetuates school segregation by race and class.
    Ours is a nation that preaches equal opportunity but often 
practices segregation. And the research of Professor Raj Chetty 
has persuasively shown that ZIP Code is often destiny, and that 
where you live often determines your opportunity and mobility.
    My first question is about one of the most egregious forms 
of exclusionary zoning, single-family zoning. This question is 
for Sheryll Cashin and Thomas Silverstein, and it is a yes-or-
no question. Is single-family zoning a violation of the Fair 
Housing Act?
    Ms. Cashin. I am going to say, ``yes.'' I would have to 
explain why, but I am going to say, ``yes,'' and leave you your 
time, sir.
    Mr. Torres. Mr. Silverstein, your opinion?
    Mr. Silverstein. I am going to say, ``often,'' and I would 
have to explain why.
    Mr. Torres. Okay.
    Ms. Hamilton, your testimony and your exchange with 
Congressman Steil, in my opinion, set up a false choice between 
housing supply and housing subsidy. It is not an either/or 
proposition. We need greater housing supply to ensure a 
sufficient quantity of housing, and we need a greater housing 
subsidy to ensure sufficient affordability of housing.
    The Build Back Better Act envisions an historic expansion 
of Section 8 vouchers, which would make housing units 
affordable that would otherwise be unaffordable to the lowest-
income Americans.
    So, we disagree on the question of housing subsidy, but I 
have a question regarding housing supply. You have spoken about 
the need for land use reform through incentives. I am 
admittedly skeptical about the effectiveness of incentives. It 
seems to me that an exclusive community that is determined to 
remain exclusive is unlikely to be swayed by incentives.
    So, what reason is there to think that incentives would be 
effective at effectuating the kind of land use reform necessary 
for addressing the affordability crisis?
    Ms. Hamilton. Thank you, Representative. I agree that 
incentives are not sufficient to encourage local zoning reform, 
particularly because the problem is most severe in high-tax-
base localities where these Federal grants are going to be 
least effective.
    For that reason, I think any program that does use 
incentives must be designed in order to be as effective as 
possible, recognizing that ultimately, reforms must come from 
the local or State levels, in some cases, rather than relying 
on the Federal purse strings.
    Mr. Torres. It seems to me the proper response to 
exclusionary zoning is not incentives, but the proper response 
is robust enforcement of the Fair Housing Act.
    I have a question for Mr. Kahlenberg. I admire your 
research on segregation. And, in the time of gentrification and 
speculation, there is an understandable concern that more 
development would likely lead to displacement rather than 
desegregation. In your opinion, how do we best structure 
development to ensure desegregation instead of the displacement 
that many fear?
    Mr. Kahlenberg. Thank you for the question, Congressman 
Torres. I have two thoughts on that issue.
    First of all, I think there is good evidence that 
exclusionary zoning, in general, causes more gentrification and 
displacement. That is to say, when individuals who might 
purchase a home in a middle-class neighborhood cannot afford to 
because of exclusionary zoning, that leads them to choose to go 
into a neighborhood that is gentrifying and, thereby, displace 
people who are living there. So, that is part of the issue.
    The other is that I think we have learned from California 
and elsewhere that zoning reform that only provides up-zoning 
without protections for individuals who may face displacement 
is wrong, and it is politically unfeasible as well.
    And so, I would agree with Professor Cashin, who has 
emphasized the importance of exclusionary measures when there 
is an area that is being up-zoned, and associated measures to 
make sure that there is not expansive displacement.
    Mr. Torres. Is there a locality that you feel represents 
the right model of affordable and sustainable and equitable 
development?
    Mr. Kahlenberg. I think we are still searching for that 
perfect model.
    Mr. Torres. Okay.
    I see my time has expired. Thank you, Mr. Chairman.
    Chairman Cleaver. Thank you, Mr. Torres.
    Before I begin my questioning, I want to place into the 
record a letter from the National Multifamily Housing Council, 
without objection. And this letter is dated October 15, 2021. 
Without objection, it is so ordered.
    I would like to just have a quick conversation with two of 
our witnesses, Mr. Kahlenberg and Ms. Gallo.
    Can you, in just a few words, speak to me please about the 
difference between segregation and gentrification? Either one, 
or both of you.
    Ms. Gallo. Segregation is what we have been talking about 
in terms of the consequences of zoning practice throughout this 
country, when you are deliberately creating situations where 
people, particularly people of color and lower-income people, 
cannot live in certain areas and the decisions to allow that to 
happen are essentially sanctioned through policies and 
programs. So, zoning is one practice where you have certain 
people not being able to live somewhere because of, for 
instance, the single-family zoning conversation.
    Gentrification happens when we have people displaced from 
communities who have traditionally lived there for a long time, 
and it happens from up-zoning practices that are not done 
correctly. Gentrification is when neighborhoods start to change 
from a predominantly low-income community to one that has 
higher prices for homes, both rental and sales, and causes the 
people who live there to no longer afford to live there.
    That is my layman's definition, practicing affordable 
housing development.
    Chairman Cleaver. Mr. Kahlenberg?
    Mr. Kahlenberg, are you still with us?
    Well, let's continue this. As I mentioned, I chaired the 
Planning and Zoning Committee when I was on the city council in 
Kansas City. And one of the problems that just drives me crazy 
is, we have an historic west side which has been primarily an 
Hispanic area for 100 years--in fact, we have an Hispanic 
community center, the Guadalupe Center, that has been there for 
100 years--but, all of a sudden, most Hispanics cannot live 
there anymore because of what has happened with the 
gentrification. And only the long-timers can afford to still 
live in that neighborhood.
    And so, I am obviously necessarily concerned, when you look 
at minorities' rate of homeownership, and compare Black and 
Brown homeownership with White homeownership, which is 
exploding at about 75 percent.
    The Urban Institute has recommended that policymakers 
create more opportunities for affordable homeownership and 
reform local zoning laws. Land use policies need to be 
reformed, building codes that inhibit affordability housing and 
development. And we need to create a means of reducing the 
racial homeownership gap.
    But I don't know if any of those things we did can halt it 
if people, Mr. Kahlenberg, are moving in and they have a 
significant income level over the existing residents. So what 
is that? Is that segregation, financial segregation, or is it 
still gentrification, as Ms. Gallo mentioned?
    Mr. Kahlenberg. I apologize, Chairman Cleaver. I have been 
having connectivity issues, so I am not sure that I got all of 
the question.
    But the question of gentrification and displacement is a 
central one. I think we want to see some movement where there 
are neighborhoods where there is going to be a nice and healthy 
economic mix, but we have to have those protections in place to 
make sure that there is not displacement.
    But I apologize, because I didn't get most of your 
question.
    Chairman Cleaver. I get excited about some areas in Kansas 
City, Missouri, that are now becoming diversified; they are 
racially mixed. But many of the homeowners in those areas are 
saying to me, ``Look, we are going to get priced out of here, 
it is just a matter of time.'' And they are saying, ``This is 
going to become another segregated neighborhood, and we will 
have to move out of here. Because the people who are moving in 
have higher incomes, and they are moving in, and rehabbing the 
older homes.''
    And I am not sure that there is a zoning law that can touch 
this issue. So, I am looking for the housing intelligentsia to 
give me the solution to this issue.
    Mr. Kahlenberg. I would say that Philadelphia is one of the 
leaders on this issue, where they are taking steps to make sure 
that there are supports for those who were longtime residents 
in the community that are not displaced. So, that is one model 
to look at.
    Ms. Gallo. And I would add, the community land trust 
conversation we had earlier is something that should be pursued 
in areas that are facing gentrification.
    Chairman Cleaver. Okay.
    We appreciate all of the witnesses. Thank you very much for 
providing us with, I think, some tremendously important 
information.
    Let me now recognize, before I close the hearing out, the 
ranking member, Mr. Hill.
    Mr. Hill. Chairman Cleaver, thank you. This has really been 
an interesting hearing. I thought it was an excellent give-and-
take discussion, so thanks for holding it.
    I just had a quick question before we wrap up, since we are 
not able to see each other in person. We haven't had a hearing 
on the oversight of the secondary mortgage market, particularly 
Fannie Mae and Freddie Mac, since December of 2018. I wanted to 
put that on your radar and see if you would agree with me to 
perhaps urge our Full Committee Chair that we do that.
    Chairman Cleaver. Yes, we actually need to do that, 
especially now that there is a new head of the Federal Housing 
Finance Agency (FHFA). So, I think it would be a good time for 
us to have that hearing.
    Mr. Hill. Thank you. And I yield back to my friend.
    Chairman Cleaver. We will talk with you about that later.
    I would like to thank again all of the witnesses, and thank 
the distinguished ranking member.
    The Chair notes that some Members may have additional 
questions for these witnesses, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    If there are no other questions or important people coming 
forth, the eminent Members of Congress are now dismissed for 
lunch. This hearing is now adjourned.
    [Whereupon, at 1:45 p.m., the hearing was adjourned.]

                            A P P E N D I X


                            October 15, 2021
                            
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