[Senate Hearing 117-760]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-760


   AFFORDABILITY AND ACCESSIBILITY: ADDRESSING THE HOUSING NEEDS OF 
                           AMERICA'S SENIORS

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

                                HEARING

                               BEFORE THE

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

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                                   ON

       EXAMINING CURRENT AND FUTURE HOUSING NEEDS OF OLDER ADULTS
                               __________

                             MARCH 31, 2022
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                
                                
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                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-819 PDF                 WASHINGTON : 2023 


            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

                 Dan Sullivan, Republican Chief Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                        Pat Lally, Hearing Clerk

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        THURSDAY, MARCH 31, 2022

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

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

                               WITNESSES

Jennifer Molinsky, Project Director, Housing an Aging Society 
  Program, Joint Center for Housing Studies of Harvard University     5
    Prepared statement...........................................    30
    Responses to written questions of:
        Senator Reed.............................................    63
        Senator Ossoff...........................................    67
Audra Hamernik, President and CEO, Nevada HAND...................     7
    Prepared statement...........................................    41
Thomas Wade, Director of Financial Services and Housing Policy, 
  American Action Forum..........................................     9
    Prepared statement...........................................    44
Norbert J. Michel, Vice President and Director for the Center for 
  Monetary and Financial Alternatives, Cato Institute............    10
    Prepared statement...........................................    48
    Responses to written questions of:
        Senator Ossoff...........................................    68
Shannon Guzman, MCP, Senior Strategic Policy Advisor, AARP Public 
  Policy Institute...............................................    11
    Prepared statement...........................................    53
    Responses to written questions of:
        Senator Reed.............................................    68

              Additional Material Supplied for the Record

Statement submitted by Michelle Missler, President and CEO, 
  American Association of Service Coordinators...................    71
Statement submitted by Steve Beck, President and CEO, AHEPA 
  Affordable Housing Management Company..........................    74
Statement submitted by Linda Couch, Vice President, Housing 
  Policy, LeadingAge.............................................    77

                                 (iii)

 
                    AFFORDABILITY AND ACCESSIBILITY:
           ADDRESSING THE HOUSING NEEDS OF AMERICA'S SENIORS

                              ----------                              


                        THURSDAY, MARCH 31, 2022

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10 a.m., via Webex and in room 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. Today's hearing is in a 
hybrid format. Dr. Molinsky, Mr. Wade, Mr. Michel, and Mrs. 
Guzman are in person. Mrs. Hamernik is appearing virtually. 
Members have the option to appear either in person or 
virtually.
    For the witnesses joining, once you start speaking there 
will be a slight delay before you are displayed on the screen. 
To minimize background noise, please click the Mute button 
until it is your turn to speak. And you have in front of you a 
box with the time on it. For those joining virtually you will 
have a bell right when you have 30 seconds left. If there is a 
technology issue, camera and our staff, we will move to the 
next issue or Member until it is resolved.
    No matter who you are, no matter where you live, at some 
point you have probably watched as an aging parent or 
grandparent has found it harder and harder to move around their 
house. Going up the stairs gets a little more difficult. Hard-
to-reach places to clean, while never fun, become almost 
impossible-to-reach places. You start calling parents and 
grandparents a little more often, to make sure they are OK. And 
when driving is no longer an option, trips to the grocery store 
or church become next to impossible.
    This story plays out in more and more families as one of 
the largest generations in our history, the baby boomers, gets 
older.
    In 2019, one in seven Americans was over 65. By 2040, it 
will be one in five. As people live longer, the homes and 
communities where they have made their lives, and where they 
want to stay, are not keeping up. Across the country, whether 
you rent or own, housing is too expensive and not accessible 
enough to meet the needs of the growing number of older adults.
    And while most seniors own their own home, home ownership 
is not offering the financial protection, in many cases, as it 
used to. A smaller share of seniors own their homes today than 
they did in previous generations, and more of today's senior 
homeowners are still paying a mortgage.
    Seniors who rent have even less to fall back on. We know 
that Black and Brown households face barriers to home 
ownership, and are more likely to rent their homes. That leaves 
more seniors than ever realizing they cannot stay in their 
homes without some kind of assistance, and HUD, local 
governments, and nonprofits just cannot keep up.
    In 2017--and many of you have heard these statistics; this 
Committee certainly has--before the pandemic, nearly 10 million 
seniors paid more than 30 percent of their income for housing. 
That is an all-time high. Five million of these households paid 
over half of their incomes toward housing. We know what that 
does to young families. We know what it does to older people.
    With less money left over each month, it is too expensive 
for older renters and homeowners to do the renovations and 
modifications they would need to keep their homes safe and 
affordable, things like adding a ramp or grab bars, or 
weatherizing to save on heat bills. My old friend, Tom Harkin, 
who served with Senator Toomey and me in the Senate, told me 
the other day--Tom is in his early 80s--he said the secret to a 
long life is a handrail, and it was kind of funny but it is 
kind of not.
    Only 10 percent of homes are accessible for people with the 
mobility challenges that come with age. If your home is not 
safe, and you cannot afford to make it safe, it leaves seniors 
really with one final choice, and that is to go into a nursing 
home. And that is often even more expensive and may be more 
care than they want or need.
    The challenges facing seniors today should not be a 
surprise. We have been watching baby boomers age for decades, 
but we have really done nothing that meets the scale of this 
change.
    Back in 2014, Dr. Molinsky's organization, the Joint Center 
for Housing Studies at Harvard, warned that the, quote, 
``existing housing stock is unprepared to meet the escalating 
need for affordability, accessibility, social connectivity, and 
supportive services.'' Their report concluded that ``the time 
to act is now.'' But that was 2014, right?
    Unfortunately, it is 8 years later, and we have not acted.
    People around the country who work with seniors and work on 
these issues know what could help us meet this challenge.
    Today we will hear from Mrs. Hamernik from Nevada HAND 
about how investments in affordable housing and services, like 
food delivery and transportation, are helping thousands of 
seniors in Nevada stay in their community without crippling 
rent payments.
    We will also hear from Mrs. Guzman about how communities 
are making investments that help seniors modify their homes to 
age in place, and in the kinds of services and transit that 
make it possible for older adults to stay in their homes, and 
stay active in their communities.
    Unfortunately, there has been far too little investment in 
efforts that could make a world of difference--and save money--
for millions of seniors and their families.
    We have legislation that would make the investments we need 
to fix that. We need to invest in additional housing and 
services to support low-income senior renters and help seniors 
do the basic home improvements they need to stay in their 
homes. We need to give communities tools to address local 
barriers to building more homes that fit the needs of an aging 
population.
    And we need to combine those efforts with reducing 
prescription costs and strengthening Medicare. That would 
finally allow seniors a little financial breathing room. These 
Americans have worked hard their whole lives. Many have scraped 
by, and they want to age with dignity, in the communities they 
love, near family and friends. It is really what we all aspire 
to.
    It is why we created Social Security in the '30s and 
Medicare in the '60s. It is why we will fight today against 
ending them within 5 years, and it is why we need these 
investments in senior housing today.
    Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman, and welcome to all 
of our witnesses.
    I think we have had at least six hearings on housing this 
Congress, including two just on private equity's minor role in 
housing. But there has been one topic, however, that has been a 
conspicuous omission. We have not had a single hearing on the 
Government's role in driving up housing costs.
    In the last 16 months, this Administration, with the 
cooperation of Democrats and Congress, have dropped hundreds of 
billions in helicopter money to stimulate an already strong 
economy. Eighty billion dollars went to rental assistance--that 
is $80 billion above all the ordinary spending in this space--
went to rental assistance, vouchers, and other housing 
subsidies. It comes to hundreds of billions of dollars per 
year. And despite record demand, the Fed continued to 
artificially hold down mortgage rates at near record lows.
    So just as this Administration has given us the highest 
inflation in 40 years, it has also given us these astonishing 
increases in housing costs. House prices skyrocketed almost 17 
percent in the last year--17 percent--while rents jumped about 
12 percent.
    Some of my colleagues seem to be willfully blind to 
Government's role in driving this inflation, but the problem is 
actually bigger than that. Across these six housing hearings 
that we have had, this Committee has spent most of its time 
seemingly grasping for justifications to spend even more of the 
taxpayers' money and expand Government's role further.
    Setting aside the question whether the Federal Government 
should have a role in the housing market, we should at least 
ask ourselves, do we really need to spend even more taxpayer 
money on housing? I think a more skeptical framework should 
guide us in these hearings. Whether in housing or otherwise, we 
ought to ask ourselves, ``What exactly is the market failure 
that we are trying to correct?'' And we should ask whether the 
taxpayers' already generous safety net is somehow still 
inadequate. In answering these questions, we should bear in 
mind the risk that the Government solution will be worse than 
the problem. The risk of Government failure is particularly 
acute when it comes to housing.
    The number and cost of housing subsidies that are already 
existing boggles the mind. There is the mortgage interest 
deduction, capital gains exclusion on home sales, tax deduction 
on property taxes, FHA, VA, and USDA mortgage insurance and 
Ginnie mortgage-backed securities guarantees, downpayment 
assistance, and there is the Low-Income Housing Tax Credit 
program.
    Then there is also this overlapping array of HUD programs, 
including project-based rental assistance, tenant-based rental 
assistance, public housing, Section 202 housing for the 
elderly, Section 811 housing for persons with disabilities, 
Section 521 rural rental housing, CDBG, HOME block grants, and 
homelessness assistance. And then we have the GSEs, which 
subsidize more than half of all single-family mortgage debt, 
and I probably left out a few.
    But look. After 50 years and many hundreds of billions of 
dollars--maybe well over $1 trillion--in subsidies, there has 
been no meaningful change in home ownership rates. In 1970, the 
home ownership rate in America was 64 percent. Today it is 65 
percent. Black home ownership levels are similar today to when 
the Fair Housing Act was passed in 1968.
    These Government policies spent an enormous amount of money 
but they have mostly just made housing more expensive. The 
inference is inescapable. When it comes to housing, Government 
has often been the problem, not the solution.
    Today, we will likely hear that the Government should 
further subsidize senior citizens' ability to ``age in place.'' 
Now, to the extent that seniors want to stay in their homes, 
that is certainly their right, and very understandably that is 
a very strong preference for a lot of seniors. Completely 
understandable.
    But we should not lose sight of the fact that it often 
makes perfect sense for seniors to decide to maybe move out of 
the three- or four-bedroom, two-story house where they raised 
their children. Many seniors downsize to apartments, to mother-
in-law suites, or to smaller homes. And in many cases, the 
seniors had already built up significant home equity, and so by 
selling their house they have new and sometimes very 
significant resources, relative to all of their other 
resources, that they can use for any purposes they see fit.
    So my point is that downsizing can be a good thing for the 
senior, but also beyond that, because when a senior chooses to 
downsize, a new home comes on the market. Maybe the buyer will 
be a young couple looking to start a family. This turnover 
helps to match a scarce resource to its highest and best use.
    So we should just be careful about any Government 
interventions that might offset this natural set of reasonable 
choices that are available to people.
    To reduce inflation and make housing more affordable we 
ought to pursue reforms that will leverage the power of free 
enterprise, increase housing supply ,and make markets more 
competitive. In January, the Chairman reiterated the housing 
finance reform principles that he released in 2019. His 
principles overlap considerably with the reform principles that 
I have released. I hope to be able to work with the Chairman to 
develop a bipartisan consensus on this critical issue. 
Meanwhile, I hope the Administration will finally engage on 
housing reform. Treasury has still not met its obligation to 
deliver a reform plan to Congress, and it is now 6 months 
overdue.
    So instead of seeking out any excuse or pretext to regulate 
more and spend more, the Administration should look to 
opportunities for bipartisan legislation, like housing finance 
reform, that relies on free enterprise, not Government, to make 
housing affordable for more Americans, including seniors.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey. I will introduce 
the five witnesses.
    Dr. Jennifer Molinsky is the Project Director of the 
Housing an Aging Society Program at the Joint Center for 
Housing Studies at Harvard University.
    Ms. Audra Hamernik is the President and CEO of Nevada 
HAND--she is joining us from Nevada--a nonprofit organization 
providing affordable housing and supportive services to low-
income families and individuals in southern Nevada. Senator 
Cortez Masto would have liked to introduce you, Ms. Hamernik, 
but she will here in a few moments to ask questions.
    Thomas Wade is the Director of Financial Services and 
Housing Policy at the American Action Forum. He joins us here 
in person.
    Mr. Norbert Michel is the Vice President and Director of 
the Cato Institute Center for Monetary and Financial 
Alternatives. He will be joining us, I believe, from his office 
in Washington.
    And Mrs. Shannon Guzman is the Senior Strategic Policy 
Advisor with the AARP Public Policy Institute, working on 
housing. She was previously a senior planner in county 
government in Maryland.
    Dr. Molinsky, if you would begin. Thank you.

 STATEMENT OF JENNIFER MOLINSKY, PROJECT DIRECTOR, HOUSING AN 
  AGING SOCIETY PROGRAM, JOINT CENTER FOR HOUSING STUDIES OF 
                       HARVARD UNIVERSITY

    Ms. Molinsky. Thank you, Chairman Brown, Ranking Member 
Toomey, and Members of the Committee. Thank you for the 
opportunity to testify at this hearing. I am Jennifer Molinsky, 
Project Director at the Housing an Aging Society Program at 
Harvard's Joint Center for Housing Studies.
    This is a critical moment in which to consider investments 
in the housing needs of the Nation's older adults. While the 
number of people 65 and older has increased dramatically since 
the first baby boomers reached that age a decade ago. In just 3 
years, the leading edge of that cohort turns 80. By 2035, the 
Census Bureau projects that the population 80 and over will 
grow to nearly 24 million people, fully doubling from 2016. 
Many of these older adults will live alone and on limited 
incomes, and many will have mobility and other health 
challenges.
    Demand for affordable, accessible housing, in-home 
services, and neighborhood supports and amenities is set to 
soar, yet right now we fall well short of meeting even today's 
needs. Without concerted action we are on track for even graver 
deficiencies that may diminish older people's health and 
ability to remain in their communities, increase the cost of 
public programs, and exacerbate deep and longstanding 
inequalities. I will highlight four specific challenges in my 
remarks.
    First, there is an enormous unmet need for affordable 
rental housing for older adults. Over 10 million households 
headed by someone 65 and over are cost-burdened, pay more than 
a third of their income on housing. Half of these pay more than 
50 percent. Nearly three-quarters of renters earning under 
$15,000 a year are cost burdened. To compensate, households 
often cut back on food and medical care and medicine, which can 
be detrimental to those with chronic health conditions.
    Renters, often on fixed incomes, are particularly at risk 
of rising housing costs and have a much smaller personal safety 
net. In 2019, the median older adult renter had a net wealth 
under $6,000.
    At last measure, over 2.2 million older, very-low-income 
renter households had worst-case housing needs, defined as 
having severe cost burdens, living in severely inadequate 
housing, or both. Only 36 percent of income-eligible older 
adults receive Federal housing assistance, and trends point to 
greater demand for support in coming years.
    The number of income-eligible households will increase with 
population growth and widening income disparities, and 
rentership rates are rising, in part because people now and 
nearing retirement were particularly hard-hit by the 
foreclosure crisis. Expanding rental assistance can provided 
needed stability to these households but also address a growing 
homelessness crisis among older adults.
    Affordability challenges are disproportionately felt by 
older people of color. Longstanding disparities in access to 
well-paying jobs and home ownership opportunities have resulted 
in steep gaps in home ownership with White households and 
greater financial insecurity, particularly for older Black and 
Hispanic households.
    Second, very little of the Nation's housing stock offers 
even the most basic of accessibility features. Our analysis 
shows that less than 4 percent of the Nation's stock offers a 
no-step entry, single-floor living, and wide enough hallways 
and doorways to accommodate a wheelchair. Older people are most 
likely to report difficulties entering, navigating, and using 
different parts of their homes. Support is needed for renters 
and property owners as well as older homeowners to make 
modifications and maintain housing in safe condition.
    Third, the need for assistance and services that support 
older adults with activities of daily living and household 
tasks is escalating. Service-enriched affordable housing has 
been shown to support independence, reduce health care costs, 
but need outstrips demand. Demand will grow for supports and 
services delivered to middle-income older adults who typically 
cannot afford assisted living.
    Fourth, our research shows that many older adults live in 
places that lack livability features such as neighborhood 
services, transportation alternative, safe streets, and 
opportunities for engagement. These all contribute to well-
being and even combat isolation and loneliness, which are both 
serious health issues in their own right.
    Housing options are part of livability, particularly for 
those seeking to remain in their communities when their current 
home no longer fits their needs. But options can be few in 
high-cost locations and in suburban and rural communities 
dominated by single-family homes, in part due to zoning 
barriers.
    We can address the challenges I have outlined with 
comprehensive and coordinated policies to build, preserve, and 
retrofit affordable housing, assist owners and landlords with 
accessibility modifications, connect housing with supports, 
services, and transportation, and help communities thrive. We 
can ensure that the oldest people in our Nation have housing 
that provides a sound foundation for a good quality of life. 
But the time to act is now. The need is already great and will 
only become more so.
    Thank you for the opportunity to testify today, and I look 
forward to addressing your questions.
    Chairman Brown. Thank you, Dr Molinsky.
    Ms. Hamernik is with us remote from Nevada. Ms. Hamernik, 
welcome.

  STATEMENT OF AUDRA HAMERNIK, PRESIDENT AND CEO, NEVADA HAND

    Mrs. Hamernik. ----housing developer and we happen to be a 
not-for-profit agency. We are dedicated to the financing, 
development, construction, and management of high-quality, 
affordable apartment homes.
    Over the last 20 years, Nevada HAND has constructed 35 
apartment communities that house over 80,000 residents in over 
4,700 units of rental housing. We have been able to build these 
housing units using Low-Income Housing Tax Credit program, HOME 
funds, National Housing Trust funds, and other local, State, 
and Federal resources.
    We have 11 family communities, the only two affordable 
assisted living communities in the Nevada, and 22 senior 
communities, housing over 2,900 seniors.
    For over 25 years, I have worked in local government, led a 
Housing Finance Agency, and now leading a nonprofit, and my 
experiences in real estate, financial services, and social 
impact lending. Today I want to present to you the model of 
resident services we use at Nevada HAND, the need for 
affordable housing, especially for seniors, and the barriers 
and a few solutions that are considering in Nevada.
    At Nevada HAND we build affordable housing, but in every 
one of our communities we provide support to every single 
tenant. Our resident services focus on four things: financial 
stability, education, health and wellness, and community 
engagement. We provide onsite food pantries, transportation 
services, wellness fairs, vaccine clinics, health and wellness 
programs, chair yoga, senior sneakers walking club, all things 
that combat isolation and create community.
    But I really want to talk to about the need. Nevada has the 
most significant housing need in the United States. We have the 
lowest statewide supply, we have the lowest metro area supply, 
in southern Nevada, Las Vegas area, and we have the highest 
cost burden. Eighty-two percent of seniors are extremely low-
income renters.
    Nevada has a shortage of roughly 84,000 units of affordable 
housing, and we, just at Nevada HAND, are receiving 2,000 calls 
a day from seniors, and last week we had 10 vacancies. So out 
of the 700 units we have under construction right now, and we 
have an additional 200 that we are rehabbing, we realize it is 
a drop in the bucket when there are 84,000 units in need that 
we need to create.
    Across the country there is approximately 36 percent renter 
households. In Nevada, that is 45 percent renter households. 
And the current median rent right now in Las Vegas is $1,600 a 
month, while we are able to provide rents at an average of $733 
a month, and that is the power of the tax credit program.
    So according to the National Homebuilders, building 100 
units of affordable housing creates lots of economic impact for 
the community--$11 million in local income, $2.2 million in 
taxes and revenues, and creates 161 local jobs. That is just 
for 100 units built.
    But there are some barriers: land availability, too few tax 
credits, too few Housing Choice Vouchers, and now material 
costs are really a big impact.
    In Nevada, over 80 percent of the land is owned by the 
Federal Government. We know that Senator Cortez Masto has 
introduced the Southern Nevada Economic Development and 
Conservation Act bill that will provide lands for conservation 
but also for affordable housing. Out of our 35 developments, we 
can see that one was built on land that was transferred by BLM, 
and we are competing for land in the open marketplace with 
residential, nonresidential, and very rarely are we competing 
with other folks doing affordable housing work. It is usually 
luxury housing.
    And there really is a lack of tax credits. In our deals, 
the tax credit equity equals around 75 to 80 percent of our 
capital staff to actually build the apartments. Due to the 
number of tax credits allocated to Nevada we are able to build 
one community a year, using the 90 percent round, and an 
increasing credit simply means an increase in affordable 
housing.
    There is also a lack of Housing Choice Vouchers. Eighty-two 
percent of extremely low-income renters in Nevada are cost-
burdened, and we are not surprised by that number. Funding for 
rental assistance is not equal across the States. Currently, 
many housing programs allocate resources based on population--
let us say the Low-Income Housing Tax Credit Program--but that 
is not the case for Housing Choice Vouchers. The formula has 
not changed. So we are getting the same level of Housing Choice 
Vouchers allocated to Nevada from the beginning of time, and it 
really is not fair for high-growth population areas.
    And I have to mention material costs. A unit that we could 
build in November of 2020, for $94,000, that same unit costs us 
now $147,000--$94,000 to $147,000. That is a 55 percent 
increase in 16 months, and this just results in less units 
being built.
    So in conclusion, the need is great. We have supply and 
demand issues. They are barriers but they are solvable.
    Thank you very much.
    Chairman Brown. Thank you very much.
    Mr. Wade is recognized for 5 minutes.

 STATEMENT OF THOMAS WADE, DIRECTOR OF FINANCIAL SERVICES AND 
             HOUSING POLICY, AMERICAN ACTION FORUM

    Mr. Wade. Chairman Brown, Ranking Member Toomey, and 
Members of the Committee, thank you for the privilege of 
appearing before you today to discuss the housing challenges 
facing America's seniors and all Americans. I would like to 
summarize my written testimony by making three major points.
    First, increased Government intervention in the housing 
market has in many, if not most cases, done more harm than 
good. Congressional subsidies and agency policies have a patchy 
record of success, at best, and home ownership rates remain 
roughly the same as they did in the 1970s, as Senator Toomey 
mentioned.
    Further congressional action will continue to artificially 
distort the free market, reducing the ability of private actors 
to compete. This lowers the quality of services, reduces 
availability, and increases the prices of available homes, all 
while increasing the systemic risk present in the housing 
ecosystem at a time of significant market stress.
    Second, no specific policies for addressing the housing 
needs of seniors can offset the negative impact of a poor 
macroeconomic environment. Due to prior policy errors, the 
United States is facing inflation levels previously unseen in 
the generation, which harms seniors and vulnerable populations 
the most. Congress would be better placed to form a more 
complete understanding of the current state of existing 
subsidies, both of existing Housing and Urban Development 
initiatives and COVID-19 grants, from which a significant 
amount of funding remains unspent. We learned from the 
Department of Treasury yesterday that little over half of 
Federal rental aid is being disbursed at this point in the 
pandemic.
    Third and finally, further demand-side subsidies fail to 
account--and, indeed, instead exacerbate--the two primary 
underlying causes of stress in the housing market: a lack of 
supply and the role played by the Government-sponsored 
enterprises, or GSEs, Fannie Mae and Freddie Mac. If Congress 
must intervene in the functioning of the free market to meet 
specific policy goals, it must do so on the supply side, for 
example, by changing local zoning regulations or investing the 
barriers to construction, and continuing the efforts to end the 
conservatorship of the GSEs. By contrast, demand subsidies 
increase demand, which results in a rise in house prices, 
making housing unaffordable to those who need it most. Congress 
may achieve precisely the opposite of what it sets out to do.
    And if you will forgive me for ending on a personal note, a 
month ago I had the privilege of taking the Oath of Allegiance 
and nationalizing as an American citizen, so the ability to 
perform my civic duty today is particularly meaningful.
    Thank you, and I look forward to your questions.
    Chairman Brown. Congratulations. Perhaps people naturalized 
give shorter testimonies, so thank you for that--not to make 
light of anybody else's testimony.
    Norbert Michel is with us, I believe, from his office in 
Washington. Mr. Michel.

STATEMENT OF NORBERT J. MICHEL, VICE PRESIDENT AND DIRECTOR FOR 
   THE CENTER FOR MONETARY AND FINANCIAL ALTERNATIVES, CATO 
                           INSTITUTE

    Mr. Michel. Thank you. Thank you, Senator. Good morning. 
Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for this opportunity to testify today. I 
am the Vice President and Director for our Center for Monetary 
and Financial Alternatives at the Cato Institute. The views 
that I express in this testimony are my own and they should not 
be construed as representing any official position of the Cato 
Institute.
    In my testimony today I argue that the best way to make 
housing more affordable is for the Federal Government to 
reverse course on policies that increase demand. These policies 
make goods and services, including housing, less affordable 
because they artificially boost demand in supply constrained 
markets. And I will expand on this argument with three main 
points.
    First, the level of Federal involvement in housing has been 
escalating for decades along with housing costs, and that 
correlation is no accident. Combined, Fannie, Freddie, and the 
FHA have been behind more than half of outstanding mortgage 
debt per year for decades, in some years responsible for a 
share close to 70 percent. From 2009 to 2020, Fannie and 
Freddie's annual share of the total mortgage-backed securities 
market averaged 70 percent. Including Ginnie Mae in that total, 
the Federal share has averaged 92 percent per year from 2009 to 
2020.
    Virtually all of these Federal housing policies, even those 
outside of the GSEs and FHA, are geared toward increasing 
demand, usually through leverage. Because housing markets are 
almost always supply constrained, these policies consistently 
put upward pressure on prices and rents. They include 
everything from supporting the GSEs, to providing housing 
allowance to military and other Government employees, as well 
as providing Section 8 vouchers. The economic principles are 
the same for assistance and subsidies that pay for housing. 
They place upward pressure on prices because they increase the 
number of dollars chasing the same amount of housing.
    My second point is that Congress' spending since 2020, and 
Biden administration policies, including those announced in the 
newest budget, only worsen the effects of these preexisting 
Federal policies, particularly when it comes to housing costs, 
and housing markets will continue to have artificially 
heightened demand, and that promises to increase housing costs 
for all Americans, both young and old. These policies continue 
to move the U.S. housing market further in the wrong direction.
    Separate from housing, the spending bills include all kinds 
of examples of wasteful Government spending, examples that most 
people would object to even in the absence of the extremely 
high inflation that we have now. These policies include things 
like millions of dollars sent to Vermont for an Institute for 
Rural Partnership and a Cattle Contracts Library; $3 million 
for a fisherman's co-op facility in Guam; $2.75 million for an 
innovation center in Waverly, New York; another $2.5 billion to 
Vermont to build a new museum in Strategic. Johnsbury; $5 
million for an electric substation in Delaware; $2 million to 
reduce inequity in access to solar power; and $10 million to 
tear down an abandoned hotel in Fairbanks, Alaska.
    And this list is just the tip of the iceberg. The Federal 
deficit is now close to $3 trillion, and deficit spending, 
whether on museums or infrastructure, classically defined, 
boosts demand while doing nothing to address supply 
constraints. This leads to more inflation while not fixing the 
underlying problems that created the inflation in the first 
place.
    It is disturbing that Congress continue to spend in this 
manner, even in the face of fraud and rapidly rising inflation, 
and we are now seeing those results. As I and many others 
warned in June of 2021, persistently high levels of debt and 
deficit spending typically lead to inflation, and Congress has 
done nothing to fix this problem. They have only made it worse.
    Last, the Federal Reserve has contributed to higher housing 
costs by continuing to support the secondary market, and 
therefore fueling more leverage to buy homes in the low-
interest-rate environment. Prior to the 2008 financial crisis, 
the Fed rarely held any mortgage-backed securities on its 
balance sheet. Now it acts as though it cannot operate without 
holding massive quantities of GSE-issued mortgage-backed 
securities. Between 2010 and 2022, the lowest amount held was 
$827 billion, and the Fed went from holding $1.4 trillion in 
March of 2020, to $2.7 trillion in March of 2022. In the face 
of a rapidly rising CPI and steadily rising home prices, this 
mortgage-backed security purchase policymakes very little 
sense.
    Thank you for your consideration. I am happy to answer any 
questions you may have.
    Chairman Brown. Thank you, Mr. Michel.
    Ms. Guzman is welcome for 5 minutes.

   STATEMENT OF SHANNON GUZMAN, MCP, SENIOR STRATEGIC POLICY 
             ADVISOR, AARP PUBLIC POLICY INSTITUTE

    Mrs. Guzman. Good morning, Chairman Brown, Ranking Member 
Toomey, and Members of the Senate Banking Committee. My name is 
Shannon Guzman, Senior Strategic Policy Advisor in the AARP 
Public Policy Institute. Thank you for the opportunity to 
address the urgent housing needs of America's older adults.
    Housing is precarious for too many older adults and their 
families. For over a decade, AARP has been focused on how to 
foster communities that can support a diverse aging population. 
The AARP Livability Index scores every neighborhood in the U.S. 
for what people need most. Our State offices advocate for State 
and local policies to advance housing that help people age in 
place. The AARP Community Challenge grant program has invested 
over $9 million in more than 800 grants across all States. The 
AARP network of age-friendly States and communities empowers 
residents and leaders with information to make better choices 
in ways that benefit residents of all ages.
    We do this because the number of people age 65 and older 
will exceed the number of children under 18 for the first time 
in U.S. history in 2034. Over the next 20 years, 85 percent of 
new households will be headed by someone age 65 and older, and 
the majority of older adults consistently tell AARP that they 
want to age in their homes and communities. However, we should 
remember that the median income for an older adult in 2019 was 
just over $27,000, and in that same year nearly 1 in 10 people 
age 65 and older lived in poverty.
    Older adults are not a homogenous group. They are becoming 
more racially and ethnically diverse, with about 20 percent 
over age 65 still working. At the same time, health conditions 
often become more challenging as the risk of developing 
disabilities increases with age. The need for accessible and 
affordable housing is therefore growing, not only for older 
adults who want to remain independent but for the 48 million 
family caregivers who care for them.
    The housing challenges for older adults are part of a 
larger national housing crisis. Both housing and rental markets 
have experienced significant price increases recently. Higher 
property taxes, due to rising home values, and higher priced 
basic goods due to inflation are putting a financial strain on 
older adult households, who are more likely to be retired and 
living on fixed incomes.
    As a result, evictions and homelessness among older 
Americans are on the rise, and home ownership rates are falling 
for every age group. Racial disparities are evident in these 
trends, and the pandemic has only increased housing instability 
among older adults, with many falling behind in their rent or 
mortgage payments.
    In the statement we have submitted for the record we offer 
numerous policy solutions that can be considered at the 
Federal, State, and local level. In particular, we urge 
Congress to strengthen the Section 202 and Section 8 programs, 
invest in public housing and supportive services, and urge more 
rigorous enforcement of the Fair Housing Act and the 
restoration of the Affirmatively Furthering Fair Housing rule. 
Loss mitigation for reverse mortgage borrowers, and Federal 
incentives to spur local and State zoning reform to encourage 
more accessory dwelling units and manufactured housing could 
also be of great benefit.
    Finally, both public and private efforts to promote home 
modifications to improve accessibility, including AARP's own 
HomeFit guides, an initiative with Lowe's, can help older 
adults stay in their homes and communities.
    Thank you again for the opportunity to testify today on the 
housing challenges facing older adults, and I look forward to 
your questions.
    Chairman Brown. Thank you very much, Ms. Guzman.
    Let me start with Dr. Molinsky. When a senior spends more 
on housing than she can afford, what kinds of things get cut 
out? What is the effect of these budget cuts?
    Ms. Molinsky. Thank you for the question, Senator. It is a 
dramatic decrease in spending on health care--so out-of-pocket 
health care, which can include medication, copays--food, 
transportation, and to the extent that people are still 
working, saving for retirement dries up. So we have compared 
extremely low-income renters who are severely cost-burdened 
with those who are affordably housed and those who are severely 
cost-burdened are spending about half on food and out-of-pocket 
medical costs.
    Chairman Brown. Thank you for that.
    Ms. Guzman, we know that eviction and foreclosure can be 
one of the greatest tragedies inflicted on anybody in this 
world and can present uniquely devastating consequences for 
seniors. We have spent much of our time in Committee talking 
about foreclosures and evictions for young families, as 
children go to different school districts, all the things that 
can happen.
    One of the beauties of the child tax credit--and I saw 
someone said that because so many families struggle in the last 
2 weeks of the month to pay their rent, someone wrote that the 
child tax credit provided people a little joy of end-of-the-
month breathing space, and what that can mean for families.
    But talk, if you would, the challenges that emerge when 
seniors lose their home, a little differently from younger 
families. Talk that through with us.
    Mrs. Guzman. Sure. I am happy to do so. When seniors are 
housing cost-burdened they have less of an opportunity to be 
able to pay for the services and goods that are essential to 
their livelihood, and when they are faced with eviction or 
foreclosure that teeters them on the edge of homelessness. And 
when someone who is older loses their home, it is harder for 
them to recover. They may have to leave their community. They 
have stayed in their community for a very long time and made 
social connections and longstanding ties, and that is 
devastating to an older adult and their family.
    Chairman Brown. Thank you.
    Ms. Hamernik, how important are services provided to 
seniors in your affordable building? How does access to 
supportive services help them live independently in your 
building and in the community?
    Mrs. Hamernik. You know, it makes all the difference. You 
can either live in your apartment and feel very isolated and 
never go out and have health consequences or you can be a part 
of a community where you are engaging in all sorts of different 
activities. We try to focus on health and wellness, all sorts 
of activities that improve community, and we know that 
connections help people feel better, help them move their 
bodies, and help them remain housed longer.
    Chairman Brown. So is there a correlation between 
especially low-income and getting out in the community? Any of 
three of you answer. Start with Ms. Hamernik. Just talk that 
through. I assume the answer is yes, but I want to explore why 
more.
    Mrs. Hamernik. Yes. I think there is a direct connection 
between that and also health and housing. When you are 
adequately housed and you are engaging in the community you are 
going to be more healthy. We are very fortunate that in many of 
our senior buildings we have food pantries. We have designed 
them in such a way that people gather together, and they have 
their shopping list, and we create community and create 
opportunities for people to engage with each other.
    I would be interested to hear what other folks have to say.
    Chairman Brown. So Ms. Guzman and Dr. Molinsky, especially 
either of you, address what she said, that people's health 
suffers. Work mental health into that answer, would you? When 
people do not get out they probably do not live as long, they 
probably have more mental health challenges. Their income does 
not really allow them to get out as much. Give us some thoughts 
on that, Ms. Guzman and Dr. Molinsky.
    Mrs. Guzman. Sure. There are several reasons why older 
adults may face social isolation. One may be due to a lack of 
community connection, but also because their housing does not 
work for them. There are barriers within their home that make 
it hard for them to connect, or they do not have access to 
places to socialize easily or they may be without broadband 
where they could connect with people online. And this is 
detrimental to their mental and physical health if they cannot 
get out of their homes, maybe walk to the grocery store for 
healthy food options, to walk to a local park for exercise, or 
to just make those connections in the community.
    Chairman Brown. Dr. Molinsky, your comments?
    Ms. Molinsky. Yeah. Loneliness and isolation have been 
compared to cigarette smoking, in terms of their impact on 
physical health, early mortality, definitely depression and 
other mental health issues.
    And I just wanted to mention that for some people the 
accessibility of their house is a barrier. If you cannot easily 
get in and out of your house that is a problem in and of 
itself, let alone get to transportation or to places where you 
feel safe and the public realm is accessible.
    Chairman Brown. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. I think we all 
know senior citizens are some of the hardest hit by inflation. 
A few weeks ago the President said, and I quote, ``It was 
simply not true that the reason for inflation is the Government 
is spending more money,'' end quote.
    The Administration and some of my Democratic colleagues 
have blamed a lot of folks for inflation. They have blamed the 
supply chain. They have tried to blame corporate greed. Now 
they blame Vladimir Putin. But that is not necessarily the view 
of all of the Democrat economists. The former Obama Treasury 
official, Steven Rattner, has said, and I quote, ``This is 
Biden's inflation and he needs to own it,'' end quote.
    That is, in fact, the way it looks to me. It looks to me 
like massive excess spending in recent years, combined with the 
Fed's lax monetary policy, has given us this inflationary 
environment. So, Mr. Michel, at a macrolevel would you agree 
that it is not the supply chain, it is not Vladimir Putin, but 
at a macrolevel it has been too much spending and too much easy 
money that has created this inflationary environment?
    Mr. Michel. Yes, Senator, I agree. I do not think among 
economists it is very controversial that if you have 
persistently high levels of debt and deficit spending you are 
going to get inflation. Lawrence Summer is another, I guess you 
would say, Democratic administration economist who has pointed 
this out for a while. Administration and Congress have been 
implementing trillions in deficit spending, with $7.5 trillion 
in packages totally over the last year-and-a-half, and about a 
$3 trillion deficit. It does not matter if we call this 
infrastructure spending. We have to sell treasuries to finance 
that spending. That is money coming into the economy, and you 
end up with more money chasing the same amount of goods.
    Senator Toomey. No, I appreciate that, and I specifically 
asked about the macro and you answered that.
    Let me follow up with a question at a more microlevel. It 
seems to me there is a lot of data that shows a tremendous 
correlation between accelerating costs for higher education 
correlated to more Government spending for higher education. 
And so my question is, is it your view that the same dynamic 
occurs in the housing space--when Government increases its 
spending on housing does that tend to increase the prices for 
housing?
    Mr. Michel. Yes, that is my view.
    Senator Toomey. And what is the mechanism? Why does that 
happen?
    Mr. Michel. Well, you are inducing demand. You are giving 
people more money to go out and buy houses or to take mortgages 
on for houses that are not there, and they take a while to get 
there. Even in Audra's testimony a little while ago she 
mentioned, in Nevada, a shortage in land. Well, you are not 
going to be able to do anything except increase prices on 
existing housing stock and construction materials if you just 
give people more money to go buy housing that you cannot build. 
So, I mean, that is the mechanism.
    Senator Toomey. Mr. Wade, many people think of Fannie and 
Freddie as permanent fixtures in the American housing system. 
It is easy to forget that the GSE actually has played a fairly 
small role in American housing finance until pretty recently. 
At the end of 1981--I am old enough to remember, and by the 
way, congratulations on becoming an American citizen--in 1981, 
the GSEs together owned or guaranteed less than 10 percent of 
single-family mortgage debt. They have since grown to more than 
half the market. And despite all that growth of the GSEs there 
has been virtually no increase in home ownership rates.
    So, Mr. Wade, could you give me a sense? Do you think there 
would be adverse effects on the housing market if the GSEs' 
footprints were shrunk on a gradual basis?
    Mr. Wade. While I could not promise that there would not be 
teething issues related to weaning the economy off a decade-
long addiction, if not dependency, on Government support and 
capital, I truly believe that the free market is the most 
efficient mechanism by which to allocate scarce resources. One 
fact that strikes me particularly hard is the evidence over the 
last sort of two decades that Fannie and Freddie have not done 
a better job of allocating funding to meet affordable housing 
goals than the free market.
    At the very, very least, I believe it is incumbent on 
Congress to ensure that Fannie and Freddie are holding enough 
capital to reflect the very real risk that they represent to 
the American economy, and moving into a post-GSE situation will 
make the economy healthier for everyone, including the most 
vulnerable participants.
    Senator Toomey. Thank you, Mr. Chairman.
    Chairman Brown. Senator Menendez, of New Jersey, is 
recognized.
    Senator Menendez. Thank you, Mr. Chairman. According to the 
urban Institute, of the 16.1 million new household formations 
over the next 20 years, more than 80 percent of them will be 
senior households. Due to lack of affordable housing options 
and lasting damage from the financial and COVID crises, many of 
these senior households will be renters.
    Dr. Molinsky, what does this significant increase in senior 
households mean for our senior public housing capacity and the 
senior housing needs that Congress should prepare for?
    Ms. Molinsky. Thank you, Senator. Right now over half of 
households living in public housing are headed by an older 
adult, and we certainly expect that given the statistics that 
you just mentioned that that will increase. And also I should 
say that only 36 percent of our older adults receive the rental 
assistance that they are income-eligible for.
    So as we see that number of income-eligible groups, 
households grow, we are going to see increased demand for these 
programs for public housing, which does provide more accessible 
housing than other market-rate affordable rentals and also 
programs like Section 202 and project-based Section 8, which 
provides services as well, which are going to be increasingly 
important.
    Senator Menendez. Well HUD's Section 202 Housing for 
Elderly program provides seniors, as you said, with affordable 
housing options and service coordinators to connect them with 
additional services and supports they need to age in place, 
which is far less costly to us than the alternatives. However, 
the program has been severely underfunded for over a decade. In 
2010, Congress appropriated more than $450 million for the 
construction of new Section 202 housing. The final fiscal year 
2022 omnibus that was enacted earlier this month provided only 
$199 million--that is an enormous cut when the population is 
going up and we are going the opposite direction. And the 
President's budget for fiscal year 2023 asks for even less.
    So I have strongly advocated for more robust funding in 
years past, and I hope my colleagues will join me in calling 
for enough funding to meet the rising needs of older Americans. 
Aging in place, at the end of the day, is far more dignified, 
far less costly to us as a society.
    The shortage of affordable housing is crushing our seniors. 
In my home State of New Jersey, one Section 202 provider has 
waiting lists 8 to 10 years long, to get into their 
communities. With waitlists that long, the sad reality is that 
some seniors may never have the opportunity to benefit from 
these critical programs.
    Mrs. Guzman, can you describe the struggles that AARP 
member face when looking for affordable housing?
    Mrs. Guzman. Thank you, Senator Menendez. Yes, I can. Older 
adults are having a difficult time because the affordable 
housing options are just not available to them in their 
communities. And what they have to pay is putting a strain on 
their household budget. And so what they need are housing 
options, a variety of housing options that can work for them, 
to meet them at their income levels, whatever those may be.
    So we advocate for accessory dwelling units, which are 
smaller units that can fit on an existing property of someone's 
home. They can be attached or detached. That can serve as a 
place for someone to remain in their homes. They can stay 
there. They can rent out their larger home. They could also 
supplement their retirement income by renting that unit out.
    So there are different ways. There is also manufactured 
housing as well, which is an affordable housing option. But 
both of those housing options need to be allowed in various 
communities across the country, and with new or reformed zoning 
laws, communities can add those housing types to their 
communities so that older adults have a place to stay.
    Senator Menendez. Well the shortage of senior housing is 
only going to grow over time. According to the Joint Center, 31 
percent of 65- to 79-year-old renter households in New Jersey, 
for example, spend more than half of their incomes on housing. 
A National Low-Income Housing Coalition report says, quote, 
``Older adults are at the center of our Nation's housing 
affordability and homelessness crisis,'' close quote. To me 
that is a call to action.
    So Dr. Molinsky, what has the Joint Center's research shown 
about the impact on the lowest-income senior household of 
paying more than they can afford for their housing?
    Ms. Molinsky. When this happens there are cutbacks in food 
and medication and out-of-pocket spending on health care, less 
savings for retirement, less spent on transportation. People 
may be forced to make an unwanted move, which takes them away 
from their support networks, doubling up with family, 
instability. And the homelessness crisis among older adults is 
growing. The numbers have gone up, especially among the younger 
baby boomers.
    So we are concerned about all of these things, about 
displacement from one's community and one's home, and all the 
necessities that affect health and well-being that people 
forego.
    Senator Menendez. Well, let me close by saying it is 
amazing in America that the choices are between putting food on 
the table, having access to your prescription drugs, and/or the 
place that you are going to call home, and that is what these 
seniors are facing. We are facing both a housing affordability 
and a housing supply crisis, and without significant 
investments in successful and trusted programs like HUD's 
Section 202, we are not going to be prepared for the coming 
wave of low-income senior renters.
    And I look forward, Mr. Chairman, to working with you on 
that question. Thank you.
    Chairman Brown. Thank you, Senator Menendez.
    Senator Smith, from Minnesota, is recognized from her 
office.
    Senator Smith. Great. Thank you, Mr. Chair, and thanks to 
all of our panelists for joining us today.
    You know, if people do not have a safe, affordable, 
dignified place to live then nothing else in their life works--
not their job, not their health, nothing. And we know that for 
many low-income people and older Americans public housing is 
what makes their lives work.
    And, in fact, as we have been exploring today there are 
many misconceptions about who lives in public housing. In fact, 
as we have talked about today, more than half of our Nation's 
public housing is occupied by people who are 62 and older or 
people with disabilities. So public housing is a lifeline for 
our Nation's seniors.
    But here is the problem. The existing public housing stock 
that we have does not come close to fully meeting the needs of 
seniors, not to mention, as Ms. Molinsky is pointing out, the 
future needs, as our population ages.
    So here is just one example in Minneapolis. According to 
the Minneapolis Public Housing Authority, 68 percent of 
residents are elderly, and 43 percent are elderly and disabled. 
On top of that, the need for public housing greatly exceeds 
current availability for our elders. Right now, in Minneapolis, 
we have 281 older people who are on the waitlist for public 
housing, with almost 4,000 disabled people, who are not elders, 
also on the waitlist. And this is just in one community.
    So Ms. Molinsky, what do we know about the situation for 
people who are on the waiting lists for public housing, seniors 
who are on the waiting list for public housing right now? What 
is their situation? Where are they living? How long are they 
waiting on these waiting lists?
    Ms. Molinsky. Thank you, Senator. Those are among the most, 
the older adults who have worst-case housing needs with 
severely inadequate physical housing, paying more than half 
their income on rent, living in places that they would prefer 
not to live, far from family or friends, doubling up with 
family or friends, instability. We do not know entirely what 
happens to people on the waiting list because their lives are 
so unstable and they move so often.
    So that is definitely something of concern, that their 
trajectory to getting off that waiting list, which can be 
years--it depends on the location--but can be many, many years, 
and some will probably not be able to access public housing in 
the end.
    Senator Smith. Right. I think about what that means in 
terms of instability, impact on people's health, the issues 
around social isolation that Chair Brown mentioned in his 
testimony, and just the deep impacts that this has on people 
when they already are, you know, potentially in a very 
vulnerable situation.
    So I want to ask this question to Dr. Molinsky and also to 
Ms. Hamernik. How do you respond to the theory that the private 
sector, if left up to its own devices, will fill the need for 
affordable housing for low-income seniors? Ms. Hamernik, would 
you like to go first, and then I will go back to Dr. Molinsky.
    Mrs. Hamernik. Sure. You know, I do not think that we would 
have private investors putting equity--not debt, equity--into 
affordable housing if it was not for the Low-Income Housing Tax 
Credit program. There would be no reason to do that without the 
tax credit program.
    Senator Smith. Thank you. Ms. Molinsky.
    Ms. Molinsky. Yes, I think to fill a need that is faced by 
extremely low-income, older adults and households, people 
making under 30 percent of their median income, the private 
sector just cannot make that pencil out. There needs to be 
subsidy to make it happen. And the nonprofits, without those 
subsidies, cannot compete with developers who can build market 
rate and luxury housing.
    Senator Smith. Right. So essentially, without the support 
that we provide for this housing, there just is not the kind of 
return on investment that any rational private sector investor 
would face in order to build these units, because they are not 
profitable, right? Thank you.
    I just have a couple more questions. I want to just go back 
to Ms. Molinsky. Actually, either one of you, I think, could be 
able to answer this. I have worked very hard on improving fire 
suppression measures in public housing, particularly in high-
rise public housing. This is something that, the tragedy of 
this we have experienced firsthand in Minneapolis, where five 
individuals were killed in a tragic fire in a public housing 
high-rise in Minneapolis.
    Could you just speak briefly about the importance of safety 
measures, including fire suppression, in housing for seniors?
    Ms. Molinsky. Yes. I have not studied fire suppression in 
particular, but safety is incredibly important, and it ties 
into accessibility, that people need the house that suits their 
needs. And we do know that people in their late 80s have 
difficulties getting around and using the home. In high-rises 
we have the elevator issue, and I think we saw during the 
pandemic many people not leaving their apartments because they 
did not want to use the elevator and go into public spaces.
    So really, really important for older adults. And again, 
back to the safety issue, you know, three million older adults 
fall every year, and 800,000 of whom are hospitalized. This is 
an incredible health priority that we must have safe and 
accessible housing since most of those falls do occur in the 
home.
    Senator Smith. Thank you.
    Mrs. Hamernik. I would agree with that. And, you know, we 
are doing fire drills in our buildings. We are looking to all 
sorts of accessibility features. Even if the resident does not 
need them we are building in such a way that if they do need 
them we can quickly retrofit and help them stay in place.
    Senator Smith. Thank you very much. Thank you, Mr. 
Chairman.
    Chairman Brown. Thank you, Senator Smith.
    Senator Ossoff, from Georgia, is recognized from his 
office.
    Senator Ossoff. Thank you, Mr. Chairman. I appreciate it.
    I would like to begin with a question for you, Ms. 
Hamernik. Approximately 300,000 Georgians who spend more than 
half of their income on housing are seniors. And across the 
State I hear from seniors, from community leaders, from elected 
officials about the acute housing shortage faced by seniors in 
Georgia. In Albany, Georgia, for example, there was a crisis of 
affordable and accessible housing for seniors.
    Based on your experience and your analysis, Ms. Hamernik, 
what policies at the Federal, State, and local level will 
support the expansion of housing supply to serve American 
seniors, in Albany, Georgia, across Georgia, and across the 
country?
    Mrs. Hamernik. It is tax credits. It is low-income housing 
tax credits. It is getting capital into local marketplaces, 
just like Georgia or anywhere else that allows developers to 
put bricks-and-sticks projects together and build. And, you 
know, tax credits are rental housing only, but it is a great 
option--and someone was mentioning earlier about downsizing, 
and that would be a good option.
    You know, downsizing into an apartment is a great solution 
for many seniors, and especially when there are strong support 
services, it gets them into a real community where they are 
much less isolated than living at home alone.
    Senator Ossoff. Thank you, ma'am. Next question please for 
Dr. Molinsky and Ms. Guzman. I frequently hear from 
constituents that when seniors can find affordable housing that 
the difficulties the operators, in particular senior-oriented 
and assisted living facilities, face in sustaining their 
business models can pose dire challenges for seniors seeking 
housing. In one facility in Acworth, Georgia, seniors were 
given just 3 days' notice to vacate before the senior housing 
facility suddenly closed. The only assisted living facility 
that accepts Medicaid patients in Camden County, Georgia, 
closed last summer, giving residents just 30 days to find a new 
place to live.
    Please, Dr. Molinsky and Ms. Guzman, why is it so difficult 
for senior housing providers to stay in business? Dr. Molinsky?
    Ms. Molinsky. I was looking to Ms. Guzman. This is 
something I frankly have not studied, Senator. I imagine that 
there is a good deal of the costs of the health provision side, 
but I would be happy to defer to Ms. Guzman.
    Mrs. Guzman. Thank you, Senator Ossoff. The business model 
of assisted living facilities I am not very familiar with. 
However, when we think about the needs of older adults and 
their housing choices, whether or not they have the option to 
move wherever they need to, depending on their certain 
circumstances, their health conditions, we need to have housing 
options that work for them regardless of their circumstances, 
their health circumstances.
    So what we want to see would be for older adults, because 
they say they want to remain in their homes and communities, to 
be able to access certain services in and around their home and 
community to support them prior to having to go into a more 
institutional setting, so that they would not necessarily have 
to face difficulties finding a specific residential facility to 
move into, and so that they can remain active and independent 
in their own communities.
    Senator Ossoff. Thank you. I am going to try to get two 
more questions in in 40 seconds. Dr. Molinsky, in a single 
sentence, if you will indulge me, what is the single most 
significant driver of senior homelessness?
    Ms. Molinsky. Housing costs--two words.
    Senator Ossoff. That is concise and effective. I am going 
to follow up with you on the record. I want to direct one more 
question to our Cato witness, Mr. Michel. As concisely as you 
can, please, what do you assess to be the number one constraint 
on housing supply nationally?
    Mr. Michel. I would have to go with zoning and land use 
restrictions, zoning laws and land use restrictions.
    Senator Ossoff. Thank you. Mr. Chairman, I landed that at 5 
minutes, and I yield.
    Chairman Brown. Five minutes and 3 seconds. Thank you, 
Senator Ossoff.
    Senator Sinema is recognized from her office, from Arizona.
    Senator Sinema. Thank you, Mr. Chairman. Thank you to our 
witnesses for being here today.
    You know, we have an obligation to ensure that all seniors 
can retire with dignity and respect. They have worked 
incredibly hard and deserve to enjoy their golden years with 
friends, family, and loved ones. However, far too many seniors 
in Arizona struggle to find affordable housing, and seniors are 
among the most vulnerable to rising prices and rent increases.
    This year, Arizona was short about 270,000 housing units. 
The high levels of demand far outpace the supply of housing 
units, which has accelerated the cost of rent.
    Dr. Molinsky, you have written about how America's housing 
stock is ill-suited to meet the needs of seniors. Can you 
explain some of the most common barriers to allowing seniors to 
age at home and the health implication of poorly designed homes 
that cannot meet a resident's physical ability?
    Ms. Molinsky. Thank you, Senator. Yes, affordability is a 
major one, as I have discussed, in the instability in the 
housing situation and the cutbacks and other things that people 
must do. The physical home, the majority of older adults live 
in single-family homes, which are among the least accessible 
housing in the country. We know that less than 1 percent, a 
very minuscule amount, of housing is actually fully wheelchair 
accessible, should that be needed. Investing in housing to make 
it more accessible can be really challenging for a homeowner. 
Adding a bathroom on the first floor, something like that, can 
be a challenge.
    The connections in the community are really important. Just 
given the issues with isolation and loneliness, we need to help 
people remain engaged and part of our community, part of our 
society.
    And then those services and supports in the home, as Mrs. 
Guzman mentioned. People are going to be needing more and more, 
but there is a huge gap, a huge gap at the bottom for low-
income people but also middle-income people, who cannot afford 
assisted living, who are going to be needing assistance in 
their homes.
    Senator Sinema. Thank you. And Dr. Molinsky, how do you 
assess the State of the Nation's public housing stock with 
respect to access for seniors and other people living with 
disabilities?
    Ms. Molinsky. Yes. We used American Housing Survey data and 
compared the publicly assisted housing, public housing as well 
as project-based. And we compared that to the homes lived in by 
extremely low-income, older renters who did not have 
assistance. And we found that public housing offers more 
accessibility, but still less than 20 percent of units have 
basic features like single-floor living, a no-step entrance, 
grab bars in the bathroom. We think that 35 percent or so could 
be made more accessible with some relatively simple 
investments.
    So it is better than what you find in the private market 
but it is still in need of assistance to help people stay in 
their homes longer and more safely, particularly given the 
growth in the older population of public housing residents.
    Senator Sinema. Thank you. Ms. Guzman, thank you for being 
here. We are seeing a rise in homelessness in Arizona, 
including among our seniors. We have a safety net in place for 
people experiencing homelessness but it is strained and it 
lacks resources.
    I also think that one challenge with the way that we have 
designed our safety net is that it often assumes that 
individuals who utilize the safety net can eventually return to 
work and build wealth to achieve financial independence. This 
is not possible for many seniors, and so many exhaust their 
eligibility for benefits without finding a viable financial 
path forward.
    Would you agree with this assessment, and can you share 
more about what AARP is seeing in Arizona and around the 
country with respect to seniors experiencing homelessness?
    Mrs. Guzman. Thank you, Senator, for your question. What we 
are seeing is that older adults are dealing with rising prices, 
rising housing prices, rising prices for basic goods and 
services, and they are becoming financially strained. They are 
not able to pay for basic needs, so groceries, transportation, 
medications. We have an example of one older adult who had to 
sell his home in order to pay for his medications. And this is 
unacceptable. We need to make sure that, at all income levels, 
including those who are teetering on the edge of homelessness, 
have adequate and affordable housing.
    Senator Sinema. Thank you. Mr. Chairman, I yield back, and 
thank you for holding this hearing today.
    Chairman Brown. Thank you, Senator Sinema.
    Senator Van Hollen is, I believe, from Maryland, from his 
office.
    Senator Van Hollen. Yes, Mr. Chairman. I thank all of you 
for your testimony today and talking about all the different 
elements that impact on the shortage of affordable housing for 
our seniors. Clearly the supply side is a big issue. A number 
of you have also mentioned the reality that seniors also need 
to be able to connect with services if they do not want to go 
into a more restricted setting. And so that is, of course, a 
key component.
    If you look at the Section 202 Support of Housing for the 
Elderly program, that is designed, as you know, to try to 
provide those services. But based on the information I have 
got, only about half of the individuals in that program who are 
already eligible for supportive services are able to access 
them. The funding is not sufficient. And so those individuals 
who might otherwise be able to use Section 202 housing but also 
need these needs would be kind of pushed into a more 
restrictive and higher-cost settings.
    Ms. Guzman, you have mentioned this issue. Could you 
elaborate a little bit on that important piece of helping 
seniors age in place, the supportive services, and what happens 
if they are not available? What are their options?
    Mrs. Guzman. Thank you, Senator. So AARP focuses on 
creating livable communities, and those are communities that 
have access to affordable housing options, accessible housing 
options, transportation, convenient transportation, access to 
healthy food options, and other amenities that can support 
those who want to age in place, so access to places to 
exercise.
    Being able to keep people active and engaged in community 
life will help them to live and remain in their communities for 
a longer period of time. So people who live in communities that 
do not have access to those types of services and amenities 
really need the support of community organizations or local 
governments to help make those connections, where possible. So 
that is through providing transportation options, making 
streets safer to walk, providing, again, more affordable or a 
diverse range of housing options to meet their needs.
    Senator Van Hollen. Thank you. And to Ms. Hamernik, in your 
experience how big a gap is there currently in this link in 
allowing seniors to age in place in affordable settings?
    Mrs. Hamernik. You know, I think it is all about resident 
services, and for Nevada HAND, that is what we fundraise for. 
We fundraise to pay for the salaries of our resident services 
coordinators. It is not to build buildings, right? It is for 
services.
    And I will give you one quick example. One thing that we 
really encourage in our senior buildings are pets. And that may 
seem very strange in the landlord world but we know that people 
with pets, especially seniors, walk them. So we provide dog 
walks, it gets Grandma up and moving, and we think that is 
terrific. We have exercise rooms and all those things too, but 
pets help.
    Senator Van Hollen. And in terms of the Section 202 funds 
for these wraparound services, has your experience with those 
been easily accessible or has there been a shortage there?
    Mrs. Hamernik. We have not experienced problems with that. 
We have some 202 buildings, and they have services that are 
right next door to buildings that are not 202, that are more 
LIHTC model, and we have not experienced problems with that.
    Senator Van Hollen. Got it. Dr. Molinsky, if you could 
comment on this. Because I have seen reports that only about 
half of the folks who are eligible for the wraparound services 
under 202 are able to get them. I do not know if you have any 
comment on this piece of the challenge.
    Ms. Molinsky. Senator, thank you. I do not have any data on 
the share who has accessed them, but I know that they are 
limited and that they are incredibly beneficial. We have done 
some work during the pandemic about the role that service 
coordinators played in stepping in to ensure people had food 
and medicine and were socially engaged, even though they could 
not necessarily leave the building or the apartment. So a very 
important component.
    Senator Van Hollen. Got it. Thank you, Mr. Chairman, and 
thank all of you for your testimony today.
    Chairman Brown. Thank you, Senator Van Hollen.
    Senator Warner, from Virginia, is recognized from his 
office.
    Senator Warner. Thank you, Mr. Chairman. And I want to 
follow up on some of the comments, a slightly different 
direction, some of the comments that Senator Van Hollen was 
making about the 202-supported housing. And I think I am going 
to direct these to Dr. Molinsky.
    I raised yesterday, with our OMB director in a different 
hearing, we have all seen rents go up about 14 percent, you 
know, some places that are actually even doubled. We have seen 
increasing shortage of housing supply, particularly I have seen 
in Virginia in rural communities.
    The Chairman and I have worked on initiatives where we can 
try to increase the amount of housing supply, particularly for 
low- and moderate-income. When we think about seniors, kind of 
within the overall universe here, Dr. Molinsky, in the 
President's budget he put that $966 million into this program, 
about housing supply, around wraparound services, some of the 
things that Senator Van Hollen was talking about, around 
wraparound. How will President Biden's budget address the 
housing supply issue, and are there other things we should be 
looking at?
    Ms. Molinsky. Thank you for the question. Certainly housing 
supply for especially low-income, older renters is incredibly 
important. We simply do not have enough to serve the people 
that we have in need and who are eligible right now, hence 
those long waiting lists that we talked about. And having those 
wraparound services are a key component of that, for all the 
reasons that we have discussed and Mrs. Guzman discussed.
    I think that one of the benefits of these programs is that 
they are deeply affordable, that they serve people at 30 
percent of income or lower, and that is really hard to find 
outside of these subsidy models, these important housing 
programs.
    Senator Warner. And I will stay with you on this topic, Dr. 
Molinsky. Another issue that a lot of us on the Committee have 
tried to take on is the challenges around racial wealth gap, 
and a lot of that racial wealth gap is due to home ownership. 
One of the things I am concerned about is that, one, racial 
wealth gap, Black and White families, it happens at a young 
age, and also it happens in folks who are seniors. And the 
number of African American seniors and people of color seniors 
who are having to kind of dispose of their equity in their 
later years.
    Have you and the folks at the Joint Center looked at these 
issues, as we address senior housing, on how we can also take 
on some of these questions around racial wealth gap?
    Ms. Molinsky. Yes. The racial wealth gap in home ownership 
is striking among those 65 and over. It is at a high of 20 
percentage points with White households, and the disparity has 
widened since the recession. So this is definitely a concern, 
and when I mentioned earlier that the median older renter has a 
net wealth of $6,000, that compares to the median homeowner, 
who has $343,000. So there are really important reasons for 
bolstering home ownership, especially among younger people, so 
that they can carry that equity into older age.
    But for now helping older adults access equity in their 
homes is going to be important, and helping them do so in a way 
that is the best choice for them. So whether that is a reverse 
mortgage or some other method, that will be an important part 
of the conversation too.
    Senator Warner. I would just say--and this is an issue I 
have worked, again, with the Chairman on in the reconciliation 
package, we had a very creative effort that was geared at 
first-generation, first-time home buyers, which by definition 
are two-thirds basically people of color, that would, along 
with a little bit of downpayment assistance, would literally 
have created, if you could afford a 30-year mortgage it would 
have provided you a 20-year mortgage. The effect of that 
payment system would have doubled your equity in about 10 
years.
    And if we are going to take on this issue I think we are 
going to have to be creative not only in terms of downpayment 
assistance but really some of these issues that will address 
the ability to build equity in a rapid way. And I look forward, 
Mr. Chairman, to continuing to work with you and folks on the 
Committee on this issue. Thank you.
    Chairman Brown. Thank you, Senator Warner.
    Senator Warren, from Massachusetts, is recognized for 5 
minutes.
    Senator Warren. Thank you, Mr. Chairman.
    The affordable housing crisis has affected families across 
the country who are struggling to keep up with rising housing 
costs, and America's seniors, who often live on fixed incomes 
that cannot meet the demands of unrelenting rent increases have 
been hit especially hard.
    Manufactured homes, homes that are factory-built and 
anchored on a plot of land, have become an essential source of 
housing for seniors who are looking to own their own homes and 
be able to age in place. Nearly half of the more than 22 
million Americans who live in manufactured housing are seniors.
    Ms. Guzman, you are an expert on older Americans' housing 
needs so let me ask you. What are the characteristics of 
manufactured housing that makes it a desirable alternative for 
seniors?
    Mrs. Guzman. Thank you, Senator Warren. So manufactured 
housing is cheaper to build than single-family housing, and 
they are a more affordable option for older adults. They are 
also located in communities where they are clustered together, 
and so this allows for residents to get together, to get 
together socially. It also allows for delivery of services, 
certain services, because they are closer together, so in-home 
care or meals-on-wheels programs.
    But there are limitations to manufactured housing in that 
they are not allowed everywhere. They are not allowed to be 
developed everywhere.
    Senator Warren. OK. So let's get into it. So what you are 
telling me, though, is when you can get a community together of 
manufactured housing it can be a terrific alternative for 
seniors----
    Mrs. Guzman. Yes.
    Senator Warren. ----because of affordability, because of 
the fact that people can come together. Manufactured housing, 
however, is not just attractive to seniors. A few decades ago, 
manufactured housing communities were generally owned by mom-
and-pop businesses. But as the population aged and our housing 
supply has dwindled the smell of money lured new players, and 
those are the big investors.
    So private equity firms, hedge funds, other Wall Street 
giants have scooped up manufactured housing communities across 
the country, including those like Sandcastle Estates and 
Liberty Estates in Massachusetts, that cater exclusively to 
seniors. Institutional investors accounted for nearly one-
quarter of manufactured housing purchases between 2019 and 
2021, a 10-percentage point jump in just 2 years.
    Dr. Molinsky, you lead research on seniors' access to safe 
and affordable housing, so let me ask you the same question I 
asked Ms. Guzman but this time about the giant investors. What 
characteristics of manufactured home communities, particularly 
those that cater to seniors, make them so attractive to Wall 
Street?
    Ms. Molinsky. Thank you, Senator Warren. Yeah, these 
investments can be very profitable. Residents typically own 
their homes but rent the land underneath in these communities, 
so an investor purchasing a community can raise the lot rent 
and other fees. This can put residents in a bind. The cost of 
moving their homes can be more than they can afford, or even 
physically impossible, and their increased rent can make it 
harder to resell a home.
    So residents have few alternatives but to pay the increased 
rent, but for those on fixed incomes this means less left over 
for food and medication and health care, tradeoffs that we 
often see when housing is unaffordable. And for older adults, 
in particular, a move can be disruptive, taking people away 
from support networks and community.
    Senator Warren. Yeah. You know, make no mistake. Trapping 
tenants is a key part of the investment strategy, and we know 
this because investors actually say it out loud. One online 
investor boot camp, for those interested in manufactured 
housing investments, states, and I quote here, ``The fact that 
tenants cannot afford the $5,000 it costs to move a mobile home 
keeps revenues stable and makes it easy to raise rents without 
losing any occupancy,'' end quote.
    In fact, according to one analyst report, since 2000, 
manufactured housing is the only real estate asset class that 
has not experienced any annual decline in operating income, in 
any year. With the money from big rent hikes and exorbitant 
fees rolling in, and protection against people moving out, why 
would it not produce huge profits?
    So Wall Street investors buying up manufactured home 
communities threatens the remaining affordable housing stock 
that seniors rely on. It means that seniors have fewer 
opportunities to age in their own homes and that they risk 
being squeezed out by rising rents, leaving them with even less 
money to buy medicine and to put food on the table.
    Congress needs to act to weaken the investors' grip on the 
housing market. And I want to thank you both for your work.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Warren.
    I am going to do something I normally do not do. There is 
one more questioner that just could not get here, and she 
represents Ms. Hamernik, Senator Cortez Masto. And plus because 
Carol, her assistant, is from Cleveland, I make special 
allowance here. She had a fall--I will not go into that. But 
anyway.
    But I have one question, Ms. Hamernik, before we wrap the 
meeting up. This is coming from Senator Cortez Masto.
    ``I am proud of the quality of homes Nevada HAND provides 
to residents of our State. Thank you for serving low-income 
seniors, people with disabilities, families, and veterans.''
    Senator Cortez Masto is on the Finance Committee today and 
the Energy Committee and just could not get here.
    ``Over the past 5 years,'' she writes, ``I have worked to 
get Federal and other funds to Nevada HAND and other groups, so 
you can build and operate more affordable homes. It is great to 
see more than 4,000 new homes under construction, 2,400 new 
homes preserved in the past year.''
    So the question she has of you, Ms. Hamernik, ``If the 
Senate passed the Build Back Better bill that passed the House 
in November, we would have had funds to build or preserve more 
than 2 million homes nationwide. If we were able to extend the 
Low-Income Housing Tax Credit, as proposed in the Affordable 
Housing Credit Act, what would Nevada HAND be able to do with 
that expansion?''
    Mrs. Hamernik. It would mean that we would probably be able 
to have more than one 9-percent award of tax credits a year, 
and that could mean around 200 to 250 new, affordable 
apartments being built in Nevada. So it is just increased 
supply of those deeply needed resources.
    Chairman Brown. Thank you. And her other question is, 
``What could Nevada HAND have done with increases, or what 
could it do with increases in successful housing construction 
programs run by HUD, like HOME, the Housing Trust Fund, Section 
202 Elderly, Section 811 People with Disabilities, all we were 
working to negotiate as part of, we hope, that legislation.''
    So tell us what you could have done with that, Mrs. 
Hamernik.
    Mrs. Hamernik. You know, 202, we have talked about that a 
little bit today, housing and services for seniors, and Dr. 
Molinsky talked about it too. It is very deeply for low-income 
folks. So we could really hit the very lowest, most vulnerable 
seniors. Section 811, folks with disability, we would love to 
participate. We have nothing in our portfolio right now but we 
would love to be a part of that program. And more vouchers for 
States like Nevada, where we have increasing population always 
helps us hit lower-income folks.
    Chairman Brown. Thank you. I care about Nevada but I care 
more about Ohio, and I know that the questions that Senator 
Cortez Masto submitted for me to ask, if we could do those, 
would make huge differences, in urban areas in my State and in 
rural areas in my State too. We have the housing crisis at 
least as acute as most other places in the country.
    To the witnesses, to the five of you three in person and, 
two remote, thanks for being here. I would like to enter into 
the record a statement submitted by LeadingAge on the need for 
senior housing investment. Without objection, so ordered.
    For Senators who wish to submit questions for the record 
those questions are due 1 week from today, by April 7th. To the 
witnesses, you have 45 days. We ask you to respond to any of 
those questions that you get 45 days from the time you receive 
them.
    With that the hearing is adjourned.
    [Whereupon, at 11:28 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    No matter who you are, no matter where you live, at some point 
you've probably watched as an aging parent or grandparent has found it 
harder and harder to move around their house.
    Going up the stairs gets a little more difficult.
    Hard-to-reach places to clean, while never fun, become impossible-
to-reach places.
    You start calling parents and grandparents a little more often, to 
make sure they're OK.
    And when driving is no longer an option, trips to the grocery store 
or church become next to impossible.
    This story is playing out in more and more families as one of the 
largest generations in our history--the baby boomers--gets older.
    In 2019, one-in-seven Americans was over 65. By 2040, it will be 
more than one-in-five.
    And as people live longer, the homes and communities where they've 
made their lives--and where they want to stay--aren't keeping up.
    Across the country, whether you rent or own, housing is too 
expensive and not accessible enough to meet the needs of the growing 
number of older adults.
    And while most seniors own their own home, home ownership isn't 
offering as much financial protection as it used to.
    A smaller share of seniors own their homes today than they did in 
previous generations. And more of today's senior homeowners are still 
paying a mortgage.
    Seniors who rent have even less to fall back on. And we know that 
Black and Brown households face barriers to home ownership, and are 
more likely to rent their homes.
    That leaves more seniors than ever realizing they can't stay in 
their homes without some kind of assistance--and HUD, local 
governments, and nonprofits just can't keep up.
    In 2017, long before the pandemic, nearly 10 million seniors paid 
more than 30 percent of their income for housing. That's an all-time 
high. And 5 million of these households paid over half of their incomes 
towards housing.
    With less money left over each month, it's too expensive for older 
renters and homeowners to do the renovations and modifications they 
would need to keep their homes safe and affordable--things like adding 
a ramp or grab bars, or weatherizing to save on heat bills.
    Just 10 percent of homes are accessible for people with the 
mobility challenges that come with age.
    If your home isn't safe anymore, and you can't afford to make it 
safe, it leaves seniors with no choice: go into a nursing home.
    And that's often even more expensive, and may be more care than 
they want or need.
    The challenges facing seniors today shouldn't be a surprise.
    We've been watching baby boomers age for decades, but we've done 
nothing that meets the scale of this change.
    Back in 2014, Dr. Molinsky's organization, the Joint Center for 
Housing Studies at Harvard, warned that the ``existing housing stock is 
unprepared to meet the escalating need for affordability, 
accessibility, social connectivity, and supportive services.'' Their 
report concluded that ``the time to act is now.''
    Unfortunately, it's 8 years later, and we haven't acted.
    People around the country who work with seniors and work on these 
issues know what could help us meet this challenge.
    Today we'll hear from Mrs. Hamernik from Nevada HAND about how 
investments in affordable housing and services, like food delivery and 
transportation, are helping thousands of seniors in Nevada stay in 
their community without crippling rent.
    We'll also hear from Mrs. Guzman about how communities are making 
investments that help seniors modify their homes to age in place, and 
in the kinds of services and transit that make it possible for older 
adults to stay in their homes, and active in their communities.
    Unfortunately, there's been far too little investment in efforts 
that could make a world of difference--and save money--for millions of 
seniors and their families.
    We have legislation that would make the investments we need to fix 
that.
    We need to invest in additional housing and services to support 
low-income senior renters, and help seniors do the basic home 
improvements they need to stay in their homes.
    We need to give communities tools to address local barriers to 
building more homes that fit the needs of an aging population.
    And we need to combine those efforts with reducing prescription 
costs and strengthening Medicare. That would finally allow seniors a 
little financial breathing room.
    These Americans have worked hard their whole lives. Many have 
scraped by. And they want to age with dignity, in the communities they 
love, near family and friends. It's what we all aspire to.
    It's why we created Social Security and Medicare. It's why we will 
fight against ending them within 5 years. And it's why we need these 
investments in senior housing today.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Thank you, Mr. Chairman.
    We've had at least six hearings on housing this Congress, including 
even two just on private equity's minor role in housing. There has 
been, however, one conspicuous omission. We have not had a single 
hearing on the Government's role in driving up housing costs.
    In the last 16 months, Democrats and the Administration dropped 
hundreds of billions in helicopter money to stimulate an already strong 
economy. $80 billion went to rental assistance, vouchers, and other 
housing subsidies. And that's above and beyond the hundreds of billions 
in ordinary housing subsidies we spend every year. Despite record 
demand, the Fed continued to hold mortgage rates down at near record 
lows.
    Just as this Administration has given us the highest inflation in 
40 years, it has also given us astonishing increases in housing costs. 
House prices skyrocketed almost 17 percent in the last year, while 
rents jumped 12 percent.
    Some of my colleagues seem to be willfully blind to Government's 
role in driving this inflation. But the problem is actually bigger than 
that. Across these six housing hearings, this Committee has spent most 
of its time grasping for justifications to spend even more of the 
taxpayers' money and expand Government's role.
    Setting aside the question whether the Federal Government should 
have a role in the housing market, we should at least ask ourselves do 
we really need to spend even more taxpayer money on housing. A more 
skeptical framework should guide us in these hearings.
    Whether in housing or otherwise, we should ask, ``where is the 
market failure?'' And we should ask whether the taxpayers' already 
generous safety net is somehow still inadequate. In answering these 
questions, we should bear in mind the risk that the Government solution 
will be worse than the problem. That risk of Government failure is 
particularly acute when it comes to housing.
    The number and cost of housing subsidies boggles the mind. There is 
the mortgage interest deduction, capital gains exclusion on home sales, 
tax deduction on property taxes, FHA, VA, and USDA mortgage insurance 
and Ginnie mortgage-backed securities guarantees, downpayment 
assistance, and the Low Income Housing Tax Credit program.
    There's also an overlapping array of HUD programs, including 
project-based rental assistance, tenant-based rental assistance, public 
housing, section 202 housing for the elderly, section 811 housing for 
persons with disabilities, section 521 rural rental housing, CDBG, HOME 
block grants, and homelessness assistance.
    And then we have the GSEs, which subsidize more than half of 
single-family mortgage debt. After 50 years and many hundreds of 
billions of dollars in subsidies, there's been no meaningful change in 
home ownership rates. In 1970, the home ownership rate in America was 
64 percent. Now, it's 65 percent. Black home ownership levels are 
similar to when the Fair Housing Act was passed in 1968.
    These Government policies have mostly just made housing more 
expensive. The inference is inescapable. When it comes to housing, 
Government has often been the problem, not the solution.
    Today, we will likely hear that the Government should further 
subsidize senior citizens' ability to ``age in place.'' To the extent 
seniors want to stay in their homes, that's certainly their right.
    But we shouldn't lose sight of the fact that it often makes perfect 
sense for seniors to decide to move out of the three- or four-bedroom, 
two-story home where they raised their children. Many seniors downsize 
to apartments, mother-in-law suites, or smaller houses.
    In many cases, the seniors had already built up significant home 
equity. By selling their home, they have new and sometimes very 
significant resources that they can use for any purposes they see fit. 
And so downsizing can be a good thing.
    When a senior downsizes, a new home comes on the market. Perhaps 
the buyer will be a young couple looking to start a family. This 
turnover matches a scarce resource to its highest and best use. We 
should be careful that any Government interventions do not, as they so 
often do, tend to further ossify the market against these dynamics.
    To reduce inflation and make housing more affordable we should 
pursue reforms that leverage the power of free enterprise to increase 
housing supply and make markets more competitive. In January, the 
Chairman reiterated the housing finance reform principles that he 
released in 2019. His principles overlap considerably with the reform 
principles I've released.
    I hope to be able to work with the Chairman to develop consensus on 
this critical issue. Meanwhile, I hope the Administration will finally 
engage on reform. Treasury has still not met its obligation to deliver 
a reform plan to Congress--it's now 6 months overdue.
    Instead of seeking out any excuse or pretext to regulate and spend, 
the Administration should look to opportunities for bipartisan 
legislation, like housing finance reform, that relies on free 
enterprise--not Government--to make housing affordable for all 
Americans, including seniors.
                                 ______
                                 
                PREPARED STATEMENT OF JENNIFER MOLINSKY
 Project Director, Housing an Aging Society Program, Joint Center for 
                 Housing Studies of Harvard University
                             March 31, 2022
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee: thank you for inviting me to testify at this hearing.
    I am the Project Director of the Housing an Aging Society Program 
at the Joint Center for Housing Studies of Harvard University and a 
Lecturer at the Harvard Graduate School of Design. Through research, 
education, and public outreach, the Joint Center for Housing Studies 
seeks to advance understanding of housing issues and to help leaders in 
Government, business, and the civic sector make decisions that 
effectively address the needs of cities and communities. The Housing an 
Aging Society Program focuses specifically on the housing challenges of 
the Nation's growing older population.
    This is a critical moment in which to consider the housing needs of 
the Nation's older adults. While the number of people 65 and over has 
dramatically increased since the first baby boomers turned 65 a decade 
ago, in just 3 years the leading edge of that cohort will turn age 80. 
By 2035, the population aged 80 and over will grow by 81 percent to 
nearly 24 million people. Many of these older adults will live alone 
and on limited income, and many will have mobility and other health 
challenges.
    Demand for affordable, accessible housing, in-home services, and 
neighborhood supports and amenities is set to soar--yet right now, we 
fall well short of meeting even today's needs. Without concerted 
action, we are on track for even graver deficiencies that may diminish 
older people's health and ability to remain in their communities; 
increase the cost of public programs; and exacerbate deep and 
longstanding inequalities in housing and financial security.
    I focus my comments today on the rapidly growing older population 
(those age 65 and over) and the increasing need for suitable housing. 
Lower home ownership rates and increasing debt are reducing housing 
equity, traditionally an important source of wealth and security in 
retirement. These trends lead to four significant issues deserving of 
the public's attention: the enormous and growing need for affordable 
housing and housing assistance, housing accessibility, community 
livability, and services and supports delivered to the homes. All of 
these can help promote health, financial security, and allow people to 
live longer in the homes and communities of their choice.
The rapidly aging population is increasing demand for suitable housing
    By 2030, more than 20 percent of the U.S. population will be age 65 
and over. The fastest growing age group will be those 80-84. Indeed, 
between 2016 and 2035, the U.S. Census Bureau projects the number of 
people age 80 and over will double to reach nearly 24 million. \1\
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     \1\ Joint Center for Housing Studies analysis of U.S. Census 
Bureau, ``Population Projections for the United States: 2017-2060'', 
Main Series Table 3.
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    Most older adults (89 percent) head their own households, and our 
Center projects that by 2038 fully one third of all U.S. households 
will be headed by someone age 65 or over. In the same period, the share 
headed by someone 80 or over will reach 12 percent, and the number of 
households in this age group will double (Figure 1). \2\ Many of these 
households will be small, as most older adults live as couples or 
alone. However, multigenerational living is becoming more common. In 
2019, 22 percent of the older population (12 million people) lived with 
relatives of at least one other generation, with higher shares among 
Asian (45 percent), Hispanic (44 percent), and Black (32 percent) older 
adults than White (17 percent). \3\ This is significant, as resources 
and requirements of these different household types lead to different 
housing preferences and needs.
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     \2\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''. Harvard University, 2019. Available at https://
www.jchs.harvard.edu/housing-americas-older-adults-2019.
     \3\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''. Harvard University, 2019
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    While all geographies--urban, suburban, rural--are seeing increases 
in older households, the fastest growth has occurred in the least-dense 
third of metro areas, where the number of older households jumped 61 
percent from 2000 to 2017 (Figure 2). \4\ In low-density and rural 
communities, single-family housing makes up most of the stock, and 
residents typically need to be able to drive to meet their needs. 
Health care workers and other service providers must also travel 
considerable distances and have few transportation options of their 
own. Medical providers may be in short supply in rural communities, and 
broadband to access telehealth more limited.
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     \4\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''. Harvard University, 2019.
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    Finally, as health and functional ability evolves with age, so too 
do needs for housing accessibility. The share of households reporting a 
member with at least one difficulty with mobility, seeing, hearing, 
cognition, self-care, or household tasks increases from 9 percent of 
households headed by someone under 50 to 60 percent of those headed by 
a person age 80 or over according to the 2019 American Housing Survey 
(AHS). Of the disabilities reported in the AHS, difficulty walking or 
climbing the stairs (22 percent of those aged 65-79 and 39 percent of 
those age 80 and over) is the most prevalent. Older adults are also 
more likely to use assistive devices--such as a wheelchair, cane, or 
crutch. \5\ For people with disabilities, inaccessible housing can 
limit independence, safety, and wellbeing.
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     \5\ Samara Scheckler, Jennifer Molinsky, and Whitney Airgood-
Obrycki. ``How Well Does the Housing Stock Meet Accessibility Needs? An 
Analysis of the 2019 American Housing Survey''. Joint Center for 
Housing Studies of Harvard University, 2022. Available at https://
www.jchs.harvard.edu/sites/default/files/research/files/harvard-jchs-
housing-stock-accessibility-scheckler-2022-0.pdf.
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Lower home ownership rates and increasing debt are reducing housing 
        wealth among older adults, traditionally an important source of 
        wealth and security in retirement
    Households headed by someone age 65 and over have the highest rate 
of home ownership in the Nation at 79.5 percent in 2021, according to 
the Housing Vacancy Survey, yet this share is lower than its 2012 peak 
of 81.2 percent. The home ownership rate for households headed by 
someone age 50-64--a group that was harder hit by the Great Recession--
has dropped significantly, from its more distant peak of 81.7 percent 
in 2004 to 75.1 percent. This cohort is now poised to enter retirement 
age with lower home ownership rates than those of the previous 
generation at the same age.
    Home ownership also varies starkly by race and ethnicity. The 
Black-White home ownership gap among households age 65 and over stood 
at just over 20 percentage points in 2019. The disparities are even 
larger within the 55-64 age group, where the Black-White gap was 28 
percent in 2019. Disparities between Hispanic and White households are 
almost as high, reaching 18 percent for those 65 and over and 19 
percent for those 55-64, while the gap between Asian and White 
households was 11 percent for households 65 and over and 5 percent for 
those 55-64. \6\
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     \6\ Joint Center for Housing Studies Analysis of U.S. Census 
Bureau, American Community Surveys 1-Year Estimates.
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    These inequalities and the overall decline in older home ownership 
are important, as home ownership provides older households greater 
housing security and more predictable costs than renting. Ownership is 
also associated with far greater wealth. The median renter household 
headed by someone age 65 or over had just $5,800 in total wealth in 
2019, compared to the median homeowner's $343,000 (Figure 3). While 
some wealth is necessary to enter into home ownership, the ability to 
build equity in a home puts owners far ahead of renters in terms of 
long-term wealth and financial security. Owners do have maintenance and 
repair costs that renters do not; these can be expensive and physically 
demanding. Yet these tasks are important for ensuring older owners' 
safety at home.
    While the majority of older adults own their homes, rental housing 
is critically important for 7 million people 65 and over, particularly 
those with low incomes. Indeed, 30 percent of extremely low-income 
renter households (those earning under 30 percent of Area Median 
Income) are at least 62 years of age. \7\
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     \7\ Andrew Aurand, et al. ``The Gap: A Shortage of Affordable 
Homes''. National Low Income Housing Coalition, 2021.
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A record number of older households face affordability challenges, and 
        trends point to greater demand for housing assistance
    Before the pandemic, roughly a third of all households headed by 
someone age 65 and over--over 10 million households-were cost burdened, 
meaning they paid more than more than 30 percent of their income for 
housing. Over five million of these households were severely cost 
burdened, spending over half their income on shelter. A larger share of 
older renter households is cost burdened compared to owners (54 percent 
versus 24 percent), but the number of cost-burdened owners is far 
greater (6.2 million vs. 3.9 million) because of the high home 
ownership rates in this age group (Figure 4). Among owners, having a 
mortgage increases the likelihood of being cost burdened: 40 percent of 
older owner households with mortgages had cost burdens in 2019, 
compared with 15 percent of older owners without mortgage debt. This is 
significant, as older adults are more likely to carry mortgage debt 
into later years than in the past: the share of homeowners aged 65-79 
with mortgage debt has increased from 24 percent three decades ago to 
45 percent in 2019, while the share of homeowners in their 80s and 
above with mortgage debt has jumped from 3 to 27 percent in the same 
time period. \8\
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     \8\ Joint Center for Housing Studies analysis of Federal Reserve 
Bank, 1989-2019 Surveys of Consumer Finances.
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    Households age 80 and over are also more likely to be cost burdened 
than those aged 65-79, a concern as more enter this age group. Older 
non-Hispanic Black and Hispanic older households are also more likely 
to be cost burdened; among renters alone, cost burden rates stand at 58 
and 59 percent respectively, compared to 53 percent for both White and 
Non-Hispanic Asian households. \9\
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     \9\ Joint Center for Housing Studies analysis of the U.S. Census 
Bureau, ``2019 American Community Survey''.
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    Finally, older households with low incomes are especially likely to 
face cost burdens. More than 80 percent of owner and 73 percent of 
renter households earning less than $15,000 were cost burdened in 2019. 
Cost burden rates for older owners decline more steeply as income rise 
than for renters, and nearly 70 percent of renters earning $15,000-
$30,000 annually face cost burdens, as do more than 50 percent of those 
earning $30,000 to $45,000 (Figure 4).
    Cost burdened households may cut back on other necessities such as 
food and health care. \10\ Severely burdened households age 65 or over 
in the bottom quartile of expenditures (typically those with the lowest 
incomes) spent only $195 per month on food in 2018, while those without 
burdens spent an average of $368. Differences in out-of-pocket health 
care expenses were just as stark, with severely cost burdened 
households spending 50 percent less on average ($174 vs. $344 per 
month) than those who were unburdened. \11\
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     \10\ Herbert, et al. (2021), ``Older Adult Out-of-Pocket 
Pharmaceutical Spending After Home Mortgage Payoff''. Center for 
Financial Security. Available at https://cfsrdrc.wisc.edu/publications/
working-paper/wi21-10.
     \11\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''. Harvard University, 2019.
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    Despite the growing numbers of income-eligible older adults, the 
share of very low-income renter households headed by someone age 62 
that received Federal rental subsidies fell between 2017 and 2019, from 
38.7 percent to 35.8 percent. In 2019, over 2.2 million very-low income 
households 62 and over had ``worst case housing needs,'' defined as 
having severe cost burdens, living in severely inadequate housing, or 
both. \12\ The numbers of older adults with worst case housing needs 
increased 16 percent from 2017-2019, and 69 percent from 2009-2019. 
\13\ Trends suggest the need for rental assistance will grow: the older 
population is expanding; income disparities are widening, leaving more 
people struggling to pay rising costs of housing and living, and 
rentership rates are rising, in part because people aging into older 
cohorts have struggled since the recession.
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     \12\ U.S. Department of Housing and Urban Development. ``Worst 
Case Housing Needs 2021: Report to Congress'', Table A-5A.
     \13\ U.S. Department of Housing and Urban Development. ``Worst 
Case Housing Needs'', 2009 and 2021.
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    An extreme consequence of unaffordability is homelessness, a 
growing concern among older adults. The number of older adults 
experiencing sheltered homelessness is growing despite declining 
sheltered homelessness among younger age groups. According to 
tabulations from HUD's Annual Homeless Assessment Report, the number of 
sheltered homeless aged 51-61 increased from about 216,000 in 2007 to 
249,000 in 2017. The number of sheltered homeless also rose for those 
62 and older, from 46,000 to 76,500. Older adults now make up 23 
percent of the sheltered homeless population, up from 16.5 percent in 
2007. \14\ While many older adults have experienced chronic 
homelessness, others experience it for the first time after age 50 
after a health or financial shock. \15\
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     \14\ Whitney Airgood-Obrycki. ``The Growing Problem of Older 
Homelessness''. Housing Perspectives, Joint Center for Housing Studies, 
2019.
     \15\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''; Margot Kushel. ``Homelessness Among Older Adults: An 
Emerging Crisis,'' Generations Journal 44:2, 2020.
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    Younger baby boomers (born 1955-1965) are disproportionately likely 
to experience homelessness, having faced strong competition for jobs 
and housing from older baby boomers at critical points in their lives; 
now in their mid-50s to 60s, this cohort is likely to add significantly 
to the number of older adults experiencing homelessness over the next 
decade. \16\ Meanwhile the incidence of homelessness among older 
veterans has also risen; HUD reports that 19.2 percent of veterans 
experiencing homelessness were at least age 62 in 2017, up from 8.7 
percent in 2009, and some 22,700 veterans age 62 and over were counted 
as sheltered in 2017, along with another 49,900 veterans aged 51-61. 
\17\
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     \16\ Dennis Culhane, et al. ``The Emerging Crisis of Aged 
Homelessness: Could Housing Solutions Be Funded by Avoidance of Excess 
Shelter, Hospital, and Nursing Home Costs?'' University of 
Pennsylvania, 2019. Available at https://aisp.upenn.edu/wp-content/
uploads/2019/01/Emerging-Crisis-of-Aged-Homelessness-1.pdf.
     \17\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''.
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    Older people who experience homelessness prematurely experience 
conditions associated with older age, including chronic medical 
conditions and disabilities. Affordable housing and emergency 
assistance to help people avoid homelessness, age-appropriate medical 
care for those who are experiencing homelessness, and permanent 
supportive housing are all needed to address the growing problem of 
elder homelessness.
Very little housing has accessibility features, and older adults report 
        the most difficulty navigating through and using their homes
    As noted earlier, the incidence of disabilities and chronic 
conditions increases with age and can reshape housing needs. Our 
analysis of the 2011 American Housing Survey, which provides the most 
recent comprehensive look at accessibility features in the home, has 
shown that less than 4 percent of America's housing has three basic 
features--a no-step entry into the home, a bedroom and bath on the main 
living floor, and hallways and doorways wide enough to accommodate a 
wheelchair (Figure 6). Among the least accessible are single-family 
houses--home to 80 percent of older homeowners and 22 percent of older 
renters. \18\ More recently, the AHS asked a series of questions 
focused on the difficulties people had entering, navigating, and using 
their homes. Our analysis found that reported difficulties were highest 
among the oldest respondents (Figure 7). Entry into the home and use of 
the kitchen, bathroom, and bedroom were cited as the most problematic. 
Both renter and lower income households--which are more likely to 
include a resident with a disability--were most likely to report 
difficulties using and navigating their homes.
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     \18\ Joint Center for Housing Studies. ``Housing America's Older 
Adults 2019''.
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    Inaccessible housing can limit independence, leading residents to 
rely on both paid professionals and family caregivers for assistance 
with tasks that could otherwise be performed by the occupant in a more 
accessible home. It can heighten risk of injury for residents as well 
as caregivers who help someone navigate features such as narrow halls 
or a high-walled tub. Inaccessibility can also impede engagement in the 
community for those who find it difficult to go in and out of their 
homes. In this way, a poor fit between the house and its older occupant 
levies economic cost on older adults who purchase additional services 
to compensate, on family caregivers who provide direct care and 
support, and on the health care industry which incurs costs ranging 
from fall-related injuries to earlier institutionalization in a nursing 
home. \19\
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     \19\ Phillippa Carnemolla and Catherine Bridge. ``Housing Design 
and Community Care: How Home Modifications Reduce Care Needs of Older 
People and People With Disability''. International Journal of 
Environmental Research and Public Health 16.11 (2019): 1951. Terri R. 
Fried, et al. ``Functional Disability and Health Care Expenditures for 
Older Persons''. Archives of Internal Medicine 161.21 (2001): 2602-
2607. Laura N. Gitlin, et al. ``Long-Term Effect on Mortality of a Home 
Intervention That Reduces Functional Difficulties in Older Adults: 
Results From a Randomized Trial''. Journal of the American Geriatrics 
Society 57.3 (2009): 476-481.
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Community safety, amenities, and services can support wellbeing, yet 
        these are lacking in the places older adults live
    While the cost and physical attributes of housing matter, so too 
does the livability of neighborhoods and communities. Safe streets, 
transportation alternatives, parks, opportunities for engagement, 
access to services, and a healthy environment contribute to quality of 
life and can make independent living easier for older adults. By 
supporting access to and opportunities for participating in the 
community, these features can also help prevent isolation and 
loneliness, both serious health issues in their own right. However, our 
research (conducted with AARP Public Policy Institute) shows that many 
older adults lack these features in their communities. \20\ 
Additionally, housing costs can act as a barrier to entry into livable 
communities.
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     \20\ Jennifer Molinsky, Rodney Harrel, Whitney Airgood-Obrycki, 
and Shannon Guzman. ``Which Older Adults Have Access to America's Most 
Livable Neighborhoods? An Analysis of AARP's Livability Index''. 
Harvard University and AARP, 2020. Available at https://www.aarp.org/
content/dam/aarp/ppi/2020/10/which-older-adults-have-access-to-
americas-most-livable-neighborhoods.doi.10.26419-2Fppi.00115.001.pdf.
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    For those wishing to remain in their communities but who are unable 
or prefer not to remain in longtime homes, a lack of housing options 
can also be an issue. Most older respondents to surveys on residential 
preferences indicate a desire to remain in their homes and communities 
as they age. \21\ Yet it can be difficult in suburban locations and 
high-cost areas to find housing options that are affordable, 
accessible, and located close to amenities and services.
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     \21\ AARP. ``2018 Home and Community Preferences Survey: A 
National Survey of Adults Age 18-Plus--Chartbook''.
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Services and supports will be critical to helping the older population 
        remain in their homes and communities--but are often 
        financially out of reach for low- and middle-income older 
        adults
    Older adults are more likely to need assistance with tasks of daily 
living, such as dressing and bathing, as well as housekeeping tasks 
like food preparation, financial management, and shopping. Assistance 
often falls to unpaid family caregivers, creating economic, employment, 
and mental wellness challenges for the caregiver. \22\ Yet according to 
a Centers for Disease Control report, the number of potential family 
caregivers per older adult will fall from 7 to just 4 by 2030. \23\ 
Distance, financial need of caregivers, other caregiving 
responsibilities, and lack of training and support may also diminish 
options for unpaid assistance.
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     \22\ Yin Liu, et al. ``Financial Strain, Employment, and Role 
Captivity and Overload Over Time Among Dementia Family Caregivers''. 
The Gerontologist 59.5 (2019): e512-e520.
     \23\ National Association of Chronic Disease Directors. 
``Caregiving for Family and Friends: A Public Health Issue''. Centers 
for Disease Control and Prevention, 2018.
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    Affordable housing providers with onsite service coordinators who 
connect residents to services and supports have been shown to help 
older adults live independently longer, reducing medical costs at the 
same time. \24\ Our Center's own research during the pandemic shows the 
wide range of ways service coordinators supported older residents, 
including assisting older adults with technology needed for virtual 
socializing and telehealth, procuring food and medicine for people 
sheltering at home, increasing uptake of pandemic-specific benefits and 
supports, and engaging older adults unable to have outside visitors. 
\25\ Yet given limited housing assistance and support for service 
coordination, many older adults who could benefit from such housing are 
unable to access it.
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     \24\ Joint Center for Housing Studies, ``Housing America's Older 
Adults 2019''. Harvard University, 2019.
     \25\ Samara Scheckler and Jennifer Molinsky. ``For Older Adults in 
Publicly Funded Housing During the Pandemic, Service Coordinators Help 
Build Resilience''. Joint Center for Housing Studies of Harvard 
University, 2020. Available at https://www.jchs.harvard.edu/research-
areas/working-papers/older-adults-publicly-funded-housing-during-
pandemic-service.
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    Furthermore, there is growing need among moderate-income older 
adults for long-term services and supports, but who cannot typically 
afford market-rate assisted living. A recent study projects that by 
2029, there will be 14 million middle-income older adults, 20 percent 
of whom will need services provided in settings such as assisted 
living. Yet the majority will find these residential options 
financially out of reach. \26\
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     \26\ Caroline F. Pearson, et al. ``The Forgotten Middle: Many 
Middle-Income Seniors Will Have Insufficient Resources for Housing and 
Health Care''. Health Affairs (2019): 10-1377.
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Conclusion: Investments and policies in affordable, accessible housing, 
        supportive communities, and in-home supports are critical--and 
        now is the time to act
    Meeting existing and growing needs for affordability, 
accessibility, neighborhood livability, and in-home services for the 
country's growing population of older adults requires comprehensive and 
concerted action.
    There is urgent need to expand rental assistance as well as the 
supply of subsidized housing as the ranks of income-eligible older 
adults grow. HUD's housing assistance programs, including Section 202 
and Section 8 Project Based Rental Assistance (PBRA), and public 
housing, offer deep income targeting, serving the lowest income older 
adults, and ensure rents are maintained at affordable levels so that 
older people can purchase food, out-of-pocket medical care, and other 
necessities as well as housing. In these project-based programs, 
economies of scale can bring health and wellness programs into the 
building and further support older residents. Most critically, housing 
subsidies provide stability for vulnerable populations, many of whom 
have experienced unsuitable living situations or homelessness; indeed, 
one study found that nearly one in five older adults had experienced 
homelessness at some point prior to moving to public housing. \27\
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     \27\ Heather Larkin, Amanda Aykanian, Erica Dean, and Eunju Lee. 
``Adverse Childhood Experiences and Substance Use History Among 
Vulnerable Older Adults Living in Public Housing''. Journal of 
Gerontological Social Work 60, no. 6-7 (2017): 428-442.
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    Investments in publicly subsidized housing are also needed to 
ensure its preservation, offer greater accessibility, and ensure the 
safety and health of residents, including the 36 percent of HUD-
subsidized renters who are older adults. Publicly assisted housing also 
tends to have more accessibility features than private-market rentals, 
but there are still significant needs. \28\
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     \28\ Whitney Airgood-Obrycki and Jennifer Molinsky. 
``Accessibility Features for Older Households in Subsidized Housing''. 
Joint Center for Housing Studies of Harvard University, 2020. Available 
at https://www.jchs.harvard.edu/research-areas/working-papers/
accessibility-features-older-households-subsidized-housing.
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    Support for accessibility modifications to current homes is also 
needed. Funding and assistance for homeowners and landlords (as well as 
renters, as they are sometimes required to pay for modifications 
themselves) is available via State and local programs, \29\ and for 
owners, through HUD's Older Adults Home Modification Program. Volunteer 
organizations like Habitat for Humanity also support older residents 
seeking to age in place. Federal assistance to modify homes for older 
adults who are members of certain target populations can be accessed 
through various programs. \30\ In general however, many accessibility 
programs are modest in both size and scope, require that residents have 
disabilities before they can receive funds to modify for safety and 
accessibility, and serve owners despite the growing numbers of older 
renters. Availability and generosity of support also varies widely 
between regions and target population membership. Dedicated funding is 
needed to fill in the patchwork of programs, some highly effective, but 
all limited in size and reach.
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     \29\ The Home Modification Network, developed by USC Leonard Davis 
School of Gerontology with support from the Administration for 
Community Living, provides a database of State initiatives and 
policies. It can be accessed at homemodes.org/acl/hmin/.
     \30\ USC Leonard Davis School of Gerontology. ``Funding Sources 
for Home Modification and Repairs: A Technical Assistance Brief for 
State Units on Aging''. Los Angeles, California: September, 2021.
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    Third, investment in and coordination of services delivered to 
older adults where they live is of growing importance. These may 
include meal delivery, personal assistance, help with housekeeping, and 
even support accessing benefits. While these are needed in multifamily 
buildings where economies of scale are possible, a growing number of 
low- and middle-income people residing in single-family houses, mobile 
homes, and nonsenior apartments will need these in the coming years, 
particularly in the absence of affordable assisted living. Finally, 
service coordination, which has proved so valuable during the pandemic, 
can be expanded to help older adults find the resources, benefits, and 
care they need.
    Livability encompasses a number of policies and investments, from 
those that would boost transit and paratransit, safe streets, 
environmental regulations, and more. Lastly, millions of older adults 
would benefit from zoning reforms at the State and local level that 
allow for increased housing options, including apartments convenient to 
services and transportation, accessory-dwelling units, and shared 
housing, allowing older people to remain in their communities as their 
needs evolve. Ordinances to incentivize or require basic accessibility 
features into new homes, or to ensure that new homes are more easily 
adaptable in the future, can also help increase the overall supply of 
accessible housing.
    The pandemic has highlighted the value of stable housing, services 
delivered in the home, service coordination, programs and efforts that 
engage older adults and address loneliness and isolation, and access to 
reliable broadband.
    Finally, supporting the Nation's growing older population will 
require concerted coordination between health and housing policy. Both 
have a role in supporting people seeking to age in the community. 
Investments in housing can support health and wellbeing; meanwhile, 
health interventions must consider the reality of where people live. A 
promising step is the collaboration between U.S. Department of Health 
and Human Services and U.S. Department of Housing and Urban Development 
to develop the Housing and Services Resource Center, a comprehensive 
resource for organizations supporting older adults and others living in 
the community. \31\ There is much to be done, however, to align health 
policy and housing in terms of incentives for providers, eligibility 
for benefits, and more.
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     \31\ See acl.gov/HousingAndServices.
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    The speed of growth in the older population is a call to action. 
The time is now for more comprehensive and expansive policies to build, 
preserve, and retrofit affordable housing; assist owners and landlords 
in creating more accessible housing; and to provide services and 
transportation. The quality of life and wellbeing of a third of U.S. 
households depend on it.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  PREPARED STATEMENT OF AUDRA HAMERNIK
                     President and CEO, Nevada HAND
                             March 31, 2022
    Chairman Brown, Ranking Member Toomey, and Members of the Senate 
Committee on Banking, Housing, and Urban Affairs:
    Thank you for inviting me to testify today. My name is Audra 
Hamernik, and I am the President and CEO of Nevada HAND. Nevada HAND is 
the State of Nevada's largest nonprofit affordable housing organization 
dedicated to the financing, development, construction, and management 
of high-quality affordable apartment communities in Southern Nevada. At 
Nevada HAND, our mission is to improve the lives of low-income 
individuals by providing affordable housing solutions and supportive 
resident services. Over the past 29 years, Nevada HAND has constructed 
35 affordable apartment communities that today house over 8,000 
residents in over 4,700 units of high-quality affordable rental 
housing. As a nonprofit affordable housing organization, we are 
committed to providing positive living environments, where healthy, 
engaged residents can take pride in their communities. In our 
portfolio, we have a total of 11 family communities, the only two 
affordable assisted living communities in Nevada, and 22 independent 
senior communities that house over 2,900 seniors.
    For over 25 years, I have worked in real estate, financial 
services, and social impact investing and lending. From running my own 
business, leading a State Housing Finance Agency (HFA), and now leading 
a nonprofit, I have seen first-hand the importance of advancing 
opportunity for the underserved through public-private partnerships 
that expand housing and foster community and economic opportunity. 
Affordable housing is complex, nuanced, and an often misunderstood 
issue that affects individuals, families, communities, and the economy. 
We have been talking for years about the huge demand for affordable 
housing for seniors as the baby boomer generation passes through 
retirement. Millions of seniors already suffer from the lack of an 
affordable place to live, and across the country, more than 4 million 
people above the age of 65 live in poverty. Of those individuals, only 
1.6 million receive rental subsidies from HUD. \1\ The key to unlocking 
the door to opportunity and addressing housing needs for seniors and 
others alike, is affordability and accessibility.
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     \1\ Anderson, Bendix. 2017. ``Seniors Have the Steepest Housing 
Challenge'', https://www.multifamilyexecutive.com/design-development/
seniors-have-the-steepest-housing-challenge-millions-of-elderly-people-
already-receive-rental-subsidies-from-HUD.
---------------------------------------------------------------------------
    Even before the pandemic, the country was in the grips of a 
pervasive affordable housing crisis. Although the pandemic offered 
lessons on how to better support low-income households during a crisis, 
the focus is now shifting from emergency support to sustainable 
solutions.
The State of Affordable Housing
    Housing affordability will remain a key issue as the Nation's 
rental housing market tries to stabilize from a lingering pandemic and 
housing stock issues. Demand for apartments and single-family homes 
continue to outpace supply, which ultimately drives competition and 
hurts housing affordability.
    Rental housing is a vital component of the entire housing system, 
affecting people of all ages and income levels. Every day, 10,000 of 
our Nation's seniors turn 65 years of age. Americans are living longer 
and demonstrate the continual need for investment in multifamily 
housing stock. \2\ Of the 2,900 seniors who live in a Nevada HAND 
community, 65 percent are female, and over 60 percent are 70 years of 
age or older.
---------------------------------------------------------------------------
     \2\ Oneil, Thomas. 2022. ``The Need To Keep Building Multifamily 
Housing''. https://rejournals.com/the-need-to-keep-building-
multifamily-housing/
---------------------------------------------------------------------------
    Across the United States, affordable housing continues to become 
increasingly difficult to access for many Americans. Nearly half of the 
44 million renter households in the U.S. are housing cost-burdened, 
meaning they spend more than 30 percent of their income on housing. \3\ 
Nevada has a shortage of roughly 84,000 affordable units for extremely 
low-income renters. \4\ This has created an environment of housing 
instability and often forces households to make tough choices between 
rent and groceries, transportation, utilities, and other necessitates.
---------------------------------------------------------------------------
     \3\ National Low Income Housing Coalition. 2021. ``The Gap: A 
Shortage of Affordable Homes''. Washington, DC: Author. See: https://
nlihc.org/gap.
     \4\ National Low Income Housing Coalition. 2021. ``Out of Reach: 
The High Cost of Housing''. Washington, DC: Author. See: https://
nlihc.org/gap.
---------------------------------------------------------------------------
    A lack of affordable housing and a limited scale of housing 
assistance programs have contributed to the current housing crisis and 
is a leading cause of homelessness. In Nevada, we have over 3,400 
unsheltered homeless individuals every night. When looking at solutions 
to this chronic problem, permanent supportive housing (PSH) is a proven 
intervention that provides affordable housing assistance with case 
management and wraparound services that adequately connect people with 
community-based health care, treatment, and employment services. The 
connection between housing and health outcomes has become more 
prevalent in recent years, and by using Medicaid funds for tenancy 
support services, more individuals can secure and remain in stable 
housing, leading to improved health outcomes and a reduction in care 
costs. PSH has been shown to lower public costs associated with the use 
of crisis services such as shelters, hospitals, jails, and prisons.
Affordable Housing Barriers
    There are a broad range of barriers that hinder the production and 
efficiency of affordable housing developments. For Nevada, these 
barriers include the current level of capital investment in existing 
resources, the availability of long-term rental assistance, land 
availability, Medicaid funds for tenancy support services, and more 
recently, supply chain challenges.
Underutilized Existing Resources
    As the Nation recovers from the pandemic, we must turn our 
attention to increasing investments in long-term solutions that address 
the underlying and structural reasons for our Nation's housing crisis. 
Nevada HAND has been able to build affordable, high-quality communities 
through the Low-Income Housing Tax Credit program, HOME funds, National 
Housing Trust Fund, Section 202 and 811, and other local, State, and 
Federal allocations. Expanding and creating more efficient pathways to 
those funds is imperative if we are to lessen this shortfall.
    The Housing Credit is the single most important Federal resource 
available to support the development and rehabilitation of affordable 
housing. It is currently financing approximately 90 percent of all new 
affordable housing development. \5\ The budget proposal that was 
released on Monday includes a proposed $50 billion to increase 
affordable housing supply, including an additional $10 billion for the 
Housing Credit. \6\ The Housing Credit must be part of any solution to 
increase supply.
---------------------------------------------------------------------------
     \5\ Local Initiatives Support Corporation. 2022. ``Intro to the 
Low-Income Housing Tax Credit''. https://www.lisc.org/our-resources/
resource/low-income-housing-tax-credit/
     \6\ https://www.whitehouse.gov/wp-content/uploads/2022/03/budget-
fy2023.pdf
---------------------------------------------------------------------------
    There are many tools in the affordable housing toolbox that can be 
utilized to advance affordable housing solutions throughout Nevada, and 
throughout the country. It is essential to address the affordable 
housing crisis by investing in the National Housing Trust Fund (HTF), 
the Section 202 Supportive Housing for the Elderly Program, the Section 
811 Supportive Housing for People with Disabilities, and the HOME 
Investment Partnerships program.
Long-Term Rental Assistance
    Across the country, 36 percent of households rent their home. In 
Nevada, 45 percent of all households are renters, and they bear the 
brunt of the shortfall in affordable homes. \7\
---------------------------------------------------------------------------
     \7\ Nevada Housing Coalition. 2018. ``Housing Gap for Nevada's Low 
Income Renters''. https://housing.nv.gov/uploadedFiles/housingnvgov/
content/programs/LIHD/Nevada%20Housing
%20Gap20180105.pdf
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    In our portfolio at Nevada HAND, the average rent for our residents 
is approximately $733 a month. This amount is less than half of the 
current median rent in Las Vegas, which has risen to $1,600 a month. 
\8\
---------------------------------------------------------------------------
     \8\ Moeller, Joe. 2022. ``Median Rent in Las Vegas Hits Over One-
Third of Average Income''. 8 News Now: www.8newsnow.com/news/local-
news/median-rent-in-las-vegas-hits-over-one-third-of-average-income/.
---------------------------------------------------------------------------
    Throughout the past few years, at any given time, Nevada HAND has 
never had more than a handful of vacancies, and we often don't have any 
at all. When Nevada HAND is mentioned in the news, we see an immediate 
correlation between obtaining earned media and our organization 
receiving hundreds and sometimes thousands of inquiries from Nevadans 
seeking an affordable place to live. Since 1961, rents in the United 
States have risen by 61 percent, far outpacing the 5 percent increase 
in income. This shift has led to a disparity between what people earn 
and what they have available to spend for their subsequent housing 
costs and utilities. This is one of the leading factors that has led to 
10.4 million renter households paying more than half of their income 
towards housing. \9\
---------------------------------------------------------------------------
     \9\ National Low Income Housing Coalition. 2020. ``The Gap: A 
Shortage of Affordable Homes''. Washington, DC: Author.
---------------------------------------------------------------------------
    Bridging the gap between rents and income is critical to solving 
the affordable housing crisis. Long-term rental assistance is a crucial 
tool for helping low-income individuals and families be able to afford 
a descent, stable home, but 3 out of every 4 households who qualify for 
rental assistance do not receive it due to an inadequate amount of 
vouchers. \10\
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     \10\ Rothstein, R. (2018). ``The Color of Law''. Liveright 
Publishing Corporation.
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    Housing Choice Vouchers (HCV), Project Based Section 8 (PBS8), and 
202/811 are critical Federal rental assistance programs for helping the 
housing needs of low-income households. What we see is that funding for 
rental assistance is not equal across States. Currently, Federal 
housing programs such as the Low-Income Housing Tax Credit and the HOME 
Program are allocated by State population. Funding for rental 
assistance programs is not allocated based on population. Rather, these 
critical Federal resources are based on long-term contracts already in 
place, properties already built, and utilization rates from the prior 
year. With Federal rental assistance programs having not been adjusted 
for population in decades, cities with growing populations like Las 
Vegas, Phoenix, and Houston receive significantly fewer Federal 
resources than cities that have experienced a significant population 
loss.
Supply Chain Challenges
    Across the country, we continue to see supply chain problems that 
are causing construction delays that are impacting every facet of the 
industry. At Nevada HAND, we currently have over 700 units of 
affordable housing under construction. According to the National 
Association of Home Builders, building 100 affordable apartments 
generates $11.7 million in local income, $2.2 million in taxes and 
other revenues for local governments, and creates 161 local jobs. The 
market needs more housing, but the impact of chronic production 
bottlenecks, including ongoing price increases for lumber and OSB are 
being felt by builders like us. While the pandemic may have transformed 
supply chain disruptions, it did not create the underlying supply 
constraints in the housing market. New housing construction has barely 
kept pace with the growth in housing demand, particularly in western 
States. \11\ As an affordable housing developer, we are building as 
fast as we can with the resources available to us. As Nevada's largest 
affordable housing developer, we are proud of the 4,700 units in our 
portfolio, but we see every day that it is a drop in the bucket 
compared to the 84,000-unit gap in Nevada.
---------------------------------------------------------------------------
     \11\ Hermann, Alexander. 2019. ``Where Hasn't Housing Construction 
Kept Pace With Demand''. Joint Center for Housing Studies of Harvard 
University. https://www.jchs.harvard.edu/blog/where-hasnt-housing-
construction-kept-pace-with-demand
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Land Availability
    In Nevada, we face a challenge that exists in many areas across the 
Nation--land availability. Simply put, it's a supply and demand issue, 
and what's happening is prices are going up and affordable housing is 
becoming even more out of reach for people in Nevada. Zoning, 
financing, and land availability are key components that enable these 
developments to come to fruition. In many areas across the Nation, 
restrictive zoning and land-use regulations are barriers to affordable 
housing development. In Nevada, one of most significant barriers is 
available land. Over 80 percent of the land Nevada is owned by the 
Federal Government. We are running out of available and affordable 
land, and developers are left with the option to build-up or to build-
out. Senator Cortez Masto has introduced a bill, the Southern Nevada 
Economic Development and Conservation Act, that not only prioritizes 
long-term conservation and economic development efforts, but also would 
spur affordable housing development in our region.
Supportive Resident Services for Seniors
    At Nevada HAND, we don't just build homes--at each of our 
communities, our onsite staff provides life-enriching resident 
services. These services help our residents take advantage of 
opportunities and resources for financial stability, education, health 
and wellness, and community engagement. For our independent seniors, we 
foster a sense of community while providing individualized services 
that promote mental, physical, and emotional well-being. We want our 
seniors to age in place with dignity. For our seniors living in 
assisted living, we ensure a level of care responsive to the range of 
their health care needs. For seniors, we provide onsite food pantries, 
transportation services, wellness fairs, vaccine clinics, health and 
wellness programs, such as our Silver Sneakers walking club, and much 
more. With funding from NeighborWorks America, we are about to launch 
our I-Ready program, that promotes literacy for the residents that we 
serve. Through application assistance in 2021, our onsite staff helped 
residents to secure $1.5 million in rental assistance dollars. Our 
Resident Services team is actively involved in the lives of our 
residents, conducting collaborative assessments with residents to help 
them access programs and services that most effectively meet their 
individual needs.
Conclusion
    Addressing the affordability and accessibility of our Nation's 
housing stock is key to address the housing needs of our Nation's 
seniors. The tools in the toolbox work, and when appropriately funded 
and utilized, they have the capabilities of solving this crisis.
    Thank you for the opportunity to testify today. I look forward to 
your questions.
                                 ______
                                 
                   PREPARED STATEMENT OF THOMAS WADE
  Director of Financial Services and Housing Policy, American Action 
                                 Forum
                             March 31, 2022
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for the privilege of appearing today to discuss 
the housing needs of America's seniors and of the country more 
generally. My testimony will focus on three main points:

    Increased Government intervention in the housing market has 
        in most cases done more harm than good. Congressional subsidies 
        and agency policies have a patchy record of success at best, 
        and home ownership rates remain roughly the same as they did in 
        the 1970s. Further congressional action will continue to 
        artificially constrain the free market, reducing the ability of 
        private actors to compete. This lowers the quality of services, 
        reduces availability, and increases the prices of available 
        homes, all while increasing the systemic risk present in the 
        housing ecosystem at a time of significant market stress.

    No specific policies for addressing the housing needs of 
        seniors can offset the negative impact of a poor macroeconomic 
        environment. Due to prior policy errors, the United States is 
        facing inflation levels previously unseen in a generation, 
        which harms seniors and vulnerable populations most. Congress 
        would be better placed to form a more complete understanding of 
        the current state of existing subsidies, both of existing 
        Housing and Urban Development initiatives and COVID-19 grants, 
        from which a significant amount of funding remains unspent.

    Further demand-side subsidies fail to account for--and 
        instead exacerbate--the two primary underlying causes of stress 
        in the housing market: a lack of supply and the role played by 
        the Government-sponsored enterprises (GSEs) Fannie Mae and 
        Freddie Mac. If Congress must intervene in the functioning of 
        the free market to meet specific policy goals, it must do so on 
        the supply side, for example by changing local zoning 
        regulations and continuing the efforts to end the 
        conservatorship of the GSEs. By contrast, demand subsidies 
        increase demand, which results in a rise in house prices, 
        making housing unaffordable to those who need it most. Congress 
        may achieve precisely the opposite of what it sets out to do.

    I will discuss these in turn.
Government Intervention in Housing Has Frequently Done More Harm Than 
        Good
    Housing finance was at the center of the 2008 financial crisis that 
visited substantial economic stress on Americans and spawned dramatic 
Government intervention. Yet more than a decade later, the central 
actors in the crisis and response--Fannie Mae, Freddie Mac, and the 
Federal Housing Finance Administration (FHFA)--remain essentially 
unchanged.
    Fannie Mae and Freddie Mac need to be wound down and closed as a 
matter of both policy and politics. From a policy perspective, the GSEs 
were central elements of the 2008 crisis. First, they were part of the 
securitization process that lowered mortgage credit quality standards. 
Second, as large financial institutions whose failures risked 
contagion, they were massive and multidimensional cases of the too-big-
to-fail problem. Policymakers were unwilling to let them fail because 
financial institutions around the world bore significant counterparty 
risk to them through holdings of GSE debt, certain funding markets 
depended on the value of their debt, and ongoing mortgage market 
operation depended on their continued existence. They were by far the 
most expensive institutional failures to the taxpayer and are an 
ongoing cost.
    At a more targeted level, it is easy to find examples of Government 
intervention and overreach that have had negative impacts on the 
housing market. Federal Reserve policies, from low interest rates to 
significant mortgage-backed security purchases \1\ have contributed to 
high housing prices. The Federal Housing Agency has significantly 
expanded its role and, with the GSEs, guarantees over $7 trillion in 
mortgage-related debt to the borrowers least able to repay. \2\ The 
Department of Treasury has declined to end the Qualified Mortgage (QM) 
Patch that allows the GSEs to breach safe lending standards set by the 
Consumer Financial Protection Bureau. Senior homeowners, in particular, 
have struggled with the ineffective and inconsistent servicing of Home 
Equity Conversion Mortgages. \3\
---------------------------------------------------------------------------
     \1\ https://www.americanactionforum.org/insight/tracker-the-
federal-reserves-balance-sheet/
     \2\ https://www.washingtonpost.com/business/economy/federal-
government-has-dramatically-expanded-exposure-to-risky-mortgages/2019/
10/02/d862ab40-ce79-11e9-87fa-8501a456c003-story.html
     \3\ https://www.nclc.org/images/pdf/foreclosure-mortgage/reverse-
mortgages/ib-hecm-examples-loss-mitigation.pdf
---------------------------------------------------------------------------
    The Federal Government already provides multiple avenues of support 
for the construction of affordable housing and assistance for low-
income renters and homebuyers, including seniors. While the success of 
these programs can be debated, support exists in many forms; primarily, 
the Federal Government provides appropriated funding through more than 
30 programs within the Department of Housing and Urban Development, tax 
credits and deductions for both corporations and individuals, housing 
programs for veterans through the Department of Veterans' Affairs, 
rural housing programs through the Department of Agriculture, and 
mortgage insurance programs through the Federal Housing Administration 
and Government corporation Ginnie Mae.
    The failures of this overly complex constellation of programs not 
performing as designed are clear. House price indices are at record 
highs, housing affordability indices are declining, \4\ and home 
ownership rates have barely changed since the 1970s. \5\ The housing 
market is under considerable stress, further impacted by the challenges 
of the recent pandemic. It is difficult, however, to point to stressed 
markets as a justification for further Government intervention if the 
Government itself is responsible for significant portions of that 
stress--there is seemingly less evidence of market failure than there 
is of Government failure.
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     \4\ https://www.americanactionforum.org/chartbook/housing-
chartbook-q4-2021/
     \5\ https://www.census.gov/housing/hvs/data/histtabs.html
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Inflation and the Macroeconomic Environment
    In many respects, the current state of the United States economy is 
quite good. Real (inflation-adjusted) gross domestic product (GDP) rose 
at an annual rate of 7.0 percent in the 4th quarter of 2021. The 
unemployment rate stood at 3.8 percent in the most recent (February) 
employment report. Wages are rising rapidly; average nominal (not 
adjusted for inflation) hourly earnings are up 5.1 percent from 
February 2021--6.7 percent for nonsupervisory and production workers.
    The Achilles heel of the outlook, however, is the worst inflation 
problem in 40 years. As measured by the Consumer Price Index (CPI), 
year-over-year inflation has risen from 1.4 percent in January 2021 to 
7.9 percent in February 2022 (see chart, below). So-called ``core'' 
(nonfood, nonenergy) CPI is up from 1.4 to 6.4 percent over the same 
period. In each case, the measure is the highest since 1982.
    Even these data, however, disguise the pain of inflation. Over one-
half of the typical family budget is devoted to food, energy, and 
shelter and the composite inflation for these items is currently 8.4 
percent. Energy costs are up a staggering 25.6 percent; gasoline alone 
is up 38.0 percent and regular gas is $4.24 a gallon, on average. \6\
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     \6\ https://gasprices.aaa.com/

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    These data raise the important question: How did the United States 
develop this inflation problem?
    In contrast to the policy actions in 2020, the major action in 
2021--the American Rescue Plan (ARP)--was partisan in nature, untimely, 
and excessively large and poorly designed. It was simply a major policy 
error. As the economy entered 2021, it was growing strongly due to the 
continued support and the arrival of the vaccines as an additional 
weapon in the fight against the coronavirus. The $1.9 trillion ARP was 
advertised as much-needed stimulus to reverse the course of the economy 
and restore growth. The economy was no longer in recession, however, 
and was growing at a roughly 6.5 percent annual rate. There was simply 
no need for additional stimulus, especially as a large fraction of the 
household support in the CARES and appropriations acts had been saved 
and was available.
    Even worse, the ARP was excessively large. Real GDP at the time was 
below its potential, with the output gap somewhere in the vicinity of 
$450 billion (in 2012 dollars). The $1.9 trillion stimulus was a bit 
over $1.6 trillion in 2012 dollars. Thus, the law was a stimulus of 
over three times the size of the output gap that needed to be closed to 
get the economy back to potential. Based on any reasonable economic 
theory of stimulus, $1.9 trillion is far too large, particularly given 
supply constraints. The ARP (passed in March) did not appreciably alter 
the pace of growth from the first to the second quarter, but it did 
fuel inflation.
    The inflation of 2021 reflects a combination of these forces. The 
COVID-19 pandemic has wreaked havoc on labor markets worldwide, and the 
resulting disruptions in supply chains and goods production have been 
well-documented. These supply constraints increased costs and generated 
higher inflation across the globe. European consumer price inflation, 
for example, increased about one percentage point each quarter and 
ended 2021 at 4 percent. Part of the U.S. experience is driven by 
supply chain issues as well.
    But the ARP added fuel to the fire. Inflation responded immediately 
to the policy error, jumping from 1.9 percent in the first quarter to 
4.8 percent in the second quarter--nearly three times the increase in 
supply-driven inflation in Europe. The fiscal stimulus was reinforced 
by an aggressively accommodative monetary policy that featured zero 
interest rates and continuous, large monetary infusions. Inflation 
continued to rise as the year went on.
    Inflation is a clear problem in the present. Will it continue? To 
be durable, price inflation must be accompanied by wage inflation and 
higher inflation expectations. Wage inflation has already arrived, as 
average hourly earnings rose 5.1 percent from February 2020 to February 
2022. To compound matters, consumers' expectations for inflation over 
the next year--as measured by the New York Federal Reserve Bank--rose 
from 3 percent to 6 percent during 2021. This raises the specter of 
workers bargaining for higher wages as a hedge against expected 
inflation. When those labor cost increases get passed on to consumers, 
the expected inflation becomes a self-fulfilling prophecy.
    The Build Back Better agenda, which has taken various legislative 
incarnations thus far, is a massive expansion of the social safety net, 
an enormous and poorly designed tax increase, a climate change policy, 
an education policy, and much more.
    At the macrolevel, it is of questionable merit as the way forward 
for progrowth fiscal policy. American Action Forum research highlights 
one area of concern regarding the economic consequences of raising the 
proposed taxes and spending it exclusively on productive 
infrastructure. The economy shrinks instead of grows, as the negative 
effects of the taxes outweigh even a disciplined focus on productive 
spending. Since the actual Build Back Better Act (BBBA) is not a 
disciplined infrastructure spending program, the likely impacts would 
be even more negative.
    The significant macroeconomic risks presented by further cash 
infusions are made more distressing by the substantial amounts of 
COVID-19 funding from previous congressional initiatives that remain 
unspent. As much as 89 percent of Federal rental aid remained unspent 
in August of last year, \7\ causing the Department of Treasury to 
initiate major re-allocation efforts. \8\
---------------------------------------------------------------------------
     \7\ https://www.usatoday.com/story/news/politics/2021/08/25/89-
federal-rental-assistance-unspent-evictions-crisis-looms/5584441001/
     \8\ https://home.treasury.gov/policy-issues/coronavirus/
assistance-for-state-local-and-tribal-governments/emergency-rental-
assistance-program
---------------------------------------------------------------------------
Housing Stresses Are Caused by Supply, Not Demand
    Even if Congress could design legislation that does not duplicate 
existing efforts, works perfectly as intended, creates sensible market 
incentives and empowers private actors, while at the same time not 
putting overt pressure on inflation and the deficit, any legislative 
solution focusing on demand rather than supply will only exacerbate the 
problems facing seniors and all Americans. The two most significant 
stresses to the housing market are shortfalls in supply and the market-
distorting role played by the GSEs.
    Housing demand is especially high as a result of low mortgage rates 
and a coronavirus-inspired flight from large urban centers and into 
homes better suited to remote work. \9\ Despite these high prices, the 
risks of an economic crash as a result of a collapse of the housing 
market appear low due to the low availability of mortgage credit and 
better underwriting standards. The rate of home ownership is on track 
to fall, however, and housing inequalities, felt disproportionately by 
seniors and other vulnerable populations, will be exacerbated. Demand-
side subsidies, such as those found in the BBBA, will further 
exacerbate existing demand issues.
---------------------------------------------------------------------------
     \9\ https://www.americanactionforum.org/insight/understanding-the-
national-increase-in-house-prices/
---------------------------------------------------------------------------
    Housing supply is constrained by a dearth of new construction 
resulting from low labor availability, the high cost of materials, and 
restrictive local regulations. Existing homes are not returning to the 
market at typical rates as economic stresses, the low mortgage rate 
environment, and the unknowns of listing a home in the backdrop of a 
global pandemic caused homeowners to delay or cancel their plans to 
list. Housing inventory, while on track to rise, is at historic lows. 
The total inventory of homes available for sale fell 26 percent in 
January 2021 year-over-year. \10\ At its lowest point, the Federal 
Reserve Bank of St. Louis estimated that there remained only 3\1/2\ 
months of total housing inventory--in other words, it would be only 
3\1/2\ months without construction until there would be no homes 
available in the United States. Housing permits and starts remain at 
prepandemic levels. \11\ Fundamentally, there must be homes for our 
seniors to move into, and demand-side subsidies will only increase the 
population of potential homeowners chasing the same, small number of 
available houses, further increasing prices.
---------------------------------------------------------------------------
     \10\ https://www.bankrate.com/real-estate/why-are-house-prices-
going-up/
     \11\ https://www.americanactionforum.org/chartbook/housing-
chartbook-q4-2021/
---------------------------------------------------------------------------
    The United States does not have a functioning private secondary 
mortgage market and has a wildly distorted primary market thanks to 
Fannie and Freddie. If Congress seeks a healthy and functioning housing 
market that benefits all participants, including seniors, then it must 
continue its efforts to reform the GSEs. Instead, this Administration 
has reversed these gains, decreasing the amount of capital the GSEs are 
required to hold and once again allowing them to purchase the riskiest 
mortgages. \12\ The degree to which Government has replaced private 
actors in the housing space has stalled if not prevented innovation and 
competition from the free market, undermining the capitalist economy on 
which the United States is based and failing to serve all Americans, 
including seniors.
---------------------------------------------------------------------------
     \12\ https://www.americanactionforum.org/insight/fhfa-reverses-
previous-housing-market-reform-progress/
---------------------------------------------------------------------------
    Thank you and I look forward to your questions.
                                 ______
                                 
                PREPARED STATEMENT OF NORBERT J. MICHEL
 Vice President and Director for the Center for Monetary and Financial 
                      Alternatives, Cato Institute
                             March 31, 2022
Introduction
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, thank you for the opportunity to testify at today's hearing. 
My name is Norbert Michel and I am Vice President and Director for the 
Center for Monetary and Financial Alternatives at the Cato Institute. 
The views I express in this testimony are my own and should not be 
construed as representing any official position of the Cato Institute.
    Congress' wasteful spending policies, through a series of massive 
bills, have harmed Americans both young and old by hampering economic 
growth and worsening inflation. These spending policies have compounded 
other existing harmful policies, such as the Federal Reserve's support 
of the secondary mortgage market, massive Federal intervention in 
housing markets, and State and local supply constraints. The typical 
American has little to show for decades of these failed housing 
policies other than excessive debt, high housing costs, volatile home 
prices, overregulation, distorted markets, and a trail of Federal 
bailouts.
Wasteful Government Spending
    The most recent omnibus spending bill, a 2,700-page $1.5 trillion 
package that sailed through Congress in a matter of days, is the fifth 
massive spending bill passed since March 2020. \1\ The bill adds nearly 
$100 billion to the current base spending level. These funds, 
regardless of the so-called trade-off between defense and non-defense 
spending, represent the latest round of higher deficit-financed 
Government spending that will add to the increasing inflationary 
pressures hurting millions of Americans, including seniors and younger 
families. \2\
---------------------------------------------------------------------------
     \1\ Matthew Dickerson, ``8 Ways Massive Omnibus Spending Bill Is a 
Mistake'', The Daily Signal, March 9, 2022, https://
www.dailysignal.com/2022/03/09/8-ways-massive-omnibus-spending-bill-is-
a-mistake/.
     \2\ Norbert J. Michel, ``Inflation: A Brief Look Back, and a Path 
Forward'', Cato at Liberty, November 9, 2021, https://www.cato.org/
blog/inflation-brief-look-back-path-forward.
---------------------------------------------------------------------------
    The omnibus includes thousands of earmarks that funnel billions in 
deficit financed spending to special-interest pork projects. These 
projects include subsidies for an Institute for Rural Partnerships and 
a Cattle Contracts Library in Vermont, a State that accounts for a 
miniscule share of U.S. agriculture. \3\ Other examples include $3 
million for a fisherman's co-op facility in Guam, $2.75 million for an 
innovation center in Waverly, New York, $2.5 billion to build a new 
museum in St. Johnsbury, Vermont, $5 million for an electric substation 
in Delaware, $2 million to reduce inequity in access to solar power, 
and $10 million to tear down an abandoned hotel in Fairbanks, Alaska. 
\4\
---------------------------------------------------------------------------
     \3\ David Ditch, ``Omnibus Thread About What's in the 2,741 Page 
Omnibus Spending Bill as I Read It'', March 9, 2022, https://
twitter.com/DavidADitch/status/1501578341178089490. Also see Dickerson, 
``8 Ways Massive Omnibus Spending Bill Is a Mistake''.
     \4\ Ditch, ``Omnibus Thread About What's in The 2,741 Page Omnibus 
Spending Bill as I Read It''.
---------------------------------------------------------------------------
    Prior to passing this omnibus, Congress added to deficit-financed 
spending with a $1.2 trillion infrastructure package in November 2021, 
the $2 trillion March 2020 Cares Act that included billions in loans 
and grants, the $900 billion Response and Relief Act in December 2020 
that further extended the counterproductive unemployment benefit bonus, 
and the $1.9 trillion American Rescue Plan in March 2021. \5\ All these 
spending packages, the sum total of which is $7.5 trillion, worsened 
inflation. They also exacerbated labor market problems and pandemic-
related supply chain problems, thus leading to the abnormally high 
increases in the Consumer Price Index that Americans continue to 
experience. \6\
---------------------------------------------------------------------------
     \5\ David Ditch, ``Congress' Wasteful Spending Spree Must End With 
Infrastructure Bill'', The Daily Signal, November 12, 2021, https://
www.heritage.org/budget-and-spending/commentary/congress-wasteful-
spending-spree-must-end-infrastructure-bill.
     \6\ Norbert J. Michel, ``Inflation and the Fed: How Congress 
Should Approach Monetary Policy'', Heritage Foundation Backgrounder No. 
3624, June 1, 2021, https://www.heritage.org/sites/default/files/2021-
06/BG3624.pdf; and, Norbert J. Michel, ``Many Consumer Prices Are 
Higher: Time To Eliminate Government-Imposed Economic Roadblocks'', 
Heritage Foundation Backgrounder No. 3650, August 20, 2021, https://
www.heritage.org/sites/default/files/2021-08/BG3650.pdf. Also see 
Matthew Dickerson, David Ditch, and Richard Stern, ``Congress Is 
Writing Blank Check for Big Government, Socialist Tax-and-Spend 
Spree'', The Daily Signal, December 10, 2021, https://www.heritage.org/
budget-and-spending/commentary/congress-writing-blank-check-big-
government-socialist-tax-and-spend.
---------------------------------------------------------------------------
    Now, on virtually the same day that the White House released its $6 
trillion budget (with a $1.4 trillion deficit), the Government official 
in charge of COVID relief announced that the Paycheck Protection 
Program (PPP) was the ``biggest fraud in a generation,'' with 
approximately $80 billion doled out fraudulently (a figure that adds to 
the $170 billion previously stolen from other COVID relief programs). 
The latest report confirms what was already widely acknowledged, that 
many of these stolen funds were used to buy expensive cars and fund 
vacations, as well as purchase larger homes. \7\ The fashion in which 
these spending packages were designed reflects, in part, a refusal to 
acknowledge the extent to which both the private sector and existing 
Government programs satisfy existing consumer needs. The massive 
amounts of spending on luxury items, to say nothing of the fraudulent 
spending, is hardly surprising.
---------------------------------------------------------------------------
     \7\ Ken Dilanian and Laura Strickler, `` `Biggest Fraud in a 
Generation': The Looting of the Covid Relief Plan Known as PPP'', NBC 
News, March 28, 2022, https://www.nbcnews.com/politics/justice-
department/biggest-fraud-generation-looting-covid-relief-program-known-
ppp-n1279664.
---------------------------------------------------------------------------
Excessive Government Involvement in U.S. Housing Markets
    Federal policies encourage borrowing by supporting the operations 
of Fannie Mae, Freddie Mac, and Ginnie Mae, and by providing loan 
insurance through the Federal Housing Administration (FHA), the 
Veterans Affairs (VA) home-lending program, and the U.S. Department of 
Agriculture's Rural Development Program. Historically, the Federal tax 
code has also promoted housing investment and consumption by allowing 
taxpayers to deduct mortgage interest and capital gains from the sale 
of a home from their Federal income tax liability. Additionally, the 
Basel capital requirements have long provided financial institutions 
with capital relief for holding mortgage-backed-securities (MBS) rather 
than whole loans, while Fannie Mae and Freddie Mac have long enjoyed 
lower equity requirements than banks. \8\
---------------------------------------------------------------------------
     \8\ Norbert J. Michel and John Ligon, ``Basel III Capital 
Standards Do Not Reduce the Too-Big-to-Fail Problem'', Heritage 
Foundation Backgrounder no. 2905, April 23, 2014, http://thf-
media.s3.amazonaws.com/2014/pdf/BG2905.pdf; and, Norbert J. Michel, 
``Strict Bank-Like Capital Rules Needed for Fannie Mae and Freddie 
Mac'', Heritage Foundation Backgrounder no. 3474, March 9, 2020, 
https://www.heritage.org/sites/default/files/2020-03/BG3474.pdf.
---------------------------------------------------------------------------
    Prior to the 2008 financial crisis, the Federal Government 
controlled a dominant share of the U.S. housing finance system, and 
that share has expanded. As of December 31, 2020, Fannie and Freddie 
(both of which remain in Government conservatorship) had combined total 
assets of $6.6 trillion, representing approximately 42 percent of the 
Nation's outstanding mortgage debt. \9\ From 2008 to 2019, the FHA's 
annual market share of purchase loans ranged from 16.49 percent to 32.6 
percent. \10\ From 2009 to 2020, Fannie Mae and Freddie Mac's annual 
share of the total MBS market averaged 70 percent. Including Ginnie Mae 
securities, those that are backed by FHA mortgages, the Federal share 
of the MBS market averaged 92 percent per year. \11\
---------------------------------------------------------------------------
     \9\ For the fiscal year ending December 31, 2020, Fannie Mae 
reported $4 trillion in total assets while Freddie Mac reported $2.6 
trillion. See Federal National Mortgage Association, ``Annual Report'', 
December 31, 2020, p. 61, https://www.fanniemae.com/media/38271/
display. p. 61; and Federal Home Loan Mortgage Corporation, ``Annual 
Report'', December 31, 2020, p. 34, http://www.freddiemac.com/
investors/financials/pdf/10k-021121.pdf, p. 34. The 42 percent figure 
is the author's estimate using the Federal Reserve's (now discontinued) 
2019 reported total for mortgage debt outstanding ($15.8 trillion). See 
Board of Governors of the Federal Reserve System, ``Mortgage Debt 
Outstanding, All holders (DISCONTINUED) [(MDOAH])'', retrieved from 
FRED Economic Data, Federal Reserve Bank of St. Louis, October 15, 
2021, https://fred.stlouisfed.org/series/MDOAH, October 15, 2021.
     \10\ See United States Department of Housing and Urban 
Development, ``FHA Single Family Market Share, 2020 Q1'', p. 4, https:/
/www.hud.gov/sites/dfiles/Housing/images/FHASFMarketShare2020Q1.pdf.
     \11\ These figures include both single-family and multifamily MBS. 
Securities Industry and Financial Markets Association, ``U.S. MBS 
Securities: Issuance, Trading Volume, Outstanding'', October 13, 2021, 
https://www.sifma.org/resources/research/us-mortgage-backed-securities-
statistics/us-mortgage-backed-securities-statistics-sifma/; and, Ginnie 
Mae, Insurance Summary, March 2021, https://www.ginniemae.gov/data-and-
reports/reporting/MonthlyIssuanceReports/Mar21-ISS.pdf.
---------------------------------------------------------------------------
    Yet, the evidence suggests that the expansive Federal role has done 
little to expand home ownership. Robust mortgage financing exists in 
virtually every developed Nation of the world without the high degree 
of Government involvement found in the United States, but the overall 
U.S. home ownership rate is below average among developed Nations (64.5 
percent in the United States versus 68.1 percent for the Organisation 
for Economic Cooperation and Development (OECD) countries). \12\ And 
even though the U.S. ownership rate has changed little since the 1960s, 
the volatility of home prices and home construction in the United 
States were among the highest in the industrialized world from 1998 to 
2009. \13\ Federal housing finance policies have, at the very least, 
magnified economic instability by inducing higher home prices. \14\ 
Federal involvement expanded after the most recent financial crisis, 
for instance, and home prices have risen to 43 percent more than where 
they peaked prior to their 2007 crash. \15\ The fact that prices are so 
far from the bottom of a housing cycle is worrisome, especially since 
empirical evidence links large increases in housing prices to banking 
crises. \16\
---------------------------------------------------------------------------
     \12\ These figures represent the combined ownership rate for 
people who own their home outright and those who own a mortgage, for 
both the United States and all Organisation for Economic Cooperation 
and Development (OECD) countries, using 2019 data, as reported in the 
OECD Affordable Housing Database, October 15, 2021, available at 
https://www.oecd.org/housing/data/affordable-housing-database/.
     \13\ Dwight M. Jaffee, ``Reforming the U.S. Mortgage Market 
Through Private Market Incentives'', in Satya Thallam, ed., House of 
Cards: Reforming America's Housing Finance System, George Mason 
University, Mercatus Center, March 2012, pp. 23-25, http://
mercatus.org/sites/default/files/House-of-Cards-March-2012.pdf 
(accessed March 6, 2014).
     \14\ Broadly, Federal housing policies have caused more than their 
share of economic turmoil. See Alex J. Pollock and Edward J. Pinto, 
``Political Disasters in U.S. Housing: The Lessons of History'', 
Housing Finance International, AEI Op-Ed, September 30, 2021, https://
www.aei.org/op-eds/political-disasters-in-us-housing-the-lessons-of-
history/.
     \15\ This 43 percent figure refers to the S&P/Case-Shiller U.S. 
National Home Price Index. See S&P Dow Jones Indices LLC, ``S&P/Case-
Shiller U.S. National Home Price Index [(CSUSHPISA])'', retrieved from 
FRED Economic Data, Federal Reserve Bank of St. Louis, October 15, 
2021, https://fred.stlouisfed.org/series/CSUSHPISA.
     \16\ Carmen M. Reinhart and Kenneth S. Rogoff, ``Is the 2007 U.S. 
Sub-prime Crisis so Different? An International Historical 
Comparison'', American Economic Review, 98, no. 2 (May 2008): 339-344.
---------------------------------------------------------------------------
    Although home equity frequently represents a large portion of many 
Americans' wealth (especially seniors), purchasing a home can be a 
risky investment that depends entirely on home price appreciation, an 
attribute fundamentally in conflict with housing becoming more 
affordable. \17\ Federal policy should not encourage home ownership as 
part of an investment strategy, just as it should remain neutral in 
terms of which stocks Americans should purchase.
---------------------------------------------------------------------------
     \17\ For at least the past 20 years, home prices have exhibited 
similar volatility to equity markets. Joe Cortright, ``Why Home 
Ownership Is Frequently a Bad Bet'', City Commentary, July 15, 2019, 
https://cityobservatory.org/why-homeownership-is-frequently-a-bad-bet/. 
Also see Daniel Indiviglio, ``Should the Government Encourage Home 
Ownership?'' The Atlantic, June 17, 2010, https://www.theatlantic.com/
business/archive/2010/06/should-the-government-encourage-home-
ownership/58320/; and, Daniel Indiviglio, ``The Fallacy of Eternal Home 
Price Appreciation'', The Atlantic, April 6, 2010, https://
www.theatlantic.com/business/archive/2010/04/the-fallacy-of-eternal-
home-price-appreciation/38546/.
---------------------------------------------------------------------------
    The United States has a long history of creating Government 
programs that subsidize housing, ultimately providing incentives to 
borrow and invest in debt-financed purchases that raise housing prices 
and rental rates. Several programs were even created to replace 
subsidies that were phased out. For instance, the Low Income Housing 
Tax Credit (LIHTC) was enacted ``hastily as a part of the Tax Reform 
Act of 1986 to replace other tax subsidies for low-income housing that 
were eliminated.'' \18\ The LIHTC is one of the more inefficient 
Federal programs, providing approximately $9 billion per year to 
support housing construction to benefit lower income households, 
studies show that ``investors, developers, and financial companies gain 
most of the benefits.'' \19\
---------------------------------------------------------------------------
     \18\ Edgar O. Olsen, ``Housing Programs for Low Income 
Households'', NBER Working Paper No. 8208, p. 7, https://www.nber.org/
system/files/working-papers/w8208/w8208.pdf.
     \19\ Chris Edwards and Vanessa Brown Calder, ``Low-Income Housing 
Tax Credit: Costly, Complex, and Corruption-Prone'', Cato Tax and 
Budget Bulletin No. 79, November 13, 2017, https://www.cato.org/tax-
budget-bulletin/low-income-housing-tax-credit-costly-complex-
corruption-prone. For more on reforming local zoning and land-use 
restrictions to increase housing supply, see Vanessa Brown Calder, 
``Zoning, Land-Use Planning, and Housing Affordability'', Cato Policy 
Analysis No. 823, October 18, 2017, https://www.cato.org/policy-
analysis/zoning-land-use-planning-housing-affordability.
---------------------------------------------------------------------------
Congress and Biden Administration Further Interfere With Housing 
        Markets While Increasing Risky Debt and Prices
    Recent moves by the Biden administration demonstrate a clear 
commitment to implementing the same types of failed housing policies 
that have consistently expanded Government intervention in housing 
markets at a great cost to millions of Americans. For instance, the 
Treasury and the Federal Housing Finance Agency (FHFA) announced (on 
September 14, 2021) that they would suspend certain conditions (added 
in 2021) to the Preferred Stock Purchase Agreements (PSPAs) that govern 
the conservatorships of Fannie Mae and Freddie Mac. \20\ The PSPAs are 
key to protecting taxpayers against future bailouts and ensuring that 
Fannie and Freddie (the enterprises) do not further crowd out private 
capital, \21\ but the Administration has weakened those protections by 
suspending the provisions that capped the enterprises' purchases of 
multifamily housing loans, as well as single-family loans ``with higher 
risk characteristics,'' second homes, and investment properties. \22\ 
These last two provisions have little to do with helping people become 
homeowners, and they represent a naked give away to special interests 
that lobby to maximize real estate lending. Uncapping the enterprises' 
multifamily loan purchases is also a giveaway to corporate rent seekers 
and will likely do little, if anything, to increase the amount of 
housing that would otherwise go unbuilt.
---------------------------------------------------------------------------
     \20\ Federal Housing Finance Agency, ``FHFA and Treasury 
Suspending Certain Portions of the 2021 Preferred Stock Purchase 
Agreements'', News Release, September 14, 2021, https://www.fhfa.gov/
Media/PublicAffairs/Pages/FHFA-and-Treasury-Suspending-Certain-
Portions-of-the-2021-Preferred-Stock-Purchase-Agreements.aspx.
     \21\ Joel Griffith and Norbert Michel, ``Revising the Preferred 
Stock Purchase Agreements of Fannie Mae and Freddie Mac May Be the 
Biggest GSE Bailout Yet'', Heritage Foundation Backgrounder no. 3448, 
November 4, 2019, https://www.heritage.org/sites/default/files/2019-11/
BG3448.pdf.
     \22\ Federal Housing Finance Agency, ``FHFA and Treasury 
Suspending Certain Portions of the 2021 Preferred Stock Purchase 
Agreements'', News Release, September 14, 2021, https://www.fhfa.gov/
Media/PublicAffairs/Pages/FHFA-and-Treasury-Suspending-Certain-
Portions-of-the-2021-Preferred-Stock-Purchase-Agreements.aspx.
---------------------------------------------------------------------------
Harmful Programs Included in President Biden's Budget
    President Biden's newest budget includes the continuation and 
expansion of multiple harmful housing policies that tend to 
artificially increase the cost of housing for millions of Americans. 
The following list provides several examples of such policies proposed 
in the budget. \23\
---------------------------------------------------------------------------
     \23\ All references in this list refer to the requests for the 
Department of Housing and Urban Development in the Budget of the U.S. 
Government, Fiscal Year 2023, https://www.whitehouse.gov/wp-content/
uploads/2022/03/budget-fy2023.pdf.

    The budget provides $32.1 billion for the Housing Choice 
        Voucher Program, an increase of $6.4 billion. This change will 
        magnify upward pressure on housing cost. The larger the rental 
        subsidy program becomes, in terms of number of renters and size 
        of the subsidy, the more upward pressure the program will have 
        on rental rates and, ultimately, housing prices. \24\
---------------------------------------------------------------------------
     \24\ For a more general view of how housing vouchers can lead to 
higher rental rates, see Robert Collinson and Peter Ganong, ``How Do 
Changes in Housing Voucher Design Affect Rent and Neighborhood 
Quality?'' American Economic Journal: Economic Policy, 2018, Vol. 10, 
no. 2, pp. 62-89, https://www.aeaweb.org/articles?id=10.1257/
pol.20150176. A similar policy problem exists with military housing 
allowances in severely supply restricted areas, such as the Hawaiian 
Islands. See Eric Pape, ``Living Hawaii: How Military Policies Drive Up 
Rents on Oahu'', Honolulu Civil Beat, June 17, 2015, https://
www.civilbeat.org/2015/06/living-hawaii-how-military-policies-drive-up-
rents-on-oahu/.

    The budget includes $2 billion for the HOME Investment 
        Partnerships Program, an increase of $600 million from 2021. 
        This program is a Federal block grant program created by the 
        Cranston-Gonzalez National Affordable Housing Act of 1990, and 
        it has a troubling track record of fraud even at its previous 
        level of funding. \25\ Moreover, the program already funds 
        duplicative programs, including downpayment assistance plans. 
        \26\
---------------------------------------------------------------------------
     \25\ Joint Hearing entitled ``Fraud in the HUD HOME Program'', 
House Financial Services Committee, November 02, 2011, https://
financialservices.house.gov/calendar/eventsingle.aspx?EventID=401964.
     \26\ Department of Housing and Urban Development, Office of 
Community Planning and Development, Home Investment Partnerships 
Program, Summary of Resources, https://www.hud.gov/sites/dfiles/CFO/
documents/20-2022CJ-HOME.pdf.

    To complement other housing programs, the budget also 
        contains a total of $50 billion in mandatory funding and 
        additional LIHTCs to increase affordable housing development. 
        The LIHTC program has already been shown to be inefficient and 
        ineffective at lowering housing costs, merely serving to pass 
        along any intended cost reductions to special interest groups 
---------------------------------------------------------------------------
        that include investors, developers, and financial firms.

    The budget includes $3.8 billion for the Community 
        Development Block Grant (CDBG) program to help communities 
        ``modernize infrastructure, invest in economic development, 
        create parks and other public amenities, and provide social 
        services.'' The CDBG program is notorious for funneling Federal 
        tax dollars to ``a variety of activities that cater to high 
        income preferences rather than low-income needs,'' partly 
        because the term community development is so broad and 
        ambiguous. Much like earmarks, the program has funded projects 
        that are difficult to defend as helping low-income households. 
        The projects range, for example, from expanding a brewing 
        company in North Tonawanda, New York ($500,000), restoring an 
        historic hotel in Boyne City, Michigan ($1 million), and 
        providing salaries ($15,000) to teach children to sail and 
        kayak in Lawrence, Massachusetts. \27\
---------------------------------------------------------------------------
     \27\ Vanessa Brown Calder, ``Community Development Block Grant 
Spending Is Poorly Targeted to Poor'', Cato at Liberty, March 8, 2019, 
https://www.cato.org/blog/community-development-block-grant-spending-
poorly-targeted-poor; and, Vanessa Brown Calder, ``Community 
Development Block Grant Spending Is Poorly Targeted, Part II'', Cato at 
Liberty, March 19, 2019, https://www.cato.org/blog/community-
development-block-grant-funding-poorly-targeted.
---------------------------------------------------------------------------
Federal Reserve Bond Buying Program Puts Upward Pressure on Housing 
        Prices
    Although the Federal Reserve deserves credit for not overreacting 
to rising inflation as the recovery from the pandemic-related 
Government shutdowns began, it has continued at least one long-term 
policy shift that has likely added to upward pressure on housing costs. 
As part of its response to the 2008 financial crisis, the Fed started 
purchasing large quantities of GSE (and Ginnie-Mae) mortgage-backed 
securities (MBS). Prior to the 2008 crisis, the Fed held virtually zero 
MBS. Between 2010 and 2022, however, the Fed has never reported holding 
less than $827 billion in MBS.
    The Fed has slowed its purchases and allowed MBS to runoff its 
balance sheet at various times since the 2008 crisis, but it went from 
holding $1.4 trillion in MBS in March 2020 to $2.7 trillion in March 
2022. \28\ Between March 2020 and January 2022 (the latest date 
available), national home prices increased (steadily) more than 30 
percent and the CPI increased 9.2 percent. \29\ As of this writing, the 
Fed planned to purchase another $21.5 billion in agency MBS between 
March 28, 2022, and April 13, 2022. \30\ The Fed should have ceased 
these MBS purchases and normalized its operations long before the 
pandemic, but it failed to do so. Currently, there is no monetary 
policy justification for continuing these purchases or continuing to 
support, in any way, the MBS market.
---------------------------------------------------------------------------
     \28\ Board of Governors of the Federal Reserve System (U.S.), 
``Assets: Securities Held Outright: Mortgage-Backed Securities: 
Wednesday Level [WSHOMCB]'', retrieved from FRED, Federal Reserve Bank 
of St. Louis; https://fred.stlouisfed.org/series/WSHOMCB, March 30, 
2022.
     \29\ S&P Dow Jones Indices LLC, ``S&P/Case-Shiller U.S. National 
Home Price Index [CSUSHPINSA]'', retrieved from FRED, Federal Reserve 
Bank of St. Louis; https://fred.stlouisfed.org/series/CSUSHPINSA, March 
29, 2022; and, U.S. Bureau of Labor Statistics, ``Consumer Price Index 
for All Urban Consumers: All Items in U.S. City Average [CPIAUCSL]'', 
retrieved from FRED, Federal Reserve Bank of St. Louis; https://
fred.stlouisfed.org/series/CPIAUCSL, March 30, 2022.
     \30\ Federal Reserve Bank of New York, ``Tentative Outright Agency 
Mortgage-Backed Securities Operation Schedule'', March 28, 2022, 
https://www.newyorkfed.org/medialibrary/media/markets/ambs/AMBS-
Schedule-032822.pdf.
---------------------------------------------------------------------------
Conclusion
    Between March 2020 and March 2022, Congress has increased the 
Federal deficit with more than $7.5 trillion through its spending 
bills. These wasteful spending policies have harmed Americans both 
young and old by hampering economic growth and worsening inflation. 
They have also compounded other existing harmful policies, such as the 
Federal Reserve's support of the secondary mortgage market, massive 
Federal intervention in housing markets, and State and local supply 
constraints. Rather than focus on underlying economic and social 
problems, and removing regulatory barriers that restrict housing 
supply, Congress has consistently increased demand by making it easier 
to obtain home mortgages. The typical American has little to show for 
decades of these failed housing policies other than excessive debt, 
high housing costs, volatile home prices, overregulation, distorted 
markets, and a trail of Federal bailouts.
    There appears to be no momentum in Congress to reverse these 
trends. In fact, the new Biden administration policies will implement 
the same types of failed housing policies of the past. Collectively, 
these policies will further expand Government intervention in housing 
markets at a great cost to millions of Americans. They will put even 
more upward pressure on prices and rental rates, waste taxpayers' 
money, and ultimately make housing less affordable.
    Thank you for the opportunity to provide this information, and I 
welcome any questions that you may have.
                                 ______
                                 
                  PREPARED STATEMENT OF SHANNON GUZMAN
   MCP, Senior Strategic Policy Advisor, AARP Public Policy Institute
                             March 31, 2022
    Good morning, Chairman Brown, Ranking Member Toomey, and Members of 
the Senate Banking Committee. My name is Shannon Guzman, Senior 
Strategic Policy Advisor in the AARP Public Policy Institute. AARP 
welcomes this opportunity to address the urgent housing needs of our 
Nation's older adults and to discuss solutions to address them. The 
current state of housing is precarious for too many older adults and 
their families, threatening their quality of life. As the older adult 
population grows in the years ahead, concrete steps are needed at all 
levels and throughout society to prepare to meet the housing needs of 
older adults. Though daunting, there are an array of solutions that can 
benefit individuals as well as communities. We also welcome the 
opportunity to share with you AARP's work to enhance housing for all, 
and to support communities in their endeavors to become more ``age-
friendly'' for people of all ages and abilities.
    AARP has a strong interest in ensuring that housing meets the needs 
of all Americans as they age. This means housing that is safe, 
affordable to all income levels, appropriate, and situated within an 
``age-friendly'' community. Housing should be fully accessible for 
persons of all abilities, and should provide an appropriate amount of 
space for a given household to be comfortable. Older Americans also 
need access to a housing system that promotes equity in policies and 
practices; that does not discriminate based on race, ethnicity, or 
income; and that provides a choice of housing types.
    That is why AARP--the Nation's largest nonprofit advocating for the 
needs of older adults--has invested in our Livable Communities 
Initiative. For more than a decade, AARP has been focused on enhancing 
the ability of practitioners, Government officials, community 
volunteers, and others to take action to create communities that 
consider the needs of an aging population and provide more choices in 
housing that better serve the diverse needs of America's older adults. 
We developed the groundbreaking AARP Livability Index which scores 
every neighborhood and community in the United States for the services 
and amenities that affect people's lives the most. AARP's State offices 
advocate for State and local policy change to advance more diverse, 
accessible, affordable, and safe housing options--as well as 
communitywide investments in transportation, parks, and health that 
best support the ability to age in place. Through our Community 
Challenge grant program, we have directly invested in over 800 grants--
across every State in the country, totaling more than $9 million over 5 
years--in quick-action demonstration projects that illustrate the 
benefits of a more age-friendly approach to housing, public spaces, 
transportation and more. And with an array of tools and programs, such 
as the AARP Network of Age-Friendly States and Communities, we work to 
empower residents and leaders with information to make better choices 
for their communities in ways that benefit all.
Demographic Trends
    The number of older adults will surge in the decades ahead and 
these individuals will represent an increasingly large share of our 
Nation's population. In fact, the number of people age 65 and over are 
expected to exceed the number of children under 18 for the first time 
in U.S. history in 2034. In just 20 years, there will be over 80 
million people over 65--more than twice as many as in 2000. And the 85 
and older population is projected to more than double from 6.6 million 
in 2019 to 14.4 million in 2040. \1\
---------------------------------------------------------------------------
     \1\ Administration for Community Living, ``2020 Profile of Older 
Americans''. May, 2021 https://acl.gov/sites/default/files/
Profile%20of%20OA/2020ProfileOlderAmericans-RevisedFinal.pdf.
---------------------------------------------------------------------------
    At the same time, the older population is becoming more racially 
and ethnically diverse. In the next 20 years, racial and ethnic non-
White populations will increase 115 percent. \2\ Further, the White 
(non-Hispanic) population age 65 and older is projected to increase by 
29 percent, the Hispanic population by 161 percent, Black American 
(non-Hispanic) by 80 percent, American Indian and Alaska Native (non-
Hispanic) by 67 percent, and Asian American (non-Hispanic) by 102 
percent.
---------------------------------------------------------------------------
     \2\ Administration for Community Living, 2021.
---------------------------------------------------------------------------
    Older households will drive the growth of new households in the 
next 20 years. Of the 16.1 million net new households that are expected 
to form between 2020 and 2040, 13.8 million--greater than 85 percent--
will be headed by someone age 65 and over. \3\
---------------------------------------------------------------------------
     \3\ Urban Institute, ``The Future of Headship and Home 
Ownership''. Revised January 22, 2021, p. 2. https://www.urban.org/
sites/default/files/publication/103501/the-future-of-headship-and-
homeownership-0.pdf
---------------------------------------------------------------------------
Current Housing and Demographic Conditions
    This future growth in the number, share, and composition of older 
adult-headed households must be considered alongside the 
characteristics of today's older adults. While certain segments of the 
older population do enjoy the fruits of lifelong savings, rising home 
equity, and secure retirement plans, this is not true for all. The 
median income for an older adult in 2019 was just $27,398. In 2019, 
nearly one in ten people age 65 and older--4.9 million people--lived 
below the poverty level. Household composition matters, too. Five 
percent of older persons who lived with families were poor, in contrast 
with 16 percent of older persons living alone. \4\
---------------------------------------------------------------------------
     \4\ Administration for Community Living, 2021.
---------------------------------------------------------------------------
    The risk of developing disabilities also increases with age. 
Thirty-six percent of households headed by a person age 65 and over and 
20 percent of households headed by a person age 50-64 include a member 
with a mobility disability. \5\ In 2019, HHS reported that nearly one 
in five adults age 65 and older say they cannot function, or have a lot 
of difficulty with at least one of six functioning domains, such as 
hearing, seeing, cognition, or self-care. The greatest challenge cited 
was with mobility--walking or climbing stairs--where 40 percent of 
adults over 65 indicated such difficulty.
---------------------------------------------------------------------------
     \5\ Harvard Joint Center for Housing Studies, ``America's Rental 
Housing 2022'', p. 22. https://www.jchs.harvard.edu/sites/default/
files/reports/files/Harvard-JCHS-Americas-Rental-Housing-2022.pdf
---------------------------------------------------------------------------
    Older adults are not a homogenous group. The circumstances and 
needs of those in their 50s and 60s can differ greatly from those in 
their older years. People are working longer: roughly 10 million people 
(about 20 percent) over age 65 are still in the workforce, although 
that number declined slightly during the pandemic. And health 
conditions often become more challenging as people age, with 30 percent 
of people over 75 self-reporting their health as ``fair or poor'' 
compared to just 22 percent of those 10 years younger. \6\ For those in 
their advanced years--70s, 80s, and 90s--their ability to reside in 
their homes and remain stably housed becomes ever-more dependent upon 
the availability of accessible housing and affordable, secure services 
to provide assistance with the activities of daily living, medical 
care, and socialization.
---------------------------------------------------------------------------
     \6\ Administration for Community Living, 2021.
---------------------------------------------------------------------------
    It is essential that care options be made available in the least-
restrictive and most affordable setting. In most cases, allowing 
someone to live longer in the home of their choice with the addition of 
in-home care on an as-needed basis is a far better option than an 
institutional setting, such as a nursing home. The pandemic made this 
even more true. More than 200,000 nursing home and other long-term care 
facility residents and staff have died due to COVID-19, despite the 
fact that nursing home residents make up less than 1 percent of the 
U.S. population. \7\ The vast majority of older adults want to live 
independently in their homes and communities. It is not only what 
people want, but it is also generally more cost effective. On average, 
Medicaid can serve about three people in their homes and communities 
for the cost of one person in a nursing home. The median cost 
nationally for a person paying out-of-pocket for a private room in a 
nursing home is $108,408. \8\ Providing individuals with support is 
critical to enabling them to live at home. Support includes home care 
aides to assist with activities such as eating, bathing, and dressing; 
home modifications to enable them to live safely at home; adult day 
services for care and socialization, as well as to give family 
caregivers a temporary break; assistance with rides to appointments and 
shopping; assistance with paying bills and coordinating care; and more. 
The ability to access needed support is essential in order to delay and 
prevent more costly institutional care for people currently living at 
home, as well as to help residents leave nursing homes who could live 
at home with support.
---------------------------------------------------------------------------
     \7\ Kaiser Family Foundation, ``Over 200,000 Residents and Staff 
in Long-Term Care Facilities Have Died From COVID-19'', Accessed March 
23, 2022. https://www.kff.org/policy-watch/over-200000-residents-and-
staff-in-longterm-care-facilities-have-died-from-covid-19/
     \8\ Genworth, ``Cost of Care Survey'', accessed March 28, 2022. 
https://www.genworth.com/aging-andyou/finances/cost-of-care.html
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    After a lifetime of hard work and contributing to our society, 
America's older adults deserve to live with independence, security, and 
dignity. AARP is fighting for older adults to have high-quality, 
affordable options when it comes to long-term care--especially care at 
home. It is important for Congress to greatly expand investments in and 
access to home care, as well as address Medicaid's institutional bias, 
though we know this is beyond this Committee's jurisdiction. Now more 
than ever, we need to prioritize making home care options more 
affordable--and available--so nursing homes are not the only 
alternative.
    In addition, over 48 million family caregivers providing care to 
loved ones are the backbone of the care system in this country. They 
help make it possible for older adults, people with disabilities, and 
veterans to live independently in their homes and communities. Family 
caregivers take on physical, emotional, and financial challenges due to 
their caregiving responsibilities. They provide over $470 billion 
annually in unpaid care to their loved ones. \9\ If families were not 
shouldering these caregiving responsibilities, taxpayers would be on 
the hook for much more costly nursing home care and unnecessary 
hospital stays. Caregivers also pay for caregiving expenses out-of-
pocket to support their loved ones that average $7,242 or 26 percent of 
their income annually. \10\
---------------------------------------------------------------------------
     \9\ AARP Public Policy Institute, ``Valuing the Invaluable 2019 
Update: Charting a Path Forward'', https://www.aarp.org/ppi/info-2015/
valuing-the-invaluable-2015-update.html.
     \10\ AARP Research, ``Caregiving Can Be Costly--Even Financially: 
2021 Caregiving Out-of-Pocket Costs Study'', https://www.aarp.org/
research/topics/care/info-2016/family-caregivers-cost-survey.html.
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    Support for family caregivers--such as assessments of their needs 
and the provision of support based on that assessment, information, 
assistance in locating services, counseling, training, respite to give 
them a temporary break from their caregiving responsibilities, 
financial relief such as a caregiver tax credit (Credit for Caring Act, 
S. 1670), and other support--are important to help sustain caregivers 
in their caregiving role and ensure their health and well-being. This 
caregiver support is also important to help the people they are 
assisting remain in their homes.
Impacts of the National Affordable Housing Crisis
    Each of the challenges above exists against the backdrop of a 
national housing crisis. Fortune Magazine last month projected that the 
20 percent increase in housing prices across the U.S. in 2021 would not 
decelerate, as some had previously expected. Rather, they cite 
projections that the housing market would further heat up in 2022, with 
predictions that the 12-month rate of home price increases would exceed 
21 percent. \11\ Similar trends are evident in the rental market--where 
a full-time minimum-wage worker cannot afford a one-bedroom rental 
apartment in 93 percent of counties across the U.S. \12\
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     \11\ Fortune, ``The Spring 2022 Housing Market Will Absolutely 
Crush Buyers'', February 12, 2022. https://fortune.com/2022/02/17/
spring-2022-housing-market-will-crush-buyers-zillow-home-prices-spike-
22-percent/
     \12\ National Low-Income Housing Coalition, ``Out of Reach'', 
2021. https://reports.nlihc.org/oor
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    At its most extreme end, the effects of this economic pressure are 
manifesting in increased rates of evictions and homelessness among 
older Americans that are evident in all States, to varying degrees. For 
example, in Ohio in 2020, 6,866 people age 55 and older experienced 
homelessness, and in Pennsylvania, 7,129 people over 55 experienced 
homelessness--compared to an average across States of 4,236. Older 
adults also represented a larger share of those evicted in 2020, 
compared to an average across States: in 2020, 2.38 percent of people 
evicted in Ohio were over age 55 and 2.46 percent of people evicted in 
Pennsylvania were over 55--compared to a State average of 2.09 percent. 
\13\
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     \13\ Statista/AARP analysis of data provided by United States 
Census Bureau (USCB).
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Impacts on Homeowners
    While the housing market surge may benefit many existing 
homeowners, it is expected to nevertheless place home ownership even 
further out of reach for many. The home ownership rate will continue to 
fall for every age group, with the decline being particularly 
pronounced for Black households headed by 45- to 74-year-olds, leading 
to projections that the number of elderly Black renters will more than 
double from 1.3 million in 2020 to 2.6 million in 2040. \14\ Many 
factors contribute to this racial disparity including discriminatory 
housing and lending practices, as well as the impact of the Great 
Recession which impacted non-White borrowers disproportionately--
resulting from widespread unemployment and financial hardship, leading 
to nearly 10 million homeowners losing their homes to foreclosure and 
subsequent home price depreciation--and from which many have yet to 
recover. \15\
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     \14\ Urban Institute, ``The Future of Headship and Home 
Ownership''. Revised January 22, 2021. https://www.urban.org/sites/
default/files/publication/103501/the-future-of-headship-and-
homeownership-0.pdf
     \15\ Urban Institute, ``How Economic Crises and Sudden Disasters 
Increase Racial Disparities in Home Ownership''. https://www.urban.org/
sites/default/files/publication/102320/how-economic-crises-and-sudden-
disasters-increaseracial-disparities-in-homeownership.pdf
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    Older homeowners are not immune from the effects of recent economic 
conditions and the resulting stress placed on family budgets. Rising 
home values lead to higher property taxes. Increasing frequency of 
natural disasters has led to increases in the cost of homeowner's 
insurance. And inflation is driving prices higher for most necessities, 
like food, prescription drugs, and utilities. These price increases 
affect older people more deeply since they are more likely to be 
retired and live on a fixed income. \16\ Older homeowners are also 
carrying more debt than in the past, with sharp increases in the 
percentage of families carrying debt and increases in the amount of 
that debt. The share of homeowners age 65 and over with housing debt 
rose from 21 to 42 percent between 1989 and 2019, while the median 
outstanding balance rose from $18,000 to $86,000 (both in 2019 dollars) 
over the same period. Owners age 80 and over exhibited the same pattern 
with 27 percent carrying mortgage debt in 2019, compared with three 
percent in 1989. \17\ Mortgage debt is the largest debt carried by 
older families and many families are facing difficulty making their 
mortgage payments as a result of the pandemic.
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     \16\ Washington Post, ``Fewer Hot Showers, Less Meat: How Retirees 
on Fixed Incomes Are Dealing With Inflation''. March 21, 2022. https://
www.washingtonpost.com/business/2022/03/21/elderly-inflation-fixed-
income/
     \17\ Jennifer Molinsky, Harvard Joint Center for Housing Studies, 
``Ten Insights About Older Households From the 2020 State of the 
Nation's Housing Report''. Dec. 17, 2020. https://www.jchs.harvard.edu/
blog/ten-insights-about-older-households-2020-state-nations-housing-
report
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    While a smaller share of older homeowners face cost burdens (paying 
more than 30 percent of their income on housing) compared to renters, 
25 percent of these homeowners are nevertheless cost-burdened--and 
represent a larger number of older adult households than of renters 
(6.3 million homeowners versus 3.6 million renters). \18\
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     \18\ Harvard Joint Center, ``Housing America's Older Adults, 
2019''.
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    The Homeowner Assistance Fund--created as part of the American 
Rescue Plan in 2020, and representing nearly $10 billion in Federal 
support to States, localities, and tribes--provides funding to help 
prevent mortgage delinquencies and defaults, foreclosures, loss of 
utilities, and displacement of homeowners who are experiencing 
financial hardship. Care must be taken to ensure that assistance is 
available to older homeowners who need assistance. During the Great 
Recession, the foreclosure rate on forward mortgage loans for borrowers 
age 75 and older increased from 0.3 percent in 2007 to a peak of 3.2 
percent in 2011. \19\ Beginning in 2012, the foreclosure rate for 
borrowers age 75 and older was higher than all other younger age groups 
(<50, 50-64, 65-74), and remained higher through 2017, the latest date 
for which data by age are available. \20\ It is expected that mortgage 
delinquencies and foreclosures will increase as borrowers exit the 
pandemic forbearance period, and that not all borrowers will qualify 
for loss mitigation.
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     \19\ L.A. Trawinski, ``Nightmare on Main Street: Older Americans 
and the Mortgage Market Crisis'', AARP Public Policy Institute, 2012.
     \20\ L.A. Trawinski, ``Mortgage Foreclosures and Older Americans: 
A Decade After the Great Recession'', In: Remaking Retirement: Debt in 
an Aging Economy. Edited by Olivia S. Mitchell and Annamaria Lusardi, 
Oxford University Press, 2020.
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    Older homeowners with FHA-insured reverse mortgages, i.e., Home 
Equity Conversion Mortgages (HECMs), are also at risk of foreclosure. 
While HECM borrowers do not make mortgage payments, they are required 
to pay property taxes and homeowner's insurance and keep up with home 
maintenance. HECM borrowers were eligible for forbearance during the 
pandemic, but had to request forbearance from their loan servicer. 
Foreclosures were put on hold until September 30, 2021, and are 
starting to increase. HUD provided some limited loss mitigation 
guidance for HECM borrowers who were delinquent on property taxes or 
homeowner's insurance, but servicers were not required to offer loss 
mitigation.
Impacts on Renters
    During the COVID-19 pandemic, both homeowners and renters faced 
severe challenges in maintaining their housing while absorbing 
unprecedented job loss and other stresses unique to this pandemic. Even 
prepandemic, in 2019, a record number of older households, 10.2 
million, were cost burdened (paying more than a third of their income 
on housing) and half of these were severely cost-burdened (paying more 
than half of their income on housing). \21\ Narrowing the scope to 
renters, the number of older adult renter households (age 62 or older) 
in the U.S. experiencing worst case housing needs \22\ has steadily 
increased to 2.2 million older renters in 2019--an increase of 16 
percent from 2017 to 2019. \23\
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     \21\ Jennifer Molinsky, Harvard Joint Center, blog, ``Ten Insights 
About Older Households From the 2020 State of the Nation's Housing 
Report''. Dec. 17, 2020.
     \22\ Worst-case housing needs means that a renter household with 
income below 50 percent of area median either is paying more than half 
of their income for rent, living in severely inadequate housing, or 
both.
     \23\ ``HUD Worst Case Housing Needs Report'', 2021 Report to 
Congress. https://www.huduser.gov/portal/sites/default/files/pdf/Worst-
Case-Housing-Needs-2021.pdf
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    Rental housing will continue to be a critical part of the housing 
solution for all older adults, but remains unaffordable for many. 
Fifty-five percent of renters age 65 and over paid more than 30 percent 
of income for housing in 2019. And the growth in renters 65 and older 
is projected to steadily increase over the next two decades from 7.4 
million in 2020 to 12.9 million by 2040. \24\
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     \24\ Harvard Joint Center for Housing Studies, ``America's Rental 
Housing 2022''. https://www.jchs.harvard.edu/sites/default/files/
reports/files/Harvard-JCHS-Americas-Rental-Housing-2022.pdf
---------------------------------------------------------------------------
    Given the expected growth in rental households, it is critically 
important to ensure that there is an adequate supply of rental units 
available to meet the need--not only in terms of the number of units, 
but also for accessible features in the home, as well as for 
transportation and mobility options outside the home. Transportation 
choices determine one's ability to travel to work, medical care, 
shopping and socializing. Informed by the needs of renters, it is 
essential to increase the supply of a full array of housing choices.
Communitywide Factors
    Action to improve the stability, affordability and safety of 
housing cannot be limited only to housing. Truly ``age-friendly'' 
housing is dependent on communitywide factors, such as access to high-
quality community-based health care, fresh food, and parks and public 
spaces. Perhaps most important on a daily basis is access to a range of 
transportation options. Fully 18 percent of older adults 65 and older 
do not drive, and 35 percent of women over 75 don't drive at all. \25\
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     \25\ AARP Public Policy Institute Analysis of 2017 National 
Household Travel Survey.
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    For those who do not drive, the ability to access secure and 
affordable transportation options--including public transit, 
paratransit, and safe streets for walking, biking and rolling--can be 
the determining factor in whether they can continue to live in their 
home of choice. Those without transportation options may simply be 
unable to reach their desired destinations on any given day, increasing 
their risk of social isolation, including contributing to delays in or 
the inability to access medical care. In 2017, almost 6 million people 
delayed medical care because of transportation, leading to higher 
medical costs. \26\ Still other risks emerge for those on foot or using 
a wheelchair outside their home, with people age 65 and older 
accounting for 21 percent of all pedestrian fatalities in 2019, while 
only 16 percent of the total population--and the pedestrian fatality 
rate of older persons is among the highest of any age group. \27\
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     \26\ Mary K. Wolfe, Noreen C. McDonald, and G. Mark Holmes, 
``Transportation Barriers to Health Care in the United States: Findings 
From the National Health Interview Survey, 1997-2017,'' American 
Journal of Public Health 110, no. 6 (June 2020): 815-822.
     \27\ National Center for Statistics and Analysis. (2021, May). 
``Pedestrians: 2019 Data'' (Traffic Safety Facts. Report No. DOT HS 813 
079). National Highway Traffic Safety Administration https://
crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/813079.
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Housing and Community Preferences of Older Adults
    Older adults have consistently expressed their desire to age in 
place--and yet, as the data above suggests, there are myriad challenges 
to doing just that. AARP's 2021 Home and Community Preferences Survey 
once again affirms that more than three-quarters of people age 50 and 
older want to age in their existing home and/or community. The number 
of older adults wanting to remain in their homes as they age has 
remained relatively consistent for more than a decade and was not 
impacted by the pandemic. However, our homes and communities are 
generally ill-prepared to make this possible.
    Most people live in housing without designs or features that allow 
someone to easily navigate if they lose mobility functions, therefore 
requiring that residents retroactively modify or equip their homes to 
suit changing needs. Over one-third (34 percent) of all adults 
responding to AARP's survey say they need to make modifications to 
their current residence so that they or a loved one could continue 
living there in the event they needed physical assistance. This is 
particularly important for the one in five Americans who is a 
caregiver.
    Further, many adults reported that they are open to alternative 
housing options (such as home sharing, in which a homeowner rents extra 
space to a tenant on a short- or long-term basis) that would better 
enable them to age independently. Approximately 60 percent of adults 
indicated their willingness to consider options like accessory dwelling 
units (ADUs) or ``in-law suites'' to be able to live near someone but 
maintain their own space, save money, or get help with daily 
activities. For homeowners currently without an ADU, roughly one-third 
cite the approval and permitting processes as a barrier to constructing 
one, and 28 percent indicate that current zoning laws prohibit them 
from building this type of dwelling.
    Older adults recognize that their ability to age in place is also 
dependent upon conditions in the neighborhood. Nearly three-quarters of 
persons age 50 and above say it is important to have safe, well-lit 
parks that give residents places to gather and interact with friends 
and neighbors. A majority of adults think it is important to have 
access to clean, safe water (82 percent); quality health care (73 
percent); and safe trails and paths to walk, run, or bike (62 percent). 
Other desirable community features include well-maintained streets, 
easy to read traffic signs, and safe and accessible streets. \28\
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     \28\ AARP, ``2021 Home and Community Preferences Survey''. https:/
/livablecommunities.aarpinternational.org/
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    To address the concerns stated above, AARP advocates for diverse 
solutions and urges the following approaches:
Investing in Housing Affordability and Stability
    Housing affordability has steadily worsened in recent years for 
older renters and homeowners. The gap between rising housing costs and 
incomes threatens housing stability for broad segments of the older 
population, putting them at serious risk of displacement, eviction, or 
foreclosure.
    Underpinning this disruption is the instability created by 
discriminatory practices in lending, appraisals, and the buying and 
rental processes that have resulted in lower home ownership rates among 
Black Americans, as well as fewer prospects for them to obtain rental 
housing in higher choice neighborhoods. Stunted opportunities to own 
property and businesses have led to lower accumulation of family wealth 
over time resulting in stark racial disparities in home ownership. 
While the home ownership rate for older White households remained in 
the 80-85 percent range for the first two decades of the millennium, 
the rate for older Black households peaked at 71.3 percent in 2003 and 
then dropped to 58.9 percent in 2019--doubling the home ownership gap 
to nearly 25 percentage points. \29\ Increasing access to home 
ownership is essential, as home ownership is the most significant way 
that families build wealth. Moreover, fixed-rate mortgages lock in 
payments over a period of decades and can help preserve an affordable 
payment structure.
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     \29\ Harvard Joint Center for Housing, ``The State of the Nation's 
Housing 2020''. https://www.jchs.harvard.edu/sites/default/files/
reports/files/Harvard-JCHS-The-State-of-the-Nations-Housing-2020-
Report-Revised-120720.pdf
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    Housing stability among older adults further deteriorated during 
and as a result of the pandemic. While the economy was improving in 
August 2021, the Consumer Financial Protection Bureau reported that 
older renters and homeowners were having trouble meeting rent and 
mortgage obligations. \30\ At that time, approximately 583,400 older 
renters were still behind on their payments. Another 144,000 were 
current on their rent but were not confident that they would make the 
following month's payment on time. The share of older adults behind on 
their payments was higher among non-White renters than White renters, 
and among older renters with incomes below $25,000 than those with 
incomes above $25,000.
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     \30\ CFPB, ``Data Spotlight: Older Renters Struggling To Make 
Their Rent Payments During the Pandemic'', August 2021, and; ``Data 
Spotlight: Older Homeowners Struggling To Make Their Mortgage Payments 
During the Pandemic'', August 2021. https://files.consumerfinance.gov/
f/documents/cfpb-older-renters-struggling-rent-payments-during-
pandemic-data-highlight-2021-08.pdf; https://files.consumerfinance.gov/
f/documents/cfpb-older-homeowners-mortgage-payments-during-pandemic-
datahighlight-2021-08.pdf
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    Likewise, older homeowners struggled to make their mortgage 
payments. About 682,400 older homeowners were behind on their mortgage 
payments, and an additional 236,000 were current on their mortgage but 
had no confidence they would be able to make their next month's 
payment. As was the case with renters, the share of older adults behind 
on their mortgage payments is higher for non-White homeowners and for 
older homeowners with income below $25,000 than for their counterparts.
    In light of the above challenges, it is not surprising that 
evictions and homelessness are affecting older adult households to a 
growing degree. Housing instability is a very real threat to the well-
being of older adults, and likely to rise. According to an analysis of 
Census data by Statista for AARP, 181,430 people age 55 and older were 
evicted in 2020, and by 2027, that that number is projected to rise to 
309,065. Relatedly, 216,018 people 55 and older experienced 
homelessness in 2020 and that number is projected to grow to 280,209 by 
2027. This is not a new trend. The share of homeless individuals age 50 
and over jumped from 22.9 percent to 33.8 percent between 2007-2017, 
according to HUD's 2017 Annual Homeless Assessment Report. During the 
same period, the number of people age 62 and over living in emergency 
shelters or transitional housing rose by about 69 percent, to nearly 
76,000. \31\ Further, persons age 55 and older who use homeless 
services increased from a 16 percent share of all service recipients in 
2016 to 22 percent in 2020, based on data HUD provided to AARP.
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     \31\ HUD, ``The Annual Homeless Assessment Report (AHAR) to 
Congress'', October 2018. https://www.huduser.gov/portal/sites/default/
files/pdf/2017-AHAR-Part-2.pdf
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    Greater Federal assistance can help alleviate the compelling need 
for affordable and stable housing among low-income older individuals, 
in which only 38.7 percent of very low-income renters age 62 and over 
received Federal rental assistance as of 2017. \32\
---------------------------------------------------------------------------
     \32\ Jennifer Molinsky, Harvard Joint Center for Housing Studies, 
``Ten Insights About Older Households From the 2020 State of the 
Nation's Housing Report''. Dec. 17, 2020.
---------------------------------------------------------------------------
    Therefore, we urge Congress to strengthen the following programs 
and laws to help address this crisis:

  1.  Section 202 Supportive Housing for the Elderly--The Section 202 
        Supportive Housing for the Elderly program represents a 
        critically important housing solution for very low-income older 
        adults. The 202 program is the only federally funded, new 
        construction housing program specifically designed to address 
        the physical frailties of elderly residents and that aims to 
        help people age well in their community. Service coordinators, 
        now present in about half of Section 202 properties, assess 
        residents' needs, and connect them to a broad array of 
        services, such as housekeeping, health, and transportation that 
        allow them to live more fully, with independence and dignity. 
        These services are particularly critical to the nearly 40 
        percent of 202 program residents who are frail or near-frail. 
        The average age of Section 202 residents is 79 years old. The 
        location of housing is also vitally important to older 
        residents. New Section 202 properties should be developed in 
        walkable sites with proximity to strong public transportation 
        services and other transportation options for nondrivers, and a 
        range of community services and amenities so that older adults 
        can stay connected to friends, family, and businesses in their 
        community. The Affordable Housing Access program in legislation 
        last year would enable these vital connections. Regrettably, 
        the demand for Section 202 housing far exceeds the Nation's 
        current supply of 400,000 units. Waiting lists several years 
        long are not uncommon--and may understate the need due to the 
        practice in some States to simply cut off waiting lists when 
        they get too long. This demand was exacerbated by several years 
        in the last decade in which funding for new construction was 
        zeroed out. Substantial funding is needed to address the acute 
        growing needs of older adults for the program. Despite the 
        return to funding new homes in 2018, funding is 18 percent 
        lower in real terms than in 2010. Legislation last year would 
        have provided $2.4 billion for Section 202 making possible 
        about 37,500 homes as well as new service coordinators. Recent 
        funding increases of $1.03 billion are a good start to 
        preserving existing properties, building new units, and 
        providing onsite service coordinators to integrate health and 
        social supports for residents.

  2.  Public Housing and Housing Choice Vouchers (Section 8)--
        Investments in public housing, such as those in last year's 
        legislation, are long overdue. Public housing is an essential 
        source of affordable housing, and funding is needed for repair 
        and rehabilitation of seriously neglected public housing 
        properties. Over 350,000 residents of public housing are age 62 
        and above. Section 8 Housing Choice Vouchers are also critical 
        for many low-income renters to address the recent steep rise in 
        rents across the country. Only one in five eligible households 
        receives rental assistance due to the chronic disinvestment in 
        the Housing Choice Voucher program. In 2018, these vouchers and 
        other Federal rental assistance lifted an estimated 665,000 
        older adults over the poverty line, more than any other program 
        except Social Security. \33\
---------------------------------------------------------------------------
     \33\ Center on Budget and Policy Priorities, ``Policy Basics: The 
Housing Choice Voucher Program''. Updated April 12, 2021. Accessed 
March 29, 2022. https://www.cbpp.org/research/housing/the-housing-
choice-voucher-program

  3.  Reverse (Home Equity Conversion) Mortgages--HUD should require 
        HECM servicers to offer loss mitigation to borrowers, as well 
        as develop more generous mitigation options. Given the sharp 
        increases in home values, more generous options could be made 
        available with little risk to the mutual mortgage insurance 
        fund. People who lose their home to foreclosure at an older age 
        have less time to recover from the financial shock, not to 
        mention the emotional and health toll that loss of a home 
---------------------------------------------------------------------------
        involves.

  4.  National Housing Trust Fund (HTF)--The HTF is the most highly 
        targeted Federal rental housing capital and home ownership 
        program. It is the only Federal housing program exclusively 
        focused on providing States with resources targeted to serve 
        households with the most acute housing needs, including those 
        of older Americans. The HTF supports construction, 
        rehabilitation, preservation and operation of rental housing 
        for extremely low-income households at or below 30 percent of 
        area median income or the Federal poverty level. Legislation 
        last year would have provided $15 billion to build and preserve 
        over 150,000 affordable, accessible homes for households with 
        the lowest incomes.
Promoting Fair Housing
    Discriminatory practices, such as historic redlining and racially 
biased home lending, appraisals, and buying processes have also 
contributed to housing instability. Violations of fair housing and fair 
lending laws are underreported and thus are too often allowed to stand.
    The Fair Housing Act must be more rigorously enforced to protect 
the public from discrimination on the basis of race, national origin, 
color, religion, sex, familial status, and disability. Congress should 
increase funding for both the Fair Housing Initiatives Program (FHIP) 
and the Fair Housing Assistance Program (FHAP). FHIP provides grants to 
nonprofit fair housing organizations to perform education and outreach 
to the public and housing providers and to conduct investigations of 
alleged discrimination in local housing markets. Through the FHAP 
program HUD reimburses State and local certified FHAP agencies based on 
the number of successful cases they process. In addition, the 
Affirmatively Furthering Fair Housing rule should be restored to its 
earlier strength.
Increasing Housing Supply Through Incentives That Deliver a Choice of 
        Housing Type
    Many older homeowners are empty nesters, living one or two in a 
dwelling that used to house a family unit with children. They often 
desire to stay in their homes and communities, downsizing into a 
smaller unit, and/or adapting their home to better accommodate family 
or caregivers in a separate unit. Older adults would also like their 
children to be able to afford homes near them. Neighborhoods with a mix 
of housing types--including traditional models such as duplexes and 
fourplexes, as well as attached or detached ADUs--in addition to single 
family homes can increase the supply of housing and help older 
homeowners right-size to a smaller home in their existing community. 
Unfortunately, however, families and individuals frequently learn that 
State and/or local zoning codes prevent these housing solutions from 
being constructed.
    Incentives by the Federal Government are needed to spur local and 
State zoning reform to unlock these housing solutions. Incentives 
should be provided to local and State governments to conduct planning 
to advance reforms that would facilitate construction of these 
``missing middle housing'' types, such in the Unlocking Possibilities 
program in legislation last year. When paired with related investments 
in construction, this could significantly contribute to a more 
affordable and diverse housing supply.
    Accessory dwelling units, or ADUs, are particularly suited to the 
needs of homeowners as they age. They allow a separate unit inside or 
outside the home which can be used to keep family nearby, to house a 
caregiver, or to supplement fixed incomes. AARP State offices across 
the country now advocate for adoption of more flexible land use 
policies to allow homeowners to construct ADUs if they choose to. In 
addition, AARP is educating our members and local leaders about the 
benefits of ADUs and how they fit into an age-friendly future.
    Manufactured housing can also serve a critical role in serving the 
housing needs of older Americans who might otherwise find it difficult 
to secure affordable housing. Manufactured housing, which is often of 
higher quality than in years past, provides a major source of 
unsubsidized housing for low- and moderate-income households. In 2018, 
the average age of residents living in manufactured housing was 54 
years. Manufactured homes are approximately 50 percent less expensive 
to build than traditional site-built homes. However, many zoning codes 
prohibit the creation of new manufactured home communities, and rising 
property values in hot housing markets further threaten the stability 
of existing communities when the landowner--often owned by a separate 
entity than the residents--seeks to redevelop the property, dislocating 
residents who are challenged to affordably relocate their home. 
Stronger State and local policies are needed to protect residents of 
manufactured housing, including rent stabilization programs and 
programs to assist residents to purchase their community. \34\
---------------------------------------------------------------------------
     \34\ ESI Econsult Solutions, Inc. ``The State of Manufactured 
Housing in the U.S. January 2022'' [Internal report to AARP].
---------------------------------------------------------------------------
Expanding Access to Accessible and Safe Housing
    The functional capability of a home often hinges on how accessible 
it is, particularly as residents face mobility challenges. Housing 
accessibility is critically important as the older population continues 
to grow, and most older Americans say they would like to remain in 
their homes as they age. New construction should more frequently 
include visitability and/or accessibility features as part of a broader 
effort to create housing products that work for Americans of all ages 
and abilities. Equally important is enhancing the ability of people to 
modify their homes as needs change, with flexible choices that make it 
possible for people to continue to live in their homes. Accessibility 
can be enhanced by both larger structural improvements and by 
relatively inexpensive modifications to the living space. Such 
modifications can help people remain independent in their home for as 
long as possible. Modifications also remove barriers that might keep 
older adults from being isolated and remove fall risks that cause 
serious injuries and severe medical costs. Among the top modifications 
cited by AARP survey respondents that they would make to their current 
residence to allow a loved one to continue to live in the home are 
bathroom modifications, such as grab bars and walk-in showers; greater 
accessibility to the home from outside and within; and emergency 
response systems.
    In recent years, AARP has developed new publications and fostered 
strategic relationships to help people modify their homes to meet their 
changing needs. Our HomeFit guide \35\--available in five languages--
features over 140 ways to modify one's home, whether a renter or an 
owner, to ensure that it is a better fit for all abilities and ages. 
AARP's expertise in aging and home modification served as the basis for 
a new collaboration with Lowe's to create their ``Livable Home'' 
initiative launched last year, which includes online resources to help 
consumers identify solutions that can be used to modify their homes. 
AARP offers online content through our publications and website on the 
topic of home modifications, and is working with Lowe's to create 
educational online content on their site focused on age-friendly 
design, as well as assist in the training of Lowe's associates 
accompanied by signage in stores nationwide. \36\
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     \35\ HomeFit Guide available at https://www.aarp.org/livable-
communities/housing/info-2020/homefit-guide.html.
     \36\ Lowe's Press Release, https://corporate.lowes.com/newsroom/
press-releases/lowes-announces-commitmentbecome-retail-leader-one-stop-
aging-place-solutions-11-17-21.
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    The coming growth in the older adult population heralds the need 
for policymakers to act now to ensure an adequate supply of accessible 
housing, and to promote home modification and repair programs that 
enable older adults to remain safely in their homes. With regards to 
accessibility, housing produced with Federal assistance should meet 
accessibility requirements, including at least one accessible entrance 
into the home, clear passage space through doorways and hallways, a 
main-level bedroom and bathroom, and electrical and climate controls 
that are reachable from a wheelchair. Also, Federal standards should be 
established to help consumers (and builders) more clearly identify 
accessibility features in homes. Finally, incentives for homeowners and 
renters to modify their homes to adapt to changing needs--as well as to 
respond to increasing risks posed by extreme weather--can ensure that 
housing remains a safe, viable, and accessible solution as physical and 
cognitive needs change.
    Home repair and modification programs, such as HUD's Older Adults 
Home Modification grants program and the U.S. Department of 
Agriculture's Section 504 Very Low-Income Home Repair loans and grants 
program (for rural areas) provide life-enhancing safety and other 
benefits. Funding for these valuable programs should be increased.
    In closing, thank you for the opportunity to testify before you 
today. Older adults want to stay in their homes and communities as they 
age. However, they are facing tremendous challenges as housing prices 
and rents soar beyond their reach, as they struggle to find accessible 
housing designed to fit their needs, and as they search for the 
supportive services that will enable them to live with dignity and 
independence in their own homes and stay connected to their 
communities. We urge you to act now to prepare for the growing needs of 
older adults in the years ahead.
         RESPONSES TO WRITTEN QUESTIONS OF SENATOR REED
                     FROM JENNIFER MOLINSKY

Q.1. How do Federal programs, such as Section 202 Supportive 
Housing for the Elderly Program, Low Income Housing Tax 
Credits, HOME Investment Partnership Program, National Housing 
Trust Fund, Section 8 Project Based Rental Assistance, and 
public housing, provide critical housing resources for our most 
vulnerable seniors?

A.1. Federal housing supports play a critical role in ensuring 
low-income older adults have access to stable housing they can 
afford. In 2021, just over 1.7 million very low-income renter 
households headed by someone age 62 and over received housing 
assistance from HUD housing programs including public housing, 
Section 8 Project Based Rental Assistance, Housing Choice 
Vouchers, and Section 202 (Table 1). Many of the households 
receiving support have extremely low incomes (earning under 30 
percent of area median income), and these programs ensure rents 
are maintained at affordable levels so that residents can 
purchase food and cover out-of-pocket medical costs.
    Low Income Housing Tax Credits, HOME, and Housing Trust 
Fund provide vital resources for increasing the supply of 
housing low-income older adults can afford and for 
rehabilitating affordable housing. The HOME and CDBG programs 
have helped to provide much needed funding for modifying 
affordable housing for accessibility.
    Services embedded in project-based housing also provide 
critical support for older adults. An estimated 5,000 HUD-
supported buildings have service coordinators on staff who help 
older residents connect with needed services and benefits and 
support their overall wellbeing. During the pandemic, service 
coordinators and building operators played critical roles in 
addressing safety, isolation and mental health concerns, and 
delivery of food and medication, and helping residents access 
and use technology (Scheckler and Molinsky, 2020).
    While these programs provide critical support, there are 
still wide gaps in need, including 2.24 million older renter 
households with very low incomes who do not receive housing 
assistance and who pay more than half their income on rent, 
live in severely inadequate housing, or both as of 2019 (U.S. 
Department of Housing and Urban Development, 2021).

Q.2. What role do housing subsidies play in preventing older 
adult homelessness and in ameliorating the effects of 
longstanding racial discrimination on minority adults?

A.2. The legacy of discrimination in housing markets and 
policies, as well as discrimination in employment, has meant 
that people of color are more likely to be renters and to have 
low incomes. The home ownership rate for non-Hispanic White 
households headed by someone age 65 or older was 83 percent, 
while the share of homeowners among was 64 percent among older 
Black households, 61 percent among older Hispanic households, 
and 69 percent among older Asian households. \1\ The 2019 
Profile of Older Americans reports that nearly 19 percent of 
Black, 20 percent of Hispanic, and 12 percent of Asian older 
persons lived in poverty, compared to just over 7 percent of 
non-Hispanic White older adults in 2018 (Administration for 
Community Living, 2019).
---------------------------------------------------------------------------
     \1\ Source: Joint Center for Housing Studies tabulations of 2021 
U.S. Census Bureau CPS/ASEC data (adjusted for nonresponse).
---------------------------------------------------------------------------
    As a result of these disparities, people of color are more 
likely to be eligible for and receive housing assistance. In 
2021, of renter households receiving HUD assistance headed by 
someone age 62 or over, nearly 30 percent were Black, 18 
percent are Hispanic, and 9 percent of another or multiple 
races (Table 1). The shares of households headed by a person of 
color receiving assistance are slightly higher than their 
representation among very low-income households (Table 2), as 
well as among all renter households, (Table 3).
    Housing supports are critical to providing stable, 
affordable housing to older adults, including people of color 
whose opportunities to access such housing have been restricted 
by discrimination in past housing policy and in housing 
markets. Housing supports can also help address the growing 
challenge of homelessness among older adults, also 
disproportionately experienced by people of color, by keeping 
rents affordable and also providing stable housing after a 
period of homelessness. Indeed, one study found that nearly one 
in five older adults had experienced homelessness at some point 
prior to moving to public housing (Larkin, et al., 2017) 
(Larkin, et al., 2017).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        RESPONSES TO WRITTEN QUESTIONS OF SENATOR OSSOFF
                     FROM JENNIFER MOLINSKY

Q.1. What is the largest driver of senior homelessness, and how 
is it contributing to the increase in senior homelessness?

A.1. High housing costs relative to income play a significant 
role in older adult homelessness. Those who experience 
homelessness for the first time after age 50 often lack the 
resources needed to rebound after an adverse event such as 
illness, job loss, divorce, or death of a spouse or parent 
(Brown, et al., 2016; Burns and Sussman, 2019; Grenier, et al., 
2016; Kushel, 2020). Of this group, Dr. Margot Kushel writes, 
``With little savings, facing difficulty finding work as an 
older adult, and having little ability to compete in an 
unforgiving housing market, they faced homelessness for the 
first time'' (Kushel, 2020, p. 3). Research suggests that up to 
half of older people experiencing homelessness do so for the 
first time after age 50 (Brown, et al., 2016; Kushel, 2020). 
Meanwhile, older adults who have experienced chronic 
homelessness in adulthood have often experienced significant 
adverse events in earlier life that have disrupted education 
and employment, leaving them without the resources to maintain 
stable housing (Brown, et al., 2016; Grenier, et al., 2016; 
Kushel, 2020).
    Younger baby boomers (those born 1955-1964) are at higher 
risk for homelessness, having faced more economic hardships at 
critical points in their lives than older boomers, including 
greater competition in housing and labor markets (Culhane, et 
al., 2019). This group also suffered housing and wealth 
setbacks during the Great Recession (Joint Center for Housing 
Studies, 2019). As this group ages, a higher share of people 
experiencing homelessness are expected to be older.
    High housing costs relative to income contribute to housing 
instability among older adults by putting them at risk of being 
unable to make housing payments and by reducing their ability 
to create a savings cushion. More than 10 million older 
households pay over 30 percent of their income for housing, 
with 5 million paying more than half their income, and an 
income shock can have devastating effects on capacity to pay 
for housing. High housing costs also inhibit saving for 
retirement. Indeed, analysis by the Joint Center for Housing 
Studies has found that among households headed by someone age 
65 or up with the lowest monthly expenditures (a proxy for low 
income), those who are affordably housed save almost three 
times as much for retirement as those who pay more than half 
their income on housing (Joint Center for Housing Studies, 
2019). In 2019, older renters had an overall median savings of 
just $5,800 (Joint Center for Housing Studies analysis of 
Surveys of Consumer Finances).
    Increases in rents are also destabilizing; in many areas 
rent increases are outstripping annual cost of living 
adjustments for those living on Social Security (Joint Center 
for Housing Studies, 2019). However, an insufficient supply of 
housing affordable can make it difficult for those with low 
incomes to find housing that meets their budgets, and also to 
secure housing once they have experienced housing instability 
or homelessness.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR OSSOFF
                     FROM NORBERT J. MICHEL

Q.1. What are the principal drivers of the housing shortage in 
the United States?

A.1. I respectfully suggest that, in general, there is no 
housing shortage in the U.S. Instead, there are many locations 
where demand has outstripped supply, placing undue upward 
pressure on prices. It is incorrect to simply blame this 
situation on a lack of supply, all else held constant. Instead, 
the problem is that there is insufficient supply relative to 
demand. That demand, in turn, is artificially boosted by many 
Federal policies, including FHA loans and the operations of the 
GSEs.
                                ------                                


         RESPONSES TO WRITTEN QUESTIONS OF SENATOR REED
                      FROM SHANNON GUZMAN

Q.1. As you say in your testimony, accessory dwelling units 
have great potential to meet the housing needs of seniors, but 
constructing them requires navigating complex roadblocks around 
approvals, permitting, and zoning. How can addressing 
exclusionary zoning policies make the housing market better for 
elderly community members?

A.1. Where we live matters. Housing and neighborhoods have a 
tremendous impact on our quality of life including access to 
homes and apartments that can accommodate a variety of family 
needs and household budgets, have jobs and services nearby, 
help keep people safe and promote healthy lifestyles.
    Zoning is a regulatory tool that governs how communities 
can grow and develop in the built environment. Zoning regulates 
where communities build and what structures can be built in the 
areas planned for development. These laws can keep people from 
living in unsafe housing conditions and away from industrial 
uses, and they can exclude certain housing from being built. 
\1\ In some communities, the policies designed to limit housing 
had the effect of excluding low-income households and 
communities of color by prohibiting certain housing types [such 
as accessory dwelling units (ADUs), duplexes, and garden style 
apartments], mandating specific design features, and limiting 
occupancy. \2\ These regulations restricted access to high-
opportunity neighborhoods often dominated by single-family 
homes. These discriminatory policies forced people into 
neighborhoods with high concentrations of poverty and fewer 
resources, services, and amenities. \3\ The result of decades 
of exclusionary zoning are gaps in household and 
intergenerational wealth, health outcomes, life expectancy and 
in economic development, among others, in underserved 
communities. \4\
---------------------------------------------------------------------------
     \1\ American Planning Association.
     \2\ American Planning Association.
     \3\ American Planning Association.
     \4\ Perry, 2018.
---------------------------------------------------------------------------
    Removing exclusionary zoning policies and other regulatory 
barriers would allow for greater access to housing and a wider 
variety of choices that can benefit older adults of all 
backgrounds, particularly those who were denied access to the 
housing of their and their family's choice when they were 
younger.
    AARP supports ADUs as one solution to addressing housing 
challenges that embodies many of the characteristics of housing 
that our organization promotes: options, affordability, and 
accessibility. ADUs are less expensive to build than single-
family homes, they can provide extra space for a family 
caregiver or care recipient, they can generate income through 
rentals, which is helpful for those with fixed incomes, they 
can be a low cost housing alternative in a community where 
housing costs are high and they can be designed to include 
features that make them accessible for people at all mobility 
levels.
    The prevalence and reach of ADUs have been restricted by 
local laws and regulations. This has often resulted in ADUs 
being prohibited in residential areas, or in requirements for 
parking and/or owner occupancy of the units. However, given the 
urgency for more affordable housing, some localities and States 
are removing these regulatory barriers, creating more 
opportunities to develop ADUs.
    AARP has created several resources on ADUs, in particular, 
the publication ADU Model State Act and Local Ordinance, \5\ to 
help local officials tailor their own legislation on ADUs. 
Additionally, AARP is providing technical assistance to many 
communities across the country through our State offices to 
raise awareness about ADUs and share best practices on adopting 
regulations that support them.
---------------------------------------------------------------------------
     \5\ AARP, 2021.

Q.2. Across the board, we need more innovation in home building 
to lower the cost of building and more rapidly increase 
affordable supply where it is needed. How can supporting 
modular construction, manufactured housing, and other 
innovative building techniques help us meet the needs of a 
---------------------------------------------------------------------------
growing older population?

A.2. In the years since the Great Recession, home prices 
rebounded and have been rising steadily for nearly a decade, 
and at an even faster rate over the last few years. Several 
factors contribute to this trend: a mismatch between housing 
demand and a sufficient housing supply, land constraints 
related to availability and regulations dictating how and where 
houses are built, \6\ and more recently a sharp increase in 
building materials. \7\ Rising home prices, along with incomes 
that are not rising at the same levels and a lack of housing 
options, are contributing to the country's housing 
affordability crisis. The lack of affordable housing options 
can leave many people, including older adults on fixed incomes, 
in precarious situations. Many are forced to choose between 
paying for housing or meeting other essential needs and 
services like food or health care. This can push many to the 
brink of homelessness due to an inability to pay their mortgage 
or rent. Modular and manufactured homes are less expensive to 
build than traditional stick-built homes. Consequently, modular 
homes, manufactured homes and innovations in housing design and 
construction can reduce development costs to create more 
affordable options for community members. There is growing 
interest in factory-built housing, however many of the Nation's 
homebuilders have not largely adopted this technology and have 
continued to use traditional building methods. \8\ With the 
increase in development costs for land and materials and 
challenges faced in the permitting process, there may be an 
opportunity to incentivize builders to accept modular design 
and manufacturing models. Sixty percent of manufactured home 
residents are age 50 and older. \9\ The median household income 
of manufactured housing residents is $30,100. \10\ The housing 
costs for these individuals are much lower than what they would 
incur in single-family homes. The manufactured housing model 
can be an important option for people with limited financial 
resources. However, local regulations often prohibit the 
development of manufactured housing communities in residential 
zones, thereby often limiting their development to places that 
lack close proximity to services and amenities that community 
members need. Moreover, manufactured homeowners can be subject 
to sharp rent increases from the community landlords since they 
do not own the land where their homes are sited. Establishing 
laws that help facilitate the purchase of the land to create 
resident owned communities (ROCs) can help eliminate the risk 
of housing instability for these homeowners.
---------------------------------------------------------------------------
     \6\ Joint Center for Housing Studies of Harvard University, 2021.
     \7\ National Association of Home Builders, 2022.
     \8\ Colton, 2019.
     \9\ Manufactured Housing Institute, 2019.
     \10\ Manufactured Housing Institute, 2019.
---------------------------------------------------------------------------

Works Cited

AARP. (2021). ``All About Accessory Dwelling Units''. Retrieved 
    from AARP: www.aarp.org/adu

American Planning Association. (n.d.). ``American Planning 
    History Since 1900''. Retrieved from Planning History 
    Timeline: https://planning.org/timeline/.

Colton, K.A. (2019). ``A Home Builder Perspective on Housing 
    Affordability and Construction Innovation''. Retrieved from 
    Harvard Joint Center for Housing Studies: https://
    www.jchs.harvard.edu/ . . . /home-builder-perspective-on-
    housing-affordability-colton-2019.pdf.

Joint Center for Housing Studies of Harvard University. (2021). 
    ``The State of the Nation's Housing 2021''. Retrieved from 
    Harvard Joint Center for Housing Studies: https://
    www.jchs.harvard.edu/sites/default/files/reports/files/
    Harvard-JCHS-State-Nations-Housing-2021.pdf.

Manufactured Housing Institute. (2019, February). ``MHI 2018 
    Consumer Research Key Findings''. Retrieved from 
    Manufactured Housing Institute: https://
    www.manufacturedhousing.org/wp-content/uploads/2019/03/MHI-
    2018-Consumer-Research-Key-Findings.pdf.

National Association of Home Builders. (2022, January 10). 
    ``Challenges We Faced in 2021: Building Materials''. 
    Retrieved from National Association of Home Builders: 
    https://www.nahb.org/advocacy/top-priorities/material-
    costs/challenges-we-faced-in-2021-building-materials.

Perry, A.M. (2018, November). ``The Devaluation of Assets in 
    Black Neighborhoods''. Retrieved from The Brookings 
    Institution: https://www.brookings.edu/research/
    devaluation-of-assets-in-black-neighborhoods/.
              Additional Material Supplied for the Record
 
 STATEMENT SUBMITTED BY MICHELLE MISSLER, PRESIDENT AND CEO, AMERICAN 
                  ASSOCIATION OF SERVICE COORDINATORS

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


STATEMENT SUBMITTED BY STEVE BECK, PRESIDENT AND CEO, AHEPA AFFORDABLE 
                       HOUSING MANAGEMENT COMPANY

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


  STATEMENT SUBMITTED BY LINDA COUCH, VICE PRESIDENT, HOUSING POLICY, 
                               LEADINGAGE

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]