[Senate Hearing 117-384]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 117-384

 
        EXAMINING BIPARTISAN BILLS TO INCREASE ACCESS TO HOUSING

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

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

      EXAMINING BIPARTISAN PROPOSALS TO EXPAND AFFORDABLE HOUSING 
                             OPPORTUNITIES

                               __________

                             JUNE 24, 2021

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban  
  
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              U.S. GOVERNMENT PUBLISHING OFFICE 
48-853PDF            WASHINGTON : 2022 
               
                
                


            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                 Beth Cooper, Professional Staff Member

                Megan Cheney, Professional Staff Member

                 Dan Sullivan, Republican Chief Counsel

                   Elie Greenbaum, Republican Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        THURSDAY, JUNE 24, 2021

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    28

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    29

                               WITNESSES

Lisa Mensah, President and CEO, Opportunity Finance Network......     5
    Prepared statement...........................................    30
    Responses to written questions of:
        Senator Tester...........................................    44
        Senator Cortez Masto.....................................    48
        Senator Sinema...........................................    51
        Senator Rounds...........................................    51
Nan Roman, President and CEO, National Alliance to End 
  Homelessness...................................................     7
    Prepared statement...........................................    38
    Responses to written questions of:
        Chairman Brown...........................................    53
        Senator Cortez Masto.....................................    54
        Senator Rounds...........................................    56
Howard Husock, Adjunct Scholar, American Enterprise Institute....     9
    Prepared statement...........................................    41
    Responses to written questions of:
        Senator Rounds...........................................    57

                                 (iii)


        EXAMINING BIPARTISAN BILLS TO INCREASE ACCESS TO HOUSING

                              ----------                              


                        THURSDAY, JUNE 24, 2021

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10 a.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Sherrod Brown, Chairman of the 
Committee, presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order.
    In our first hearing that I gaveled as Chair, we talked 
about how housing is the gateway to opportunity and to building 
a middle class, how too many families in our country are locked 
out of it.
    I said that this Committee, the Banking and Housing 
Committee, will focus on housing perhaps more than the 
Committee ever has. Since then, I have been encouraged from so 
many Members of this Committee in both parties that have taken 
that change to heart. We have held hearings on the state of our 
Nation's housing and the legacy of racism in the housing 
system.
    Last week, we heard from three mayors and a county 
commissioner about how housing is holding back communities and 
families in Pennsylvania, Ohio, Montana, and Arizona. We heard 
from the mayor of Bozeman that the city's businesses lose out 
on candidates for good-paying salaried jobs because there are 
not enough homes. The mayor of Tempe, said that they have had a 
900 percent increase in the number of residents without a place 
to lay their heads at night. Just in the last 5 years, the 
mayor of Akron said most of his housing was built before 1970, 
long before we stopped using poisonous lead paint.
    These are not isolated problems. Homeowners and renters, 
people working minimum or making a steady salary, they are 
struggling to find an affordable place to live. This is a 
national problem. Members of both parties in these hearings 
have asked thoughtful questions.
    We will discuss many of these bipartisan proposals today. 
Let me just run through a number of them.
    We have legislation to expand affordable housing 
opportunities: The Family Stability and Opportunity Voucher 
Act, introduced by Committee Member Democrat Senator Van Hollen 
and Republican off the Committee, Senator Young.
    The Choice in Affordable Housing Act, legislation offered 
by Senator Cramer, a Member of the Committee, and Senator 
Coons.
    S.2008, introduced by Senator Reed on the Committee and 
Senator Collins to strengthen the U.S. Interagency Council on 
Homelessness.
    The Yes in My Back Yard Act, offered by Senator Young from 
Indiana, Schatz, and Senator Warnock from this Committee, 
shedding light on communities' plans to remove barriers to make 
housing more affordable and combat discrimination.
    We will look at the Native American Rural Homeownership 
Improvement Act, introduced by a Committee Member who is 
present, Senator Smith, also Committee Members Rounds, Tester, 
Cramer, and also Schatz and Thune, that supports lending to 
Native Community Development Financial Institutions.
    We will talk about a plan from two Committee Members, 
bipartisan, Senators Tester and Lummis, the Improving FHA 
Support for Small-Dollar Mortgages Act of 2021, something that 
will make a huge, huge, huge difference in so many States 
including in my neighborhood.
    Many of us have read Matthew Desmond's powerful book 
Evicted. Inspired in no small part by that book, Senator Bennet 
and Senator Portman, one of each party, and I have introduced 
the Eviction Crisis Act.
    In Ohio, we also know how the addiction crisis has torn 
families apart. Senators Casey and Collins introduced the 
Grandfamily Housing Act--I have joined them--to help 
grandparents caring for grandchildren find the housing support 
they need.
    The Trafficking Survivors Housing Act of 2021, Senators 
Durbin and Blunt--I guess they are not Members of the 
Committee. I thought I had a trend going there. I guess I do 
not.
    More of my colleagues have introduced other bipartisan 
housing acts. Senators King and Young, along with Cantwell, 
Tester of this Committee, and Kennedy of this Committee, have 
introduced the Task Force on the Impact of the Affordable 
Housing Crisis Act.
    These ideas recognize, all of these together, recognize the 
breadth of our housing challenges. And they show how these 
problems cut across geographic, racial, and partisan lines.
    They tell me, the reason I wanted to be on this Committee 
is that the word housing is in the title and everything starts 
with housing. Your health care, your access to food, your 
schools, your safety, the structure of the house, whether there 
is lead paint and lead in the pipes. All of those things 
matter.
    So we have got lots of work to do in this Committee.
    The last thing I will say, on Monday I was talking with 
parents from Ohio about the Child Tax Credit, what the 
expansion means for the ability to afford childcare and diapers 
and transportation and, of course, housing.
    One advocate who worked with Northeast Ohio families said 
something she hears so often. She said she has talked to 
clients, these were her words, whose whole lives revolve around 
making their rent. Whose whole lives revolve around making 
rent.
    We know how many people in this country, we know there are 
tens of millions of people who spend half or even more 
sometimes of their income in housing costs. One thing goes 
wrong, their life can fall apart. We have an obligation to 
them.
    Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thanks, Mr. Chairman.
    I would like to begin with a brief aside. I would like to 
thank Mark Calabria, the Director of FHFA until yesterday. Mark 
is an outstanding American, extremely intelligent, 
knowledgeable about housing issues. I think he did an 
outstanding job leading the FHFA and I wish him well.
    I will say I do think the Supreme Court actually reached 
the right decision about the authority of a President to fire 
him, even though that is not the policy outcome I prefer. I 
think it is the right constitutional decision.
    I think the President made a mistake in firing a very, very 
good and qualified man who was doing an excellent job. I hope 
that the ultimate successor to Mr. Calabria, when one is 
nominated and confirmed, will be as dedicated to the important 
task of reforming the housing finance in this country as Mr. 
Calabria was.
    When we had our first housing hearing this Congress, I made 
it clear that I am committed to working with all Members of 
this Committee to improve access to affordable housing. You may 
recall I released a set of principles at the start of this 
Congress for reforming the housing finance system.
    And as I pointed out before, my principles that I laid out 
overlap significantly with the principles that you laid out, 
Mr. Chairman, back in September of 2019. So I think there is an 
opportunity and we should be working on a bipartisan solution 
to comprehensive reform of housing finance which will serve 
families and the taxpayers.
    I am not sure that today's conversation is going to be 
primarily about ways that we can make housing more affordable. 
I think today we are going to be discussing a number of 
disconnected bills, most of which increase Government spending 
and interference in housing markets. I think we would be wise 
to remember that there is no guarantee that further Government 
spending is going to improve access and affordability of 
housing.
    The Government already supports a very wide array of 
overlapping housing subsidies that have not been very 
successful in addressing affordability. We have a mortgage 
interest deduction, capital gains exclusion on house sales, 
property tax deduction, Government guaranteed and subsidized 
mortgages, we have LIHTC, a huge host of HUD programs.
    But as with taxpayer subsidies for health care and higher 
education, all of these programs tend primarily to contribute 
to price escalation. Just last month, we saw that the year-
over-year change in the median home sales price in American was 
up nearly 25 percent. That is staggering.
    Now I acknowledge that monetary policy is probably the 
primary driver of this. But all of these subsidies are 
contributing, as well.
    So if we want to make housing affordable, I think we ought 
to be talking about how Government subsidies foster higher 
housing prices and how monetary policy--in particular, the 
Fed's extraordinary easy money policy of zero interest rates 
and purchasing nearly half-a-trillion dollars a year in 
mortgage-backed securities--how those are contributing 
significantly to rapid escalation in home prices. And we 
certainly know that wages are not growing at 25 percent per 
year.
    So the experiment of a vast subsidy framework combined with 
a hyper-accommodative monetary policy has actually driven up 
prices so much it has reduced the affordability of housing in 
America.
    Congress recently has doubled down on subsidizing housing 
and that does not appear to be working so far. Congress 
appropriated over $80 billion for housing in response to COVID, 
much of it unanimously in the Senate. But much of the money has 
not gone out the door yet. Nearly $50 billion was spent on 
emergency rental assistance, little of that has reached 
landlords or tenants.
    Congress spent almost another $25 billion on more HUD 
programs through the March 2020 CARES Act and President Biden's 
partisan relief bill, but 15 months after the CARES Act was 
enacted, less than one-third those funds have been spent.
    I think we need a new discussion. I think the measure of 
success should not be just how many families are receiving 
housing assistance. We should begin focusing on enabling people 
to work their way out of poverty and empower them to graduate 
from Government support. But unfortunately, we often have the 
same conversations on how to expanding existing programs that 
are not working very well.
    This Administration is ignoring the success of the welfare 
reform efforts that directly contributed to poverty reduction 
in this country. President Biden's partisan relief bill 
provided additional unemployment benefits, letting many people 
receive more money not to work than they make working. It also 
eliminated the requirement to work or prepare for work as a 
condition of receiving many welfare benefits like the Child Tax 
Credit.
    And just a few weeks ago, HUD unilaterally decided it would 
not even study the effectiveness of work requirements for 
tenants receiving taxpayer assistance from HUD.
    I certainly hope my colleagues will agree we do not want 
people to live their entire lives on Government assistance. 
This assistance should be temporary, should be transitional. 
But after 50 years and literally trillions in Federal housing 
support, there has been no meaningful change in home ownership 
rates.
    HUD's rental programs also are meant to enable self-
reliance in housing. However, according to most recent studies, 
we have seen the average length of stay for families across all 
HUD assisted housing programs nearly doubled from 1995 to 2015. 
At the same time, the average length of stay for voucher 
holders grew from just under 1 year to over 6\1/2\ years.
    Just expanding the welfare State does not work. I think it 
is incumbent on Congress to craft policies that will actually 
help these families move on.
    Today, we will hear from a witness who will provide an 
alternative view to expanding the welfare State. Howard Husock 
joins us from the American Enterprise Institute, and he will 
provide new ideas to consider for helping families to graduate 
from HUD assisted programs.
    Key among them is we need not assume that the only way to 
reduce poverty is to grow housing programs. Government support 
does not always lead to better outcomes.
    Before I end my remarks, Mr. Chairman, I just want to 
repeat that I welcome and encourage bipartisan compromise on 
major housing legislation. As an example, my principles for 
housing finance reform lay, I think, important groundwork for a 
bipartisan solution to a very large and as yet unresolved 
problem.
    So I hope we can have bipartisan hearings to discuss 
housing finance reform itself. And I think we should dispel the 
myth that more spending without reform is necessarily a good 
thing for families.
    Thank you.
    Chairman Brown. Thank you, Senator Toomey.
    Lisa Mensah is the President and CEO of the Opportunity 
Finance Network, a CDFI network for other CDFIs. She previously 
served as Under Secretary of Agriculture for Rural Development 
and is the Executive Director of the Aspen Institute's 
Initiative on Financial Security.
    She held positions at the Ford Foundation and at Citibank.
    Welcome, Ms. Mensah.
    Nan Roman is President and CEO of the National Alliance to 
End Homelessness. She is a nationally recognized expert on 
homelessness and has more than 20 years of local and national 
experience in the areas of poverty and community-based 
organizations.
    Welcome, Ms. Roman.
    Howard Husock is an Adjunct Scholar at the American 
Enterprise Institute. Prior to joining AEI, he held multiple 
positions at the Manhattan Institute. He served as Director, 
Author, and Executive Education Program Instructor at Harvard's 
Kennedy School of Government.
    Welcome back, Mr. Husock.
    Ms. Mensah, please begin.

   STATEMENT OF LISA MENSAH, PRESIDENT AND CEO, OPPORTUNITY 
                        FINANCE NETWORK

    [Pause.]
    Chairman Brown. I am not sure your mic's on.
    Ms. Mensah. Hello.
    Chairman Brown. Now it is.
    Ms. Mensah. There it is.
    So again, whether we are paying rent or securing a 
mortgage, too many Americans are in crisis as they seek access 
to affordable housing. And this affordable housing crisis has 
worsened since the pandemic.
    Bold new investments are needed to combat years of 
disinvestment, and this hearing gives us an important change to 
speak to some key bipartisan steps.
    Community Development Financial Institutions, CDFIs, must 
play a central role in efforts to rebuild, rehabilitate, and 
rethink our housing stock. I want to speak to those three key 
themes today.
    I am privileged to lead Opportunity Finance Network, a 
network of CDFIs operating in low wealth communities across the 
Nation. Financing affordable housing has long been a core 
business for the CDFI industry. In 2019, certified CDFIs made 
more than 600,000 housing loans, totaling more than $56 
billion. So CDFIs finance housing in areas of greatest needs.
    I want to speak to one example of a great need for housing, 
which is on our Nation's Native lands. Mortgage lending on 
restricted trust lands is complicated. But CDFIs are 
specialized lenders who know how to do it.
    This Committee already knows how important the Department 
of Agriculture is to providing rural housing. Yet, when USDA's 
502 mortgage program struggled to reach Native areas, the USDA 
turned to two Native CDFIs in South Dakota, Four Bands and 
Mazaska, to implement a bold pilot program to relend 502 funds.
    The USDA staff piloted a partnership with these Native 
CDFIs. They knew that as lending partners to the USDA, those 
CDFIs could deploy the capital responsibly, conduct the 
outreach and counseling needed to prepare the buyers, develop a 
pipeline, and ultimately put more people on a path to home 
ownership. And the results are clear.
    Those two Native CDFIs were able to provide 20 loans 
totaling more than $2.3 million to first-time Native homebuyers 
on Tribal lands.
    This pilot was successful because the CDFIs know their 
communities and have local market expertise. The low-cost 
capital from USDA was precisely what was needed to scale the 
program.
    So I am very pleased to support the bipartisan bill S.2092 
to support the relending pilot's expansion to get more 502 
dollars to Native CDFIs. It deserves this body's support and 
attention.
    In my time as Under Secretary of Rural Development, I 
traveled across the country visiting so many rural communities, 
including the low-wealth communities that CDFI's serve. And I 
saw what many Senators have seen and know to be true, that 
housing matters. And I appreciate your sentiments this morning, 
Senator, that our lives revolve around this. I applaud the 
bipartisan efforts and urge you to keep going.
    The housing access challenge is significant but the 
answers, I believe, are in front of us and I want to highlight 
three areas where new investment is needed.
    First, the rebuilding challenge. We need to rebuild 
significantly more new units of affordable housing. That is 
rental and home ownership. Without major new investments in the 
supply home ownership will remain out of reach and renters will 
struggle to pay their bills. And we can do this by investing in 
what we already have, Section 502 and Section 515 programs at 
USDA, and the Capital Magnet Fund at Treasury.
    We also need to reduce barriers to building affordable 
housing through smart proposals like Senator Warren's bill to 
consider land use policies for Community Development Block 
Grants.
    And we must rebuild a more resilient housing stock that 
incorporates greener technology.
    Next is rehab. We have to be good stewards of the 
investments we have already made. We have to invest in 
repairing the existing housing stock. A 2016 USDA study showed 
a backlog of nearly $6 billion needed to repair leaky roofs and 
drafty windows, and that need has only grown. This is a renewal 
of our commitment to rural communities by repairing the 
infrastructure. CDFIs can be partners.
    Finally, rethinking. We need to rethinking how we can meet 
the needs of our communities. One step in the right direction 
is the proposed review of the FHA mortgages to ask what more 
can be done to encourage mortgages for properties under 
$100,000. It is so important to rethink how to encourage the 
supply of mortgages and properties that are affordable for 
working families.
    As we rethink, I want to encourage the Congress to think 
about using stronger partnerships with CDFIs. During the height 
of COVID-19, CDFIs were financial first responders. They 
quickly pivoted their models, offering forbearance to 
homeowners and payment relief for renters and landlords. We 
want to remain strong partners.
    And to enhance and scale our field, we need you to urge 
your colleagues to also scale the Treasury funds that come to 
CDFIs. We are advocating for $1 billion in annual 
appropriations.
    So in closing, I want to thank you for the chance to 
testify in support of the many strong bills today that would 
help address the Nation's housing and infrastructure needs and 
I urge you to look to CDFIs as partners. The time is now to 
invest in the very core of the communities, the place we call 
home.
    Thank you.
    Chairman Brown. Thank you, Ms. Mensah.
    Ms. Roman.

STATEMENT OF NAN ROMAN, PRESIDENT AND CEO, NATIONAL ALLIANCE TO 
                        END HOMELESSNESS

    Ms. Roman. [Off microphone.]
    Chairman Brown. I think it is still not on. I am sorry, Ms. 
Roman.
    Ms. Roman. [Off microphone.]
    Chairman Brown. I am sorry, the transcriber says it is not 
on. She cannot hear. Sorry about that.
    Ms. Roman. Test, test. Now? OK.
    Chairman Brown. That is good.
    Ms. Roman. Do I need to start over?
    Chairman Brown. You can start over, sure, and take an extra 
minute.
    Ms. Roman. Thank you again so much for inviting me to 
testify before you today.
    The National Alliance to End Homelessness is a nonpartisan, 
nonprofit organization committed to finding and implementing 
solutions to homelessness.
    The Nation is experiencing a homelessness crisis that 
appears to have been exacerbated by the COVID pandemic. While 
homelessness decreased between 2007 and 2016, it has increased 
every year since then. For the first time ever, last year there 
were more unsheltered individuals than there were sheltered 
individual adults.
    Alliance surveys during the pandemic indicate that overall 
the number of available beds is down, the number of homeless 
people is up, and the number of unsheltered people is up 
although some communities have managed to avoid these increases 
through strategic use of Federal stimulus funds.
    The pandemic, we all hope, is ending but concerns remain 
about homelessness. There is a large cohort of youth whose 
educations have been interrupted and who may fail to attach to 
the job market and become homeless. There is a growing cohort 
of aging homeless people who need housing. And many feel that a 
rental housing crisis looms in our future, leading to more 
homelessness even if the economy is healthy.
    The solution to homeless is housing, notwithstanding other 
needs that people may have including for services. Ending 
homelessness requires either increasing the supply of housing, 
housing that is affordable to lower income people, or 
increasing people's wages so that they can afford the housing 
that is available.
    Many people will need services and we will have to address 
the racial disproportionality and disparities that have 
resulted in so many people of color becoming homeless. But the 
problem will not be solved unless the cost of housing is within 
reach of millions of low-income households who cannot afford 
housing today.
    Fortunately, we have an opportunity before us now to 
significantly reduce homelessness. The stimulus funds that you 
have provided will, if used strategically, make a serious dent 
in homelessness, although they will not end it entirely. We are 
deeply grateful for the $14 billion in resources targeted to 
turning the ship on homelessness.
    Congress has also placed several opportunities on the table 
that would definitely help reduce homelessness and that we 
support. Senators Van Hollen and Young's bipartisan Family 
Stability and Opportunity Voucher Act supplies housing vouchers 
for 500,000 families with services to help them locate in high 
opportunity communities. This would clearly be enough vouchers 
to end family homelessness.
    The Choice in Affordable Housing Act, a bipartisan bill 
just introduced by Senators Cramer and Coons, would improve the 
Section 8 program by providing $500 million to incentivize 
landlords to participate in it. I can share that the 
homelessness system has learned quite a bit about incentivizing 
landlords, as it houses thousands of tenants every year who 
maybe do not look that great on paper.
    Strategies that have worked include increasing the size of 
security deposits, acting as a third party when landlords have 
issues with a referred tenant, and immediately providing a 
qualified replacement tenant when a referred tenant is evicted. 
This bill would support these and other successful strategies 
to get people into housing.
    Senators Brown and Blunt have proposed the Trafficking 
Survivors Housing Act of 2021. Sadly, homelessness is too often 
intertwined with human trafficking. This important bill would 
task the U.S. Interagency Council on Homelessness to examine 
what Federal agencies can do to eliminate that link between 
homelessness and trafficking.
    And finally, Senators Bennet, Portman, and Brown literally 
just reintroduced the bipartisan Eviction Crisis Act. 
Everything this bill does to reduce evictions will help to 
reduce homeless. We are particularly grateful for the provision 
of flexible funding for people who can generally afford their 
housing but for whom any economic emergency can result in an 
eviction and even homelessness. This bill provides flexible 
assistance to break that pattern.
    We support all of these helpful bipartisan bills.
    I would be remiss if I did not say also that if you ask me 
what is the one thing that can be done that would end 
homelessness, I would say that it is to provide housing 
assistance to every extremely low-income household that needs 
it. This definitely also implies increasing the supply of 
affordable housing.
    In closing, homelessness is not a problem that the 
homelessness system can solve alone. The homelessness system is 
like an emergency room. We get people who are in crisis and we 
can patch them up a bit. But just as the emergency room is not 
the solution to the Nation's health problems, the homelessness 
system alone is not the solution to the Nation's homelessness 
problem.
    People who are homeless need more than an aspirin and a 
Band-Aid. They need an adequate supply of affordable housing, a 
voucher, and access to services.
    Thank you so much for inviting the Alliance to speak before 
you today, and for your efforts on behalf of people 
experiencing homelessness.
    Chairman Brown. Thank you, Ms. Roman.
    Mr. Husock.

     STATEMENT OF HOWARD HUSOCK, ADJUNCT SCHOLAR, AMERICAN 
                      ENTERPRISE INSTITUTE

    Mr. Husock. I am pushing this button and it is not going 
green. I am paying for this microphone.
    It is OK? OK.
    Thank you very much, Chairman Brown and Ranking Member 
Toomey. I appreciate the opportunity to testify on the 
legislation being considered by the Committee, especially 
before my hometown of Cleveland Senator Brown.
    I will specifically address these proposals related to the 
expansion of the housing choice voucher program and the 
proposed terms of the Community Development Block Grants.
    There is no doubt that too many low-income households find 
it difficult to afford housing. But before considering a major 
expansion of the housing choice voucher program, we should make 
the existing program more effective. Let us keep in mind that 
the past year has seen unprecedented spending on Federal 
housing initiatives. The American Rescue Plan expanded the 
housing voucher program by allocating $5 billion dollars for 
70,000 housing vouchers. That was referred to by Secretary 
Fudge as a once in a lifetime--once in a generation investment.
    $46.5 billion has been allocated for emergency rental 
assistance. That rivals the annual HUD budget overall. The New 
York Times documented the fact that that rental assistance has 
been mired in limbo, in too many cases.
    This all to say that our current focus should be on making 
sure the money in pandemic housing assistance is distributed as 
effectively as possible. But commonsense adjustments can 
increase the voucher program's reach specifically without major 
new spending while, crucially, providing incentives and 
encouragement for low-income households to improve their 
economic status.
    Fundamentally, low-income households face an income 
problem. Providing a coupon that can be used only for rental 
assistance limits how they can use this new income while 
failing to address the root causes of why their income is low 
in the first place. We must not forget the steps it takes to 
truly encourage economic mobility for poor households. 
Providing skills training, ensuring every child has access to a 
high-quality public education, encouraging safe and healthy 
communities, and reducing racial barriers.
    But we can and should, in the near term, make commonsense 
adjustments to the current housing choice voucher program. Let 
us not assume that poverty is a life sentence in America. This 
suggests that we better allocate vouchers by seeing them as a 
transitional program.
    That leads me to two very specific proposals. First, the 
time has come to allow voucher households to sign the same type 
of rental leases as nonsubsidized households take for granted: 
a flat rent for a fixed period. As it stands, as a voucher or 
public housing tenants earns more income, they pay more rent, 
34 cents on each new dollar. This has all sorts of ill effects: 
discouraging those who would seek a higher-paying job, the 
formation of two-income families, savings in general, including 
for potential house purchases.
    To make better use of our housing vouchers, we should 
follow the example of the housing authority of the State of 
Delaware, I did not choose that randomly or for political 
reasons, which as part of its Moving to Work program combines 
capped rent and savings account escrows with a 5-year ceiling 
on housing assistance.
    A similar program has been adopted by the housing authority 
of San Bernardino, California, which specifically sets out as a 
key goal the encouragement of tenants' economic independence, 
including what a shift it describes as from ``entitlement to 
empowerment.'' Longitudinal studies in San Bernardino report 
earned income over that 5-year period for participating 
families increased by 31 percent. Full-time employment 
increased by 20 percent. And unemployment decreased by 26 
percent.
    This healthy turnover should be a core part of the voucher 
program. Poverty should not be viewed as inevitable and 
forever. As things stand now, there is turnover but we need to 
increase it. A transition to work and increased income is, 
today more than ever, a practical goal, as the Nation enjoys 
widespread labor shortages.
    Let us resist expanding the program to and giving priority 
to low-income single parents, as the legislation suggests. It 
is understandable that we respond to need. But we must take 
care not to foster need by sending a signal that low-income 
single parenthood will qualify one for a subsidized rental 
which, in most jurisdictions today, is lifetime eligibility. We 
know that the life chances of those born to single mothers in 
poverty are such that this is not a choice we should 
inadvertently encourage.
    The proposal to link Federal CDBG assistance to the 
encouragement of affordable housing is, on one level, 
understandable. There is too much inflexible zoning around the 
country. But the idea that there is a missing middle in our 
housing supply is rapidly gaining adherents, and localities are 
responding to the fact that children cannot live in the housing 
areas that they grew up in.
    Minneapolis and Oregon have rolled back single-family 
zoning already. Mayor Garcetti of Los Angeles has just 
commissioned local architects to develop two-to-four family 
housing that is affordable to build. A one-size-fits-all 
Washington review of local zoning risks stifling this creative 
change.
    Woodrow Wilson, he was a Democratic president, observed 
that, in the United States, localities are not governed; they 
govern themselves. This historic tradition is one we must keep 
in mind.
    As Jenny Schuetz of the Brookings Institute wrote in 2018 
about the idea of linking CDBG to affordability review: HUD's 
interest in persuading local governments to reform exclusionary 
zoning is admirable. But withholding CDBG would not be 
effective mechanism, because exclusionary communities do not 
get CDBG funding. It is the low-income communities that are 
already providing affordable housing that get that money. Let 
us not burden them with costly reviews.
    A better approach embraces the spirit of localism and 
adaptability of American municipalities and acknowledges the 
growing success of State and local movements to increase 
housing supply.
    I appreciate the opportunity to present my views. Thank you 
very much, and I look forward to your questions.
    Chairman Brown. Thank you, Mr. Husock.
    I will start with Ms. Mensah. In many parts of Mr. Husock's 
and my own State, there are lots of homes, including in my 
neighborhood, 400 yards maybe from my house, listed for $40,000 
or $50,000. They look like affordable starter homes but lenders 
generally will not make a mortgage for less than $100,000.
    Senators Tester and Lummis, both on this Committee, both 
have a bill, the Improving FHA Support for Small-Dollar 
Mortgages Act, that would direct HUD to look at the barriers to 
financing these small loans through FHA.
    Ms. Mensah, how could reducing these barriers to small 
loans help more families own their homes they can afford?
    Ms. Mensah. Thank you, Senator, for the question.
    We support strongly this review. It is clear that markets 
do not push toward small in this case. Our CDFIs stand ready to 
make these mortgages, but we would benefit as a country from 
seeing the FHA do a thorough review and remove any barriers to 
being able to increase the supply and affordability of 
mortgages of under $100,000. We strongly support this bill.
    Chairman Brown. Thank you.
    Ms. Roman, evictions--you know better than anybody in this 
room, and better than most in the country--can be both the 
result and the cause of homelessness. Talk about the Eviction 
Crisis Act. As you know, I recently introduced with Senators 
Bennet, Portman, and Young, on how to prevent evictions or ease 
some of the pain on families when they do happen. Talk about 
that.
    Ms. Roman. Thank you so much for introducing that bill, 
that we are very, very supportive of. The Act will do a lot to 
help us understand better what goes on around evictions by 
collecting data, understanding when they occur, and therefore 
how we can prevent them.
    It will also help jurisdictions find ways to prevent 
housing crises. Often we see, in the homelessness system, 
people that have become homeless because they could basically 
afford their rent but something happened, their car broke down 
or their child became ill and they could not go to work for a 
couple of weeks. Then they could not pay the rent that month 
and they entered a downward spiral into eviction and, often, 
eventually, into homelessness.
    This bill provides the flexible funding that would give 
people a couple of hundred dollars so that would not happen to 
them; and we end up spending much, much more if they do become 
homeless.
    Basically, I think it makes eviction the last course for 
somebody having a housing crisis, rather than the first thing 
that happens to them. And we are very supportive of it.
    Chairman Brown. Thank you.
    You obviously are commenting about homelessness, how it 
puts too many people--in addition putting too many people at 
risk of human trafficking. The Trafficking Survivor Housing Act 
requires USICH to work with partners and stakeholders and 
survivors to study ways to get more survivors safe, affordable 
housing.
    Talk about that. Why is this so necessary? What happens?
    Ms. Roman. I can say that what we see in the homelessness 
system is that people who have been trafficked, who are severed 
from their ties in the community, or who need services, are 
often the people who end up in the homelessness system. People 
are trafficked out of the homelessness system and people who 
have been trafficked end up in the homelessness system. And I 
can also say that being homeless makes people very vulnerable.
    But apart from knowing that homelessness and trafficking 
are entwined, we do not actually know that much about what 
happens. This bill will collect information on that so that we 
can see how it plays out and how we can help.
    I think the USICH study would help with that. USICH is a 
really helpful agency because people who are homeless tend to 
have complex needs--needs that must be addressed by a variety 
of agencies. USICH helps the Federal Government coordinate to 
provide what people need across various agencies like Health 
and Human Services and HUD, for example, and in this case the 
Department of Justice. And I think that involving USICH and 
having that research will help us better understand so that we 
can detach homelessness from trafficking.
    Chairman Brown. Thank you.
    Last question. In rural Minnesota, Northern Minnesota, 
Southeast Ohio, or Central Pennsylvania, we know there has 
already been a shortage of affordable places to live. By 2027, 
it is estimated that we will lose another 21,000 affordable 
USDA homes for rural renters just because they are old. How do 
we preserve, Ms. Mensah, these affordable units and keep them 
affordable in rural areas?
    Ms. Mensah. Thank you, Senator.
    Thank you for your attention. The Department of Agriculture 
is a warrior for these homes and we need more support for the 
Agency's work. It is in front of you. The titles are there. We 
can increase the support for the rehabilitation and fund the 
titles that are in the law. And I urge you to keep the focus on 
rural housing.
    Chairman Brown. Thank you. Thank you both, all three of 
you.
    Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman.
    You know, as best I can figure, we have considerably more 
than doubled the amount of housing spending last year versus 
what is ordinary spending.
    Mr. Husock, you pointed out that among the many things that 
we passed, we passed $5 billion for 70,000 new vouchers. But it 
turns out HUD has decided it is not even going to require 
verification of citizenship or immigration status, so we do not 
know whether these vouchers are even going to eligible 
Americans.
    But speaking of the vouchers, you raised an interesting 
dilemma, it seems to me, and I am wondering if we could discuss 
this a little bit. And that is the idea that when the 
vouchers--as I understand what you were saying--is that the 
rental assistance requires a tenant to pay a fixed percentage 
of their income. And so the practical effect of that is it is 
equivalent to a very high marginal tax rate for the person, the 
more they earn the more they are required by this provision to 
pay in rent.
    And so it is--all else being equal, it presumably dissuades 
people from the extra work and extra effort that is involved in 
having more income.
    You mentioned a Delaware program, and I am happy to hear 
more about that, but in the absence of this kind of arrangement 
where you have this percentage of income requirement, do you 
necessarily, in the alternative, end up with a cliff where at 
some point you have to eliminate the subsidy. So if you do not 
sort of phase it down or have this percentage of income, do you 
have a cliff where the subsidy disappears and presumably that 
creates problems of its own?
    Could you share your thoughts on that?
    Mr. Husock. Yes, that is certainly true. That is why I 
think we ought to focus on new tenants who make a new deal when 
they enter the system. And that new deal is I pay a fixed rent 
in exchange for accepting a 5-year limit on my overall tenancy. 
That is what the State of Delaware does. That is what San 
Bernardino does.
    I think it is unlikely that we are going to change the 
terms for existing tenants, so that is a way to cut that 
Gordian Knot, I think.
    Senator Toomey. So do I understand you to say that this 
arrangement that you are suggesting, and that is in place in 
several of these communities----
    Mr. Husock. Yes, right.
    Senator Toomey. ----for new tenants is an explicit 
commitment on their part that it will be for a finite, limited, 
defined period of time?
    Mr. Husock. Yes, and it is voluntary on their part, at 
least to date. But yes, they sign a self-sufficiency type 
agreement. They have different terms for it. But yes, it is 
voluntary. They sign up for it. And they know that they are 
going to get, in a sense they are going to get a deeply 
subsidized rent for a 5-year time period.
    Senator Toomey. And it is totally independent of their 
income? If they go out and they work overtime, they take a 
second job, they go to night school and get training and 
upgrade their skills, whatever they do to have more income, no 
effect on the arrangement?
    Mr. Husock. That is right. I think the housing authority in 
California asks that they put that additional savings that they 
would have paid in rent into escrow. That seems like a useful 
idea.
    Senator Toomey. But they still own it?
    Mr. Husock. They still own it, yes.
    Senator Toomey. So this is being done--did you also say in 
Delaware and in a city in----
    Mr. Husock. Yes, there are 27 Moving to Work communities. 
Many of them have these variations on this program. There have 
been proposals over the years to give housing authorities 
across the country more of this similar type of flexibility.
    It was their idea to do this, not HUD's idea. And so if we 
increase the number of Moving to Work opportunities, more 
people might move to work.
    Senator Toomey. Do we have any--do you know how long these 
programs have been in place in any of these communities?
    Mr. Husock. In San Bernardino, I am familiar with it having 
started in 2008, I believe.
    Senator Toomey. So that is quite a while.
    Mr. Husock. Oh no, there are longitudinal studies by 
academic----
    Senator Toomey. That is what I was going to ask. What do 
they show us? What does the data show about how this has 
affected people? What do we know about it?
    Mr. Husock. In San Bernardino, earned income for families 
in the program increased by an average of 31.4 percent during 
the 5 years. Full-time employment increased by 20 percent. And 
unemployment decreased by 26 percent.
    Senator Toomey. So we know how that compares to a control 
group of people who, say, participated in the conventional 
programs?
    Mr. Husock. I do not know the answer to that.
    Senator Toomey. Would that be a useful point of comparison?
    Mr. Husock. I think it certainly would be. And PD&R, as 
they call it in HUD, could certainly commission that kind of 
research and should pay more attention to this really unusual 
program that is kind of a stepchild at HUD right now.
    Senator Toomey. I do not know why we would not want to at 
least get the data and see, you know, is this helping the 
people who are participating in it relative to people who are 
participating in----
    Mr. Husock. Just as we want eviction data, we want moving 
up and out data.
    Senator Toomey. Right. Right.
    Thank you. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey.
    Senator Cortez Masto is recognized.
    Senator Cortez Masto. Thank you, Mr. Chairman. And thank 
you to the panelists.
    Let me follow up on Senator Toomey's conversation. I am 
curious, Ms. Mensah or Ms. Roman, do you have a comment with 
respect to this--let me couch it right--the stepchild program 
that is in HUD right now? I am just curious. I think it is 
something to explore, but I would like to know, do you have any 
comments on the program itself?
    Ms. Roman. There are disincentives, obviously, to increased 
earnings when you are in the Section 8 program. So I certainly 
do not have any objections to looking into ways that that might 
work better.
    I do think, basically, that if the housing is unaffordable 
it is not going to be more affordable after 5 years 
necessarily. Obviously, you want people's incomes to go up and 
people's incomes do tend to go up. I believe, as Senator Toomey 
said, the average length of stay in Section 8 is only 6 years, 
as is.
    But I think the Moving to Work program was to give 
flexibility to agencies to try different structures and that is 
what they are doing. It is good to do that.
    Senator Cortez Masto. Thank you. I appreciate that. Thank 
you for the comments.
    Let me follow up, Ms. Roman, with you on the Interagency 
Council on Homelessness, a piece of legislation that I have 
cosponsored, Senate Bill 2008. What have been the historical 
successes of the Interagency Council on Homelessness? And what 
are some of the challenges, as well?
    Ms. Roman. Well, I think one success has been, for example, 
the Mayor's Challenge on Ending Homelessness, which USICH 
really orchestrated. This initiative brought together not only 
the Federal agencies but also communities, mayors, to set goals 
on how many veterans they were going to get housed over a 
period of time.
    That ended up reducing veteran homelessness by over half in 
a few years. Resources from you all had a lot to do with that, 
as well.
    But you know, coordination is a boring kind of term and 
everybody always says we need to coordinate and have 
partnerships. We know that, but it is hard to do.
    But I think USICH shows that another way to do it is to 
really have a boundary spanner, somebody who goes across the 
agencies rather than having to have the agencies all agree 
about how they are going to partner and just makes the 
partnership happen.
    Senator Cortez Masto. I appreciate that.
    Listen, the one thing I have learned is just what you said, 
coordination is such an easy thing to say that should happen. 
But it does not always happen. And unfortunately, there are 
times when we have to force it through legislation to make sure 
everybody is talking with one another.
    So I appreciate your comments. Thank you.
    Ms. Mensah, let me talk about Native American Rural 
Homeownership Improvement Act which my colleague who is sitting 
to my right, Senator Smith is responsible for introducing. And 
I completely support it. I want to be a cosponsor or a sponsor 
on that bill with her.
    Let me talk a little bit about the challenges in Nevada 
with our tribal communities. There is only one Treasury-
certified CDFI in Nevada. In the past 30 years, we have had 
only eight awards to a Nevada-based CDFI. We are the only State 
with a single digit award amount to a CDFI in our State. Nevada 
does receive investments from regional and national groups, but 
awards to the Nevada headquarter groups have consistently 
lagged.
    So how is your organization addressing the disparate 
coverage of CDFIs across the country? And what can we do in 
Congress to help address this issue, as well?
    Ms. Mensah. Thank you for the question, Senator.
    The CDFIs have finally seen more visibility this year as 
the Nation has acknowledged that we are necessary partners in 
the financial system to get funds, and in this case for 
housing, throughout the country. There are 1,000 certified 
CDFIs covering all 50 States, but there are not sufficient.
    So first of all, I appreciate your increased visibility, 
your efforts also to expand funding for us both through 
existing channels like the Federal Home Loan Bank, allowing 
those existing ones and to encourage the kind of partnerships 
that will assist.
    I look forward to working with you and your team to 
increase the amount of CDFIs in Nevada.
    But in the meantime, expanding the pilot that Senator Smith 
has sponsored will help. It will allow more partnerships to 
work with USDA, which is already in your State. So I believe it 
is a smart first step and I believe the kind of encouraging of 
partnerships with CDFIs with existing programs, run the same 
program but in better partnership.
    It is expanding programs and it is giving us more funding 
and more access to funding. That is what happened in the PPP 
program and we believe it could happen in others.
    So thank you for your visibility and attention.
    Senator Cortez Masto. Thank you.
    Chairman Brown. Thank you, Senator Cortez Masto.
    Senator Smith from Minnesota is recognized for 5 minutes.
    Senator Smith. Thank you, Chair Brown and Ranking Member 
Toomey.
    I really appreciate this panel. I am grateful to have a few 
minutes with you all to talk about this issue.
    I always start from the place that if you do not have a 
safe, affordable, stable place to live then nothing else in 
your life works. Not your education, not your job, not your 
family, not your health. Nothing works. And we know that fair 
access to home ownership, and housing even, in this country is 
still not a promise that is realized for everyone.
    And so this is really, I just want to thank you, Ms. 
Mensah, for highlighting the work that I have done with Senator 
Mike Rounds from South Dakota on the Native American Rural 
Homeownership Improvement Act. These bills in Washington all 
have such long names.
    I am really--it seemed to us, I think what we have learned 
from the pilot that we now want to expand nationwide is that 
CDFIs, Native CDFIs in this case, because of the ties of 
understanding and trust that they have in community are able to 
make the connection and bridge the divides and overcome some of 
the discrimination that exists when it comes to lack of access 
to financing.
    So could you just comment--first, do you think that that is 
right? Do I have that right?
    Ms. Mensah. Yes.
    Senator Smith. And then could you comment on what are some 
of the other ways, in addition to my bill with Senator Rounds, 
that we could deploy and lift up CDFIs to expand home ownership 
opportunities in other places in other ways with other Federal 
programs?
    Ms. Mensah. Thank you so much.
    You are precisely right. When the USDA partnered in this 
pilot with the two Native CDFIs, Four Bands and Mazaska, you 
had the perfect partnership. You had the capital of a USDA 
program that I used to be a supervisor of that is a $1 billion 
program each year. And you had it positioned to work in Native 
areas, where we have had very little success. We were not just 
waiting for buyers to quality.
    So I believe this is the direction. I fully support your 
opportunity. It is a wise expansion of this program.
    And I appreciate your question about how would we look for 
other places in the Federal Government to expand housing. And I 
think people do not always remember that the Department of 
Agriculture is a huge and important houser in our rural areas. 
And there are so many parts of rural America that are not 
touched when we do these interesting moves on vouchers and 
things. It just does not have--it does not play out in rural 
America.
    So I urge you to keep looking at USDA titles, 515 is our 
rental title. And I would also encourage the HUD titles to 
partner more with CDFIs.
    And I want to thank you for your attention to Native areas.
    Senator Smith. Thank you. Thank you so much.
    As I listened to all of your testimony, I think it really 
reveals something that I have come to understand from the many, 
many conversations I have had with people in Minnesota which is 
that across the board the housing market in this country is 
just failing. I mean, it is failing to meet demand, especially 
for low-income housing.
    And we can see that failure across the spectrum. Ms. Roman, 
from lack of access to affordable housing and supportive 
housing, transitional housing for people who are experiencing 
homelessness all the way up to workforce housing needs in 
places like Thief River Falls, Minnesota, where literally the 
lack of access to housing is the limiting factor on whether 
companies in that community can recruit more folks to work in 
their businesses. This is, of course, a complicated problem.
    But I want to just, in the minute I have left, come to Mr. 
Husock about this. You mentioned Minneapolis and the work that 
is happening in Minneapolis around the 2040 plan. This is a 
long-term planning work that has been doing to support local 
zoning reform. It basically does some pretty innovative things 
like saying we should reduce minimum parking requirements for 
new housing production. We should legalize triplexes citywide. 
We should allow for larger residential buildings to be built 
along transit corridors.
    And it seems to me that this has the possibility of 
addressing one of the challenges we have around affordable 
housing, which is that it costs too much. We cannot afford 
affordable housing because it costs too much.
    Now, I do not support making changes that would increase 
people's--that would damage people's safety. But could you just 
talk a bit about this, Mr. Husock, and how the Federal 
Government can support these kinds of innovative local zoning 
reforms?
    Mr. Husock. Thank you for the question.
    I spent some time in Minneapolis looking at that plan and 
it is very innovative. It unfortunately became too 
controversial for some reasons. And the surrounding suburban 
areas are the ones with the most exclusionary zoning. 
Minneapolis city was already doing a pretty good job on 
relatively flexible zoning.
    But duplexes, triplexes, fourplexes, small five-to-nine 
unit buildings, these are prohibited in most jurisdictions. 
They used to be our ticket to provide affordable housing that 
was naturally affordable because it was a number of units on a 
relatively small space. We need to rediscover that formula.
    As far as what HUD can do, I am concerned about tying CDBG 
funds, as I said in my testimony, because that can be a lot of 
red tape and I do not want there to be a formula. But I think 
HUD should convene widely on this and help this idea spread, 
shine a light on it, including on what is happening in 
Minneapolis, what is happening in Los Angeles.
    So I am glad to sound a bipartisan note on that.
    Senator Smith. Thank you.
    I know I am out of time. I just want to mention, I think 
the Yes in My Back Yard Act, which some of my colleagues are 
working on, is an example of how we can sort of support better 
understanding about the impacts of these local zoning policies 
and advance them.
    So thank you, Mr. Chair. I yield back.
    Chairman Brown. Thank you, Senator Smith.
    Senator Scott is recognized for 5 minutes from South 
Carolina.
    Senator Scott. Thank you, Mr. Chairman. Thank you for 
holding this hearing, as well, a very important hearing.
    Let me just say, before Senator Smith departs, that I 
appreciate her cosponsorship of a bipartisan piece of 
legislation that I am leading with Senator Durbin, the Lead-
Safe Housing for Kids Act. The commonsense bill would require 
HUD to modernize its lead prevention regulations to better 
protect children from the harmful risks of lead exposure. Thank 
you for being a cosponsor of that important legislation.
    Thank you all for being here, as well, to discuss this 
really important issue about the housing availability.
    While some of the bills being discussed here today could 
make small piecemeal improvements to the availability of 
housing, they do not address the bigger picture, one that is 
the failed State of our housing finance system. The status quo 
is not a viable option. No amount of tinkering in the margins 
will actually fix it.
    The nearly 13 years since the GSEs were placed into 
conservatorship, their footprint has continued to grow while 
the mortgage market has gotten less diverse as a number of 
active private lenders have dwindled. This shortfall of 
competition in mortgage financing seems to be leaving too many 
Americans behind in their dream of home ownership as a lack of 
innovation and product choices has limited mortgage credit 
availability to too many credit-worthy households.
    It strikes me that the most effective way to responsibly 
and sustainably make home ownership affordable and accessible 
for a broad range of Americans is for this Committee to get 
serious about finally enacting comprehensive legislative reform 
of our housing finance system.
    Mr. Husock, do you agree that Congress should work in a 
deliberative and bipartisan manner on a comprehensive fix for 
the many challenges that we face within our system?
    Mr. Husock. Thank you very much, Senator Scott, for that 
important question.
    The Chairman raised an interesting point earlier about that 
$40,000 home in Cleveland that cannot get a rehab loan. Well, 
when you have a mortgage finance duopoly, as we have in this 
country, there is no competition for those small dollar loans. 
I understand that we may have to subsidize other actors to get 
into that space, but we have to foster competition. And the way 
to do that is to expand the secondary market in a way that goes 
beyond the existing duopoly.
    Senator Scott. Thank you.
    I will yield back the balance of my time.
    Senator Van Hollen [presiding]. Thank you. Thank you, 
Senator, and thank all of you for your testimony here today. We 
have a vote on so we are going to be running back and forth.
    First, Ms. Mensah, it is good to see you. We had a hearing 
the other day, actually, in the Appropriations yesterday, the 
subcommittee that oversees the CDFIs with Secretary Yellen. I 
just want to thank you for all of your good work on CDFIs and I 
am pleased to see the Administration's request supporting an 
increase there and grateful for all of your work. We are on the 
same page there.
    I did want to use this as an opportunity, Ms. Roman, to 
talk about the bipartisan legislation that I have introduced 
with Senator Todd Young, which would provide vouchers to help 
families with young children move to areas of opportunity and 
couple them with wraparound services to make sure that in that 
transition they have a greater opportunity to succeed.
    Could you talk a little bit about why this is an 
effective--assuming you think it is an effective--approach and 
some of the research that you may have seen that supports that 
conclusion?
    Ms. Roman. Well, thank you so much, Senator, for 
introducing that bill.
    Clearly, we have too many homeless families, although 
family homelessness has been going down slightly, which is 
good, compared to other populations. Many families that are 
homeless are very young and have young children. And there is a 
lot of evidence, obviously, about how housing instability 
affects young children, their educations and their development 
generally.
    Also, of course, there is a tremendous amount of 
information about the consequences of growing up in 
neighborhoods where there is not opportunity, where the schools 
are not good, where the hospitals are not available, where the 
jobs are not there, where the grocery stores are not present, 
and relegating homeless and low-income families to these 
neighborhoods over generations obviously has its impacts.
    So, I think that the scale and the configuration of your 
proposal are both extremely exciting. I said earlier, I do not 
know if you were here, that if it were targeted it could 
certainly end family homelessness altogether. And providing the 
assistance to help people, I think, increase their earnings and 
be connected with better services, better education, better 
support, you have much, much improved outcomes.
    We are very, very grateful to you for introducing the bill.
    Senator Van Hollen. Thank you for your testimony, your work 
in this area. I do not have to, I guess, ask unanimous consent 
but I do want to put into the record a document that details 
some of the studies that have been done to support this 
legislation because it is an evidence-based piece of 
legislation.
    Mr. Husock, if I can ask you--and I know that you are not a 
big fan of vouchers, I was looking at a piece you wrote in 2000 
that is entitled ``Let's End Housing Vouchers''.
    But I do understand from your testimony today, and some of 
your colleagues at AEI have also been positive, as you know, 
about the idea of if we are going to have vouchers trying to 
help families move to areas of greater opportunity.
    If you are going to have vouchers, do you believe those 
kind of conditions and wraparound services are the most 
effective way to go? Do you agree with the research that has 
been done that supports that conclusion?
    Mr. Husock. I am familiar with Professor Raj Chetty's work, 
which I think you are referring to.
    Senator Van Hollen. Yes.
    Mr. Husock. And I think that the voucher program, as I said 
in my testimony, can be effective. I am a practical person. I 
understand the voucher program is here with us and we need to 
make it effective. And that is why I favored the flat rate rent 
and the transitional character of it.
    I do worry about the idea that we are going to give up on 
lower income neighborhoods and cast them off as being low 
opportunity zones. HUD was originally chartered by the Johnson 
administration to make poor neighborhoods good neighborhoods. 
And to me, I fear that we are signaling that if you live in a 
low-income neighborhood, it is a low opportunity zone. That is 
a dispiriting message to give. And I think we have an 
obligation in our public services, in our schools, in our law 
enforcement, to make every neighborhood a good neighborhood and 
every neighborhood a high opportunity zone. So I worry about 
the practical dimensions of it.
    And I notice in Professor Chetty's work, he found 
effectiveness for children aged 13 and younger. Well, are we 
going to cast people off when their children get to be 13? 
There is a lot of details on this we have to look at. And I 
think we have to be empathetic to property owners who may have 
different reasons for wanting to participate in the program or 
not.
    Senator Van Hollen. Well, I look forward to having you back 
for another hearing on the idea of making sure that we can 
better empower neighborhoods right now that are struggling. And 
there is a number of bills that have been introduced. And I 
would argue a big part of President Biden's plans, both in 
terms of the American Jobs plan but also the American Families 
plan, would provide many additional supports and help to 
families to be more successful in those areas, including the 
school systems.
    And I have long worked to try to increase the resources as 
well as the reforms and other changes to better empower those 
neighborhoods.
    But at this moment in time, we have something that seems, 
at least through the evidence, to have been shown to be 
effective at helping these families. And it seems to me that we 
should seize that opportunity.
    So at this point in time, there is a vote on. I am going to 
recess the Committee briefly, because I have got to go vote. 
And Senator Warren will be back shortly to ask some questions. 
And I am pleased that we have been joined by Senator Ossoff.
    So the Committee is recessed until it is reconvened.
    [Recess.]
    Senator Warren [presiding]. The Banking hearing is back in 
session.
    I recognize myself to ask some questions here.
    I want to thank our witnesses for being here today.
    To address our Nation's housing needs crisis, we need a 
bipartisan commitment to take on our Nation's housing needs 
headfirst, not just nibble around the edges on them.
    I am deeply concerned about comments my Republican 
colleagues on this Committee have made about housing 
investments, namely that housing does not constitute ``real 
infrastructure'' since infrastructure only means ``things like 
roads, bridges, ports, airports, and transit.'' Housing is 
essential infrastructure.
    I agree with Secretary Fudge who told this Committee 
several weeks ago that housing ``lays the foundation for a 
stronger and more connected society.''
    So I want to talk a little about the State of our Nation's 
housing. And I want to start out with public housing here.
    Ms. Roman, is our Nation's public housing in good shape? Or 
do we have a long list of repairs that have been outstanding 
for years?
    Ms. Roman. Our public housing is not in good shape and we 
do have a long list of repairs that have been outstanding for 
many years. And we are losing, as a result, public housing 
units every year, I think at the pace of about 10,000 a year, 
to demolition or disposition. And we have lost, I think, more 
than 200,000 units since the 90s.
    So yes, that infrastructure is in need of fixing.
    Senator Warren. So think about that. We are talking about 
our public housing and the fact that we do not spend enough 
money on just plain old maintenance and repairs. That means we 
are losing about 10,000 units a year, about 200,000 units that 
we can count so far, units that families need to be able to 
live in.
    This means that families are living in unsafe, unhealthy, 
and undignified conditions. We need more than $70 billion just 
to make public housing safe for the residents who are there.
    We are not even talking about the investments we need to 
make to upgrade public housing to withstand the impact of 
climate change or to incorporate energy efficient upgrades. 
This is just to maintain the level of where we are now, to have 
this critical source of housing available to us. So even if we 
zoom out, the situation on housing is not much better.
    Ms. Mensah, is the Nation's housing stock overall in sound 
condition?
    Ms. Mensah. Thank you, Senator, for the question.
    It is not in sound condition. We must be better stewards of 
this.
    A PolicyMap and Federal Reserve study showed that there 
were actually $127 billion of repairs. And when I served as 
Under Secretary of Rural Development, we identified $6 billion 
in the Nation's rural rental properties.
    Stewardship matters. And the CDFIs that I represent stand 
ready to be your partners in this effort. We can create loans 
for homeowners who want to do this. We can work with 
properties. We are the ones who want to do this kind of rehab.
    And today, it will be more energy efficient. We will 
rebuild greener when we repair.
    And there is no reason to not be good stewards of what is 
already here. So thank you.
    Senator Warren. Thank you.
    And I very much appreciate your point but I really want to 
underscore what this means. When we do not maintain, what kind 
of things are we talking about? We are talking about pest 
infestations, plumbing that does not work, structural problems, 
electrical problems that can be very dangerous, hearing 
problems, leaks. And as you say, we are looking at about $127 
billion worth of repairs just to be able to maintain where we 
are.
    Ms. Roman, if a low-income family living in a crumbling 
house wants to move to safe housing, housing that is free of 
mold, free of pest infestation, does not have lead pipes, can 
they generally find someplace affordable to move?
    Ms. Roman. No, because there is not an adequate supply of 
affordable housing and the places they will be looking at that 
they can afford will probably be as you described, like the 
places they are trying to leave.
    Senator Warren. Yes. And you know, that is the real problem 
here. We are disinvesting in the affordable housing that 
exists, losing units year after year. We are not making 
investments to produce enough new affordable housing. And while 
Congress twiddles our thumbs, we put families at risk. We put 
their health at risk.
    President Biden recognized the urgency of this need when he 
included historic investments in housing in his infrastructure 
proposal. And I have said all along frankly, we need to make 
bigger investments in housing.
    But instead, some in Congress are saying that we can kick 
housing out of the infrastructure package altogether in hopes 
that Republicans will agree somehow then to vote for the 
package. Or that Democrats can go it alone but only if we spend 
less than President Biden proposed in his American Jobs Plan 
and American Families Plan.
    This is unacceptable. We need to be going further than the 
President has proposed, not settling for half as much and then 
patting ourselves on the back for a job well done. Families 
across this country understand the stakes. It is time that 
Congress catches up with the needs that our families have in 
housing and that we finally make the investments necessary to 
turn this crisis around.
    Again, I want to thank you very much for being here today 
and thank you for your work.
    Thank you, Mr. Chairman.
    Chairman Brown [presiding]. Thank you, Senator Warren. 
Thank you.
    Before turning it to the most senior Democrat on this 
Committee, Senator Reed of Rhode Island----
    Senator Reed. The oldest.
    Chairman Brown. I want to announce that his staff, James 
Ahn, this is his last day or last hearing for sure, his last 
day is tomorrow. He has been serving for better than a decade. 
I have worked with him, and my staff has worked with him for 
years now. He even looks out for my grandchildren in his boss's 
home State of Rhode Island.
    But Mr. Ahn, most significantly, I mean it is significant 
he is a public servant. But the work that he was here, maybe 
the only personal staff still here from the Dodd-Frank days. 
And he was helpful in that legislation. And Jack Reed played a 
major, major role. It should be called the Reed-Frank bill, but 
it is not.
    And James was new then, and James was not able to get Jack 
Reed's name in the title apparently.
    Anyway, Senator Reed is recognized for 5 minutes.
    Senator Reed. Thank you very much, Mr. Chairman.
    I join you in saluting James. He has been an extraordinary 
asset, not just to my office but to the Committee. We will miss 
him but we will still be calling upon him.
    Thank you all for your testimony. This is absolutely a 
critical topic. Everywhere I go in Rhode Island, everywhere we 
go around the country, affordable housing, affordable housing 
is the cry.
    Ms. Roman, I believe Senator Cortez Masto touched on this 
but Senators Collins, Van Hollen, Senators Cortez Masto, 
Klobuchar and I have introduced the S.2008, which is extending 
the life of the Interagency Agency Council on Homelessness. 
Could you comment on how critical that is?
    Ms. Roman. Yes, thank you so much for introducing that. I 
did talk a little bit about it before to just say that people 
who are homeless generally have complex issues. We talk about 
the need for cooperation and partnership and everybody agrees 
with that but it is hard to make it happen.
    USICH sort of makes it happen through being a boundary 
spanner, going among agencies and pulling together what is 
needed from each one to really address homelessness. I think it 
is a pretty inexpensive way to really improve outcomes.
    They also share information with the States and localities 
on best practices and so forth, which is also extremely helpful 
and creates those partnerships.
    As long as we have homeless people, it would be good to 
have USICH so I appreciate your efforts there.
    Senator Reed. Thank you very much.
    It is a holistic problem. It is not just one thing. And you 
need interagency cooperation.
    Looking at numbers around for Medicaid, for example, the 
homeless average $14,723 a year higher than the average 
Medicaid recipient who presumably is in housing. That is just 
$8,200. That is an example of some of the costs that are not 
borne by the housing system but borne by the health care 
system.
    I concur, that is why we are trying to push the 
legislation. Thank you.
    Ms. Mensah, Capital Magnet Fund, it is a competitive 
affordable housing grant that is funded outside of the 
appropriations process, which is good. And in addition, it 
allows grants for economic development, service facilities such 
as daycare centers, workforce development.
    Could you discuss the importance of anchoring affordable 
housing around economic development activities like daycare 
centers and other things that allow people to work?
    Ms. Mensah. Senator Reed, thank you for your question.
    The Capital Magnet Fund is a very valuable tool for both 
housing and the economic development activities. We support 
expanding the Capital Magnet Fund to provide over $12 billion 
over the next 5 years. We are in full support of this.
    It is incredibly efficient. And I think what was so wise 
about this was not just its unique funding mechanism, but its 
targeting of the way partners join CDFIs.
    Capital Magnet Fund awardees have leveraged over $18 
billion in the past 5 years of funding. That is over three 
times the requirement. And they have completed projects through 
this that has been 28,000 units of affordable housing, 
including 4,500 home ownership.
    So this is a program that has worked. We thank you for your 
early championship of this program. But it is time now, as I 
spoke in my testimony, to expand what we know works.
    So I thank you for your attention to this. It is the 
knitting together of home ownership and economic activities 
that will transform our communities.
    Senator Reed. I concur. I was at a celebration earlier of 
14 separate units in Providence, Rhode Island funded from the 
Affordable Housing Trust Fund, which we also developed as well 
as the Capital Magnet Fund. And these now are first-rate 
housing.
    And basically, it is not only providing housing, it is 
stabilizing the neighborhood.
    Ms. Mensah. Exactly.
    Senator Reed. Which was just on the precipice of beginning 
to slide. So thank you for that.
    And just a final question, Ms. Roman, I was struck in your 
written testimony, the analogy that the homeless system is like 
an emergency room. We patch you up and we figure out what is 
going but we have got to send you someplace. And the present 
system is not the solution.
    I will just give you 11 seconds. What is the solution?
    Ms. Roman. Well, the solution is housing. We need housing 
to send people to. And the faster we get them into the housing, 
the better off they are. Being homeless is terrible for your 
health. We have seen that during COVID. Unsheltered people, for 
example 50 percent of them are trimorbid, they have mental 
health, substance abuse, and physical illnesses. We need to get 
people into housing.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman. Thank you all.
    Chairman Brown. Thank you, Senator Reed.
    There is one Member we are awaiting and I have a couple of 
other questions so I will take the liberty to, I guess, do a 
second round and a question for each of you.
    Ms. Mensah, many of the lowest income homeowners in rural 
areas, we talked about the problems of housing in rural 
America, depend on the USDA 504 program to make critical 
repairs and improve the efficiency of their home to save on 
monthly bills. Talk to us about the 504 program, especially the 
grants that are available through that program to help 
homeowners in rural areas stay in their homes.
    Ms. Mensah. This is one that brings me to tears when you 
see the successes that have happened with this program. Elderly 
residents getting ramps so that they can get into their homes, 
better heating, better efficient systems. It is exactly what we 
need.
    The only problem with the 504 program, it has been too 
small. So I would urge your attention to this.
    In some ways, rural housing does not have the attention of 
the Nation but it is experienced painfully by the people who 
are part of rural America. So I appreciate the attention.
    My feeling is that the tools are there within USDA. They 
can be partnered as appropriate, like we saw with the 502 
Relending Pilot. But they are there and they just need your 
attention and an increase. These are powerful, smart pieces of 
legislation that already work.
    Chairman Brown. Thank you, Ms. Mensah.
    Ms. Roman, I have introduced a bill with Pennsylvania 
Democrat Bob Casey and Maine Republic Susan Collins to support 
housing for grandfamilies, grandparents raising their 
grandchilden, often after traumatic circumstances. We would 
provide funds to repair and maintain apartments for 
grandparents and grandfamilies, if you will, and provide 
service coordinators to help connect these families to 
services.
    Talk about why this is important, to support families that 
so often could end up afflicted by homelessness.
    Ms. Roman. I will say, among homeless individual women, 
women who are homeless but not with their families--the most 
common situation is that they have children and the children 
are staying with another family member. They are often families 
that are very poorly resourced, as well, and at risk.
    So, think this would be tremendously helpful. Obviously, 
there is help that needs to be provided to the parents but to 
be able to support the grandparents to take care of families, I 
think would make a real difference in homelessness situations.
    Chairman Brown. There is one more Senator that I am 
awaiting, but we cannot really wait too much longer. But would 
each of you just like to summarize any thoughts each of the 
three of you want to give to the Committee? And then, if the 
Senator who may or may not be returning has not arrived, I will 
adjourn. But if he has, I would like to give him the 
opportunity.
    Mr. Husock, you want to start on that?
    Mr. Husock. Sure. I appreciate the opportunity, Senator 
Brown.
    I think the thrust of my remarks is let us view our housing 
programs not in isolation to our general assistance programs 
for people of low-income. The issues involve giving incentives 
to improve their lives over time, trusting them to improve 
their lives over time. When we remark that after 5 years they 
will still be in the same situation, that is a pessimistic view 
of America and I do not share it. I think that we should look 
to uplift through incentives. I think we should be careful in 
providing programs that may provide disincentives for upward 
mobility.
    Just a quick comment on eviction. We have to be careful. 
Many of those--if you look at Matthew Desmond's wonderful book 
which the Chairman referenced, among the heroes of that book 
were low-income landlords who were struggling to pay their 
bills and were dealing with tenants who were causing 
significant problems not just I paying their rent but for other 
tenants, starting fires, other things like that.
    So the housing ecosystem is a complex ecosystem and we need 
to look at it holistically rather than saying let us just stop 
evictions. No, let us study the situations that lead to 
evictions and try to assess those, both for owners and for 
tenants.
    Thank you, very much.
    Chairman Brown. Mr. Husock, thank you for those comments 
and insight.
    Ms. Roman.
    Ms. Roman. I think really it is housing that is the 
solution to homelessness. We have a fairly sizable homelessness 
system. It is not inexpensive. And it is, I think, the tip of 
the iceberg in terms of what homelessness costs us in other 
areas, health care, policing, education.
    To end homelessness we just need to focus on getting people 
experiencing homelessness into homes. That will solve the 
problem of homelessness.
    Chairman Brown. Thank you, Ms. Roman.
    Ms. Mensah, thank you.
    Ms. Mensah. Thank you, Senator.
    I think what was interesting about being invited to address 
this hearing was that it had the word bipartisan in our title, 
as you were seeking to increase access to housing. And I think 
there are so many practical ideas that can go a long way to the 
real unfinished work we have.
    But if I could leave you with one thought, it is that 
America is a complex place. And its localities are very 
different. And an army of Community Development Financial 
Institutions stands ready to be a smart partner to the work of 
finishing what is unfinished in providing housing.
    I am so appreciative of the attention to Native housing. So 
rarely do we get a moment to speak to our Tribal areas.
    I am appreciative to the focus on rural housing. So rarely 
do we get a chance to focus on this.
    And in all of this, I feel like the Nation can do better to 
turn to our CDFIs in the jobs of rebuilding and rehabilitating 
and rethinking our housing stock. And I want to thank you for 
the attention to make this case today.
    Chairman Brown. Thank you.
    What excited me about this hearing is there are probably 20 
of my colleagues, roughly half Democrats and half Republicans. 
I spoke to a number of them today. I spoke to Tester and Reed 
and Coons and Collins and Cramer and Young and Van Hollen, and 
a number of them have bipartisan bills. These are not, you 
know, this is an investment of $100 billion in public housing. 
It is not the big rental assistance we did in the most recent 
bill.
    But it will make a significant difference and it is 
something that this Committee, I am hopeful, can do. That is, 
to me, why this is one of the--I mean, it was exciting to do 
this hearing and be a new Chair and look at the history of 
structural racism from black coats to Jim Crow to redlining to 
the Trump administration locking in discriminatory housing 
practices and how we address that.
    But today, to me, was just a very uplifting time that we 
can do a lot of things bipartisanly, taking the ideas of the 
three of you and many of my colleagues.
    So thank you for being here.
    The Senate Committee on Banking, Housing, and Urban Affairs 
is adjourned.
    [Whereupon, at 11:27 a.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    In our first hearing I gaveled as chair, we talked about how 
housing is the gateway to opportunity, and to building a middle class 
life--and how too many families are locked out of it.
    I said that this Committee, the Banking and Housing Committee, will 
focus on housing, perhaps more than the Committee ever has.
    Since then, I've been encouraged to see Members of our Committee, 
of both parties, take that charge to heart.
    We've held hearings on the state of our Nation's housing, and on 
the legacy of racism in our housing system.
    And last week, we heard from America's mayors about how the lack of 
affordable housing is holding back communities and families in all 
parts of the country.
    We heard from the Mayor of Bozeman, Montana, that the city's 
businesses are losing out on candidates for good-paying salaried jobs 
because there are no homes potential workers can afford to move their 
families into.
    We heard from the Mayor of Tempe, Arizona, that they've had a 900 
percent increase in the number of residents without a place to lay 
their heads at night, in just in the last 5 years.
    We heard from the Mayor of Akron, Ohio, that most of their housing 
was built before 1970, long before we stopped using poisonous lead 
paint.
    These aren't isolated problems. Homeowners and renters, people 
working minimum wage or making a steady salary--they're all struggling 
to find an affordable place to live.
    This is a national problem. And our Members of both parties have 
asked thoughtful questions, listened to our witnesses, and are already 
working on solutions.
    We'll discuss some of those bipartisan proposals today. Many of 
them are proposals that the Members of our Committee have introduced in 
past Congresses--and it's unfortunate that they have not been 
considered before today.
    These ideas take steps to bring down housing prices for families, 
and they tackle the housing needs of renters, aspiring homeowners, and 
Native communities.
    All of the bills we'll discuss today are bipartisan, and all of 
them have at least one cosponsor from this Committee.
    We have legislation to expand affordable housing opportunities:

    The Family Stability and Opportunity Voucher Act (S.1991), 
        introduced by Senators Van Hollen and Young, which will help 
        half a million more families afford a home, including in areas 
        with greater opportunities

    The Choice in Affordable Housing Act (S.1820), legislation 
        from Senators Cramer and Coons, to encourage more landlords to 
        participate in affordable housing programs.

    We'll examine a bill, S.2008, introduced by Senators Reed and 
Collins and others to strengthen the U.S. Interagency Council on 
Homelessness, and we'll look at the Yes in My Back Yard Act (S.1614), 
offered by Senators Young, Schatz, and Warnock, that sheds light on 
communities' plans to remove barriers to making housing more affordable 
and combat discrimination.
    We'll look at the Native American Rural Homeownership Improvement 
Act (S.2092), introduced by Senators Smith, Rounds, Tester, Cramer, 
Schatz, and Thune, that supports lending to Native Community 
Development Financial Institutions, to increase Native American home 
ownership in rural communities.
    We'll talk about a plan from Senators Tester and Lummis--the 
Improving FHA Support for Small-Dollar Mortgages Act of 2021--to 
encourage more small-dollar mortgages.
    Many of us have read Matthew Desmond's powerful book Evicted.
    Inspired in no small part by that book, Senators Bennet and Portman 
have reintroduced the Eviction Crisis Act, which I'm also proud to 
cosponsor.
    In Ohio we also know how the addiction crisis has torn apart so 
many families. It's one of the reasons I joined Senators Casey and 
Collins to introduce the Grandfamily Housing Act, to help grandparents 
who are caring for their grandchildren find the housing and support 
they need to help children thrive, after often traumatic circumstances.
    I also have a bill, the Trafficking Survivors Housing Act of 2021 
(S.2049), with my friends Senators Blunt and Durbin to identify ways to 
help survivors of human trafficking find safe housing and rebuild their 
lives.
    And more of our colleagues have introduced other bipartisan housing 
bills just this week.
    Senators King and Young, along with Senators Cantwell, Tester, and 
Kennedy, have reintroduced their bill, the Task Force on the Impact of 
the Affordable Housing Crisis Act, to research the effects of 
unaffordable housing on families.
    These ideas recognize the breadth of our housing challenges. And 
they show us how these problems cut across all geographic and racial 
and partisan lines. Every one of these bills is bipartisan.
    Of course these bills alone won't solve all our housing problems. 
They're not a substitute for the generational investment we need in our 
housing infrastructure.
    We must take the opportunity for something far more transformative:
    We can build more homes people can afford, and we can improve the 
homes we already have and make them more affordable.
    We can make houses and apartment buildings more energy efficient 
and bring down people's utility bills.
    We can remove lead that poisons our kids.
    And we can hire American workers to do it all--these are jobs that 
can't be shipped overseas.
    The bills we'll consider today won't accomplish that on their own. 
These ideas are a downpayment on our commitment to start solving the 
problems we can, on a bipartisan basis.
    On Monday, I was talking with parents from Ohio about the Child Tax 
Credit, and what the expansion we passed will mean for their ability to 
afford childcare and diapers and transportation and, of course, 
housing.
    One advocate who works with Northeast Ohio families said something 
that she hears so often from Ohioans--she said their whole lives 
revolve around making rent.
    Think about what it's like to live with that stress.
    On this Committee, we have an opportunity to make people's lives 
better through better housing policy
    All of us should get to define what home looks like for us. And 
people should be able to find it and afford it without that crippling 
stress every single month. Today, we will consider bipartisan ideas to 
make it so for everyone.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Mr. Chairman, thank you.
    As I made clear at our first housing hearing this Congress, I am 
committed to working with all Members of this Committee to improve 
access to affordable housing. You may recall I released a set of 
principles at the start of this Congress for reforming the housing 
finance system. And as I pointed out before, my principles overlap with 
the principles you laid out in September 2019, Mr. Chairman.
    We must work in a bipartisan manner toward comprehensive reform 
which serves families and the taxpayers. But we aren't here today to 
talk about ways we can make housing more affordable. Instead, we are 
asked to discuss a number of unrelated bills, most of which increase 
Government spending and interference in housing markets.
    We would be wise to remember there is no guarantee that further 
Government support will improve access to housing. The Government 
already supports a whole array of overlapping housing subsidies that 
have done little to address affordability: mortgage interest deduction, 
capital gains exclusion on home sales, property tax deduction, 
Government guaranteed and subsidized mortgages, LIHTC, a host of HUD 
programs.
    As with taxpayer subsidies for health care and higher education, 
all of this support for housing is only leading to price escalation. 
Just last month, the year-over-year change in median home sales price 
has grown to nearly 25 percent. We know wages aren't growing 25 percent 
year-over-year.
    If we want to make housing affordable, we should be talking about 
how Government subsidies, and how monetary policy--the Fed's easy money 
policy of low interest rates and its purchase of nearly half-a-trillion 
dollars in mortgage-backed securities annually--are causing rapid home 
price inflation. The experiment of a vast subsidy framework combined 
with accommodative monetary policy have done little to address 
affordability.
    Congress recently doubled down on subsidizing housing and it 
doesn't appear to be working. Congress appropriated over $80 billion 
for housing in response to COVID, but much of this money hasn't gone 
out the door yet. Nearly $50 billion was spent on emergency rental 
assistance, but little of this is reaching landlords and tenants. 
Congress spent almost $25 billion on more HUD programs through the 
March 2020 CARES Act and President Biden's partisan relief bill, but 15 
months after the CARES Act was enacted, less than one-third those funds 
have been spent. And none of the money from the Administration's 
flagship spending bill has actually been delivered to any family.
    We need to start a new discussion. The measure of success shouldn't 
just be how many families are receiving housing assistance. We should 
begin focusing on enabling people to work their way out of poverty and 
empower them to graduate from Government support.
    But we appear to be having the same conversations and doubling down 
on the same unworkable ideas that only grow the welfare State. This 
Administration is ignoring the success of those welfare reform efforts 
that directly contributed to poverty reduction in this country.
    President Biden's partisan relief bill provided additional 
unemployment insurance benefits, letting many people receive more money 
than they would working. It also eliminated the requirement to work or 
prepare for work as a condition of receiving many welfare benefits like 
the child tax credit. And just a few weeks ago, HUD unilaterally 
decided it wouldn't even study the effectiveness of work requirements 
for tenants receiving taxpayer assistance from HUD.
    I hope my colleagues would agree we don't want people to live their 
entire lives on Government assistance. Assistance must be temporary and 
transitional. But after 50 years and trillions in Federal housing 
support, there's been no meaningful change in home ownership rates--64 
percent in 1970 compared to 65.8 percent in 2020.
    HUD's programs also are meant to enable self-reliance in housing. 
However, according to most recent studies, we've seen the average 
length of stay for families across all HUD assisted housing programs 
nearly double from 1995 to 2015. In that same time, the average length 
of stay for voucher holders grew from just under 1 year to over 6\1/2\ 
years.
    Expanding the welfare State doesn't work. It's incumbent on 
Congress to craft policies that actually support families.
    Today, we will hear from a witness who will provide an alternative 
view to expanding the welfare State. Howard Husock joins us from the 
American Enterprise Institute, and he will provide new ideas for 
helping families graduate from HUD assisted programs. Key among them: 
we need not assume that the only way to reduce poverty is to grow 
housing programs, and Government support does not always lead to better 
outcomes.
    Before I end my remarks, I want to repeat that I welcome and 
encourage bipartisan compromise on major housing legislation. As an 
example, my principles for housing finance reform lay the important 
groundwork for a bipartisan solution to an as-of-yet unresolved 
problem. I still hope we can have bipartisan hearings to discuss 
legislative improvements.
    We need to dispel the myth that more spending without reform helps 
families. I welcome a discussion of novel ideas to advance affordable 
housing. I want to hear new suggestions for helping families succeed 
and am eager to advance legislation that promotes those ideas.
                                 ______
                                 
                   PREPARED STATEMENT OF LISA MENSAH
             President and CEO, Opportunity Finance Network
                             June 24, 2021
    Thank you for holding this hearing entitled ``Examining Bipartisan 
Bills To Increase Access to Housing''. My name is Lisa Mensah, 
President and CEO of the Opportunity Finance Network (OFN). I am 
pleased to be here today to testify about how community development 
financial institutions (CDFIs) can drive major new investments in rural 
and tribal housing, and how CDFIs can contribute to the rebuilding of 
our Nation's infrastructure.
    OFN is a national network of CDFIs: mission-driven community 
development banks, credit unions, loan funds, and venture capital funds 
investing in opportunities that benefit low-wealth communities across 
America. For nearly 40 years, CDFIs have provided responsible, 
affordable capital where it is needed most: CDFI customers are 84 
percent low-income, 60 percent people of color, 50 percent women and 26 
percent rural. In FY2019, CDFIs in our network financed $7.9 billion in 
loans, including roughly $2.2 billion in loans that supported rural 
communities. \1\
---------------------------------------------------------------------------
     \1\ Opportunity Finance Network, ``Impact Performance'', https://
ofn.org/impactperformance.
---------------------------------------------------------------------------
    Nationwide, the more than 1,200 CDFIs certified by the U.S. 
Treasury Department's CDFI Fund manage more than $222 billion. CDFIs 
are experienced housing lenders with deep expertise reaching low wealth 
markets. In fiscal year (FY) 2019, certified CDFIs made more than 
600,000 housing loans totaling more than $56 billion. \2\ CDFIs have 
cumulatively developed or rehabilitated more than 2.1 million housing 
units. With cumulative net charge-off rates of less than 1 percent, 
CDFIs lend prudently and productively in markets underestimated by 
mainstream banks. \3\ CDFIs are specialized lenders who can reach deep 
into communities and provide services that are tailored to each market 
across the country.
---------------------------------------------------------------------------
     \2\ Opportunity Finance Network, ``2019 CDFI Fund Annual 
Certification Reporting Database'', Accessed November 19, 2020.
     \3\ Opportunity Finance Network, ``Impact Performance'', https://
ofn.org/impact-performance.
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    This is a unique moment with the opportunity to commit to 
addressing the Nation's housing issues and to tend to the problems that 
we have left unaddressed for too long. The COVID-19 pandemic has 
exacerbated existing problems in affordable housing and now is the time 
to invest and go deeper into the communities across the country that 
have faced decades of underinvestment.
    The United States has an insufficient stock of affordable housing 
and the stock that does exist is aging and in need of repair. We must 
also be good stewards of the investments that have already been made. 
In 2016, the U.S. Department of Agriculture (USDA) estimated the 20-
year capital needs of the USDA multifamily portfolio were $5.6 billion. 
\4\ A 2010 HUD-sponsored assessment of the Nation's public housing 
capital needs determined that approximately $21 billion was needed for 
unmet maintenance and repairs, and that the overall public housing 
stock is aging, with 51 percent of public housing units having 
completed their last construction before 1975. \5\ Completing these 
repairs not only preserves the investment already made into affordable 
housing and improves the quality of life for residents of these 
properties but will also make the buildings more energy efficient and 
reduce future utility costs.
---------------------------------------------------------------------------
     \4\ USDA, ``USDA Rural Development Multi-Family Housing 
Comprehensive Assessment'', March 1, 2016, https://www.rd.usda.gov/
sites/default/files/USDA-RD-CPAMFH.pdf.
     \5\ Urban Institute, ``The Future of Public Housing'', Benny 
Doctor and Martha Galvez, October 21, 2019, https://www.urban.org/
sites/default/files/publication/101482/
the20future20of20public20housing20public20housing20fact20sheet-0.pdf.
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    CDFIs are the adaptable partners the Federal Government needs to 
address the wide range of housing issues unique to each community. The 
rural, urban, and Native communities where CDFIs work need a local 
approach to meet their needs. CDFIs have decades of on-the-ground 
experience working on the full spectrum of housing issues, from 
constructing affordable rental housing, to renovating outdated housing 
stock and making properties more energy efficient, to construction of 
senior housing, to providing mortgages, technical assistance, and 
facilitating downpayment assistance on the path to home ownership. 
CDFIs already work with a variety of public and private resources. 
Existing programs at Treasury, the Department of Agriculture, the 
Department of Housing and Urban Development and throughout the Federal 
Government need new investment to address the scale of the problem. 
CDFIs need a strong partnership with the Federal Government to continue 
to meet the moment and serve their communities.
Housing Challenges Facing Rural and Tribal Communities
    Rural America--home to about 20 percent of the U.S. population and 
covering more than 90 percent of the U.S. landmass--is diverse 
economically and demographically. \6\ Rural America is not a monolith, 
and its housing needs vary in different communities. In some rural 
communities, outmigration and population loss are key drivers of the 
housing challenges, while other rural communities have experienced 
rapid growth and changes to the labor markets that have increased 
demand for affordable housing. Many rural communities are also located 
in ``areas of persistent poverty''--defined as communities with a 
poverty rate of greater than 20 percent for three decades in a row. 
According to Partners for Rural Transformation, of the 395 persistent 
poverty counties in the U.S., eight out of ten are nonmetro and the 
majority (60 percent) of people living in persistent poverty counties 
are people of color. \7\
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     \6\ U.S. Census Bureau, ``Measuring America: Our Changing 
Landscape'', December 16, 2016, https://www.census.gov/newsroom/press-
releases/2016/cb16-210.html.
     \7\ Partners for Rural Transformation, ``Transforming Persistent 
Poverty in America: How Community Development Financial Institutions 
Drive Economic Opportunity'', March 2020. https://
www.ruraltransformation.org/wp-content/uploads/2020/03/Transforming-
Persistent-Poverty-in-America-Policy-Paper-PRT-FINAL.pdf.
---------------------------------------------------------------------------
    Aging housing stock puts pressure on the supply of both single and 
multifamily affordable housing. According to the National Low Income 
Housing Coalition, nearly 30 percent of rural households experience at 
least one major housing problem, such as high cost, physical 
deficiencies, or overcrowding. These problems are found throughout 
rural America but are particularly pervasive among several geographic 
areas and populations, such as the Lower Mississippi Delta, the 
southern Black Belt, the colonias along the U.S.-Mexico border, Central 
Appalachia, and among Native Americans and farm workers. \8\
---------------------------------------------------------------------------
     \8\ Housing Assistance Council, Leslie R. Strauss, ``USDA Rural 
Rental Housing Programs'', https://nlihc.org/sites/default/files/AG-
2021/04-15-USDA-Rural-Rental-Housing-Programs.pdf.
---------------------------------------------------------------------------
    Below are some key issues impacting access to affordable housing in 
rural markets:

    Housing cost increases outstrip income growth. While 
        housing costs are still relatively low in some rural markets, 
        there are some communities where increased housing costs 
        coupled with stagnant income growth is creating an 
        affordability crisis. For example, in the Rio Grande Valley 
        where OFN member ``Come dream, Come build'' (Cdcb) works, 
        housing prices increased as they have throughout Texas. During 
        the 10-year period from 2011 to 2020, the median sales price in 
        the Brownsville-Harlingen MSA increased 70.8 percent, from 
        $101,300 to $173,000. However, rising home prices in 
        Brownsville-Harlingen have far outpaced the modest growth in 
        incomes. Median income in 2019 was $37,900, less than three-
        fifths of the statewide median income of $64,800, making this 
        community one of the least affordable in the State. \9\
---------------------------------------------------------------------------
     \9\ Come dream, Come build, ``The Myth of Affordability in the 
RGV: Homeownership Fact Sheet'', March 3, 2021. https://img1.wsimg.com/
blobby/go/28825c06-7c1e-41eb-8bf1-b2e39c412309/
Myth%20of%20Affordability%20Homeownership%20fact%20sheet.pdf.

    Housing quality and aging housing stock. Nowhere are the 
        challenges to the Nation's aging housing stock more prevalent 
        than in rural communities. In too many rural communities, 
        housing lacks adequate plumbing and kitchen facilities as well 
        as facing conditions of overcrowding. The adequate housing that 
        does exist is often unaffordable because rural incomes are 
        below the national median income. \10\
---------------------------------------------------------------------------
     \10\ Come dream, Come build, ``The Myth of Affordability in the 
RGV: Homeownership Fact Sheet'', March 3, 2021. https://img1.wsimg.com/
blobby/go/28825c06-7c1e-41eb-8bf1-b2e39c412309/
Myth%20of%20Affordability%20Homeownership%20fact%20sheet.pdf.

    Limited home ownership opportunities for rural communities 
        of color. For the millions of people of color living in rural 
        America, access to home ownership is also an issue of racial 
        equity. There are more than 2,000 rural and small-town census 
        tracts where racial and ethnic minorities make up the majority 
        of the population--many who experience limited access to home 
        ownership opportunities due to lending practices and housing 
        policies that historically excluded rural people of color. \11\
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     \11\ Housing Assistance Council, ``Rural America Is More Diverse 
Than You Think'', https://ruralhome.org/rural-america-is-more-diverse-
than-you-think/.

    Increased housing cost burdens. Nearly one-fourth of the 
        Nation's most rural counties have seen a sizeable increase this 
        decade in the number of severely cost-burdened households--
        defined as spending at least half their income on housing. \12\ 
        The National Low Income Housing Coalition found that 47 percent 
        of rural renters are cost burdened--spending more than 30 
        percent of their income for their housing--with nearly half of 
        that group being severely cost burdened. \13\ These housing 
        cost burdens highlight the shortage in affordable rental and 
        home ownership units for low-income populations and the 
        pandemic has exacerbated this issue.
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     \12\ Housing Assistance Council, ``Rental Affordability Crisis 
Continues'', February 6, 2020, https://ruralhome.org/rental-
affordability-crisis-continues/.
     \13\ Housing Assistance Council, Leslie R. Strauss, ``USDA Rural 
Rental Housing Programs'', https://nlihc.org/sites/default/files/AG-
2021/04-15-USDA-Rural-Rental-Housing-Programs.pdf.

    Expiring affordability provisions. Many loans for rural 
        multifamily properties financed through USDA programs are 
        reaching maturity. USDA estimates that the pace of mortgage 
        maturities will increase starting in 2028. USDA projects that 
        more than 16,000 rental homes will be lost each year between 
        2028 and 2032, and 22,000 homes will be lost annually in the 
        following years. \14\ When USDA loans reach maturity, property 
        owners are no longer required to meet affordability standards; 
        many may convert their properties to market-rate housing or 
        stop operating the property altogether. This will result in a 
        significant reduction in the available affordable housing stock 
        in rural communities. Compounding the issue, low-income tenants 
        are no longer eligible for USDA rural rental assistance once 
        the loan matures. A lack of available rental units and limited 
        access to home ownership opportunities will intensify existing 
        housing cost burdens for rural families.
---------------------------------------------------------------------------
     \14\ National Low Income Housing Coalition, ``Housing Needs in 
Rural America'', https://nlihc.org/sites/default/files/Housing-Needs-
in-Rural-America.pdf.

    Limited access to smaller dollar mortgages. While there are 
        rural markets where housing costs have increased significantly, 
        there are still markets where home prices are relatively low 
        and borrowers, especially first-time homebuyers, need access to 
        smaller balance loans that are not typically financed by 
        traditional lenders. Accessing small dollar mortgage lending 
        continues to be challenging because of the limited availability 
        of mortgages under $100,000. The Urban Institute found that 
        ``only one in four low-cost homes sold was likely to be 
        financed with a mortgage. In 2019, 26.7 percent of home sales 
        nationwide were for homes priced below $100,000. Of those, only 
        23.2 percent were purchased with a mortgage, compared with 73.5 
        percent of homes priced at or above $100,000.'' \15\
---------------------------------------------------------------------------
     \15\ Linna Zhu, ``Making FHA Small-Dollar Mortgages More 
Accessible Could Make Homeownership More Equitable'', Urban Institute 
Blog, April 22, 2021. https://www.urban.org/urban-wire/making-fha-
small-dollar-mortgages-more-accessible-could-make-homeownership-more-
equitable.
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Housing Challenges in Tribal Communities
    Tribal communities experience many of the same housing issues 
facing other rural communities but also have unique obstacles. In rural 
America, racial and ethnic minority groups are more likely to live in 
substandard housing than White residents. For instance, the rate of 
housing without basic plumbing on rural tribal lands is up to 10 times 
the average national rate. \16\ According to Prosperity Now, the home 
ownership rate for Native American households is around 54 percent, 
while the rate for White households is 72.1 percent. \17\ A study from 
the Federal Reserve Bank of Minneapolis' Center for Indian Country 
Development found that Native households often face higher mortgage 
costs when seeking to buy a home, especially when those loans are made 
on reservation lands. \18\ One of the major challenges to increasing 
Native home ownership is access to affordable mortgages.
---------------------------------------------------------------------------
     \16\ Housing Assistance Council, ``Taking Stock: Rural People, 
Poverty, and Housing in the 21st Century'', December 2012. http://
www.ruraldataportal.org/docs/HAC-Taking-Stock-Full.pdf#page=55.
     \17\ ``Prosperity Now, Scorecard Homeownership & Housing'', 
https://scorecard.prosperitynow.org/data-by-issue#housing/outcome/
homeownership-rate.
     \18\ Federal Reserve Bank of Minneapolis, ``The Higher Price of 
Mortgage Financing for Native Americans'', Donna Feir and Laura 
Cattaneo, September 27, 2019, https://www.minneapolisfed.org/news-
releases/2019//link.aspx?-id=3A72BEC46859433BAA0CACAB5084ABD3&-z=z.
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    According to a 2017 study commissioned by the Department of Housing 
and Urban Development, lenders report that prepurchase counseling, 
particularly counseling provided by organizations familiar with the 
unique challenges of lending on tribal trust land, is critical to 
getting borrowers mortgage ready. CDFIs exemplify this unique approach 
by combining technical assistance with access to capital. In the same 
study, lenders reported that lending on tribal trust land can be 
complicated and time-consuming and specifically recommended working 
with CDFIs, Tribes, and lenders that already have a presence in the 
community. \19\
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     \19\ ``Mortgage Lending on Tribal Land: A Report From the 
Assessment of American Indian, Alaska Native, and Native Hawaiian 
Housing Needs'', January 2017, https://www.huduser.gov/portal/sites/
default/files/pdf/NAHSG-Lending.pdf.
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CDFIs Provide Access to Capital in Rural Communities
    Addressing the access to capital issues in rural communities 
requires on-the-ground partners like CDFIs that understand the local 
markets and can develop targeted solutions. Data from the CDFI Fund 
shows that CDFI lending in rural markets has grown from $358 million in 
FY2005 to more than $2.8 billion in financing closed in FY2019. \20\
---------------------------------------------------------------------------
     \20\ Transaction Level Reporting (TLR) data from the CDFI Fund. 
This data reflects the data reported only by CDFIs that are Financial 
Assistance awardees within their 3-year reporting cycle.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    CDFIs play a vital role in America's housing finance system. Below 
are examples of CDFIs providing innovative and tailored solutions to 
address their communities housing challenges and meet the needs of 
---------------------------------------------------------------------------
local borrowers:

    FAHE, a network of affordable housing lenders based in 
        Berea, Kentucky, and working throughout Appalachia, launched 
        the MicroMortgage Marketplace pilot project in 2020. The pilot, 
        in partnership with the Homeownership Council of America (HCA) 
        and the Urban Institute provides small-dollar mortgages under 
        $100,000 in Louisville and parts of Southern Indiana. The 
        program also offers underwriting flexibility, simplifies the 
        loan process, and reduces many of the fees and costs in the 
        process. Fahe is underwriting, funding, and servicing the loans 
        through the MicroMortgage Marketplace while HCA will manage 
        product development, market testing and capital partnerships, 
        and create distribution channels that can scale across the 
        country.

    Come Dream, Come Build (cdcb), based in Brownsville, Texas, 
        provided relief to their borrowers impacted by the COVID-19 
        pandemic and also administered the City of Brownsville's 
        pandemic housing assistance programs. In 2020, cdcb continued 
        to increase access to affordable home ownership, providing 73 
        households with smaller dollar mortgages with a median home 
        sales price of $104,000. \21\
---------------------------------------------------------------------------
     \21\ Come dream, Come build, ``Myths of Affordability in the 
RGV'', March 3 2021, https://img1.wsimg.com/blobby/go/28825c06-7c1e-
41eb-8bf1-b2e39c412309/
Myth%20of%20Affordability%20Homeownership%20fact%20sheet.pdf.

    HOPE Credit Union based in Jackson, Mississippi and working 
        throughout the Delta region has financed the development of 
        affordable housing throughout the region. Mortgage lending is a 
        key component of HOPE's strategy to close the racial wealth gap 
        in the Deep South. Over the last 10 years, HOPE's mortgage 
        portfolio almost quadrupled from nearly $34 million in 2010 to 
        $127 million at the end of 2020. In 2020, 86 percent of HOPE's 
        mortgages were made to people of color, primarily Black 
        borrowers, and 83 percent were made to first time homebuyers. 
        HOPE employs tailored solutions to meet the credit needs of 
        borrowers including manually underwriting loans, considering 
        nontraditional indicators of credit repayment history, and 
        discounting deferred student debt. \22\
---------------------------------------------------------------------------
     \22\ HOPE, Comment Letter to the Bureau of Consumer Financial 
Protection, May 10, 2021, http://hopepolicy.org/manage/wp-content/
uploads/2021.5.10-HOPE-CFPB-Regulation-X-Comment.pdf.

    Oweesta, based in Longmont, Colorado, is a Native 
        intermediary lender. One Oweesta member, Four Directions 
        Development Corporation is a Maine-based CDFI serving the 
        Passamaquoddy Tribe, Penobscot Nation, Houlton Band of 
        Maliseets, Aroostook Band of Micmac, and any enrolled Native 
        American from a federally recognized tribe in Maine. This CDFI 
        helps tribal members purchase, improve, and access equity from 
        on reservation residential properties. Four Directions works to 
        provide credit counseling and is uniquely suited to working on 
        tribal lands and navigating the process of working with the 
---------------------------------------------------------------------------
        Bureau of Indian Affairs.

    Southern Mutual Financial Services Over the past 50 years, 
        Southern Mutual Help Association (SMHA) and the subsidiary 
        CDFI, Southern Mutual Financial Services have developed 1,421 
        new or renovated affordable homes in rural Louisiana. SMHA's 
        work in affordable housing has generated over $454.1 million in 
        local income and an additional $67.5 million in State and local 
        tax revenue. SMHA has invested nearly $19.4 million in 
        affordable mortgage and business loans directly to Louisiana 
        families, $16.5 million of which was made possible through 
        working with private partners like IBERIABANK, reaching an 
        additional 214 families.
Building Strong, Vibrant Communities--Housing as Infrastructure
    Housing is an essential element of infrastructure and is the 
starting point for the built environment. Affordable housing is a long-
term investment that is needed to help support American families and 
revitalize communities. Investing in housing helps families achieve 
self-sufficiency and generates economic growth. The National 
Association of Home Builders estimates that, for every single-family 
home constructed, 2.90 jobs are created and $129,647 in taxes are 
generated. Building an average rental apartment is estimated to 
generate 1.25 jobs and $55,909 in tax revenue. \23\
---------------------------------------------------------------------------
     \23\ National Association of Home Builders, ``National Impact of 
Home Building and Remodeling: Updated Estimates'', 2020, https://
www.nahbclassic.org/generic.aspx?sectionID=734&genericContentID=272642.
---------------------------------------------------------------------------
    Housing is the key link between all other infrastructure 
investments. The availability and condition of housing stock has just 
as significant of an impact on a community as the condition of its 
roads and bridges. The availability of affordable housing near jobs 
reduces the strain on transportation infrastructure. The need for 
additional investment is clear, America is facing a significant housing 
shortage.
Leveraging Federal Resources to Finance Rural Housing
    The Federal Government is a critical partner in ensuring access to 
safe quality housing options in rural communities. Access to capital is 
a challenge for many of the lenders working to address affordability 
and supply issues in rural housing markets. Rural CDFIs receive less 
capital from Community Reinvestment Act-motivated banks. In 2019, only 
34 cents of every dollar borrowed by rural CDFIs was from a bank. In 
contrast, over 60 percent of borrowed funds from urban CDFIs were 
supplied by banks. \24\ Adding to the challenge, philanthropic 
resources are often less available in rural markets. From 2010-2014, 
grant making in Appalachia, the Mississippi Delta, and the Rio Grande 
Valley was around $50 per person--well behind the national average of 
$451 and $4,096 in San Francisco. \25\
---------------------------------------------------------------------------
     \24\ OFN data.
     \25\ Partners for Rural Transformation, ``Transforming Persistent 
Poverty in America: How Community Development Financial Institutions 
Drive Economic Opportunity'', November, 2019, https://fahe.org/wp-
content/uploads/Policy-Paper-PRT-FINAL-11-14-19.pdf.
---------------------------------------------------------------------------
    Federal investment to support housing in rural areas lags 
investment in urban communities. Programs that provide grants, loans, 
credit enhancements like those at USDA are a critical lifeline to 
finance affordable housing in rural communities but are inadequately 
funded. These programs are oversubscribed and highly competitive and 
must be expanded to meet the growing demand. Additionally, investing in 
programs and proven solutions that build the capacity of CDFIs will 
increase the development and preservation of affordable housing in 
rural communities and across the country.
Policy Recommendations
    The following are OFN recommendations to increase access to 
affordable housing in rural and tribal communities:

    Provide $1 billion in annual appropriations for the CDFI 
        Fund. The Federal Government put a downpayment on the CDFI 
        industry in H.R.133. More investments at this scale are needed. 
        An annual appropriation of $1 billion for the CDFI Fund is 
        critical to strengthening CDFIs to continue assisting in the 
        long-term recovery of low-wealth communities. To truly achieve 
        an inclusive recovery, the Federal Government must increase the 
        supply of capital to CDFIs, mission based responsible lenders 
        that are adept at channeling those resources into distressed 
        communities. This investment will also broaden the reach and 
        impact of the Federal Government's investments and help expand 
        access to credit and safe, affordable lending in underserved 
        rural communities.

    Pass The Native American Rural Homeownership Improvement 
        Act. USDA's Section 502 Direct Loan Program is an important 
        source of mortgage financing for low- and very low-income 
        families living in rural communities, and the program could 
        help address the relatively low home ownership rates in rural 
        Native communities. USDA currently operates a pilot program in 
        South and North Dakota, where the Department has partnered with 
        two Native CDFIs to leverage their deep ties in local 
        communities and deploy Section 502 loans to eligible Native 
        borrowers.

    This bill would expand this pilot program and create a national 
relending program within the Section 502 Direct Loan Program to help 
deploy these mortgage loans in Native communities. Specifically, the 
relending program would create a $50 million annual set-aside within 
the Section 502 program, allowing Native CDFIs to relend this money to 
eligible Native homebuyers. Because of CDFIs' vast experience operating 
on Tribal land and their ability to provide financial and homebuyer 
education, their participation will improve utilization of the USDA 
loans and help more Native families achieve the dream of home 
ownership.

    Pass the Improving FHA Support for Small Dollar Mortgages 
        Act of 2021. Limited access to small dollar mortgages is 
        putting affordable home ownership opportunities out of reach 
        for many borrowers, especially first-time homebuyers, borrowers 
        in rural communities and borrowers of color. OFN supports the 
        creation of a study of Federal Housing Administration lending 
        to understand how HUD could better reduce barriers to home 
        ownership.

    Pass the American Jobs Plan. The American Jobs Plan 
        includes several housing provisions, including the bipartisan 
        Neighborhood Homes Investment Act (NHIA). Offering $20 billion 
        worth of NHIA tax credits over a 5-year period is expected to 
        result in over 500,000 homes built or rehabilitated, \26\ 
        creating a pathway for more families to buy a home and start 
        building wealth. No other Federal tax incentive addresses the 
        problem of development costs that exceed market values for 
        owner-occupied homes in distressed neighborhoods, a common 
        problem in smaller cities and rural areas.
---------------------------------------------------------------------------
     \26\ American Jobs Plan Fact Sheet https://www.whitehouse.gov/
briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-
jobs-plan/.

    OFN also supports expanding the Capital Magnet Fund (CMF) to 
provide $12 billion over the next 5 years. CMF is incredibly efficient. 
CMF awardees have leveraged $18.6 billion over the past five rounds of 
funding, over three times the requirement. Completed projects funded 
through CMF awards have created 28,100 affordable units, including 
4,500 home ownership units. \27\ The CMF has supported a wide variety 
of housing, including senior housing. OFN member New West Community 
Capital, formerly Idaho-Nevada CDFI, leveraged their CMF award to help 
build the 55-unit River Place Senior Apartments in Sparks, Nevada. \28\
---------------------------------------------------------------------------
     \27\ CDFI Fund FY2020 CMF Award Book https://www.cdfifund.gov/
sites/cdfi/files/2021-04/FY-2020-CMF-Award-Book--022221.pdf.
     \28\ CDFI Fund Impact Story, https://www.cdfifund.gov/sites/cdfi/
files/documents/revised-nevada-idaho-cdfi-cmf-impact-story-042717.pdf.
---------------------------------------------------------------------------
    The infrastructure bill must also include significant funding to 
address the capital backlog for maintenance of existing housing. The 
$300 million included in the AJP is a good starting place but is 
insufficient to meet the current need. OFN supports increasing the 
funding levels across various rural housing programs, including $700 
million in Section 515 Rental Housing Loans, $1.4 billion in 
Multifamily Housing Revitalization and $2.1 billion in Rental 
Assistance.
    Finally, the AJP includes the creation of a Community 
Revitalization Fund at the Department of Housing and Urban Development 
to support the financing of assets that complement affordable housing, 
such as health care clinics, parks, workforce development, or other 
essential human services. The program should leverage the expertise of 
CDFIs and partner with them to administer the funding.

    Increase technical assistance and capacity building for 
        rural mission lenders. The Federal Government should invest in 
        building the capacity of local affordable housing and community 
        development organizations deeply rooted in rural places. With 
        existing Federal programs oversubscribed and fewer 
        philanthropic and bank resources flowing to rural communities, 
        the Federal Government should provide funding for technical 
        assistance to build the capacity of rural mission lenders.

    Increase funding for USDA Rural Housing Programs. Low-cost, 
        long-term financing to support both home ownership and rental 
        housing is not readily available from other sources. Congress 
        should increase funding for Federal affordable housing programs 
        serving rural populations. According to the National Low Income 
        Housing Coalition, funding for USDA's Section 515 Rural Rental 
        Housing Loan Program has been cut by more than 95 percent over 
        the past few decades, limiting the ability of rural communities 
        to attract private-sector capital and other Federal resources. 
        Despite the growing need in rural America, there has been no 
        new construction of rural rental homes under the Section 515 
        program since 2012. \29\
---------------------------------------------------------------------------
     \29\ https://nlihc.org/sites/default/files/AG-2021/04-15-USDA-
Rural-Rental-Housing-Programs.pdf

    Preserve affordability on properties with expiring 
        mortgages. There is a brewing crisis of affordability for 
        thousands of rural multifamily properties with expiring Federal 
        subsidies. USDA rental assistance subsidies should be decoupled 
        from Rural Development loan programs to continue to subsidize 
        the housing after the loans are repaid. There is a precedent 
        for this: the Government Accountability Office noted that when 
        the Department of Housing and Urban Development (HUD) faced a 
        similar loss of affordable housing subsidies, Congress 
        authorized the department in 2011 to continue providing rental 
        assistance at properties after contracts expired. \30\
---------------------------------------------------------------------------
     \30\ Government Accountability Office ``Rural Housing Service 
Better Data Controls, Planning, and Additional Options Could Help 
Preserve Affordable Rental Units'', Report to the Subcommittee on 
Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies, Committee on Appropriations, U.S. Senate, May 2018. 
https://www.gao.gov/assets/gao-18-285.pdf

    Allow Government sponsored enterprises (GSE) equity 
        investments in CDFIs. Many CDFIs still lack access to the 
        capital markets supported by the housing finance system. In 
        part because of this lack of access, CDFI housing lenders 
        experience liquidity challenges that inclusion in more 
        mainstream sources of housing finance could help solve. 
        Allowing Fannie Mae and Freddie Mac to make direct equity or 
        equity-like investments in CDFIs will enable CDFIs to manage 
        risk and their balance sheets more effectively. These flexible 
        investments would provide much needed liquidity to support the 
        specialized lending done by CDFIs and support training and 
        technical assistance needed to build the capacity of lenders 
---------------------------------------------------------------------------
        working in difficult-to-serve markets.

    Support and expand affordable housing tax credits The low-
        income housing tax credit (LIHTC) has proved to be a valuable 
        tool to help finance affordable housing construction The 
        bipartisan Affordable Housing Credit Improvement Act (AHCIA) of 
        2021, would expand and strengthen LIHTC, our Nation's primary 
        tool for developing and preserving affordable housing. Passing 
        the AHCIA could result in the financing of over an additional 2 
        million affordable homes in the next decade, support the 
        creation of nearly 3 million jobs, and generate more than $346 
        billion in wages and business income and nearly $120 billion in 
        additional tax revenue.

    The AHCIA would increase LIHTC allocations by 50 percent over 
current levels for the 9 percent credit. This allocation increase will 
be phased in over 2 years, provide a basis boost to help LIHTC better 
serve hard-to-reach communities including rural, Native American, and 
high-poverty areas. It would simplify and align rules, and enable 
States to maximize affordable housing production and preservation by 
lowering the threshold of Private Activity Bond financing required to 
trigger the maximum amount of 4 percent Housing Credits.

    Allow CDFIs to pledge nonhousing collateral for Federal 
        Home Loan Bank advances. Allowing CDFIs to make better use of 
        FHLB membership would enable nondepository CDFIs to leverage 
        their existing portfolio to make more loans. A 2015 GAO report, 
        Federal Home Loan Banks: Collateral Requirements Discourage 
        Some Community Development Financial Institutions from Seeking 
        Membership, noted that collateral restrictions discouraged some 
        nondepository CDFIs from seeking membership. Under current law, 
        CDFIs can only pledge long-term home mortgage loans of at least 
        5 years.

    Thank you for the opportunity to speak with you today. I look 
forward to your questions and to continuing to work with you to address 
our significant affordable housing challenges.
                                 ______
                                 
                    PREPARED STATEMENT OF NAN ROMAN
        President and CEO, National Alliance to End Homelessness
                             June 24, 2021
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for inviting me to testify before you today. I am 
Nan Roman, President and CEO of the National Alliance to End 
Homelessness (the Alliance). I am honored that you have invited the 
Alliance to testify before you on Bipartisan Bills that Increase Access 
to Housing.
    The National Alliance to End Homelessness is a nonpartisan, 
nonprofit organization committed to preventing and ending homelessness 
in the United States. It was founded in 1983 by a group of national 
leaders from both parties, deeply disturbed by the appearance of 
thousands of Americans living on the streets of our Nation. In its 
early years it focused on meeting the emergency and service needs of 
this emerging population. Soon, however, as it became apparent that 
emergency measures would not solve the problem, we turned our attention 
to more permanent solutions. Today, the bipartisan Alliance Board of 
Directors and our thousands of nonprofit, faith-based, private and 
public sector partners across the country devote ourselves to the 
affordable housing, access to services, and livable incomes that will 
end homelessness.
    Thank you for inviting the Alliance to appear before the Committee 
to discuss where we stand in the effort to end homelessness, what 
remains to be done, and the role of Congress in achieving the goal.
Homelessness
    The Nation is experiencing a homelessness crisis that appears to 
have been exacerbated by the COVID pandemic. While homelessness 
decreased between 2007 and 2016, it increased slightly every year 
between 2016 and 2020. The Point in Time count that takes place in 
January (and is the only enumeration that includes people who are 
unsheltered as well as sheltered) was not fully conducted in 2021 due 
to the pandemic. As a result, it is not clear where the size of the 
population now stands. However, the Alliance surveyed all of the 
Nation's Continuums of Care (CoCs) several times during the pandemic, 
and respondents reported the following: the number of shelter beds 
significantly decreased as shelters followed CDC guidance to 
``decompress;'' though many people from shelters and unsheltered 
locations were placed in motel/hotel rooms for quarantine and 
isolation, fewer beds were gained through this strategy than were lost 
through decompression; and most CoCs believe that unsheltered 
homelessness has increased. Many jurisdictions are now closing their 
motel/hotel rooms, which will increase the demand for shelter beds even 
more. Even prior to the pandemic, as reported in the most recent Annual 
Homelessness Assessment Report to Congress (AHAR Part 1, 2020), for the 
first time ever there were more unsheltered individual adults than 
sheltered individual adults. \1\
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     \1\ Adults on their own not with family members.
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    As a result of these factors, it is our belief that unsheltered 
homelessness has likely increased, and it is possible that overall 
homelessness has increased. However, it is also important to note that 
some jurisdictions have managed to avoid these increases, and the 
problem would be much worse were it not for Federal stimulus funds.
    While overall and unsheltered homelessness appear to be up, the 
numbers are down for certain subpopulations. The 2020 AHAR Part 1 shows 
a slight decrease in families, veterans, and youth. Further, both 
through our CoC surveys and in anecdotal evidence from the field, it 
appears that the number of families with children that are homeless has 
decreased significantly during the pandemic. This could be a result of 
families staying doubled up with friends and family due to reluctance 
to enter congregate facilities during the pandemic.
    Also, on the subject of subpopulations, it will be important to 
address two key demographic groups moving forward. The first is youth. 
Widespread homelessness in the modern era first emerged in the early 
1980s, largely as a result of the developing deficit of low-income 
affordable housing. But also contributing was a sizable cohort of youth 
and young adults who failed to attach to the job market due to the 
recessions of the late 1970s/early 1980s, and who became homeless as a 
result. This was the largest group of people experiencing homelessness 
at the time, and remains a large group today. There is a similarly 
disproportionate cohort of young people now--young people whose 
educations have been interrupted, and who may have failed to graduate 
from high school. While the fears of a major recession post-COVID may 
have diminished, there are still concerns about how people with less 
than a college education will fit into the job market--including this 
youth cohort. We could face a new wave of homelessness moving forward. 
The second issue is the aging of the homeless population. Work by Dr. 
Dennis Culhane at the University of Pennsylvania and others has 
revealed that: (1) the homeless population ages much faster 
physiologically than chronologically and in effect becomes senior at 
age 50 or 55, not 65; (2) the homeless system is not prepared to deal 
with an aging population; and (3) without housing the health costs of 
this group are significantly high. Moving this cohort into housing 
would generate significant public savings, not to mention saving 
people's lives.
    It should also be noted that while fears of a recession may have 
diminished, concerns about a rental housing crisis have increased. The 
end of the eviction moratorium and a likely increase in evictions, as 
well as the pricing out of first time homeowners from the market and 
the resulting pressure on the rental market, will make it harder for 
extremely low income households to find housing.
    Given all of these issues, what can and should be done to reduce 
homelessness in our Nation? Homelessness is driven by the mismatch 
between what people earn and what housing costs. Lack of affordable 
housing causes homelessness, and, notwithstanding any other problems 
they may have, people who have a home are not homeless. This is not to 
say that people experiencing homelessness do not have other problems or 
that they do not require services. Many do. People with disabilities 
including mental illness, substance use disorders, physical 
disabilities, and illnesses are more likely to be poor and therefore 
unable to afford housing. People with criminal justice or foster care 
histories are more likely to struggle to find and afford housing, and 
therefore to become homeless. People of color who have been subjected 
to historical and systemic housing discrimination, inferior health and 
behavioral health care, lack of access to good hospitals and schools, 
who are paid less, have fewer savings, and have weaker support 
networks, are also more likely to become homeless. Housing is not the 
only problem. But it also must be said that the vast majority of people 
in these categories are NOT homeless--they are housed. It is the 
affordability of housing that drives homelessness.
    Fundamentally, what needs to be done to end homelessness in our 
Nation is to increase the supply of housing that is affordable to lower 
income people, or to increase people's wages so that they can afford 
the housing that is available. Many people will definitely need 
services, and we will have to address the racial disproportionality and 
disparities that result in so many people of color becoming homeless. 
But the problem will not be solved unless the cost of housing puts it 
within reach of the millions of low income households that cannot 
afford it today.
An Opportunity
    This is where we stand on homelessness, but we also have a very 
significant opportunity at the moment to make a serious dent in the 
problem.
    The pandemic has taught us some things about the importance of 
housing. We have learned that you cannot quarantine if you do not have 
a home. We have learned that housing is, indeed, a social determinant 
of health. We have learned that millions of Americans who have a home 
live paycheck-to-paycheck, and that any crisis could create housing 
instability and cause them to lose that home.
    The stimulus funds provide a significant opportunity to reduce the 
number of people experiencing homelessness. These funds will not solve 
the problem entirely. But I believe they could reduce it. And I believe 
that the types of funds that have been provided are the right resources 
to get many people experiencing homelessness into housing.
    We are grateful for the $4 billion that Congress and the White 
House provided in the CARES Act to fund services and housing for people 
experiencing homelessness. We are grateful for the $5 billion for 
Emergency Housing Vouchers that ensure that up to 70,000 households can 
obtain and afford a permanent place to live--ending their homelessness. 
We are grateful for the $5 billion in HOME funds that will allow 
jurisdictions to take advantage of the unusual confluence of available 
hotel, motel, commercial, and retail stock that can be quickly and 
affordably converted to housing targeted to people experiencing 
homelessness. We are grateful for the Emergency Rental Assistance and 
other prevention funds that will help ensure that a new generation of 
homelessness does not emerge from this pandemic. These resources may 
not be sufficient to end homelessness, but there is a real opportunity 
to take a U-turn, from 5 years of increases in homelessness, to a 
steady decrease--if these resources are used strategically.
    And I would be remiss if I did not say that if we were to provide 
every low income household who needed one with a housing voucher, and 
to take measures to increase the supply of affordable housing to meet 
the demand, this would, at a minimum, end homelessness. And ending 
homelessness would eliminate the economic costs, the social costs, and 
the human costs of allowing more than half-a-million people to be 
homeless every night in one of the wealthiest and most compassionate 
Nations in the world.
    I hope we will move in this direction, which will allow our Nation 
and its citizens to thrive. And Congress has given us considerable 
tools, as I have said, in the stimulus bills. Several other critical 
proposals are on the table that would also help, and the Alliance 
supports them and urges their passage.

    Senators Van Hollen and Young's bipartisan Family Stability 
        and Opportunity Vouchers Act would expand the supply of housing 
        vouchers to 500,000 additional families; 100,000 new vouchers 
        every year for 5 years. The vouchers would be targeted to 
        pregnant people or families with a child under six who are 
        homeless, unstably housed, living in an area of concentrated 
        poverty, or at risk of having to leave an area of opportunity. 
        Services would help the families locate in high opportunity 
        communities if they so choose.

    The Choice in Affordable Housing Act is also a bipartisan 
        bill, just introduced by Senators Cramer and Coons. It would 
        help to improve the Section 8 program by reducing burdensome 
        bureaucratic guidance, and by providing $500 million to 
        incentivize landlords to participate in rental assistance 
        programs. I can share that the homelessness system has learned 
        quite a bit about how important it is to have tools that 
        incentivize landlords when seeking rental units in tight rental 
        markets and for high-need households. Since the onset of 
        Housing First approaches, and as a result of the adoption of 
        Rapid Re-Housing for people who are likely to get back on their 
        feet with shorter term assistance, we have learned how to be 
        more competitive for the housing that is available. Among the 
        strategies that have been successful in convincing landlords to 
        rent to homeless households have been: relationship building 
        with landlords and landlord groups; reserving multiple units 
        from one landlord or group; increasing the size of the security 
        deposit; acting as a third party the landlord can call for help 
        in addressing problems with any tenant who has been referred; 
        and assisting to ease the eviction of a referred tenant and 
        providing a suitable replacement tenant in order to avoid 
        vacancy. This bill would provide the hard-to-find flexible 
        funding that is needed for such strategies.

    Senators Schatz and Young also have a bipartisan bill to 
        reduce ``Not in My Back Yard,'' or NIMBY, activities. These are 
        policies and processes that delay or prevent the development or 
        creation of affordable housing. Their bipartisan ``YES in My 
        Back Yard,'' or YIMBY, Act would discourage the use of 
        discriminatory land use policies and remove barriers to making 
        housing more affordable. Jurisdictions that receive Community 
        Development Block Grant Funds would have to report on their 
        efforts to make it easier for affordable housing to be 
        developed, including loosening restrictions in areas zoned 
        single family, reducing minimum lot sizes, streamlining or 
        shortening permitting processes, and eliminating or reducing 
        off street parking requirements. These steps would help 
        jurisdictions use Federal resources to increase the supply of 
        affordable housing more quickly.

    Senators Brown and Blunt have proposed the Trafficking 
        Survivors Housing Act of 2021. Homelessness is, sadly, too 
        often intertwined with human trafficking. People who are 
        homeless are vulnerable to being trafficked. People who have 
        been trafficked are vulnerable to becoming homeless. Stable 
        housing is essential in protecting people from trafficking and 
        helping them recover from it. This important bill would task 
        the U.S. Interagency Council on Homelessness (USICH) to examine 
        what different Federal agencies can and should do to eliminate 
        the link between homelessness and trafficking. I should mention 
        as well that USICH has been an incredibly valuable partner in 
        bringing Federal agencies together to solve problems of 
        homelessness--an issue that does not fit neatly beneath any 
        single agency's umbrella, given its housing, health, education, 
        employment, and other ramifications. USICH has done a terrific 
        job, in both Republican and Democrat Administrations, of 
        bringing Federal agencies together in the partnerships that are 
        so essential to solving human problems. For this reason, we are 
        also grateful to Senator Reed for his bill that would 
        permanently authorize USICH.

    We strongly supported Senators Bennet and Portman's 
        bipartisan Eviction Crisis Act of last session, and given that 
        communities now have extensive experience with emergency rental 
        assistance, we urge that it be introduced again and funded to 
        scale. Anything that reduces evictions helps to reduce 
        homelessness. Often people are able to afford their rents but 
        are living paycheck-to-paycheck. If something interrupts their 
        income--their car breaks down, or a child is sick and they 
        cannot go to work--they cannot pay the rent and are threatened 
        with eviction and sometimes homelessness. This of course has 
        enormous human costs to those who experience it, and can also 
        be very costly to public systems if the household does not 
        quickly get back on its feet. This bill provides such flexible 
        assistance, among many other helpful provisions that would 
        reduce evictions.

    And finally, Senator Young has a bipartisan bill to create 
        a Task Force on the Impact of the Affordable Housing Crisis. 
        This important bill would create a bipartisan Task Force to 
        evaluate and quantify the impact of housing on other Government 
        programs and costs, and to make recommendations to Congress on 
        how to better address the affordable housing crisis so as to 
        improve life outcomes for all residents of our Nation.

    All of these bills would help ensure safe and stable housing for 
American's most vulnerable households, including those experiencing 
homelessness. We urge their passage.
    In closing, as the gap between what housing costs and how much low 
income people earn continues to grow, homelessness will continue to 
grow. This will be exacerbated by the difficulty people have accessing 
mental health treatment, substance use treatment, disability support 
and other services. Moving forward, the significant youth and young 
adult, and older adult age cohorts also have the potential, if not 
addressed, to increase homelessness, as do ongoing racial 
disproportionality and disparities. We can re-house homeless people 
faster, and indeed the homeless system is doing that. But the number of 
homeless people keeps going up because more and more people are falling 
into homelessness for the reasons above.
    Homelessness is not a problem that the homeless system can solve 
alone. The homeless system is like an emergency room. It receives 
people who are in crisis, and can patch them up a bit. But just as the 
emergency room is not the solution to the Nation's health problems, the 
homeless system, alone, is not the solution to the Nation's 
homelessness problem. The solution is an adequate supply of affordable 
housing, and access to services for those who need them. And as hard as 
the homeless system works, that emergency room does not have enough 
beds for everyone. Four out of every ten people who become homeless are 
unsheltered.
    What would solve this problem? It would be solved by vouchers and 
an increased affordable housing supply, along with better access to 
services for those who need them. At the end of the day, people who are 
housed are not homeless, despite any other issues they may have.
    We have substantial housing resources on the table right now, and 
if we use them strategically, we can reduce homelessness significantly. 
I am convinced of that. But we will not end it. We really must address 
the affordable housing crisis if we are to solve the problem of 
homelessness.
    Thank you for inviting the Alliance to speak before you today, and 
for your efforts on behalf of the Nation.
                                 ______
                                 
                  PREPARED STATEMENT OF HOWARD HUSOCK
             Adjunct Scholar, American Enterprise Institute
                             June 24, 2021
    Greetings. Thank you, Chairman Brown and Ranking Member Toomey. I 
appreciate the opportunity to testify on the legislation being 
considered by the committee. It is an honor to submit my testimony and 
answer questions for today's hearing. I will specifically address those 
proposals related to the expansion of the housing choice voucher 
program and the proposed terms of the Community Development Block 
Grants (CDBG).
    My name is Howard Husock, and I am an adjunct scholar at the 
American Enterprise Institute, where I focus on local government, civil 
society, and urban housing policy. Before joining AEI, I was vice 
president for research and publications at the Manhattan Institute and 
director of case studies in public policy and management at the Harvard 
Kennedy School. I am the author of America's Trillion-Dollar Housing 
Mistake: The Failure of American Housing Policy and a forthcoming book, 
The Poor Side of Town-and Why We Need One. I have spent my career 
committed to thinking and writing about housing policy and its 
implications, particularly for the urban poor.
    My forthcoming book argues for a ``poor side of town.'' It combines 
a critique of more than a century of housing reform policies, including 
public and other subsidized housing and exclusionary zoning, with the 
idea that simple low-cost housing--a poor side of town--helps those of 
modest means build financial assets and join in the local democratic 
process. This is a deeply important book to me, and I encourage 
everyone listening today to consider its implications.
    Too many low-income households find it difficult to afford housing. 
Before considering a major expansion of the housing choice voucher 
program, we should make the existing program more effective. What's 
more, the past year has seen unprecedented spending on Federal housing 
initiatives. The American Rescue Plan expanded the housing voucher 
program by allocating $5 billion dollars for 70,000 housing vouchers, 
referred to by Secretary Fudge as a ``once in a generation 
investment.'' \1\ In the two most recent COVID relief packages, over 
$46.5 billion has been spent on emergency rental assistance, which 
rivals the annual HUD budget. As Jason DeParle of the New York Times 
has documented, the rental assistance aid has been mired in both 
political and practical problem in its distribution leaving renters and 
rental property owners in limbo. \2\ Another $300 billion dollars 
(which includes tax credits) in ``housing infrastructure'' has been 
proposed by the Biden administration, much of it that has little to do 
with incentivizing upward mobility or emphasizing the transitional 
natures of these programs. \3\ This all to say that our current focus 
should be on making sure the money in pandemic housing assistance is 
distributed as effectively as possible. Commonsense adjustments can 
increase the voucher program's reach without major new spending while, 
crucially, providing incentives and encouragement for low-income 
households to improve their economic status.
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     \1\ U.S. Department of Housing and Urban Development, ``HUD 
Announces $500 Billion Dollars To House People Experiencing 
Homelessness'', press release, May 17, 2021, https://www.hud.gov/press/
press-releases-media-advisories/HUD-No-21-087.
     \2\ Jason DeParle, ``Federal Aid to Renters Moves Slowly, Leaving 
Many at Risk'', New York Times, April 25, 2021, https://
www.nytimes.com/2021/04/25/us/politics/rental-assistance-pandemic.html.
     \3\ The White House, ``Fact Sheet: The American Jobs Plan Will 
Produce, Preserve, and Retrofit More Than 2 Million Affordable Housing 
Units and Create Good-Paying Jobs'', May 26, 2021, https://
www.whitehouse.gov/briefing-room/statements-releases/2021/05/26/fact-
sheet-the-american-jobs-plan-will-produce-preserve-and-retrofit-more-
than-2-million-affordable-housing-units-and-create-good-paying-jobs/.
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    Fundamentally, low-income households face an income problem. 
Providing a coupon that can be used only for rental assistance limits 
how they can use this new income while failing to address the root 
causes of why that income is low in the first place. We cannot forget 
the steps it takes to truly encourage economic mobility of poor 
households--by providing the skills training needed for the 21st 
century, ensuring that every child has access to a high-quality public 
education, encouraging safe and healthy communities, and reducing 
racial barriers.
    But we can and should make some commonsense adjustments to the 
current housing choice voucher program. We should not assume that 
poverty is a life sentence in America. That suggests that we better 
allocate vouchers by seeing them as a transitional program. That leads 
me to two proposals.
    First, the time has come to allow voucher households to sign the 
same type of rental leases as nonsubsidized households enjoy: a flat 
rent for a fixed period. As it stands, as voucher or public housing 
tenants earn more income, they pay more rent--34 cents on each new 
dollar. This has all sorts of ill effects: discouraging those who would 
seek a higher-paying job, the formation of two-income families, and 
savings.
    To make better use of our housing vouchers, we should follow the 
example of the Housing Authority of the State of Delaware, which as 
part of its Moving to Work program combines capped rent and savings 
account escrows with a 5-year ceiling on assistance. \4\ A similar 
program has been adopted by the housing authority of San Bernardino, 
California, which specifically sets out as a key goal the encouragement 
of tenants' economic independence, including what it calls a shift from 
``entitlement to empowerment.'' Longitudinal studies out of San 
Bernardino reports the following positive results.
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     \4\ Delaware State Housing Authority, ``What Is Moving to Work?'', 
https://laborfiles.delaware.gov/main/det/one-stop/MTW%20Program.pdf.
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    We have seen positive outcomes since implementation, including:

    Earned income for families in the program increases by an 
        average 31.4 percent during their 5-year term of assistance;

    Full-time employment increased by 20 percent;

    Unemployment decreased by 26.5 percent. \5\

     \5\ Housing Authority of the County of San Bernardino, ``2021 
Moving to Work Annual Plan'', May 22, 2020, https://
14icnrm1xwspvm3t3c7830p2-wpengine.netdna-ssl.com/wp-content/uploads/
2020/08/2021-mtw-annual-plan-05.22.20-for-public-comment.pdf.

    This healthy turnover should be a core part of the voucher program. 
Poverty should not be viewed as inevitable and forever. Indeed, as 
matters stand, the U.S. Department of Housing and Urban Development 
(HUD) reports an 8 percent turnover rate annually among voucher units. 
In years past, that rate has reached as high as 15 percent. \6\ Steps 
to increase turnover while improving the situation of voucher 
households should be key goals of the program. A transition to work and 
increased income is today, more than ever, a practical goal, as the 
Nation enjoys widespread labor shortages.
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     \6\ U.S. Department of Housing and Urban Development, Office of 
Policy and Research, ``Assisted Housing: National and Local'', https://
www.huduser.gov/portal/datasets/assthsg.html#2009-2020-data.
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    Second, we should resist expanding the program and be cautious in 
giving priority to low-income single parents, as is suggested. It is 
understandable that we seek to respond to need. But we must take care 
not to foster need by sending a signal that low-income single 
parenthood will qualify one for a subsidized rental--which is, in most 
jurisdictions, a lifetime eligibility. The life chances of those born 
to single mothers in poverty are such that this is not a choice we 
should inadvertently encourage. Indeed, a time-limited program for 
young married couple might be a better option.
    The proposal to link Federal CDBG assistance to the encouragement 
of affordable housing is, on one level, an understandable response to 
the inflexible zoning found in too many municipalities. But there are 
several reasons not to adopt this approach and to proceed with caution.
    The idea that there is a ``missing middle'' in our housing supply 
is rapidly gaining adherents, as officials respond to concerns that 
young adults cannot afford to live in the towns where they grew up and 
public servants cannot afford to live in the towns they serve. Cities, 
such as Minneapolis, and States, such as Oregon, are already beginning 
to move away from strict large-lot single-family zoning. States like 
California have seen the proliferation of the YIMBY (``yes in my 
backyard'') movement, which has successfully sought to make the 
economic case for loosening restrictive zoning to increase housing 
supply in the State's most high-cost cities.
    A one-size-fits-all Washington review of local zoning risks 
stifling this creative change. Woodrow Wilson, a Democratic president, 
observed that, in the United States, localities are not governed; they 
govern themselves. This historic tradition brings with it democratic 
accountability. And perhaps most importantly, CDBG eligible communities 
are largely those already providing a great deal of affordable housing.
    As Jenny Schuetz of the Brookings Institute wrote in 2018 about 
then-Secretary Ben Carson's proposed rule revision to make receipt of 
HUD funds, particularly from the CDBG program, contingent on local 
zoning reform, ``HUD's interest in persuading local governments to 
reform exclusionary zoning is admirable. But withholding CDBG would not 
be an effective mechanism, because exclusionary communities receive 
very little CDBG funding.'' \7\
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     \7\ Jenny Schuetz, ``HUD Can't Fix Exclusionary Zoning by 
Withholding CDBG Funds'', Brookings Institution, October 15, 2018, 
https://www.brookings.edu/research/hud-cant-fix-exclusionary-zoning-by-
withholding-cdbg-funds/.
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    A better approach embraces the spirit of localism and adaptability 
of American municipalities and acknowledges the growing success of 
State-level movements to increase housing supply. HUD may want to 
provide useful models and technical assistance to zoning officials, 
rather than subjecting them to costly review.
    I appreciate this opportunity to present my views. Thank you very 
much, and I look forward to your questions.
        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TESTER
                        FROM LISA MENSAH

Q.1. Improving FHA Support for Small-Dollar Mortgages Act--
There are many challenges in Montana related to the 
availability and affordability of homes, especially with home 
prices going up 57.5 percent in the last decade. But there are 
still many areas of my home State where the average price of a 
home sold is below or near $100,000. I'm very concerned that 
folks trying to buy those homes may struggle to access a 
mortgage, which is why I have been working to address barriers 
to home ownership for these families, including improving the 
availability and timeliness of appraisals in rural areas, and 
it's why Senator Lummis and I introduced the Improving FHA 
Support for Small-Dollar Mortgages Act. Why is it so important 
for folks to be able to have access, and what do you see 
causing some of these problems?

A.1. Access to affordable home ownership is part of OFN's 
commitment to affordable, responsible financial products and is 
crucial work of the CDFI industry. Home ownership is key to 
building wealth, and significant gaps remain in the market. 
CDFIs are experienced housing lenders committed to closing that 
gap with deep expertise reaching low wealth markets. In fiscal 
year (FY) 2019, certified CDFIs made more than 600,000 housing 
loans totaling more than $56 billion. CDFIs have cumulatively 
developed or rehabilitated more than 2.1 million housing units.
    Limited access to small dollar mortgages continues to put 
affordable home ownership opportunities out of reach for many 
borrowers, especially first-time homebuyers, borrowers in rural 
communities and borrowers of color. OFN Members have developed 
products and services to better serve this market, including:

    FAHE, a network of affordable housing lenders based 
        in Berea, Kentucky, and working throughout Appalachia, 
        launched the MicroMortgage Marketplace pilot project in 
        2020. The pilot, in partnership with the Homeownership 
        Council of America (HCA) and the Urban Institute 
        provides small-dollar mortgages under $100,000 in 
        Louisville and parts of Southern Indiana.

    Come dream, Come build (cdcb), based in 
        Brownsville, Texas provided relief to their borrowers 
        impacted by the COVID-19 pandemic and also administered 
        the City of Brownsville's pandemic housing assistance 
        programs. In 2020, cdcb continued to increase access to 
        affordable home ownership, providing 73 households with 
        smaller dollar mortgages with a median home sales price 
        of $104,000.

    HOPE Credit Union, based in Jackson, Mississippi, 
        and working throughout the Delta region, has financed 
        the development of affordable housing throughout the 
        region. Mortgage lending is a key component of HOPE's 
        strategy to close the racial wealth gap in the Deep 
        South. Over the last 10 years, HOPE's mortgage 
        portfolio almost quadrupled from nearly $34 million in 
        2010 to $127 million at the end of 2020. In 2020, 86 
        percent of HOPE's mortgages were made to people of 
        color, primarily Black borrowers, and 83 percent were 
        made to first time homebuyers.

    Oweesta, based in Longmont, Colorado, is a Native 
        intermediary lender. One Oweesta member, Four 
        Directions Development Corporation, is a Maine-based 
        CDFI serving the Passamaquoddy Tribe, Penobscot Nation, 
        Houlton Band of Maliseets, Aroostook Band of Micmac, 
        and any enrolled Native American from a federally 
        recognized tribe in Maine. This CDFI helps tribal 
        members purchase, improve, and access equity from on 
        reservation residential properties. Four Directions 
        works to provide credit counseling and is uniquely 
        suited to working on tribal lands and navigating the 
        process of working with the Bureau of Indian Affairs.

    Southern Mutual Financial Services Over the past 50 
        years, Southern Mutual Help Association (SMHA) and the 
        subsidiary CDFI, Southern Mutual Financial Services 
        have developed 1,421 new or renovated affordable homes 
        in rural Louisiana. SMHA's work in affordable housing 
        has generated over $454.1 million in local income and 
        an additional $67.5 million in State and local tax 
        revenue. SMHA has invested nearly $19.4 million in 
        affordable mortgage and business loans directly to 
        Louisiana families, $16.5 million of [No more 
        information provided.--Ed.]

    In addition to a $1 billion appropriation for the Community 
Development Financial Institutions Fund in FY22 that would 
bolster CDFI efforts such as these, OFN supports the creation 
of a study of Federal Housing Administration lending to 
understand how the Department of Housing and Urban Development 
could better reduce barriers to home ownership.

Q.2. Access to Housing--What are the greatest challenges that 
you see in your communities to access and affordability of 
housing?

A.2. Rural America--home to about 20 percent of the U.S. 
population and covering more than 90 percent of the U.S. 
landmass--is diverse economically and demographically. Rural 
America is not a monolith, and its housing needs vary in 
different communities. In some rural communities, outmigration 
and population loss are key drivers of the housing challenges, 
while other rural communities have experienced rapid growth and 
changes to the labor markets that have increased demand for 
affordable housing. Many rural communities are also located in 
``areas of persistent poverty''--defined as communities with a 
poverty rate of greater than 20 percent for three decades in a 
row. According to Partners for Rural Transformation, of the 395 
persistent poverty counties in the U.S., eight out of ten are 
nonmetro and the majority (60 percent) of people living in 
persistent poverty counties are people of color. Aging housing 
stock puts pressure on the supply of both single and 
multifamily affordable housing. According to the National Low 
Income Housing Coalition, nearly 30 percent of rural households 
experience at least one major housing problem, such as high 
cost, physical deficiencies, or overcrowding.
    Below are some key issues impacting access to affordable 
housing in rural markets:

    Housing cost increases outstrip income growth. 
        While housing costs are still relatively low in some 
        rural markets, there are some communities where 
        increased housing costs coupled with stagnant income 
        growth is creating an affordability crisis.

    Housing quality and aging housing stock. Nowhere 
        are the challenges to the Nation's aging housing stock 
        more prevalent than in rural communities. In too many 
        rural communities, housing lacks adequate plumbing and 
        kitchen facilities as well as facing conditions of 
        overcrowding. The adequate housing that does exist is 
        often unaffordable because rural incomes are below the 
        national median income.

    Limited home ownership opportunities for rural 
        communities of color. For the millions of people of 
        color living in rural America, access to home ownership 
        is also an issue of racial equity. There are more than 
        2,000 rural and small-town census tracts where racial 
        and ethnic minorities make up the majority of the 
        population--many who experience limited access to home 
        ownership opportunities due to lending practices and 
        housing policies that historically excluded rural 
        people of color.

    Increased housing cost burdens. Nearly one-fourth 
        of the Nation's most rural counties have seen a 
        sizeable increase this decade in the number of severely 
        cost-burdened households--defined as spending at least 
        half their income on housing. The National Low Income 
        Housing Coalition found that 47 percent of rural 
        renters are cost burdened--spending more than 30 
        percent of their income for their housing--with nearly 
        half of that group being severely cost burdened. These 
        housing cost burdens highlight the shortage in 
        affordable rental and home ownership units for low-
        income populations and the pandemic has exacerbated 
        this issue.

Q.3. Where are there gaps in resources from Federal programs?

A.3. Federal investment to support housing in rural areas lags 
investment in urban communities. Programs that provide grants, 
loans, credit enhancements, like those at USDA, are a critical 
lifeline to finance affordable housing in rural communities but 
are inadequately funded. These programs are oversubscribed and 
highly competitive and must be expanded to meet the growing 
demand.
    The key resource for CDFIs, the Community Development 
Financial Institutions Fund in the Department of the Treasury, 
is also consistently oversubscribed. In the most recent funding 
round, applicants requested three times the available funding. 
A robust Federal appropriation of $1 billion for the CDFI Fund 
in FY22 would help alleviate the demand for these resources.

Q.4. Leveraging Investments--There are significant housing 
needs all across the country, and it is clear that the Federal 
Government needs to be doing more to address these challenges. 
But we are not going to be able to spend our way out of this 
problem all on our own--public-private partnerships will be 
critical to fixing this shortage, and we already have a number 
of examples of successful Federal programs.
    How can partnerships leveraging Federal dollars improve the 
availability and affordability of housing?

A.4. Community Development Financial Institutions demonstrate 
the potential of public-private partnerships. As private-sector 
institutions, they leverage Federal resources to extend capital 
and credit to help people and communities underserved by 
mainstream finance join the economic mainstream. In addition to 
direct support to the CDFI Fund, CDFIs can improve the 
availability and affordability of housing with improved access 
to Federal lending and guarantee programs. Opportunity Finance 
Network strongly supports CDFI access to lending programs 
across the Federal Government. CDFIs have proven that they are 
effective stewards of Federal resources and sound lenders that 
pose minimal risk to investors, including the Federal 
Government. Data demonstrates the success, safety, and 
soundness of CDFIs.
    For example, data shows that OFN membership, which includes 
mostly nondepository CDFIs, have low loan loss rates--a 
cumulative 0.79 percent from 1999-2018 that outperformed the 
0.92 percent loan loss rate of FDIC-insured institutions in 
that same time. OFN data also indicates a 1.34 percent 
delinquency rate greater than 90 days among OFN members in 
2018. CDFIs have been and can continue to be effective partners 
in relending and direct loan programs to improve home 
ownership, including the Federal Home Loan Bank System and the 
pilot under USDA's 502 Relending Program. OFN applauds 
expansion of this model.

Q.5. Housing in Tribal Communities--We are not doing enough to 
address the dire lack of housing for many Indigenous 
communities.
    What do you see as the most important programs and 
investments to address these challenges?
    Where are there areas we need to be doing more? Or new, 
innovative programs and ideas we could be using?

A.5. Native American CDFIs are a critical resource for 
expanding financial services in Native American communities, 
including supporting home ownership in those markets. The CDFI 
Fund's Native American CDFI Assistance (NACA) Program provides 
capacity-building and financial assistance resources to 
institutions serving Native Americans, Alaska Natives, and/or 
Native Hawaiian communities. This is the CDFI Fund's only 
program that funds sponsoring organizations in the very early 
stages of forming CDFIs, leveraging Federal resources to build 
CDFIs in Native communities, as well as supporting Native-
serving CDFIs of all sizes and stages of development. A robust 
Federal appropriation of $1 billion for the CDFI Fund in FY22 
will strengthen the growing network of CDFIs serving Native 
communities, including providing home ownership opportunities 
for Native American home buyers.
    In addition, OFN strongly supports the passage of the 
Native American Rural Homeownership Improvement Act (S.2092). 
The bill would extend the incredibly successful pilot program 
nationwide which would allow Native CDFIs to make these loans 
to their target markets across the country.
    Native American homebuyers would be assisted by many of the 
Federal resources that OFN supports to increase access to 
affordable housing in rural and tribal communities:

    Pass the Improving FHA Support for Small Dollar 
        Mortgages Act of 2021. Limited access to small dollar 
        mortgages is putting affordable home ownership 
        opportunities out of reach for many borrowers, 
        especially first-time homebuyers, borrowers in rural 
        communities and borrowers of color. OFN supports the 
        creation of a study of Federal Housing Administration 
        lending to understand how HUD could better reduce 
        barriers to home ownership.

    Pass the American Jobs Plan. The American Jobs Plan 
        includes several housing provisions, including the 
        bipartisan Neighborhood Homes Investment Act (NHIA). 
        Offering $20 billion worth of NHIA tax credits over a 
        5-year period is expected to result in over 500,000 
        homes built or rehabilitated, creating a pathway for 
        more families to buy a home and start building wealth.

    Increase technical assistance and capacity building 
        for rural mission lenders. The Federal Government 
        should invest in building the capacity of local 
        affordable housing and community development 
        organizations deeply rooted in rural places. With 
        existing Federal programs oversubscribed and fewer 
        philanthropic and bank resources flowing to rural 
        communities, the Federal Government should provide 
        funding for technical assistance to build the capacity 
        of rural mission lenders.

    Increase funding for USDA Rural Housing Programs. 
        Low-cost, long-term financing to support both home 
        ownership and rental housing is not readily available 
        from other sources. Congress should increase funding 
        for Federal affordable housing programs serving rural 
        populations.

    Allow Government sponsored enterprises (GSE) equity 
        investments in CDFIs. Many CDFIs still lack access to 
        the capital markets supported by the housing finance 
        system. In part because of this lack of access, CDFI 
        housing lenders experience liquidity challenges that 
        inclusion in more mainstream sources of housing finance 
        could help solve. Allowing Fannie Mae and Freddie Mac 
        to make direct equity or equity-like investments in 
        CDFIs will enable CDFIs to manage risk and their 
        balance sheets more effectively. These flexible 
        investments would provide much needed liquidity to 
        support the specialized lending done by CDFIs and 
        support training and technical assistance needed to 
        build the capacity of lenders working in difficult-to-
        serve markets, including native American homebuyers.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
             SENATOR CORTEZ MASTO FROM LISA MENSAH

Q.1. How is Opportunity Finance Network addressing the 
disparate coverage of CDFIs across the country?

A.1. Opportunity Finance Network strongly supports resources 
that build capacity of CDFIs, both new and existing, to enter 
and serve new markets. We pioneered the CDFI Coverage Map to 
help the industry see, understand, and improve upon the 
distribution of its lending and investing activities. Our own 
lending and investment programs, including the Finance Justice 
Fund and Grow with Google, focus on ``going deeper'' to reach 
smaller CDFIs and increase CDFI coverage across the Nation.
    Two key items on our advocacy agenda that would address the 
disparity in coverage include strong support for the Community 
Development Financial Institutions Fund and reform to the 
Community Reinvestment Act.
    The Community Development Financial Institutions Fund has 
taken steps to build the national coverage of CDFIs including:

    A longstanding, statutory Technical Assistance (TA) 
        grant program, aimed at building the capacity of 
        emerging CDFIs to strengthen their organization and 
        financial ability to serve their markets. Technical 
        assistance funds can be used by emerging CDFIs that 
        target areas not well-served by existing CDFIs.

    Similarly, the Small and Emerging CDFI Assistance 
        component of the Fund's Financial Assistance (FA) 
        program provides younger, smaller CDFIs--those more 
        likely to be in markets new to CDFIs--with specialized 
        opportunities for support.

    The Persistent Poverty Counties (PPC) set aside 
        provides strong CDFIs of all sizes and maturity with 
        resources to target counties suffering deep and 
        persistent poverty.

    The Fund's Native American CDFI Assistance (NACA) 
        Program provides capacity-building and financial 
        assistance resources to institutions serving Native 
        Americans, Alaska Natives, and/or Native Hawaiian 
        communities. This is the CDFI Fund's only program that 
        funds sponsoring organizations in the very early stages 
        of forming CDFIs, leveraging Federal resources to build 
        CDFIs in Native communities.

    Robust support for the Community Development Financial 
Institutions Fund is the best way to increase coverage of CDFIs 
across the county. Congress must support at least $1 billion in 
CDFI Fund grants in the FY22 Appropriations bill.
    The Community Reinvestment Act (CRA) has been a critical 
tool to extend the financial services system into underserved 
markets. However, its impact has been uneven across the Nation. 
Longitudinal data from the past dozen years illustrates the 
painful gap between bank investment in CDFIs serving rural 
markets compared to bank investment in CDFIs serving urban 
markets.
    For rural CDFIs, capital borrowed from banks in 2018 
comprised 31 percent of total borrowed funds. For urban CDFIs, 
capital borrowed from banks comprised 52 percent of total 
borrowed funds. OFN's comments to the Federal regulators 
considering reform to the CRA highlighted a number of 
improvements that would improve the distribution of CRA 
investment, particularly in supporting CDFIs in rural areas.

Q.2. With regards to the Native American Homeownership 
Improvement Act, is the tribal CDFI now serving North and South 
Dakotas able to offer mortgages to tribes in other communities? 
Or are other tribal CDFIs able to provide mortgages to other 
communities?

A.2. The current pilot program is authorized only in North and 
South Dakota. With the passage of the Native American Rural 
Homeownership Improvement Act (S.2092) the program would be 
extended nationwide which would allow Native CDFIs to make 
these loans to their target markets across the country. OFN 
strongly supports this bipartisan bill.

Q.3. I appreciate Opportunity Finance Network's support of a 
pending bill I'm leading, which would enable Treasury-certified 
nondepository CDFIs to pledge non-housing collateral to gain 
advances from a Federal Home Loan Bank.
    Can you speak to how many CDFIs are members of Federal Home 
Loan Banks?

A.3. As of December 31, 2020, 64 CDFIs were members of the 
Federal Home Loan Bank System.

Q.4. How has membership in a FHLBank benefited CDFIs?

A.4. Since the Housing and Economic Reform Act (HERA) provided 
CDFIs the opportunity to become members of the Federal Home 
Loan Bank System, CDFI FHLB members have gained access to long-
term funding, which allowed more high-impact loans to be made 
to creditworthy borrowers in underserved communities. Since the 
beginning of this partnership, FHLBs have seen enormous growth 
in CDFI memberships. According to FHFA's 2018 Report on Low-
Income Housing and Community Development Activities of the 
Federal Home Loan Banks, CDFI membership has grown almost 4.6 
times since 2011. The report also shares that annual FHLB 
advances to CDFIs have grown from $59 million in 2013 to $221.5 
million in 2018. FHLBs recognize the value CDFIs provide in not 
only serving low to moderate-income communities but helping 
achieve their mission of ``supporting housing finance and 
community investment.'' Additionally, several FHLBs, including 
the FHLB of New York, remain active in trying to recruit more 
CDFI members. CDFIs have also been able to utilize grants from 
the Affordable Housing Program (AHP) to make high impact loans 
in distressed communities.

Q.5. How would including small business, small agriculture and 
community development loans as collateral help CDFIs?

A.5. Opportunity Finance Network appreciates Senator Cortez 
Masto's support of legislation to improve CDFIs' capacity to 
access and use Federal Home Loan Bank System advances. Allowing 
CDFIs to make better use of FHLB membership would enable 
nondepository CDFIs to leverage their existing portfolio to 
make more loans. A 2015 GAO report, ``Federal Home Loan Banks: 
Collateral Requirements Discourage Some Community Development 
Financial Institutions From Seeking Membership'', noted that 
collateral restrictions discouraged some nondepository CDFIs 
from seeking membership. Under current law, CDFIs can only 
pledge long-term home mortgage loans of at least 5 years. A 
change in collateral requirements would likely incent 
additional CDFIs to seek membership, as well as enabling 
additional loans to be pledged from those CDFIs that are 
already members, allowing them to make more loans in 
underserved communities. As noted above, CDFIs use FHLB 
membership and advances to increase their lending in low-income 
and low-wealth communities.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                        FROM LISA MENSAH

Q.1. What solutions should Congress be considering to address 
the supply chain challenges that make building materials for 
new housing stock unavailable or excessively expensive?

A.1. CDFIs fill an important role in housing affordability. 
They are experts in dealing with challenges posed by economic 
disruption, including pandemic-related uncertainty in the 
supply chain. Using this experience in markets that other 
lenders cannot reach, CDFIs pull together capital stacks to 
make loans and investments in their communities. A $1 billion 
appropriation for the Community Development Financial 
Institutions Fund can help CDFIs and their communities better 
weather changes in the housing market.

Q.2. What tools, trainings, and resources are available to 
better prepare lenders to work with tribal communities in 
Arizona, particularly in navigating challenges associated with 
tribal trust land?

A.2. Native American CDFIs are a critical resource for 
expanding financial services in Native American communities, 
including supporting home ownership in those markets. The CDFI 
Fund's Native American CDFI Assistance (NACA) Program provides 
capacity-building and financial assistance resources to 
institutions serving Native Americans, Alaska Natives, and/or 
Native Hawaiian communities. This is the CDFI Fund's only 
program that funds sponsoring organizations in the very early 
stages of forming CDFIs, leveraging Federal resources to build 
CDFIs in Native communities, as well as supporting Native-
serving CDFIs of all sizes and stages of development. As local 
institutions with deep roots in their communities, CDFIs have 
expertise in tackling the unique challenges of their markets, 
including issues related to tribal trust land.
    A robust Federal appropriation of $1 billion for the CDFI 
Fund in FY22 will strengthen the growing network of CDFIs 
serving Native communities.
    The Center for Indian County Development of the Federal 
Reserve Bank of Minneapolis provides a clearinghouse for 
research, tools and resources for both lenders and tribal 
governments working to improve access to capital in Native 
American communities. Their research found that Native American 
CDFIs were most successful in serving those communities. These 
findings reinforce the success of CDFIs' local market-driven, 
place-based model in serving their communities.
    The Center provides resources for lenders and tribal 
governments partnering with financial institutions, including a 
Tribal Leaders Handbook on Homeownership and Reservation 
Profiles that include Home Mortgage Disclosure Act (HMDA) to 
help lenders understand market gaps.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR ROUNDS
                        FROM LISA MENSAH

Q.1. Do you believe the 502 relending model could also be 
effective to improve the deployment of other Federal direct 
loan programs in partnership with Native CDFIs, including the 
Native American Direct Loan program for Native American veteran 
borrowers?

A.1. Yes, Opportunity Finance Network strongly supports CDFI 
access to lending and credit enhancement programs across the 
Federal Government. CDFIs have proven that they are effective 
stewards of Federal resources and sound lenders that pose 
minimal risk to investors, including the Federal Government. 
This success is why the 502 program has been extremely 
effective in bringing capital to the Native American 
communities in which the pilot is authorized. CDFIs are active 
participants in the Federal Home Loan Bank system, the U.S. 
Department of Agriculture Intermediary Relending Program, and 
the Small Business Administration 7(a) program, among others. 
CDFIs have been and will continue to be effective partners in 
relending and direct loan programs and OFN applauds expansion 
of this model.

Q.2. In addition to the Native American Rural Homeownership 
Improvement Act, what other financing opportunities should we 
consider to assist potential Native American home buyers that 
are struggling in their home ownership process?

A.2. Native American CDFIs are a critical resource for 
expanding financial services in Native American communities, 
including supporting home ownership in those markets. The CDFI 
Fund's Native American CDFI Assistance (NACA) Program provides 
capacity building and financial assistance resources to 
institutions serving Native Americans, Alaska Natives, and/or 
Native Hawaiian communities. This is the CDFI Fund's only 
program that also funds sponsoring organizations in the very 
early stages of forming CDFIs, leveraging Federal resources to 
build CDFIs in Native communities, as well as supporting 
Native-serving CDFIs of all sizes and stages of development. A 
robust Federal appropriation of $1 billion for the CDFI Fund in 
FY22 will strengthen the growing network of CDFIs serving 
Native communities, including providing home ownership 
opportunities for Native American home buyers.
    Native American homebuyers would be assisted by many of the 
Federal resources that OFN supports to increase access to 
affordable housing in rural and tribal communities:

    Streamline the Section 184 Loan Guarantee program 
        by ensuring tribally sponsored CDFIs are automatically 
        eligible to be lenders after gaining Treasury 
        certification.

    Pass the Improving FHA Support for Small Dollar 
        Mortgages Act of 2021. Limited access to small dollar 
        mortgages is putting affordable home ownership 
        opportunities out of reach for many borrowers, 
        especially first-time homebuyers, borrowers in rural 
        communities and borrowers of color. OFN supports the 
        creation of a study of Federal Housing Administration 
        lending to understand how HUD could better reduce 
        barriers to home ownership.

    Pass the American Jobs Plan. The American Jobs Plan 
        includes several housing provisions, including the 
        bipartisan Neighborhood Homes Investment Act (NHIA). 
        Offering $20 billion worth of NHIA tax credits over a 
        5-year period is expected to result in over 500,000 
        homes built or rehabilitated, creating a pathway for 
        more families to buy a home and start building wealth.

    Increase technical assistance and capacity building 
        for rural mission lenders. The Federal Government 
        should invest in building the capacity of local 
        affordable housing and community development 
        organizations deeply rooted in rural places. With 
        existing Federal programs oversubscribed and fewer 
        philanthropic and bank resources flowing to rural 
        communities, the Federal Government should provide 
        funding for technical assistance to build the capacity 
        of rural mission lenders.

    Increase funding for USDA Rural Housing Programs. 
        Low-cost, long-term financing to support both home 
        ownership and rental housing is not readily available 
        from other sources. Congress should increase funding 
        for Federal affordable housing programs serving rural 
        populations.

    Allow Government sponsored enterprises (GSE) equity 
        investments in CDFIs. Many CDFIs still lack access to 
        the capital markets supported by the housing finance 
        system. In part because of this lack of access, CDFI 
        housing lenders experience liquidity challenges that 
        inclusion in more mainstream sources of housing finance 
        could help solve. Allowing Fannie Mae and Freddie Mac 
        to make direct equity or equity-like investments in 
        CDFIs will enable CDFIs to manage risk and their 
        balance sheets more effectively. These flexible 
        investments would provide much needed liquidity to 
        support the specialized lending done by CDFIs and 
        support training and technical assistance needed to 
        build the capacity of lenders working in difficult-to-
        serve markets, including native American homebuyers.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                         FROM NAN ROMAN

Q.1. I understand that HUD has initiated a study of alternative 
rent structures through the Moving to Work demonstration 
program. Are you aware of the status of that study?

A.1. With regard to the Moving to Work demonstration study, we 
are told that the second cohort will be studying both stepped 
and tiered rents as an alternative to the Brooke rent model. 
The ten agencies conducting the study have been selected and 
are in the pre-implementation stage of the study--on-boarding 
into the MTW program.
    The Alliance recognizes that the Brooke rent model, 
limiting housing costs to 30 percent of the household's income, 
provides life-altering relief to people with extremely low 
incomes who are able to access these programs. We hope, of 
course, that the days where most eligible people do not receive 
the deep subsidies that HUD now has in its toolkit are nearing 
an end. As long as most eligible people receive no help from 
HUD's rent subsidy programs, however, it is important to gather 
more information about whether shallower forms of subsidy, that 
cost less money and could therefor reach more people with 
whatever sum is appropriated, achieve benefits that are 
worthwhile. I encourage the Committee to follow up with HUD 
about this research, and to help clear the way for findings to 
be discussed and evaluated.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
              SENATOR CORTEZ MASTO FROM NAN ROMAN

Q.1. Does the National Alliance to End Homelessness support a 
Federal law that would require all landlords accept income from 
VA benefits, SSDI, Social Security and vouchers? Such a law 
would ban discrimination based on source of income.

A.1. The Alliance supports such legislation. Reducing and 
ending homelessness will require significant federally funded 
rental assistance through various Federal programs for those 
most in need. If landlords can reject a tenant using such 
assistance simply on the basis of its source, those already 
disadvantaged in a housing market with insufficient supply will 
be even further discriminated against. Certainly, it will 
impede progress on ending homelessness.
    Also, source of income discrimination can mask more 
invidious kinds of discrimination, such as those based on race, 
ethnicity, or gender, since people of color and women are more 
likely to be unemployed due to employment discrimination, and 
need to rely on these programs.
    At the same time, it is important for housing authorities 
and others who run voucher programs to operate the programs in 
a manner that works for property owners, ensuring that owners 
understand the program, that tenants know their 
responsibilities, that inspections take place quickly, and that 
the rent is paid on time.

Q.2. Can you explain how a lack of stable housing for children 
and their parents makes people vulnerable to human trafficking 
and abuse?

A.2. For several reasons, homelessness and lack of stable 
housing make children and their parents vulnerable to human 
trafficking. People who experience homelessness are traumatized 
and desperate, making them vulnerable to traffickers' efforts 
to trick, lie to, or defraud them into situations they cannot 
then escape. They may also be more willing, out of desperation, 
to enter situations and work that is inhumane, illegal, or 
otherwise unacceptable.
    Also important is that people of color are more likely to 
be homeless and trafficked because of historical and system 
racism, discrimination, and inequity that leave them more 
vulnerable to otherwise unacceptable life options. Permanent 
housing is a key part of any solution. For more on the 
connection of trafficking and homelessness, please see the 
blogpost on the Alliance's website, The Intersection of Human 
Trafficking and Homelessness, and the resources cited there.

Q.3. Senator Brown's bill, the Trafficking Survivors Housing 
Act (S. 2049), would require the Interagency Council on 
Homelessness publish a report on the needs of victims of human 
trafficking. Which Federal agencies do you think need to 
collaborate better to break the link between homelessness and 
human trafficking?

A.3. Key Federal agencies to address trafficking and 
homelessness are already part of the U.S. Interagency Council 
on Homelessness: the Departments of Housing and Urban 
Development; Health and Human Services; Justice; and Labor; as 
well as the Domestic Policy Council. Each of these has 
responsibility for important parts of any solution, and the 
need to coordinate in that regard.

Q.4. What are some of the challenges that the Interagency 
Council on Homelessness needs to address now?

A.4. The U.S. Interagency Council on Homelessness, since it was 
overhauled during the early years of the George W. Bush 
administration, has been key to coordinating the Federal 
response to homelessness. The Council can only be as effective 
as its Federal agency members want it to be, and as it is 
resourced to be. It does not control agency budgets, so it must 
use its persuasive powers to advance best practices, new ideas, 
and outcomes. And it must make the most of the ability to 
coordinate strategies among the various agencies as no single 
Federal agency can end homelessness on its down. The Members of 
the Council itself must be committed to coordinating to end 
homelessness. The fact that Council is again made up of agency 
Secretaries is a tremendous boost.
    Challenges moving forward include hiring a new Executive 
Director and filling vacant staff positions that were left 
unfilled in the previous Administration. Ensuring that the key 
agencies involved in ending homelessness are working together 
and have formal relationships to fund housing (HUD and VA) and 
services (HHS and VA) is a challenge. Also a challenge is 
enhancing the role of the Department of Labor in connecting 
people experiencing homelessness to employment. A critical 
challenge is how to address the fact that homelessness has been 
increasing since 2016, and that, tragically, unsheltered 
homelessness is also going up: this year for the first time 
ever, there were more unsheltered individuals than sheltered 
individuals. And finally, emerging challenges are how to 
address the aging of the homeless population, and a large youth 
cohort that may fail to attach to the labor market and become 
homeless post-COVID.

Q.5. What development incentives work best to build more homes 
for victims of human trafficking, low-income families, veterans 
and elderly individuals, people with disabilities and 
unaccompanied youth?

A.5. Making funding available is, of course, the first thing 
that is necessary. This includes not only capital funding for 
acquisition, construction, and rehabilitation; but also 
operating subsidies, usually through rental assistance. People 
with incomes that are low enough to make them vulnerable to 
homelessness can not afford to pay rent that will cover the 
ongoing operation of housing: utilities, maintenance, security, 
and other costs.
    It would be helpful to have more formal relationships 
between HUD and HHS to ensure that services accompany housing, 
in particular for older adults and people with disabilities. At 
present developers may be less likely to build for these 
tenants because the services are not readily available to the 
them. Federal funding incentives that encourage jurisdictions 
to remove zoning, permitting, and approvals processes that slow 
down the development of affordable housing and raise its cost 
should also be considered.

Q.6. The design of the Family Stability and Opportunity 
Vouchers Act (S.1991) is to make awards competitively. Do 
competitive programs give greater access to communities that 
already have the resources to hire grant writers and have more 
matching funds? How can competitive programs ensure that funds 
reach communities that may have more need for affordable 
housing but less infrastructure to prepare and compete for 
grants?

A.6. Competitive programs can definitely favor communities with 
more resources, reinforcing historical and systemic racially 
discriminatory trends. The Alliance is strongly supportive of 
HUD's Continuum of Care (CoC) program, which is a competitive 
program. Some aspects of that program's success are relevant to 
this question. There is strong technical assistance for 
communities to help them achieve better outcomes, and thus 
perform better in the competitive environment (the CoC 
competition is based in good part on strategic use of funds and 
past performance). The CoC process also involves bringing a 
wide range of community partners to the table, all of which can 
contribute to better performance.
    Every CoC is required to collect client level 
administrative data which allows it to objectively prove its 
outcomes, rather than having to have a professional grant-
writer describe them.
    Making eligible matching funds as flexible as possible and 
including public funds, can help even the playing field. In the 
CoC funding, other Federal funds count as a match, if 
homelessness is prioritized (unlike in many other Federal 
funding programs). This means that, for example, State policy 
makers can prioritize using Medicaid as part of coordinated 
work on homelessness, and achieve the same results in the 
competition as another, wealthier, community would achieve 
through its local tax base. Medicaid is, of course, one of the 
largest Federal programs, extremely important to constructing a 
comprehensive response to homelessness, and generally supplies 
more Federal funding to poorer States.
    Simplifying the grant application process as much as 
possible is also helpful. To the greatest extent possible, 
criteria for awards should be based on concrete, objective 
indicators, rather than on the quality of prose in an 
application.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR ROUNDS
                         FROM NAN ROMAN

Q.1. Do you believe the 502 relending model could also be 
effective to improve the deployment of other Federal direct 
loan programs in partnership with Native CDFIs, including the 
Native American Direct Loan program for Native American veteran 
borrowers?

A.1. The Alliance has generally found that even deeply 
subsidized home ownership models do not reach people whose 
incomes are so low that they are at risk of or experiencing 
homelessness. That being said, it is clear that reservations 
and other tribal lands can prove an exception. The Alliance 
would appreciate the opportunity to work with Senator Rounds 
and others to improve the overall housing situation for Native 
Americans, a group with one of the highest rates of 
homelessness.

Q.2. In addition to the Native American Rural Homeownership 
Improvement Act, what other financing opportunities should we 
consider to assist potential Native American home buyers that 
are struggling in their home ownership process?

A.2. As with most Federal housing programs, the programs are 
not funded to the scale necessary to solve the problem they are 
meant to address. Experience with the existing programs, we are 
told, indicates that they are well designed but underfunded. 
Again, the Alliance would be happy to work with the Senator and 
convene national partners to explore this issue further.
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        RESPONSES TO WRITTEN QUESTIONS OF SENATOR ROUNDS
                       FROM HOWARD HUSOCK

Q.1. Do you believe the 502 relending model could also be 
effective to improve the deployment of other Federal direct 
loan programs in partnership with Native CDFIs, including the 
Native American Direct Loan program for Native American veteran 
borrowers?

A.1. I am not qualified to provide a knowledgeable answer.

Q.2. In addition to the Native American Rural Homeownership 
Improvement Act, what other financing opportunities should we 
consider to assist potential Native American home buyers that 
are struggling in their home ownership process?

A.2. I am not qualified to provide a knowledgeable answer.