    [Senate Hearing 118-555]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-555

                CHALLENGES IN PRESERVING THE U.S. HOUSING STOCK

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

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
               HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

                                     of the

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

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

         EXAMINING THE CHALLENGES IN PRESERVING THE U.S. HOUSING STOCK

                                   __________

                                 APRIL 16, 2024

                                   __________

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

                     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                    Available at: https: //www.govinfo.gov /

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    58-503 PDF                WASHINGTON : 2025

                COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                           SHERROD BROWN, Ohio, Chair

    JACK REED, Rhode Island              TIM SCOTT, South Carolina
    ROBERT MENENDEZ, New Jersey          MIKE CRAPO, Idaho
    JON TESTER, Montana                  MIKE ROUNDS, South Dakota
    MARK R. WARNER, Virginia             THOM TILLIS, North Carolina
    ELIZABETH WARREN, Massachusetts      JOHN KENNEDY, Louisiana
    CHRIS VAN HOLLEN, Maryland           BILL HAGERTY, Tennessee
    CATHERINE CORTEZ MASTO, Nevada       CYNTHIA M. LUMMIS, Wyoming
    TINA SMITH, Minnesota                J.D. VANCE, Ohio
    RAPHAEL G. WARNOCK, Georgia          KATIE BOYD BRITT, Alabama
    JOHN FETTERMAN, Pennsylvania         KEVIN CRAMER, North Dakota
    LAPHONZA R. BUTLER, California       STEVE DAINES, Montana

                         Laura Swanson, Staff Director

                  Catherine Fuchs, Republican Policy Director

                          Cameron Ricker, Chief Clerk

                          Shelvin Simmons, IT Director

                           Pat Lally, Assistant Clerk

                                     ______

       Subcommittee on Housing, Transportation, and Community Development

                          TINA SMITH, Minnesota, Chair

                   CYNTHIA M. LUMMIS, Wyoming, Ranking Member

    JACK REED, Rhode Island              MIKE CRAPO, Idaho
    ROBERT MENENDEZ, New Jersey          MIKE ROUNDS, South Dakota
    JON TESTER, Montana                  JOHN KENNEDY, Louisiana
    CATHERINE CORTEZ MASTO, Nevada       BILL HAGERTY, Tennessee
    KYRSTEN SINEMA, Arizona              J.D. VANCE, Ohio
    RAPHAEL G. WARNOCK, Georgia          KATIE BOYD BRITT, Alabama
    JOHN FETTERMAN, Pennsylvania

                    Tim Everett, Subcommittee Staff Director

            Kelsey Pristach, Republican Subcommittee Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------

                            TUESDAY, APRIL 16, 2024

                                                                       Page
    Opening statement of Chair Smith.................................     1

    Opening statements, comments, or prepared statements of:

        Senator Lummis...............................................     2

                                   WITNESSES

    Jesse Ergott, President and CEO, NeighborWorks Northeastern
      Pennsylvania...................................................     5
        Prepared statement...........................................    23
        Responses to written questions of:
            Senator Crapo............................................    70
    Robin Davey Wolff, Senior Director for Rural Communities at
      Enterprise Community Partners..................................     7
        Prepared statement...........................................    55
        Responses to written questions of:
            Senator Crapo............................................    71
    Christopher Volzke, Deputy Executive Director, Wyoming Community
      Development Authority..........................................     8
        Prepared statement...........................................    63
        Responses to written questions of:
            Senator Crapo............................................    71

                  Additional Material Supplied for the Record

    Statement submitted by Guy Cecala, National Board of Directors
      Chair, Rebuilding Together.....................................    73
    Letter submitted by HAC..........................................    74
    Statement submitted by NLHA/IRHP.................................    83

                                     (iii)

                CHALLENGES IN PRESERVING THE U.S. HOUSING STOCK

                                  ----------

                            TUESDAY, APRIL 16, 2024

                                   U.S. Senate,
      Committee on Banking, Housing, and Urban Affairs,
        Subcommittee on Housing, Transportation, and Community
                                                   Development,
                                                        Washington, DC.
        The Subcommittee met at 10 a.m., in room SD-538, Dirksen
    Senate Office Building, Hon. Tina Smith, Chair of the
    Subcommittee, presiding.

                 OPENING STATEMENT OF CHAIR TINA SMITH

        Chair Smith. Well, good morning, and the Subcommittee on
    Housing, Transportation, and Community Development will come to
    order.
        So without a safe, decent, affordable place to live, we
    know that nothing else in your life works. Not your job, not
    your education, not your health, not your family, not anything.
        So if your roof is leaking, or the apartment that you've
    lived in for years has a big rent increase, or you're having
    trouble getting around your home as you age, all of these
    challenges are going to stick with you in every single part of
    your life.
        And we know that nearly half of the homes in this country
    are more than 40 years old. And of those homes and the
    Americans living in them, as they continue to age, it's
    important for us to understand that it will take--what it will
    take to keep our homes habitable, affordable, and accessible,
    both for current residents and for the future.
        Around the country, around 400,000 apartments that the
    Government helped build years ago in small towns and rural
    places are on the verge of becoming unaffordable without action
    by Congress.
        Our bipartisan Rural Housing Service bill would address
    that. And I'm so grateful for Senator Lummis for her
    cosponsorship of that legislation. That would help to preserve
    about 9,000 of these affordable units just in Minnesota, where
    the average tenant income is only about $17,000 a year.
        So today in this hearing, I am looking forward to hearing
    about the ways that Pennsylvania has worked to keep up older
    homes that are in need of repairs. And I believe that the
    people who know best how to do this are going to be those that
    are closest to the work. So I know that all of you on this
    panel will have some really good lessons to share with us.
        In addition, I'm interested in hearing about how some home
    modifications have helped seniors to live in their homes as
    they age in place. After all, if the installation of a ramp or
    a lift or an accessible shower can help keep a senior stay
    independent, then that allows them to lead the life that they
    choose, and helps also to save taxpayer dollars when compared
    to the cost of nursing home care, just as one example.
        So I'm hoping that we can learn a lot today on this
    hearing. I'm grateful for all of you being here, and I
    particularly appreciate Senator Lummis's partnership on this
    hearing. Senator Lummis, you are recognized for your opening
    statement.

             OPENING STATEMENT OF SENATOR CYNTHIA M. LUMMIS

        Senator Lummis. Thank you, Madam Chairman. We've been
    talking a lot in this Committee about the need for new homes.
    But today we're really going to focus on the challenges of
    ensuring the housing stock we do have remains safe and in use.
        To catch up and meet the needs in Wyoming, we'll need to
    build somewhere between 20 and 38,000 housing units this
    decade. And in Wyoming, that's a lot, because we're the
    smallest population in the Nation, as you know, and it goes up
    every time an existing house falls into disrepair and becomes
    uninhabitable.
        Home preservation is particularly a problem in rural areas,
    where houses tend to be older and more likely to need major
    repairs are abandoned. You know, I moved back into the house I
    grew up in and on the ranch, and the foundation and the
    basement are made of cinder block.
        And so getting that those French drains set up, and all of
    the exterior work that needed to be done to protect the
    basement from water leakage, was extremely expensive for me.
    And you know, I've got nothing to show for it because it's all
    the kind of expense that is hidden from public view.
        Our rural homeowners work hard to achieve the American
    dream, and they're more likely to own their own homes outright.
    But inflation has made things much more expensive lately, and
    home repairs and construction costs have risen, just have gone
    up dramatically.
        So when a major repair is needed, rural homeowners are
    often unable to obtain the mortgage or home equity line of
    credit that could fund these projects. Banks and appraisers can
    be in short supply in rural areas. Heaven knows, I know that
    firsthand. It's hard to bring an electrician or roofer to your
    home to make repairs. They're hard to find.
        When these properties are abandoned by their owners, that's
    often the end. There's no economic incentive to rehabilitate
    the homes, and they often aren't replaced either. Right now,
    I'm trying to repair the little bunk house on our ranch. We
    think it was the first home to proof up a homestead in Wyoming.
    It has hand-hewn logs on the inside.
        We've moved it twice. It is--now it's covered with
    concrete, and it's in desperate need of repair. And I'm just
    starting to repair it. There's no way the cost of repairing
    would justify the cost of doing it, because it's so tiny. This
    is a labor of love. This is not a labor of good economic sense,
    and that's true on a lot of rural farms and ranches.
        So when the properties are abandoned by those owners,
    that's often the end. They're not usually replaced.
        So despite the housing shortage, building new homes in a
    rural area, especially at a price that's affordable to a
    working family, is just not feasible. Rates are high, and to
    cover costs means that developers either add more square
    footage or sell for higher cost per square foot.
        When it comes to affordable housing, Congress needs to
    consider the burden of regulation and what we could be doing
    better. And that's true of local governments as well. Local
    governments place a tremendous burden on affordable housing
    with regulations.
        We know that the high cost of regulations have limited the
    construction of new homes, but I'd also like to hear today
    about how we're limiting access of repairs, and why existing
    programs haven't helped as many families as they could.
        So here's an example. Building codes change over time as
    building materials and construction techniques evolve. We don't
    require a home that renovates their kitchen to install
    sprinklers or widened doorways in other parts of the house, but
    that can be a requirement when HOME Investment Partnership
    Program funds are used. Burdens like this limit the number of
    families that can be helped by these programs.
        So I'd like to talk today about what changes we need to
    make, so the money the Federal Government spends on houses goes
    to support the broadest number of families, and is spent
    efficiently and responsibly. I appreciate the work of Senator
    Smith and Rounds on the Rural Housing Service Reform Act, and
    I've partnered with Senator Fetterman on the Whole Homes Repair
    Act. And I think both of these are small efforts that really
    will help.
        But it took decades for our housing challenges to evolve,
    and fixing them is going to take very different approaches, and
    different approaches in different parts of the country. So I
    want to thank our witnesses for being here today, and I look
    forward to hearing your solutions to preserve the housing stock
    we already have, as we work to fix the affordable housing
    shortage.
        And Madam Chairman, I yield back.
        Chair Smith. Thank you so much, Senator Lummis.
        So for witnesses, we're going to now go to witness
    introductions, and I will turn to Senator Fetterman to
    introduce Jesse Ergott. And then I will introduce Ms. Wolff,
    and then Senator Lummis will introduce our last witness.
        Senator Fetterman.
        Senator Fetterman. All right. And thank you to the
    Chairwoman from Minnesota and my colleague from Wyoming.
        Today, the witness is Jesse Ergott, and he is the president
    and CEO of NeighborWorks Northeastern Pennsylvania. This
    organization is dedicated to creating stable, vibrant
    communities by providing critical housing assistance, financial
    guidance, and commuting development services.
        A committed advocate, Mr. Ergott has been active on
    multiple local, State, and national boards, and cofounding
    NeighborWorks Association of Pennsylvania, and on the National
    NeighborWorks Association board.
        During Mr. Ergott's 16-year tenure in NEPA, he has helped
    launch their Aging in Place program, numerous blight reduction
    efforts, and their administration of the Whole Homes Repairs
    Program, is in Lackawanna and Waynes Counties in my home State.
        NeighborWorks NEPA's focus is working with communities to
    ensure access to quality homes, which has a positive effect on
    neighborhood, community, and region. I'm proud to have him here
    today, and I look forward to hearing his testimony.
        And I also want again the opportunity to shout out my
    colleague to Wyoming to co-supporting this. And I really wanted
    to talk about what we're really here today. You know, we really
    have a crisis here in Pennsylvania, and we need a very kind of
    crisis-level kinds of response.
        And I really want to discuss that the genesis of this, the
    whole home bill came from my home State, Pennsylvania, and that
    was actually championed by my former colleague in the
    Pennsylvania Senate. His name's Senator Saval, outside of
    Philadelphia. And on the political side, it's safe to say that
    Senator Saval is fairly, fairly left. Is that accurate, Mr.
    Ergott?
        [Laughter.]
        Senator Fetterman. Yeah. And yet, generously, yeah. But
    yet, even some of the most conservative members of the
    Pennsylvania Senate all understood and realized the value in
    this, and they signed on that. And truthfully, that was
    actually remarkable, particularly as Senator Saval was a first-
    term senator as well.
        And I guess that really illuminates just how this is a red-
    county, this is a blue-county kind of an issue, and we have a
    housing crisis regardless of where you are, and this is a very
    smart way in order to target and allow people to maintain in
    their homes and remain in dignity as well.
        So I am grateful to be here to have that conversation, and
    I turn that over to Mr. Ergott.
        Question?
        Chair Smith. Senator Fetterman, we're going to complete the
    witness introductions, and then we'll go to our testimony.
    Thank you very much.
        Next, I'd like to introduce Ms. Robin Davey Wolff, who is
    the senior director for rural communities at Enterprise
    Community Partners, where she leads their housing and economic
    development strategies, including the provision of direct
    technical assistance to nonprofit organizations, Government
    agencies, and Tribal communities across the Nation.
        Prior to joining Enterprise, Ms. Wolff served as the deputy
    director of Community Resources and Housing Development
    Corporation, a nonprofit housing developer and service provider
    with an extensive rural portfolio.
        She also has worked on the creation of the Colorado Housing
    Finance Authority Developers Guide and the Native Housing
    Developers Guide.
        Ms. Wolff resides in Denver and holds a B.S. in corporate
    corporate communication from the University of Texas, Austin,
    and an M.A. in global finance, trade, and economic interchange
    from the University of Denver's Joseph Korbel School of
    International Studies.
        And I'll turn now to Senator Lummis for the final
    introduction.
        Senator Lummis. Thank you, Chairwoman Smith.
        I'm pleased to introduce Christopher Volzke, deputy
    executive director of the Wyoming Community Development
    Authority. He currently acts as the chief operating officer for
    the Authority, with a focus on internal operations, program
    development, and strategic planning for Wyoming housing policy.
        He's a fantastic representative of Wyoming with a deep
    family history in farming and ranching, so he's the right
    person to be here from Wyoming today.
        I'm so pleased you can join us, Chris, and I look forward
    to hearing your remarks.
        Madam Chairman, I yield back.
        Chair Smith. Thank you so much.
        We will now turn to our witnesses for their opening
    statements. You each--ask each of you to keep your testimony to
    about 5 minutes. There's a clock in front of you to remind you
    of how much time you have left.
        And we'll start with Mr. Ergott. Thank you very much.

      STATEMENT OF JESSE ERGOTT, PRESIDENT AND CEO, NEIGHBORWORKS
                       NORTHEASTERN PENNSYLVANIA

        Mr. Ergott. Well, thank you, Chairwoman Smith, Ranking
    Member Lummis, Senator Fetterman, and Members of the
    Subcommittee for the opportunity to testify this morning on the
    challenges our Nation faces with preserving our housing stock.
    My name is Jesse Ergott, and I have the privilege of serving as
    the president and CEO of NeighborWorks Northeastern
    Pennsylvania, headquartered in the city of Scranton.
        NeighborWorks Northeastern Pennsylvania was founded over 40
    years ago, specifically to assist modest-income families who
    were finding it difficult to obtain financing for home repairs
    and improvements.
        Now, over four decades later, we serve our neighbors across
    the region in multiple ways, including home ownership
    assistance, foreclosure prevention services, comprehensive
    community development initiatives, aging-in-place programming,
    and critical home repairs. We've repaired or approved over
    1,600 homes to date and have also helped to facilitate numerous
    community improvement projects addressing blight and neglect in
    our neighborhoods.
        All this work has been deeply rooted in our core
    organizational belief that home is where it all starts. We
    believe that having a safe, dignified, and stable place to live
    leads to better health, more financial opportunity, better
    educational outcomes, and other real benefits for individuals,
    families, and our community. We've been supported in this work
    as a longstanding chartered organization in the National
    NeighborWorks Network and as a proud member of the National
    NeighborWorks Association.
        The current housing challenges facing our Nation touch all
    types of communities, urban, suburban, and rural areas alike,
    and span all income levels. The lack of available housing to
    meet an individual's specific needs can have a ripple effect
    that negatively impacts regional economies, hampers
    revitalization efforts by local government, and can ultimately
    lead to economic stagnation and the deterioration of our
    neighborhoods.
        While there are many different concurrent strategies needed
    to address these challenges, one key element must be the
    modernization and preservation of as much of our housing as
    possible. Implementing coordinated and scaled efforts to
    preserve our existing housing stock is becoming more important
    than ever. Deteriorating housing stock can be a root cause of
    other types of community instability and housing insecurity.
        My testimony speaks to creative efforts taking place in the
    Commonwealth of Pennsylvania, including the Pennsylvania Whole
    Home Repairs Program, to invest in the preservation of our
    existing housing stock, while also addressing the individual
    needs of our neighbors. With one of the oldest housing stocks
    in the country, combined with an aging population that also
    marks us as one of the most elderly States, Pennsylvania can be
    a fertile testing ground for creative policies and solutions
    that will benefit the rest of the Nation.
        As homes age and deteriorate, preservation of housing in
    many communities becomes even more significant due to the
    nature of the housing itself. Although aging, many homes are
    irreplaceable, meaning if the units were lost, they either
    could not or would not be replaced because of a lack of
    economic incentive to build new single-family units in those
    communities. Likewise, when there's extensive deferred
    maintenance, there can be little to no economic incentive for
    investors to purchase these homes in many markets.
        Pennsylvania's Whole Home Repairs Program has been a
    critical new tool in our State and region to address this
    challenge. While other State and Federal resources have been
    available for decades to address housing preservation, we have
    found many to be very challenging to use on the front lines.
    These programs tend to be broad in their potential uses, but
    burdensome in implementation and difficult to leverage with
    other resources.
        By contrast, the Whole Home Repairs Program is specific in
    its intended use and very flexible in its practical
    implementation. We currently manage approximately $1.2 million
    in whole-home repair funding for two counties in our footprint,
    which has helped us to leverage and stretch another $3.5
    million in Federal, State, and private investment into our
    aging-in-place program and home repair work.
        This ability to leverage, layer, and unlock other funds has
    been critical. For example, our partners at a local Community
    Action Agency have used the funds to great effect to address a
    large deferral list for their weatherization program. And at
    NeighborWorks, we can layer whole-home repairs funding with
    other Federal resources, including HUD's Older Adult Home
    Modification Program and funding from the Administration for
    Community Living.
        The flexibility of this program also extends to the way it
    is administered, which can be tailored at the municipal and
    county levels to meet the most pressing needs of local
    communities and residents.
        Advancing programs like the Whole Home Repairs Act will be
    an important next step in providing scaled investment and
    preserving our Nation's housing stock.
        Thank you again for the opportunity to testify today on
    this important topic. I look forward to answering any questions
    the Subcommittee may have. Thank you.
        Chair Smith. Thank you.
        Thank you so much, Mr. Ergott.
        We'll now turn to Robin Davey Wolff. Thank you.

       STATEMENT OF ROBIN DAVEY WOLFF, SENIOR DIRECTOR FOR RURAL
                  COMMUNITIES AT ENTERPRISE COMMUNITY
                                PARTNERS

        Ms. Wolff. Chair Smith, Ranking Member Lummis, and Members
    of this Subcommittee, thank you so much for the opportunity to
    speak with you today. My name is Robin Davey Wolff, and I'm the
    senior director of rural communities at Enterprise Community
    Partners, where I work to lift up and support the needs of
    rural housing developers, providers, and residents across the
    country.
        Before joining Enterprise, I worked as an affordable-
    housing developer, serving rural communities across the State
    of Colorado with programs for renters and homeowners. It was
    through this work I first became familiar with unique
    challenges of preserving and developing affordable housing in
    rural communities, places where we often struggle to meet
    economies of scale, and where resources developed are more
    scarce.
        Communities across the country are losing affordable
    housing supply faster than new homes can be developed. Targeted
    resources, programs, and policies are critical to maintain the
    existing affordability of multifamily properties, because once
    affordable units are lost, they are difficult and cost-
    prohibitive to replace.
        At Enterprise, my team and I focus a great deal on the
    preservation of USDA Section 515 housing stock, supporting
    affordable housing providers across the country as they work to
    preserve homes at great risk of losing affordability.
        This program, which houses approximately 400,000 low-income
    rural renters, is projected to lose up to 137,000 units over
    the next 10 years. Much of this housing was developed 50 years
    ago, is in danger of losing its rental assistance, and needs
    significant repair.
        Each week, my team and I receive new inquiries from
    nonprofits, and housing authorities, and local leaders who want
    to preserve the 515 properties in their communities, but who
    are struggling to understand the best way to recapitalize the
    housing, and to fund the needed repairs and improvements.
        I want to thank the Subcommittee and the full Banking
    Committee for the work that has been done to address housing
    preservation, including the Whole Home Repairs Act introduced
    by Senators Fetterman and Lummis, which is being discussed
    today.
        I also want to thank Senator Smith and Rounds for their
    work on the Rural Housing Service Reform Act, which would give
    property owners of 515 and prospective buyers of those
    properties the flexibility to keep this housing affordable and
    in good condition.
        That said, additional resources still must be leveraged to
    preserve all units at risk. And the need for affordability
    preservation extends beyond currently subsidized housing stock.
    In rural and urban communities alike, market pressures and
    disinvestment pose significant threats to existing affordable
    housing.
        As I discuss in my written testimony, a full ecosystem of
    funding types is needed. We must expand and modernize programs
    that are already in place, such as the low income housing tax
    credit, the home program, and the Indian Housing Block Grant
    program.
        There are also newly proposed programs that would be
    helpful in preserving and expanding the housing supply.
    Chairman Brown has introduced several pieces of legislation
    that would further facilitate housing preservation, the Housing
    Supply Fund Act, the Affordable Housing Preservation and
    Protection Act, and the Yes in God's Backyard Act, which
    promotes faith-based development.
        We are rapidly losing affordable units, and there is a
    profound need for directed tools, resources, and policies to
    mitigate and prevent the loss. Affordable housing helps
    households avoid housing cost burden and contributes to housing
    stability, creating positive outcomes that can last for
    generations.
        Simply put, we cannot build our way out of our housing
    crisis. Preservation of affordable housing is necessary to
    address the critical lack of affordable housing supply.
        Preservation is faster and more cost effective than new
    construction. It also provides housing stability and prevents
    displacement of existing residents, homeowners and renters
    alike.
        For this reason, the inclusion of home ownership and home
    repair in the preservation and conversation is very important
    and appreciated. The need for single-family home repair is
    especially true in rural communities, where we see higher rates
    of home ownership and homes in need of significant repair.
        Housing preservation is a critical component of
    Enterprise's strategy to connect low income households to
    opportunity. From our home repair programs in Detroit and
    Cleveland, to our rural multifamily preservation work, and our
    housing resilience programs, Enterprise works with nonprofits,
    developers, local governments, landlords, and homeowners to
    improve financial health, resiliency, and sustainability of
    homes.
        I am appreciative of the opportunity to share my
    experiences and perspectives today. On behalf of Enterprise, I
    would like to thank the Subcommittee, especially Chair Smith
    and Ranking Member Lummis, for their leadership on rural and
    Tribal housing issues, as well as their bipartisan cooperation
    on issues that affect so many Americans in every corner of the
    country.
        I hope the conversations we have today will bring more
    attention to the needs surrounding housing preservation and
    home repair, and that together we can make home and community
    places of pride, power, and belonging for all.
        Chair Smith. Thank you so much for your testimony.
        And now we'll turn to Mr. Volzke.

      STATEMENT OF CHRISTOPHER VOLZKE, DEPUTY EXECUTIVE DIRECTOR,
                     WYOMING COMMUNITY DEVELOPMENT
                               AUTHORITY

        Mr. Volzke. Chair Smith, Ranking Member Lummis, Members of
    the Committee, thank you for the opportunity to testify today
    about the challenges in preserving the U.S. housing stock. I'm
    Christopher Volzke, deputy executive director of the Wyoming
    Community Development Authority.
        Since 1975, the WCDA has been championing affordable
    housing in Wyoming. WCDA was created as an instrumentality of
    the State, though we receive no State funding for our programs.
    I'm grateful for the opportunity to speak about housing and
    specifically from a rural housing lens.
        My written testimony, which your offices have a copy of,
    includes more specifics regarding inventory, data elements,
    programmatic examples, and legislative consideration. However,
    due to time constraints, I'll focus my verbal testimony on
    Wyoming and rural America in general. That's more of my
    wheelhouse anyway.
        I've not only spent most of my career in the housing space,
    but I've lived exclusively in rural States, South Dakota,
    southwest Minnesota, and Wyoming. I'm from a fifth-generation
    farming and ranching family, and had a high school graduating
    class of sixteen. You can say I've not only worked in rural
    housing, I've lived it.
        Our Nation's stock for ownership housing is aging. As homes
    get older, they require necessary repairs and upgrades to
    remain habitable. Unfortunately, many working families have
    trouble accessing affordable financing to pay for such
    projects. I applaud Ranking Member Lummis for acting to tackle
    this issue when you introduced with Senator Fetterman the Whole
    Homes Repair Act, which would establish a repair grant program
    for low- and moderate-income homeowners.
        One of the most important Federal resources we have for
    rental preservation is the Home Investment Partnerships
    program. This is why I want to thank Senator Cortez Masto for
    introducing the Home Investment Partnerships Program
    Reauthorization and Improvement Act, which would make a number
    of changes to HOME.
        Moving to a more local perspective, the state of housing in
    Wyoming is complex, it's expensive, and it's lacking. The WCDA
    recently published a statewide housing needs assessment. It's a
    lengthy report, 300 pages, which I feel further illustrates the
    point that this is not a problem we solve with one silver
    bullet. Rather, it's a complex set of dials, each needing to be
    adjusted, so we can collectively bring about change.
        The median household income in Wyoming cannot afford the
    median home value in every county. The situation is no better
    if you rent; 38 percent are cost-burdened per HUD, meaning that
    in many cases, renters are spending close to half of their net
    pay on housing.
        From a demographic perspective, the population of Wyoming
    is aging. Our fastest growing age group is 65-plus and expected
    to increase another 40 percent by 2030.
        Not only is our population aging, but housing stock in
    Wyoming includes 32 percent of inventory built over 50 years
    ago. That's pre-1970; and 66 percent built prior to 1990. They
    need new roofs, furnaces, and windows.
        Additionally, the needs of the owner may have changed, and
    conditions for accessibility and a needed upgrade for
    homeowners to age in place.
        As we transition to the discussion around rural capacity,
    especially those isolated from major cities, they face
    difficulties accessing the technical expertise and incur high
    costs for material transport, making it challenging to attract
    developers due to their small-scale housing needs.
        A city manager, a clerk, even a mayor can be part-time
    positions while they work their full-time career outside of
    city administration. And this creates a barrier for rural
    municipalities to fully participate in the process when
    programs become available.
        I also touch on community banking needs to assist rural
    populations in my written testimony. I mentioned the Whole
    Homes Repair act earlier. I don't need to look any farther than
    central Wyoming to imagine the impact. Mills, Wyoming is one of
    the top 20 cities in Wyoming in terms of population. The city
    has a bit over 4,000 residents. And yes, you heard that
    correctly; 4,000 residents will get you in the top 20 in
    Wyoming. We're talking about rural Wyoming, after all.
        At the same time, Mills is in the bottom 20 percent for
    income. The median household income is barely above 44,000. And
    that's household, that's not individual. The city has an old
    housing stock, with 69 percent of its households built prior to
    1990. We must invest in transforming the housing stock we have,
    rather than losing it to obsolescence.
        In rural America, we pride ourselves in pulling ourselves
    up by our bootstraps and lending a helping hand when needed. We
    look to embrace the challenges posed by our aging single-family
    housing stock and solving the rental affordability for the
    future.
        I'd be remiss if I didn't take a few moments to thank our
    allies in Wyoming and here in DC for your willingness to engage
    in this conversation and partner on solutions.
        I would also like to specifically thank my team back at the
    WCDA. You show up every day. You put in the hard work, work
    that makes real life impacts for your fellow Wyomingites. Be
    proud and thank you.
        Finally, I'd like to close with a quote from a recent post
    of Governor Gordon's team. ``The world needs more cowboys and
    cowgirls. In Wyoming, we need more housing for our cowboys and
    cowgirls.''
        [Laughter.]
        Mr. Volzke. Thank you, and I look forward to the
    conversation.
        Chair Smith. Thank you very much.
        Thanks to all of you for your excellent testimony.
        We will now turn to a round of questions from my
    colleagues, and I will begin with Senator Fetterman.
        Senator Fetterman. Oh, I'd defer to the--either one,
    please.
        [Laughter.]
        Chair Smith. OK. All right, well, then, in that case, I'd
    be happy to start.
        Thank you again very much for your testimony.
        And I'd like to--I'm going to start with you, Mr. Ergott. A
    couple of years ago, HUD secretary Marcia Fudge came to
    Minneapolis, and we had an opportunity to visit with some
    homeowners in the Older Adult Home Modification program. It was
    really great to see firsthand how a little bit of assistance
    making that house that they had lived in for years and years
    and years work for them as they were in their sixties and
    seventies. Just what a difference it made in their lives. Just
    simple modifications, like grab bars, or a ramp to make a
    shower accessible were just a huge change.
        So could you talk a little bit about the intent of this
    program, how it fits with other things that your organization
    does, and what in particular you think Congress could do to
    make this grant funding work better for communities and
    families.
        Mr. Ergott. Thank you for your question. The Older Adult
    Home Modification program has really been a significant
    opportunity for organizations and communities who are seeking
    to help seniors age-in-place safely and with dignity. As you
    mentioned, things like grab bars, accessible bathrooms,
    wheelchair ramps, really can be a game-changer in keeping
    seniors in their homes for as long as they want to live there.
        Some of the challenges with the programs are sometimes its
    limit, you know, funding. So if you can only do about $5,000
    worth of modifications with that----
        Chair Smith. Mm-hmm.
        Mr. Ergott. ----it can take care of a lot of great smaller
    needs, like we mentioned. But, you know, if you're modifying a
    bathroom or adding a grab bar, and the roof is leaking----
        Chair Smith. Mm-hmm.
        Mr. Ergott. ----it still doesn't stabilize that older adult
    in their home, which is why programs like the Whole Home
    Repairs Act can provide that kind of additional leverage for
    those funds.
        Chair Smith. I see what you're saying. So if it's $5,000,
    and you got to come up with $15,000, and how do you come up
    with the other 10? And how do you see those two programs
    working together, if we were--you know, when we're successful
    in passing Senator Fetterman and Senator Lummis' bill?
        Mr. Ergott. Well, we can attest that they work very well
    together, you know, when we have, for example, a home that
    needs that $15,000 worth of various repairs. So it might need
    some kind of accessibility improvements; it might need a new
    furnace; you know, it might even need a wheelchair ramp. You
    can really be creative with how you layer those funds together
    from those two programs and others, frankly, to kind of
    accomplish the whole need of that home, to keep that homeowner
    in their home safely and with dignity.
        Chair Smith. Thank you very much.
        Ms. Wolff, I'd like to ask you a bit about Tribal housing.
    Senator Lummis and I have both made Tribal housing a real
    priority in this Subcommittee. And we also know that there are
    significant challenges with housing stock on Tribal lands,
    where we see properties that are four times more likely to see
    have major physical deficiencies, like even things as basic as
    plumbing and heating just not working at all. So could you talk
    a bit about those challenges and what you think we should be
    doing to address that uniquely in Indian country?
        Ms. Wolff. Certainly. I think Enterprise is really
    committed to serving Tribal Nations. You have met with my
    colleague Tonya Plummer, also, who talks a lot about this and
    is an enrolled Tribal member herself, and who gives our team
    tremendous perspective and cultural awareness as we enter into
    working on Tribal housing.
        Really, the biggest challenges with getting Federal
    resources out to Tribal communities, partly you also, many of
    them are coming through State agencies. And there are a lot of
    requirements related to how those dollars go out, and related
    to things on the back end, such as recapture. They are
    sometimes in conflict with Tribal sovereignty, to be frank. And
    I think----
        Chair Smith. I'm sorry to interrupt, but----
        Ms. Wolff. Yeah.
        Chair Smith. ----do you see those as primarily Federal law
    challenges, or State law challenges, or a mix?
        Ms. Wolff. I think it's--I really do think it's a mix. I
    think it's partly how States deploy Federal dollars.
        Chair Smith. Right.
        Ms. Wolff. And how they underwrite those dollars. What
    additional requirements, as Senator Lummis was talking about,
    sort of additional requirements that come with dollars. States
    can tack on additional requirements if you're going to use
    their HOME dollars, for example.
        Also remember, Tribal Nations are generally rural
    communities, so they're non-entitlement communities. They're
    not entitlement communities de facto.
        Chair Smith. Right.
        Ms. Wolff. And so they have to work through additional
    agencies in order to access these dollars.
        The way that that's not true is through, like, programs
    like the Indian Housing Block Grant, which is a tremendous
    program. But we've been talking about how a suite of resources
    is necessary to layer and leverage together. And when you're
    focused on only one set of dollars, then Tribal homes are not
    getting access to that full capital stack.
        Chair Smith. Right.
        Ms. Wolff. And so I think this has really been the
    challenge that we're facing. I'm excited to have other
    resources come to the table. The real key is flexibility with
    how those resources are deployed, and that those resources are
    sensitive to Tribal sovereignty.
        Chair Smith. I really appreciate that point very much. And
    I also just have to acknowledge that we have been waiting to
    reauthorize NAHASDA for--what, since 2013?
        Ms. Wolff. Yes.
        Chair Smith. And so a source of great frustration for me
    and others, I know, so.
        Well, lots to talk about, but I will turn now to Senator
    Lummis.
        Senator Lummis. Thank you, Chairwoman.
        This is a question for all witnesses. Some Federal programs
    like CDBG or NAHASDA, which is that Federal block grant program
    for Tribal housing, can be used for repairs and rehab, but in
    practice, they're not. So can you talk about why in practice
    it's hard to spend CDBG or HOME funds on rehabilitation and
    repairs?
        Mr. Ergott, would you like to begin?
        Mr. Ergott. Sure. No, I think that's a very relevant
    question to all the challenges that we see locally,
    specifically in the HOME program, which we administered for the
    city of Scranton for many years. Some of the challenges we are
    running into is that when you use a HOME dollar to start to
    repair a home, you have to take care of all of the necessary
    issues in that home, no matter if it's $5,000 or $50,000.
        And the challenge is, with matching and leveraging those
    dollars is very difficult. And so you're stuck with trying to
    put a significant amount of dollars--and when you look at our
    homes in northeastern Pennsylvania, there are many needs, and
    it's rare that you have a small price tag on that total
    renovation cost. And so you can use a lot of funds on very few
    properties.
        And so it's one of the reasons that we started to back away
    from using that program, frankly. And I know in Pennsylvania,
    only about 25 percent of HOME funds are actually used for home
    repairs. That's, you know, that's the stat we have from the
    State. And that just kind of speaks to the fact that they're
    just difficult to implement and layer with other types of
    funding.
        Senator Lummis. Thank you.
        Ms. Davey Wolff.
        Ms. Wolff. Yeah, I think this is a particularly interesting
    question for rural communities, because they do not get direct
    entitlement allocations of HOME and CDBG. So in that effect,
    they are also just harder to access. Again, you're having to
    navigate another--it depends on HOME or CDBG, the process for
    navigating that. There's a tremendous amount of administrative
    hoops you have to jump through in order to access those dollars
    for rural communities.
        I also want to point out that they're really just
    critically underfunded resources. And so there's a lot of
    different demands for those funds. CDBG has been flat-funded
    since fiscal year 2022, and HOME has received a $250 million
    cut in FY24. So I think that part of it is just, there's not
    enough of those funds to leverage in, and home repair doesn't
    end up being really the priority for that.
        We do see HOME dollars going into multifamily rehab often,
    and it does work. It can work in communities that have USDA
    housing stock. HOME can be part of that rehabilitation and
    repair. Again, sometimes there's additional hoops that need to
    be jumped through. Sometimes there's misunderstanding of
    whether or not you can use HUD dollars in a USDA program. They
    are allowed to be leveraged, but often that's also where the
    technical assistance comes in about helping those agencies that
    are on the ground to navigate how to layer those resources
    together.
        Senator Lummis. Do you ever see something like Habitat for
    Humanity go in on some of these projects? And does that help
    you utilize HOME funds, or is it irrelevant?
        Ms. Wolff. Sure. So I live in Denver, Colorado. We have a
    very strong Habitat affiliate in Denver, and Habitat uses a lot
    of Federal resources for their programs and leverages them into
    home repair and to home ownership. And it does help those
    dollars stretch, because Habitat has a tremendous amount of
    fundraised resources as well. And so it's a significant source
    of leverage for those programs.
        Senator Lummis. Thank you. Same question, same last two
    questions for you, Christopher, but I want to point out
    something interesting to you. Fort Fetterman in Wyoming is a
    very famous fort involved in the Bozeman Trail, a very historic
    fort, it turns out in conversation with Senator Fetterman, he
    is related to Wyoming's Fort Fetterman.
        Mr. Volzke. Fantastic.
        Senator Lummis. Yeah. So very historic note.
        [Laughter.]
        Senator Lummis. There you go.
        Anyway, Mr. Volzke.
        Mr. Volzke. Thank you for the question. So I'm going to
    focus mainly on CDBG. We've had some testimony here on HOME
    already.
        So CDBG, I like to call it a little bit of a sticky widget
    for the municipalities. It's a great program. We can do very
    flexible as far as what we can usually do.
        At the same time, it can be complicated for small
    municipalities to do correctly. You know, as the State
    allocating agency for CDBG, we only have one entitlement
    community at Cheyenne. Otherwise, everything else has to go
    through the WCDA.
        What you normally find in these communities is they want to
    deploy those funds, because it's a limited resource for larger-
    community impacts. We've seen a lot of water and sewer. And I
    think, you know, some of these people may think, ``What's water
    and sewer? Isn't that already set up?''
        I mean, I think we have to remember, like the rural nature
    of Wyoming, we have the population smaller than what's in
    interior DC We're less than 600,000 people, yet we have the
    square footage or mileage, so to say, of the size of Germany.
        So you've got, you have to--infrastructures--infrastructure
    dollars fairly far, they're pocketed. And for municipality to
    bite off and do a CDBG program that's going to be a home-repair
    style, it's an administrative burden. The only community I'm
    aware that has actually tried that and accomplished it, this
    was years ago, was Casper. And they've since backed away from
    that. And we're doing other programs with Casper, but more on
    a, not on a home repair.
        So I just don't know if CDBG and home repairs are a good
    match. Hence the reason the Whole Home Repairs Act seems to be
    a better deployment of those dollars.
        In regards to your second question on Habitat for Humanity,
    you know, we do deploy these funds and CDBG to units of local
    government. So local government would have to sponsor, say,
    this, Habitat for Humanity to do that. We haven't necessarily
    seen that happen here in Wyoming. We'd be happy to see, you
    know, do that if there's the ability to do that. But once
    again, it kind of comes down to a capacity thing, and with the
    amount of municipalities coming in for the money, so.
        Senator Lummis. Thanks, Madam Chairwoman.
        Chair Smith. Thank you so much.
        Senator Tester.
        Senator Tester. I want to thank the Chair and Ranking
    Member for having this hearing. It's very, very important.
        I also want to thank the panelists for being here.
    Sometimes we have hearings, and the panelists are great, but
    they're not panelists that actually have solutions. I think all
    three of you have solutions, and I want to commend both the
    Chairman and the Ranking Member for having the folks here that
    are here.
        Look, housing is a big issue everywhere. It's a big issue
    in Montana, communities of all sizes. In many areas, there
    aren't houses available, and if there are houses available,
    nobody can afford to buy them that makes a reasonable wage.
        In some of our more rural communities, housing is not fit
    to live in, unless it's rehabbed.
        It's the first thing I hear about when I talk to Main
    Street businesses. We just had a sawmill shut down in Montana,
    and this is just one example of many. And the reason they shut
    down, lack of workforce; lack of housing, even if they had the
    workforce.
        So if we're going to have an economy and communities that
    are vibrant, both of them, I think we need to get the Rural
    Housing Service Reform Act passed, something that Senator Smith
    and Senator Rounds both have been working on, because our rural
    communities have significant housing needs.
        I think our urban communities do, too. But the bottom line
    is if we're going to get housing on track in rural America,
    this is one step in the right direction.
        So Ms. Wolff, could you just let me know as concisely as
    you can, more concisely than I just said, how this bill will
    make sure that we preserve housing in rural areas ,so that
    those communities can continue to grow.
        Ms. Wolff. Sure. Thank you, Senator Tester, for your
    question.
        Enterprise supports the Rural Housing Service Reform Act,
    which is led by Senators Smith and Rounds and is supported by
    the majority of the Committee. This legislation is going to
    make long overdue updates to RHS programs that are really
    needed, including allowing Section 521 rental assistance to
    continue at properties where the USDA mortgage expires.
        Right now, that's a big concern, because we have have a tie
    of that rental assistance to the mortgage on the property. We
    have many mortgages; the peak starts in 2028, but we are
    already right now on the cusp of losing a tremendous amount of
    housing to just mortgage maturity.
        And with that housing stock, we are also going to lose
    rental assistance. So I'm really excited about the
    conversations around decoupling that are included.
        It's also going to help leverage--tack housing credits into
    debt to recapitalize the properties, while ensuring that the
    tenants can continue to be stably housed. It allows for
    different resources to come in. This is super important, since
    there are around 400,000 units of Section 515 housing
    remaining.
        On the single-family side, the bill would also build off
    the successes using the Section 502 direct lending program for
    native communities, which we're very much in support of as
    well, and make important updates to USDA's home repair loan
    limits, which I think could really be leveraged by the Whole
    Home Repairs Act and other sources such as that.
        So all really important to have that RHS Reform Act put in
    place.
        Senator Tester. Thank you.
        Mr. Ergott, manufactured homes have long been a widely
    utilized option for affordability in Montana.
        Recent years, we've seen out-of-State investors come in and
    buy manufactured-home communities. They start with adding fees,
    and then they jack up rent, and all of a sudden those
    affordable-housing options aren't so affordable anymore. And
    quite honestly, the people they're putting at risk don't have a
    lot of options, period.
        So what tools do we have to keep the big national investors
    from buying up, whether it be in Montana or any other State,
    buying up these manufactured-home communities, eliminating the
    only affordable option for many of the hardworking families,
    and for Montana seniors. What can we do about that?
        Mr. Ergott. So thank you, Senator Tester. We, in
    northeastern Pennsylvania, it's not one of our primary areas of
    expertise or work, but what I do know is that many across our
    network, in the National Labor Works Network, are helping to
    try to organize local mobile-home parks, manufactured-home
    parks, to purchase ownership themselves. And so finding ways, I
    think, to empower the folks who live in those homes, and enable
    them to find their own local solutions to ownership, is a way
    to control some of that before the out-of-town investors come
    in.
        Senator Tester. Thank you.
        Mr. Volzke, I do not have a question for you at this moment
    in time, but I appreciate you being here. Your description of
    what's going on in Wyoming versus Washington, DC, is a pretty
    damn good description of why one-size-fits-all policies don't
    work in Washington, DC. Because the distance issue in a State
    like Wyoming, our good neighbor to the south, is just a killer
    in rural America. So if we don't take that into account, it
    becomes a problem. So thank you for being here.
        Chair Smith. Thank you Senator Tester.
        Senator Fetterman.
        Senator Fetterman. Thank you. So Mr. Volzke, strange as it
    might sound, but I've spent a lot of time in Wyoming, and I
    know that a town about 4,000 size is meaningful and a big deal
    in Wyoming. In fact, I was a small--I was a mayor of a town of
    roughly that size as well. So I understand that.
        So let me ask you a question. Do you have leaky roofs in
    Wyoming?
        Mr. Volzke. Yes, I'd say there's leaky roofs across the
    State.
        Senator Fetterman. Do furnaces break down?
        Mr. Volzke. Unfortunately, the mechanics also break down in
    Wyoming, correct.
        Senator Fetterman. Oh, yeah. Well; why, we need to confirm.
    Mr. Ergott, do roofs leak in Pennsylvania?
        Mr. Ergott. Senator, many of the roofs leak in
    Pennsylvania, yeah.
        Senator Fetterman. And furnaces? Do they break down?
        Mr. Ergott. Often. Yeah.
        Senator Fetterman. Hmm. Well, that's--and in my community
    and in western Pennsylvania, they do, and they do. And this is
    the kind of a bill that it can address to those kinds of a
    thing.
        It's also that once a roof is breached, and now the home is
    allowed to deteriorate, and become unhabitable, and then that
    becomes abandoned, and that creates all kinds of other costs as
    well. And it's not very cheap to actually demolish them.
        And that's a significant issue in my community is right
    now. For every abandoned home, that becomes a 20,000 to 25,000
    IOU to demolish, and that's one less home for someone to live
    in. And this is the kind of bill that can address that with the
    kind of flexibilities of that.
        Have any of you, when you are providing some kind of
    service, did you ever ask them, ``Who are you voting for?'' Or
    ``What are your political beliefs are?''
        Mr. Ergott. No. No.
        Senator Fetterman. So it's really agnostic to politics or
    red or blue counties. It's just something for all of us, for
    Americans, that they have these kinds of very common issues,
    and it allows them that typically skew more elderly, and they
    just want to remain in dignity and this kind of security of
    living in their home. Is that accurate? Seems pretty reasonable
    as well.
        And also when you often deal with the Government, things
    can be less inefficient then. But this is the kind of
    flexibility that allows those things to directly is all. Is
    that accurate?
        Mr. Ergott. [Nods.]
        Senator Fetterman. Flexibility can be helpful in that.
    Right? And it addressed these very specific kinds of a thing.
    And it is undeniable that making someone's bathroom more
    comfortable or usable means, or bars and things, that's
    helpful. But to that point earlier, it's like you can't live
    with a better bathroom if you can't heat your house, or it's
    leaking, and it may sit there. So this really gets that.
        And this also allows that if you are forced to leave your
    home, that cannot preserve any kind of wealth or anything as
    well.
        So this undermines a lot of different things as well. And
    this was born in a senator from Pennsylvania in a very, very
    blue, liberal, and that was embraced by a very, very
    conservative members of my former chamber in Pennsylvania. And
    now as politics become more and more, you know, divisive and
    everything, it's encouraging to have something like this we
    could, hopefully we can come together and acknowledge, that we
    want to, you know, we want to serve everyone and allows them to
    provide elderly to live in dignity, and to preserve our housing
    stock, and remind everybody that, as what my colleague from
    Montana pointed out, that we need kind of solutions like that.
        So I want to thank all of you on what your works do and how
    important that is. Small town, where I live in right now,
    regardless of where in this Nation, this is the kind of bill
    that can address that and allow people to live in dignity and
    to preserve our housing stock in a Nation that is now faced
    with a significant housing crisis. So I want to thank you for
    coming here and joining us today.
        And I turn back to our Chairwoman.
        Chair Smith. Thank you so much, Senator Fetterman, and
    thanks for your work on this legislation.
        I believe that Senator Cortez Masto will be joining us
    shortly.
        But in the meantime, I'll turn to Senator Lummis, if you
    have any additional follow-up questions.
        Senator Lummis. Thank you, Madam Chairwoman.
        A quick question for Mr. Volzke. We talked earlier about
    CDBG and HOME. So now I'd like to turn to CDFIs. What are some
    of the reasons that banks and even community-focused lenders
    like CDFIs have not been able to provide sufficient financing
    for needed repairs and rehab in rural areas?
        Mr. Volzke. Thank you for the question, Ranking Member
    Lummis. I think it's a very interesting piece of this
    particular equation, because you would think, we have a
    financing mechanism out there, why can't these people just go
    get some loans from their local bank and solve this, right?
        The fact of the matter is, you know, banks have a different
    profile. They're looking at the credit, and they're looking at
    that risk profile, whether that's a national bank or even a
    community bank. So they're governed to make sure that the risk
    they're putting out there, whether it's a cash-out refi,
    whether it's a HELOC, that person has the ability to repay.
        Unfortunately, if you've got a 540 FICO and a 45 percent
    debt ratio, you may not qualify for any bank financing, but
    that doesn't make your leaking roof go away, right? So that's
    kind of the impact of the people that we're trying to help
    through, say, the Whole Homes Repair Act bill. Right? You're
    capturing the folks that don't have access to credit.
        Even though folks that do have access to credit, typically,
    especially in a rural area, it's going to be more expensive. By
    way of example, I know a couple who recently the wife became
    wheelchair-bound, and they needed to do some accessibility
    modifications to the kitchen and ramps and et cetera. They
    needed about $20,000.
        They go and do a cash-out refi. Most banks are going to
    sell that in the secondary market to Fannie or Freddie. You now
    have got to find a appraiser.
        The nearest appraiser is a 3-hour round trip.
        Senator Lummis. Yeah.
        Mr. Volzke. You've got the cost of that coming in, and then
    also just the cost of doing that loan, that $20,000 suddenly
    became like 23 or $24,000, just for the origination fees on it.
    So even if you got the ability to, it can be very costly.
        CDFIs? I think in certain States, they're very robust, and
    they maybe can be a more nuanced approach. Unfortunately, in
    other areas of the country, you have very few CDFIs. I'm only
    personally aware of one in the State of Wyoming. There may be
    some others that I haven't ran into, but we've only interacted
    with one here in Wyoming.
        Senator Lummis. Is that the one on the reservation?
        Mr. Volzke. It is, yes. Thank you. Yeah, so that's the only
    CDFI I am aware of in the entire State of Wyoming.
        So that's also a little more nuanced and not going to solve
    our statewide problems. So you've kind of got this dual edge
    thing of community lending, whether it's accessible and the
    cost, and then the CDFI piece doesn't--it's not a one-size-
    fits-all.
        Senator Lummis. OK. Thank you so much. I note that we've
    been joined by our colleagues, Senator Cortez Masto. So I will
    yield additional time to her.
        Chair Smith. Thank you, Senator Lummis.
        Senator Lummis. Thank you, Senator Cortez Masto.
        Senator Cortez Masto. Thank you.
        And I have to thank both the Chair and Ranking Member for
    their continued focus on really addressing affordable housing
    needs. So thank you so much. It is an issue in Nevada I've been
    working on, to address affordable housing needs.
        So Mr. Volzke, let me ask you. This is regarding the HOME
    Investment Partnerships Program. I have a piece of legislation
    that reauthorizes the legislation. It's S. 3793.
        But can you do me a favor? Why is the home program so
    important to our ability to invest in affordable housing,
    construction, and preservation? Can you touch on that a little
    bit?
        Mr. Volzke. Yes. Thank you for the question, Senator. For
    us, you know, HOME is one of the most-used programs we have for
    rental rehabilitation and rental creation. That's primarily how
    we use that program in Wyoming. It's got some other
    flexibilities that could be used for other items, but to be
    quite honest, we've never quite cracked the code on how to do
    that for single-family development and rehab.
        It's a little scattershot. Other States will use that. Some
    States for their single-family piece will use it for
    downpayment assistance. We roll that into our mortgage revenue
    bonds. We finance those. So we don't want to take HOME dollars
    and use them for something that I can solve in a different way.
        So really, it's one of the main tools to help create
    inventory and rehab inventory that the--otherwise, the private
    market isn't doing 50 percent AMI units. So it's a good tool.
        Senator Cortez Masto. And that's what I hear in Nevada as
    well. And that's why for me, this piece of legislation is so
    important, not just in Nevada, but as you identified, in
    Wyoming and other communities as well. And I'd hope all of my
    colleagues join me in this legislation.
        Let me touch on something else as well. It's the Mortgage
    Revenue Bond and Mortgage Credit Certificate programs. Again,
    this is--there's a piece of legislation that I have focused in
    this space.
        And again, Mr. Volzke, let me ask you this. How do State
    housing finance agencies use the Mortgage Revenue Bond and
    Mortgage Credit Certificate to improve middle-class families'
    ability to buy homes?
        Mr. Volzke. Yeah. So in Wyoming, the Mortgage Revenue Bonds
    is really our bread and butter for how we finance what we call
    our first-time homebuyer program. And that's, I think, what
    most people in Wyoming recognize, and they see the WCDA
    acronym, they think first-time home buyers.
        Those tax-exempt bonds allow us a lower cost of issuance,
    and then we're allowed to pass that savings on to prospective
    homebuyers that are trying to buy. It kind of depends on the
    market, but a lot of times, especially the rates being higher,
    we get actually a better competitive advantage in the tax-
    exempt revenue space. So we could be sometimes up to a point
    lower. And a point lower on a 30-year mortgage for a first-time
    homebuyer can sometimes be the difference between whether they
    qualify to buy a home. or whether they're still in the rental
    space.
        So opening equity and the ability for them to share in
    wealth creation.
        Senator Cortez Masto. And this is in my legislation. But
    why is it essential to increase the Mortgage Revenue Bond and
    home improvement loan limit from 15,000 to 50,000?
        Mr. Volzke. Yeah. So that's a piece of the legislation that
    would allow for rehabilitation work. And it hasn't been
    adjusted, from my understanding, in decades, and I think we've
    heard plenty of testimony here that $15,000 is most likely not
    going to create the necessary rehabilitation pieces; or maybe
    it'll address one of the rehabilitation pieces, but not
    holistically. So I think it's a more all-in number that allows
    a homeowner to properly get their house ready for the next 10
    years, 20 years.
        Senator Cortez Masto. And thank you. And again, legislation
    that actually, Senator Cassidy and I introduced, the Affordable
    Housing Bond Enhancement Act, really focuses on all these
    issues that we're hearing about. We've heard from our housing
    communities. How do we address this? How do we bring affordable
    housing?
        We know that at the end of the day, putting together
    affordable housing is cobbling financing together. It is not
    easy. You need people that understand it, but we also need
    those programs that we can rely on to help address and bring in
    that financing. So that is key for all of us.
        I thank you for giving me the opportunity, as I bounce
    around between Committee hearings this morning, to come in and
    talk about this important issue.
        Chair Smith. Thank you, Senator Cortez Masto.
        Senator Lummis.
        Senator Lummis. You know, this question is for you, Madam
    Chairwoman, I'm glad you came. It seems like we're getting good
    momentum, good feedback, good validation for these bills, from
    a variety of panels and witnesses.
        What do you think are the chances that we can put together
    sort of a package of housing bills and bring them to the full
    Banking Committee, and get a vote, and get these bills moving
    before the end of the calendar year? I know we don't have
    many--a surprisingly few number of days on the Senate calendar
    that are available for things other than, you know, budgets and
    the big stuff, but these bills seem to have so much--use case
    has been established. The bills have good support. What are the
    chances?
        Chair Smith. Well, thank you for that, Senator Lummis. And
    I agree with you that there are a group of bills that are
    defined by being really focused on solutions to problems, and
    that are bipartisan. And I know that the Chair is very
    interested in moving forward a set of bills that would allow us
    to take action. Not only on the Rural Housing Service bill, but
    on many of these other bills that have bipartisan support and
    that are within the jurisdiction of this Committee.
        And so I think all of the Members of this Committee should
    give that message to both the Chair and the Ranking Member,
    that we think it would be really valuable to do a markup and to
    move them forward.
        Senator Lummis. Thank you. I will make a point of doing
    that with the Ranking Member. I know housing has always been a
    high priority of his----
        Chair Smith. Yes.
        Senator Lummis. ----on this Committee, so I think we're in
    a decent position to rattle some cages around here.
        Chair Smith. Thank you. I think we could make real headway.
    Thank you for sharing that.
        Senator Lummis. Thanks very much, Madam Chairwoman.
        Chair Smith. Chairwoman, I have just one follow-up
    question, and then I think we'll be ready to conclude, unless
    any of my colleagues have other questions.
        Ms. Wolff, when I was asking you about Tribal housing
    issues, you noted that a lack of understanding of Tribal
    sovereignty is often a barrier for program implementation, both
    at the Federal and the State level. And I wanted you just to
    elaborate on that a bit and explain to us kind of where the--
    where that breakdown is. I note that in Federal policy, there
    is frequently a challenge with Federal agencies not always
    grasping how Tribal sovereignty affects the way that these
    programs are implemented.
        Ms. Wolff. Yes. Thank you for the question. And I want to
    say I'm still a learner about this as well. And I've been
    working--I've had the privilege to support our Tribal Nations
    team through a deployment of technical assistance, primarily in
    the State of California last year, as they were working to
    leverage State resources into Tribal housing.
        But again, I continue to learn, and as we're all learning
    about this, this matter. And each Tribal Nation is different.
    And it's a different Government. It's own Government, and we
    have to think about it as Government-to-Government relations.
    And I think that's just something different for many of us to
    wrap our heads around, for our bureaucracies to wrap their
    heads around, because we're so used to all the different boxes.
        So an example of kind of where you might run into this is
    the State resources might say you have to have a--this is also,
    I think, not really responsive to rural communities either. But
    a State resource might say, ``You need to have your transit
    committee sign off on this''----
        Chair Smith. Yeah.
        Ms. Wolff. ----you know, ``in order to build X amount of
    housing units.''
        Well, there's no transit community. And so then the
    conversation needs to be, ``Well, can we have the Tribal
    council, which is the authority, sign,'' and it was, ``Well,
    that requires a waiver, because that's not the transit
    authority.''
        And so those--like, even those little things make it so
    hard and so difficult to access, that many Tribes have just
    given up on trying to access those resources at that level. So
    I think that's just one small example.
        I think the other piece that's really interesting in terms
    of direct kind of conflict is a conversation of recapture. And
    we understand that as you're deploying Federal dollars, you
    want to have a way to ensure those dollars are underwritten, or
    as a bank, that you can foreclose, they can take back. But we
    have to recognize that this is on Tribal land. And so you can't
    really foreclose on a property in the same way, because that
    land--it would be similar also to being in a community land
    trust----
        Chair Smith. Right.
        Ms. Wolff. ----is entrusted to the Tribe. And so there are
    things like that that are subtle, but create real, real
    obstacles for Tribes accessing those dollars.
        Chair Smith. Thank you very much. I appreciate that. I
    think that's absolutely right. And too often, I think Federal
    and State agencies treat Tribal governments as if they are, you
    know, some other form of nonprofit or grantee, rather than
    appreciating that Government-to-Government relationship. And so
    it's a real challenge we have to keep working on.
        Ms. Wolff. Yes.
        Chair Smith. Well, I want to thank our witnesses for being
    here today and for providing excellent testimony.
        I want to let my colleagues know--for Senators who wish to
    submit questions for the record, those questions are due 1 week
    from today, which will be Tuesday, April 23rd.
        For our witnesses, you will have 45 days to respond to any
    questions for the record.
        And thank you again. I think we've gotten great input and
    feedback as we think about legislation that we want to move
    forward. So I'm grateful for your testimony.
        And with that, this hearing is adjourned.
        [Whereupon, at 11:19 a.m., the hearing was adjourned.]
        [Prepared statements, responses to written questions, and
    additional material supplied for the record follow:]
                       PREPARED STATEMENT OF JESSE ERGOTT
           President and CEO, NeighborWorks Northeastern Pennsylvania
                                 April 16, 2024
        Thank you, Chairwoman Smith, Ranking Member Lummis, and Members of
    the Subcommittee, for the opportunity to testify this morning on the
    challenges our Nation faces with preserving our housing stock. My name
    Jesse Ergott, and I have the privilege of serving as the President and
    CEO of NeighborWorks Northeastern Pennsylvania (NeighborWorks
    Northeastern PA) headquartered in the City of Scranton.
        NeighborWorks Northeastern PA was founded in 1981 by a group of
    local lenders, resident leaders, and officials in the city of Scranton
    specifically to assist modest-income families who were finding it
    difficult to obtain financing for home repairs and improvements. With
    growing instances of blight and neglect in our neighborhoods, a more
    creative approach to providing resources was sorely needed to preserve
    home ownership opportunities for our neighbors. In our early years, our
    work focused on a few target neighborhoods in Scranton and consisted of
    pooling both private capital from various local lending institutions
    and public dollars from the City of Scranton to assist our neighbors
    with paying for and managing critical home repairs.
        Now, 43 years later, NeighborWorks Northeastern PA has an expanded
    geographic footprint including 7 counties throughout the region and
    serves our neighbors in multiple ways, including home ownership
    assistance, foreclosure prevention services, comprehensive community
    development initiatives, aging in place services, and critical home
    repairs. Over the course of our history, we have helped create over
    1,200 new homebuyers, repaired or improved 1,600 homes, provided home
    ownership and financial counseling to thousands of residents, and
    helped to facilitate countless community improvement projects and
    investment valued at over $250 million.
        All this work has been deeply rooted in the following core
    organizational belief that ``Home is Where it All Starts''. We believe
    that having a safe, dignified, and stable place to live leads to better
    health, more financial opportunity, better educational outcomes, and
    other real benefits for individuals, families, and our community.
        We have been supported in this work as a longstanding chartered
    organization in the National NeighborWorks Network and a proud member
    of the National NeighborWorks Association (NNA).
        NeighborWorks America is a private nonprofit organization,
    established by Congress in 1978 as the Neighborhood Reinvestment
    Corporation (P.L. 95-557) to expand opportunities for people to live in
    affordable homes, improve their lives and strengthen their communities.
    NeighborWorks pursues this mission through its support of a network of
    nearly 250 nonprofit housing and community development organizations
    like ours, which provide on-the-ground support to families and
    communities in every State, the District of Columbia, and Puerto Rico.
    The experience of this national network is extremely relevant to
    today's hearing, as our organizations have extensive collective
    experience in various housing preservation efforts. For example,
    NeighborWorks organizations across the country facilitated the repair
    of 82,500 homes in fiscal year 2023 alone.
        Addressing our Nation's significant housing challenges will require
    comprehensive solutions. These challenges touch all types of
    communities--urban, suburban, and rural areas alike, and span all
    income levels. The lack of available housing to meet an individual's
    specific needs can have a ripple effect that negatively impacts
    regional economies, hampers revitalization efforts by local government,
    and can ultimately lead to stagnancy and deterioration of
    neighborhoods.
        Building more affordable housing to increase supply, improving
    access to capital, addressing localized zoning impediments to smart
    community growth, and cutting red tape which currently makes various
    Federal programs difficult to implement are just a few of the
    approaches that are needed. One key element in this continuum of
    strategies needs to be the modernization and preservation of as much of
    our existing housing as possible.
        Deteriorating housing stock can be a root cause of other types of
    community instability and housing insecurity. My testimony speaks to
    creative efforts taking place in the Commonwealth of Pennsylvania, such
    as the Pennsylvania Whole Home Repairs Program, to invest in the
    preservation of our existing housing stock while also addressing the
    individual needs of our neighbors.
    Housing Preservation: The Challenge
        So how did we get here and what are the issues driving the need to
    invest in preserving our housing stock? Although the challenges we face
    in Pennsylvania, and particularly in northeastern Pennsylvania, are
    especially acute due to our aging housing stock and an older
    population, this also means we have a unique opportunity and fertile
    testing ground for policies and solutions that may benefit the rest of
    the Nation.
        Pennsylvania has one of the oldest housing stocks in the country,
    with 26 percent of existing homes built prior to 1939 compared with 12
    percent across the country. \1\ In fact, Pennsylvania's housing stock
    is on average 16 years older than the national average. Housing is even
    older in northeastern Pennsylvania, where in many communities upwards
    of 40 percent of homes were built more than 85 years ago. Most of the
    homes in Pennsylvania are single family structures (76 percent), with
    some rural counties in our region seeing single family dwelling numbers
    closer to 85 percent. Home ownership rates in both Pennsylvania (70
    percent) and our northeastern counties (67 percent) are higher than the
    nationwide average (65 percent).
    ---------------------------------------------------------------------------
         \1\ ``Pennsylvania Comprehensive Housing Study, May 2020. https://
    www.phfa.org/forms/housing-study/2020/pennsylvania-comprehensive-
    housing-study-full-report.pdf
    ---------------------------------------------------------------------------
        As homes age and deteriorate, preservation of housing in many
    communities becomes even more significant due to the nature of the
    housing itself. Although aging, many homes are irreplaceable, meaning
    if the units were lost, they either could not or would not be replaced
    because of a lack of economic incentive to build new single-family
    units in those communities. Likewise, when there is extensive deferred
    maintenance, there can be little to no economic incentive for investors
    to purchase these homes in many markets.
    Challenges for Seniors
        Aside from our older housing stock, possibly the most important
    trend shaping housing issues in Pennsylvania is our aging population.
    The statewide population of seniors has increased by 14 percent in the
    last two decades and Pennsylvania is now one of the most elderly States
    in the country, with over 17 percent of its population aged 65 or
    older. The 2020 Census estimates that 18.4 percent of all citizens in
    Lackawanna, Luzerne, and Wayne counties in northeastern Pennsylvania
    are 65 years of age or older, and another 14 percent are considered
    ``future seniors'' (aged 55-64). \2\
    ---------------------------------------------------------------------------
         \2\ Aging in Place, The Institute for Public Policy & Economic
    Development, at Wilkes University.
    ---------------------------------------------------------------------------
        The combination of one of the oldest housing stocks in the Nation
    with one of the oldest populations presents a unique challenge,
    especially when it comes to preserving existing housing. Seniors tend
    to own their own homes (76 percent home ownership rate in Pennsylvania)
    \3\ but also live on lower (and many times fixed) incomes, making it
    more challenging to tackle larger repairs or absorbing other increases
    in the cost of their housing (such as taxes, etc.), which ultimately
    increases the likelihood of deferred maintenance for these properties.
    The vast majority of seniors we serve express interest in staying in
    their homes and neighborhoods as they age, and a lack of affordable and
    physically viable housing options in their communities often leaves
    them without other options even should they seek them.
    ---------------------------------------------------------------------------
         \3\ ``Forecasting State and National Trends in Household Formation
    and Homeownership'', The Urban Institute.
    ---------------------------------------------------------------------------
        Older homes are also more likely to have higher utility costs due
    to insufficient insulation, inefficient windows and doors, and outdated
    heating and cooling systems. In addition, most were not built with ease
    of access in mind, and steep stairs, narrow entryways, high-sided tubs,
    and other similar features often create accessibility barriers for
    homeowners as they age. Ultimately, these older homes often equate to a
    smaller amount of accessible housing with universal design elements
    such as low or no threshold entryways, wider doorways, and walk-in
    showers. A third of Pennsylvanians aged 65 or older have a disability,
    which may require adaptive housing modifications or a move to
    accessible and/or supportive housing.
        To illustrate this issue, I have personally visited several homes
    where the homeowner was restricted to living on their first floor due
    to a lack of ability to get up the stairs safely. This often meant
    sleeping in a chair or on a couch for extended periods of time. And
    without a full bathroom on the first floor, they often ended up sponge-
    bathing in their kitchen or bathroom sink.
        In northeastern Pennsylvania, the typical structure we encounter is
    a two-story home which has an entryway with multiple steps, one full
    bathroom upstairs (and perhaps a half-bath on the main level), steep
    and narrow stairways, and a small laundry area in the basement. Homes
    typically have deferred maintenance ranging from a few thousand dollars
    (smaller accessibility improvements and repairs) to over $30,000 for
    significant structural and systems repairs).
        A critical question to ask is how these types of repairs can be
    funded, especially for modest-income working families and seniors on
    limited incomes. Previous data released by The Federal Reserve Bank of
    Philadelphia showed that in northeastern Pennsylvania, 50 percent of
    all requests for conventional home improvement financing were denied
    for low-to-moderate income borrowers. With limited access to private
    capital to help address these much-needed repairs, individuals and
    communities often turn to various Federal, State, and local funding
    sources to address these needs.
    Existing Federal Investments in Housing Preservation
        In our experience, only a relatively small amount of funding from
    existing Federal programs which include home rehabilitation as an
    allowable use is utilized for this purpose. For example, the Community
    Development Block Grant (CDBG) program and HOME Investment Partnership
    funds can provide a meaningful amount of resources, but many
    communities opt to use them for other purposes due to the challenges
    involved in utilizing them for home repairs. These programs tend to be
    broad in their potential uses, but onerous in practice and difficult to
    leverage with other resources.
        Specific to HOME funding, the requirement to address all
    deficiencies in a property, instead of just tackling the most critical
    repairs, can lead to putting in an excessive investment of resources
    into one project and diluting their overall impact on an area. These
    requirements were a critical factor in NeighborWorks Northeastern PA
    deciding to discontinue managing HOME-funded owner-occupied rehab
    programs on behalf of the City of Scranton.
        Another example of this is the U.S. Department of Energy's
    Weatherization Assistance Program. This program can provide a
    significant amount of funding to make homes more energy efficient and
    habitable, but other issues in the home including moisture/mold, old
    electrical wiring, roof damage or other structural problems can prevent
    an eligible client from receiving WAP services unless they are able to
    correct the specific problems with other funding.
        These are just a few examples of the barriers that can exist to
    utilizing existing Federal funding to address housing preservation at a
    scale that makes a difference in our communities. Finding ways to
    remove these barriers and incentivize the use of these programs for
    housing preservation would help to leverage and expand other local and
    regional efforts.
    A Critical Opportunity: The Whole-Home Repairs Act of 2024
        The Whole-Home Repairs Act, which is based on Pennsylvania's highly
    effective program of the same name, would be a much-needed addition to
    the relatively small list of Federal resources focused on addressing
    housing preservation.
        Pennsylvania's Whole Home Repairs Program received bipartisan
    support due to the universal nature of home repair needs in the
    Commonwealth. Rural, urban, and suburban communities across the State
    all tend to have modest-income homeowners with older housing and
    deferred maintenance needs; it is an issue which is apparent to anyone
    who lives here. Pennsylvania State Senator Nikil Saval, who spearheaded
    its creation, helped to craft a flexible program that could address
    home repairs at scale. Here are some of the major benefits of the
    program model:

      1.  Flexibility. Whereas other funding sources (HOME, CDBG, etc.)
            tend to have broad potential uses but are restrictive in their
            uses for home repair, the Whole-Home Repairs Program is
            specific in its intended use and flexible in its practical
            implementation. The funding can address any/all issues of
            habitability, accessibility, energy efficiency, and safety and
            can be prioritized on at a local (or even a home-by-home)
            level.

      2.  Maximizing Use. Has the ability to only address the issues that
            are most critical for safety and stability in the home without
            needing to tackle every other issue. This helps to maximize the
            impact of the funds by spreading them out.

      3.  Speed. By eliminating burdensome requirements and red tape, we
            have found that some projects are often able to be completed in
            a matter of weeks or even days depending on the circumstance.

      4.  Layering and Leverage. Because of the program's flexibility, the
            funds are extremely leverageable and can be effectively layered
            into projects in ways that wouldn't be possible with other
            Federal funds, ultimately resulting in more creative funding
            strategies for individual rehabilitation projects and more
            impact for the program overall.

      5.  Local Strategies and Oversight. By putting the implementation of
            the program at the local municipal/county level, local leaders
            can tailor the program to meet the most critical needs of their
            communities and residents. This autonomy allows administrators
            to be better stewards of public funds and to build the program
            into larger local and regional efforts.

      6.  ``Unlocking'' Other Funds. Programs like the Weatherization
            Assistance Program are not able to fund projects at homes with
            other significant repair needs. Much time can be lost in
            evaluating and assessing properties that ultimately cannot be
            assisted due to the lack of other resources to address the
            deferral items. The Whole-Home Repairs Program can address
            these deferrals and leverage other Federal, State, and local
            investments.

        These factors, along with a backlog of need in many parts of the
    State, contributed to an unprecedented public response to the program.
    Many counties had to close their application process during the first
    few days because they had already reached their maximum project limit.
    The most recent data reported to the Pennsylvania Department of
    Community and Economic, the statewide administrator of the program,
    showed that there are over 16,500 homes currently on waitlists for
    funding across the State.
        I believe these same benefits which are unique to this program
    could be expanded to other areas of the country through the pilot
    program created by the Whole-Home Repairs Act.
    Integrating Whole-Home Repairs With Aging in Place Strategies
        In our case, the flexibility of the Whole-Home Repairs Program has
    allowed NeighborWorks Northeastern Pennsylvania to effectively
    integrate it into our comprehensive Aging in Place Program.
        NeighborWorks Northeastern PA's Aging in Place program provides
    homeowners in our region aged 60 and above with services that focus on
    assisting them with continuing to live safely and with dignity in their
    home and community. After over 3 decades of managing various home
    rehabilitation programs utilizing a variety of Federal, State, local
    and private funds, we found that approximately 70 percent of applicants
    requesting assistance were seniors. This ultimately led to a shift in
    our focus to providing home modifications and repairs exclusively to
    seniors over the past 5 years.
        When tackling a project for an older adult, our primary concern is
    to remove any barriers that the homeowner may have to remain in their
    home. Often, we have found that older homeowners have a variety of
    challenges that create instability in their housing situations. We seek
    to take a holistic approach to addressing habitability and
    accessibility to address as many issues as possible to both fix the
    property and preserve or improve the homeowner's health. By taking this
    approach, we have been able to attract significant new health-focused
    public and philanthropic resources to our housing preservation efforts.
        For example, our Aging in Place program has secured a $1 million
    grant from the HUD Older Adult Home Modification Program (OAHMP), an
    additional $1 million from the Administration for Community Living
    (ACL), and ongoing LIHEAP and Medical Assistance (waiver) resources for
    home modifications, energy needs, and accessibility improvements
    through local Area Agencies on Aging. These funds, along with flexible
    resources from Pennsylvania's highly successful Housing Affordability
    and Rehabilitation Enhancement (PHARE) fund, have allowed us to address
    hundreds of home modification and accessibility improvement projects
    across 3 counties. Many of these projects include critical safety
    modifications such as grab bars, wheelchair ramps, bathroom
    modifications, tub cuts, and other accessibility improvements.
        However, home modifications are often only one piece of the puzzle
    when it comes to housing stability. For example, providing an
    accessible bathroom for a homeowner is impactful, but if that same
    homeowner has a leaking roof or major structural issue in their home,
    their housing stability remains threatened. As most other funding
    sources we had access to don't allow for larger structural repairs, the
    Whole-Home Repairs Program was the missing piece for our Aging in Place
    program.
        Now, in addition to providing a bathroom modification, wheelchair
    ramp, or stairlift, we can replace the roof, improve energy efficiency,
    and replace an old furnace. The Whole-Home Repairs Program has allowed
    us to take a comprehensive approach to addressing issues of the whole
    home and as well as the critical needs of the person living in it.
    NeighborWorks Northeastern PA manages a total of approximately $1.2
    million in Whole-Home Repairs Program funding for two counties, and
    these funds are currently helping to stretch and leverage an additional
    $3 million in State, Federal, and philanthropic investments.
        Working with a team of Certified Aging in Place Specialists (CAPS),
    Occupational Therapists, Residential Housing Inspectors, a Construction
    Manager and licensed and reputable constructions teams, we take a
    personal and professional approach to assessing and identifying the
    housing repair and accessibility needs of older adults throughout
    northeastern Pennsylvania. The various assessments conducted by this
    team helps to prioritize the work that needs to be accomplished at the
    home and to identify which funding sources will be layered into the
    project. Projects are then bid out per relevant requirements from the
    various funding sources and/or local municipalities. We have found that
    this model allows us to deploy funding quickly and in a comprehensive
    manner.
        Repairs and improvements address time-sensitive needs like roof
    repairs, accessibility improvements (stairs, porches, entryways, etc.),
    systems replacement (heating/cooling units, water heaters, etc.) and
    unsafe electrical or plumbing conditions. Other improvements focusing
    on the home's long-term habitability are also addressed when possible,
    such as siding, windows, insulation, ventilation systems, and other
    items impacting the home's energy efficiency and overall envelope. Each
    older adult referred to the Aging in Place program to utilize Whole
    Home Repair services is also given access to each of the other services
    offered through the Aging in Place program (small home repair,
    volunteer led repair services, smart home technology, social isolation
    prevention, community resource connection, and financial guidance), all
    of which allow each older adult to continue to reside safely and with
    dignity in their homes and communities.
    Whole-Home Repair Success Stories
        The Whole-Home Repairs Program has made a direct and measurable
    impact on our neighbors here in northeastern Pennsylvania, and a small
    sample of success stories are included below.
        In one of our rural counties, the program assisted a family of
    five, comprised of three children and two adults. The father, a
    veteran, struggles with PTSD, and the mother is a postal worker within
    the community. They were in urgent need of various and time-sensitive
    improvements, including a new roof. Through the Whole-Home Repairs
    Program, these major safety concerns were able to be addressed quickly
    and efficiently.
        In another rural county, the program assisted a 64-year-old retiree
    living by herself in an older home which is in good condition except
    for the roof, which is over 30 years old. Her monthly income is
    $3,206.60 from Social Security and retirement benefits. A contractor
    was secured to address the aging roof, and the property was stabilized
    for a total cost of $17,070.
        In Scranton, Mr. and Mrs. Walter Gardner are both in their 80s and
    have lived in their family homestead in the city since 1955. Mr.
    Gardner is a veteran. In early February, NeighborWorks Northeastern PA
    received a call from the Gardners reporting a complete lack of heat in
    their home. A Plumbing and Heating specialist was sent to the home and
    confirmed the furnace had a cracked heat exchanger, necessitating a
    full replacement. It was also relayed that the Gardners' carbon
    monoxide detector was going off and the Scranton Fire Department and
    UGI Utilities were also deployed to the home. The source of the CO
    being emitted into the home was caused by the broken furnace, as
    emissions were escaping through the crack in the heat exchanger rather
    than being ducted out with the exhaust, creating a dangerous situation.
    Due to the availability of Whole Home Repair Funds, NeighborWorks was
    able to facilitate the installation of a new furnace within 5 days from
    that initial phone call, likely preventing even more costly repairs
    from froze pipes and other issues resulting from lack of heat in the
    home. The Gardners received a new Comfort Maker 95 percent Efficient
    Hot Air Furnace utilizing a total of $6,800 of Whole Home Repair
    funding. NeighborWorks was also able to use this situation as an
    opportunity for our Certified Aging in Place Specialist to assess and
    plan for other critical home repairs and safety modifications needed in
    the home
        Another older client we have served resides in the City of
    Carbondale. Despite having replaced a portion of his roof in recent
    years, he had a leaking roof and missing gutters, both of which
    contributed to water infiltration into his home, a deteriorating and
    leaning chimney, and a completely corroded boiler that wasn't working
    properly. We have been able to provide a new boiler for him and repair
    some other plumbing problems and a potentially dangerous ventilation
    issue that he had, in addition to replacing the leaking areas of his
    roof as well as installing gutters where they were missing to minimize
    and/or hopefully eliminate the water infiltration into his home. Whole-
    Home Repairs funding allowed us to address all these issues at once.
    Conclusion
        We know that safe, dignified, and affordable housing options are
    critical to the health of any community. However, many communities are
    facing shortages across much of the housing continuum, including
    affordable rental units, entry-level homes for first-time homebuyers,
    and accessible dwellings for seniors as they age. These factors and
    others have created an extreme sense of urgency in many communities
    like ours to preserve the housing that exists before it deteriorates
    past the point of economically viable rehabilitation. Passing the
    Whole-Home Repairs Act will be an important first step in providing a
    scaled investment in our Nation's aging housing stock by empowering
    States and municipal governments to address the housing preservation
    needs of their own communities.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    PREPARED STATEMENT OF ROBIN DAVEY WOLFF
     Senior Director for Rural Communities at Enterprise Community Partners
                                 April 16, 2024
        Chair Smith, Ranking Member Lummis, and Members of the
    Subcommittee, thank you for the opportunity to share perspectives on
    the needs related to Affordable Housing Preservation and Home Repair
    with you today.
        My name is Robin Davey Wolff. I am the Senior Director of Rural
    Communities at Enterprise Community Partners, where I work to lift up
    and support the needs of rural housing developers and providers across
    the country. Enterprise is a national nonprofit on a mission to make
    home and community places of pride, power and belonging for all. To
    make that possible, we listen to what our communities need and bring
    everything under one roof to deliver it to them. That means we advocate
    on a nonpartisan basis for sound public policy at every level of
    Government; we develop and deploy programs and support community
    organizations on the ground nationwide; we invest capital to build and
    preserve rental homes; and we own and operate 13,000 apartments and
    provide resident services for 23,000 people.
        This end-to-end approach, combined with more than 40 years of
    experience and thousands of local partners, has enabled Enterprise to
    build and preserve affordable homes nationwide, invest $72 billion in
    communities, and improve millions of lives. This month, we are
    celebrating the one millionth affordable home that Enterprise has
    created and preserved since our founding. Our strategic priorities are
    advancing racial equity, building climate resilience and upward
    mobility, and creating and preserving housing people can afford.
        Enterprise's Tribal Nations and Rural Communities Team has sought
    to support safe, decent, and culturally appropriate housing in rural
    communities and on Tribal lands since 1997. Our commitment to rural and
    Tribal communities is deep: over the last 20 years Enterprise has
    invested more than $1.1 billion in grants, loans and equity, and
    developed more than 40,000 affordable homes in rural communities
    nationwide. Prior to joining Enterprise, I worked for an affordable
    housing developer serving rural communities. I now apply that
    experience to help rural nonprofits, housing authorities, Tribes and
    Tribally Designated Housing Entities (TDHE) preserve and develop
    affordable housing in their communities. Our team offers direct
    technical assistance, training, peer learning sessions, and other
    capacity building services to expand access to home ownership
    opportunities and develop or preserve affordable rural rental homes.
        Much of this work is supported by Federal contracts through the
    Department of Housing and Urban Development's (HUD) Rural Housing and
    Economic Development program, the United States Department of
    Agriculture's (USDA) Rural Community Development Program and the USDA
    515 Technical Assistance Program, through which we are able to support
    affordable housing providers across the country as they work to
    preserve housing at risk of losing affordability due to mortgage
    maturity or prepayment. According to USDA projections, the USDA Section
    515 program, which currently provides stable affordable housing to
    approximately 400,000 low-income rural renters nationwide, is projected
    to lose up to 137,000 affordable-housing units over the next 10 years
    due to mortgage maturities. Work is being done to address this,
    inclusive of the recently approved Rental Decoupling pilot in the
    Consolidated Appropriations Act, 2024 (H.R. 4366) and the Rural Housing
    Service Reform Act (RHSRA), recently introduced legislation that our
    team has worked on in partnership with Senator Smith and Rounds'
    office, which would include various provisions to modernize the USDA
    rural housing programs. That said, these programs and reforms alone are
    not adequate to stave off the loss of affordability we are facing
    nationally.
        In this testimony, I will discuss (1) The need for housing
    preservation; (2) The challenges communities across the country are
    facing as they work to preserve existing affordable housing; (3) The
    need for affordable single-family preservation and home repair
    programs; (4) The Enterprise approach to address housing preservation
    challenges; and (5) Ways congress can take action to support the
    preservation and production of affordable housing.
    The Need for Housing Preservation
        The country is in the middle of an affordable housing crisis.
    Communities across the country are losing a vital source of the
    existing affordable housing supply faster than new affordable units can
    be developed. With each year that passes, more mortgages and
    affordability restrictions expire, and countless nonrestricted
    properties are lost to the market, making more homes unaffordable. It
    is not possible to build new homes fast enough to make up for those
    that are being lost. We must prioritize affordable housing preservation
    in addition to new construction. Depending on the level of
    rehabilitation needs, preservation can often be faster and more cost
    effective than new construction.
        Harvard's Joint Center for Housing Studies published a report
    stating that since 2012, the market has lost more than 2.1 million
    units renting for less than $600 and 4.0 million units renting for $600
    to $999. During the same period, the market gained 8.4 million units
    renting for at least $1,400, driven by rent increases and high-end new
    construction. Not only have rents risen, but they have outpaced incomes
    over the last two decades. Among renter households with an annual
    income under $30,000, the median amount of money left over after paying
    for rent and utilities was just $310 a month. \1\
    ---------------------------------------------------------------------------
         \1\ Joint Center for Housing Studies of Harvard University,
    ``America's Rental Housing 2024'', 2024, https://www.jchs.harvard.edu/
    americas-rental-housing-2024.
    ---------------------------------------------------------------------------
        Data from the 2022 American Community Survey (ACS) supports this
    and clearly shows that newer properties are more expensive than older
    ones. More specifically, the most recently built rental units (those
    built in 2020 and later) command a 35 percent premium over the median,
    and even properties built in the 2010s are 24 percent more expensive on
    average than the median rental unit. \2\ Older properties are at risk
    of being acquired and upgraded above the point of affordability.
    ---------------------------------------------------------------------------
         \2\ Ibid.
    ---------------------------------------------------------------------------
    The Benefits of Housing Preservation
        Preservation is often more cost-effective than new construction and
    avoids significant changes to the existing built environment,
    mitigating community concerns over neighborhood change that can stall
    or prevent new affordable development. It should be further noted that
    preservation directly affects some of our lowest income and most
    vulnerable populations. Displacement of renters in subsidized units
    that lose their restriction and subsidies are at far greater risk of
    homelessness or living in unsafe conditions.
        Targeted resources, programs, and policies are critical to maintain
    the existing affordability of multifamily properties and mitigate the
    risk that they will be lost permanently from the affordable housing
    supply. Once affordable units are lost, they are very difficult and
    cost prohibitive to replace, risking the displacement of long-time
    residents.
    The Challenge of Preserving Multifamily Housing Stock
        Many existing affordable rental homes are in small- to medium-
    multifamily (SMMF) properties (defined as having between 2 and 49
    units). In fact, this housing stock is the largest single source of
    housing affordable to low-income households.
        The 2022 ACS data tells us that 23 million SMMF units exist in the
    U.S., and 87 percent of those units are occupied by renters. 80 percent
    of SMMF units are affordable to households with incomes at or below 80
    percent AMI. \3\ This represents 52 percent of all affordable housing
    in the country. 95 percent of these units receive no Federal project-
    based subsidy. Of the 996,000 SMMF units that are subsidized, about 22
    percent are set to expire by 2027. \4\
    ---------------------------------------------------------------------------
         \3\ Enterprise Community Partners calculations of 2022 1-year
    American Community Survey, as provided by IPUMS USA, University of
    Minnesota, www.ipums.org. AMI is calculated based on HUD Section 8
    income limit data for the applicable year.
         \4\ Ibid.
    ---------------------------------------------------------------------------
        Market pressures and disinvestment pose significant threats to this
    housing stock. There is limited financing to keep properties
    affordable. Without robust investment in this housing, residents are at
    risk of eviction, displacement, and homelessness.
        The Low-Income Housing Tax Credit (Housing Credit), which is our
    Nation's most effective tool for the development of affordable rental
    housing, is oversubscribed and requires improvements to better address
    the needs of smaller properties. A program that does not rely on tax
    credits and that prioritizes preservation presents an opportunity to
    slow the loss of affordable units, provide stability for low, moderate,
    and very low-income residents who live in these homes, keep communities
    intact by combating residential and cultural displacement, and deepen
    the impact of all affordable housing strategies.
    Single-Family Preservation and Home Repair
        On the single-family side, including Home Repair in this
    conversation is crucial and appreciated. The impact of a well-run home
    repair program can prevent utility shut offs, foreclosure, and
    homeowner displacement. The need for single family home repair is
    especially true in rural communities where we see higher rates of home
    ownership than the national average (73 percent vs. national average of
    65 percent).
        Single-family housing in rural communities is, in general, older
    stock which is more likely to have deferred maintenance and capital
    needs that should be addressed. This is particularly true for
    households living in manufactured homes, which make up a significant
    portion of housing for lower-income families living in rural
    communities. \5\
    ---------------------------------------------------------------------------
         \5\ Housing Assistance Council, ``Rural Research Brief'', July
    2020, https://ruralhome.org/wp-content/uploads/2021/05/Manufactured-
    Housing-RRB.pdf.
    ---------------------------------------------------------------------------
        Homeowners often feel stuck when they try to address the needed
    repairs. The market simply does not work for people living on low or
    fixed incomes. Costs of labor and materials are high, driving up the
    average cost of a home repair project and conventional loans are at
    high rates, which makes funding needed repairs more expensive. This is
    true even when there is significant equity in the home.
        We must continue to identify new strategies to meet the needs of
    vulnerable homeowners beyond the existing offerings. In rural
    communities the USDA 504 Home Repair program, which provides subsidized
    loans and grants for seniors over the age of 62, is useful but often
    does not allow for enough funding to get homeowners to where they need
    to be when it comes to truly safe and decent housing. This source can
    be leveraged with other sources. Many States and localities operate
    home repair programs funded with HUD's Community Development Block
    Grant (CDBG) program or the HOME Investment Partnership (HOME) program
    funds, for instance. New programs should leverage these existing
    programs to allow for more significant or comprehensive repairs.
    The Enterprise Approach
        Enterprise Community Partners has decades of experience supporting
    repair of small properties and preserving affordable rental housing.
        Enterprise deploys capital to produce new housing, preserve
    existing affordable housing and build the capacity of our partner
    organizations. In the preservation realm, Enterprise supports the
    acquisition, rehabilitation, and refinancing of affordable housing, in
    addition to providing grants that support nonprofit partners'
    preservation efforts. Over the last 10 years, Enterprise has invested
    more than $6.6 billion in the preservation of affordable housing, which
    accounts for 54 percent of Enterprise's total investment in affordable
    housing and n has ensured the continued affordability of 140,000 homes.
        Enterprise cochairs the ``A Call To Invest in Our Neighborhoods''
    (ACTION) campaign, a coalition of over 2,400 of local, State, and local
    organizations and businesses advocating working together to protect,
    expand, and strengthen the Housing Credit. Part of the coalition's
    advocacy has been focused on the bipartisan, bicameral Affordable
    Housing Credit Improvement (AHCIA) Act. This legislation would not only
    increase the supply of Housing Credit developments but would also
    streamline the program to better meet the needs of rural communities,
    veterans, seniors, Native Americans, and extremely low-income families.
    Ultimately, strengthening and expanding the program is foundational to
    advancing racial equity and economic mobility for low-income Americans
    across the country.
    City and Regional Solutions:
        Enterprise Advisors and market teams work with cities and regions
    to develop comprehensive housing strategies that address the unique
    housing challenges in that location. Based on complex data analysis,
    stakeholder interviews and expertise in affordable housing programs,
    Enterprise helps develop preservation strategies that are tailored to
    individual communities, such as an emphasis on the preservation of
    Naturally Occurring Affordable Housing (NOAH) or the development of
    preservation-related funds.
    Support for Community-Based Organizations, Developers, and Landlords:
        Enterprise supports existing property owners to improve the
    financial health, resiliency, and sustainability of their properties so
    they can continue to provide affordable homes for local communities.
        Preservation grants support either organizational infrastructure or
    project redevelopment. To strengthen partners' organizational
    infrastructure, Enterprise builds organizations' current staffing,
    software, and professional development models, and provides the
    operating capital necessary to effectively pursue preservation.
        Through project redevelopment grants, Enterprise supports the
    actual redevelopment of existing real estate by assisting with
    predevelopment expenses, staffing, consultants, or capital.
    Training and Resources:
        Through the Rural Rental Housing Preservation Academy and the
    Preservation Next Training Academy, Enterprise organizes a series of
    training sessions for affordable housing developers across the county
    and advocates to acquire, rehab, and stabilize affordable homes and
    prevent resident displacement.
        Enterprise also provides online resources, information, and tools
    to help:

        Developers acquire, rehab, and preserve affordable homes

        Practitioners and advocates to understand preservation
            opportunities and advocate for resources and policies

        Existing owners and operators to improve the stability and
            sustainability of their properties
    Policy Advocacy:
        Enterprise works with a broad range of public and private partners
    to advocate for policies at the local, State, and national levels that:

        Protect, expand, and improve tenant protections

        Replicate best practices and policies in eviction
            prevention

        Increase resources to enable the acquisition and
            preservation of affordable housing by mission-minded owners and
            residents
    Investing in Healthy, Sustainable, and Resilient Homes:
        Properties that are currently affordable and that need
    preservation, both subsidized and unsubsidized, are often older and
    suffering from deferred maintenance. Preservation can address unmet and
    ongoing capital needs and repairs that affect health, safety, and
    sustainability.
        More than 38,000 homes have been created or rehabilitated to meet
    the Enterprise Green Communities Criteria since its inception in 2004.
    When buildings meet energy efficiency standards, both property owners
    and tenants can see savings in their utility costs, which improves the
    affordability of the property.
    Home Repair Programs
        Enterprise is leading Home-Repair programs in several markets
    across the country:
            Detroit Home Repair

            Enterprise Community Partners serves as manager of the Detroit
            Home Repair Program, which is a $20M initiative providing no
            cost support to low-income households in Detroit. The program,
            which aims to support 1,000 households, has a waiting list of
            over 14,000. To date, over $4.3MM has been in deployed for
            repairs in over 200 homes, including $1.2MM in energy-
            efficiency and weatherization measures. The University of
            Michigan estimates that 37,630 Detroit households live in
            inadequate conditions (exposed wiring, broken furnaces) and
            local program sponsors estimate total repairs costs at well
            over $5B. It is this type of local work and knowledge that
            highlights the need for additional focus and resources, like
            those outlined in the Whole-Home Repairs Act of 2024 led by
            Senator Fetterman, that could be leveraged to meet the existing
            needs of the communities where we work.

            Lead Safe Cleveland Coalition and Home Fund

            Enterprise is a founding member and program manager of Lead
            Safe Cleveland and its $45M Fund which aims to implement lead
            safe practices in over 40,000 rental properties throughout the
            city.

            Make It Home Cleveland

            Enterprise and the City of Cleveland with others is piloting a
            repair and purchase program for Cleveland homeowners who live
            in tax forfeited properties. The program aims to work with 50
            households in 2024.
    Actions Needed From Congress
        We urge Congress to continue its commitment to supporting
    affordable housing and community development efforts by enacting
    critically needed legislation, most of which has bipartisan support,
    which would expand existing programs or else create new programs where
    there are gaps in the housing and community development financing
    ecosystem.
    Support Production and Preservation of Affordable Housing
            (1) Enact the Rural Housing Service Reform Act (RHSRA) (S.
            2790)

            RHSRA is a bipartisan and bicameral bill introduced by Chair
            Smith and Senator Mike Rounds and would help preserve rural
            affordable rental housing and expand home ownership
            opportunities for Native communities This legislation does this
            by improving the tools that USDA has available to address the
            housing preservation crisis that USDA faces by allowing for
            decoupling of rental assistance from USDA multifamily mortgages
            to ensure families living in USDA-financed properties are not
            cut off from rental assistance. Furthermore, the legislation
            would improve rural vouchers by allowing the value to change
            based on the fluctuations in tenant income and unit rent
            levels, and by expanding its use to tenants in properties with
            maturing mortgages. The bill would also allow for funding to
            improve the agency's capacity through additional staffing and
            upgrading of outdated technology that the agency uses. This
            bill also would make the highly successful USDA Section 502
            Native CDFI Relending Program, Multifamily Preservation and
            Revitalization Program, Multifamily Transfer Technical
            Assistance Program, and the Rural Community Development
            Initiative permanent. Finally, the bill will raise outdated
            funding caps, bring multifamily foreclosure process in line
            with those at HUD, increase data transparency, and require
            studies on the efficacy of programs.

            (2) Enact the Affordable Housing Credit Improvement Act (AHCIA,
            S. 1557)

            This legislation, sponsored by Senators Maria Cantwell (D-WA)
            and Todd Young (R-IN), has 34 cosponsors, including leads,
            split evenly between Democrats and Republicans. The bill has
            several financing provisions that will expand production and
            preservation of affordable housing. It also includes several
            dozen provisions that would enable State Housing Credit
            agencies to strengthen program administration. Some of the
            changes would update rules to improve access for veterans,
            students, and victims of domestic violence and human
            trafficking. We have never seen an affordable housing
            production bill with such deep and widespread support in
            Congress, and this is by far the most important piece of
            legislation we can enact to help put a dent in our current
            housing crisis. The AHCIA will create or preserve close to 2
            million additional affordable rental homes over the next
            decade.

            (3) Enact Housing Credit provisions in the House-passed Tax
            Relief for American Families and Workers Act of 2024 (H.R.
            7024)

            We are excited to see that two key provisions of the AHCIA Act
            were included in the bipartisan and House-passed tax package,
            the Tax Relief for American Families and Workers Act of 2024.
            This bill would make it easier to finance affordable rental
            housing in two key ways: it would restore the 12.5 percent
            increase to the 9 Percent Credit, which expired in 2021, from
            2023 (retroactively) until 2025, and it would lower the 50
            percent Private Activity Bond (PAB) threshold for the 4 Percent
            Credit to 30 percent for 2 years. Together, the provisions
            could finance an estimated 200,000 additional affordable homes
            nationwide through new development and preservation; generate
            over $34 billion in wages and businesses income; support over
            304,000 jobs; and generate nearly $12 billion in Federal,
            State, and local tax revenue. \6\
    ---------------------------------------------------------------------------
         \6\ Enterprise Community Partners, ``A Crucial Moment for the
    Housing Credit and the Future of Affordable Housing'' February 2024,
    https://www.enterprisecommunity.org/blog/crucial-moment-housing-credit-
    and-future-affordable-housing.

            (4) Enact the New Markets Tax Credit (NMTC) Extension Act of
    ---------------------------------------------------------------------------
            2023 (S. 234)

            This bipartisan legislation introduced by Senators Ben Cardin
            (D-MD) and Steve Daines (R-MT) would permanently authorize the
            NMTC program (which is set to expire in 2025) at $5 billion per
            year--adjusted annually for inflation--and exempt investments
            in the credit from the Alternative Minimum Tax. NMTCs are
            predominantly used to support commercial revitalization,
            businesses, and community facilities in lower-income
            communities, and are one of the most effective of all Federal
            economic and redevelopment programs--spurring over $120 billion
            of total investments in distressed communities and creating
            over 1 million jobs to date.
            While the NMTC is not intended be used to support residential
            rental properties, some NMTC investments have nonetheless
            supported housing activities--principally through investments
            in mixed-use commercial redevelopment projects that include on-
            site housing, and to a lesser extent, home ownership
            activities. The Treasury Department indicates that the NMTC has
            helped to finance over 18,000 affordable homes.

            (5) Enact the Neighborhood Homes Investment Act (NHIA, S. 657)

            This bipartisan legislation reintroduced by Senators Cardin and
            Young would create a Neighborhood Homes Tax Credit (NHTC),
            which would spur the renovation or development of one- to four-
            unit homes in once-thriving urban, suburban, and rural
            communities that now have distressed, blighted neighborhoods
            and low home ownership rates.
            Modeled after the Housing Credit, the NHTC would cover the
            ``value gap'' between the cost of building or renovating a home
            and the market-rate price at which it can be sold to low- and
            middle-income homebuyers. This credit would provide low- and
            middle-income households with more equitable opportunities for
            home ownership and upward economic mobility. If enacted, the
            NHTC could finance the construction or renovation of an
            estimated 500,000 homes over the next decade.

            (6) Tax-Exempt Controlled Entity Issue

            An issue has arisen with regard to the proper interpretation of
            an arcane provision of the tax code designed to prevent tax-
            exempt entities from indirectly benefiting from tax incentives
            provided to taxable entities who either lease property to, or
            are in partnership with, tax-exempt entities. Because of the
            Preferred Stock Purchase Agreements between the Treasury
            Department and the GSEs, some lawyers for Housing Credit
            investors have been questioning whether the GSEs, which pay
            taxes, could be considered TECEs, because Treasury is a tax-
            exempt entity that controls the GSEs. This interpretation has
            caused concern among Members of Congress, and a bipartisan
            group of 20 Senators sent a letter in June to Sec. Yellen
            requesting clear guidance on the issue. Otherwise, rural areas
            could be particularly devastated, as the GSEs invest
            significantly in these areas, and Housing Credit investments in
            these communities could dry up.
            The potential application of this law to Fannie Mae and Freddie
            Mac is interfering with their ability to invest in Housing
            Credit properties because the law would require slower
            depreciation and loss of certain energy and rehabilitation tax
            credits. GSE Housing Credit investments help the GSEs fulfill
            their Duty to Serve requirements set by FHFA, bringing capital
            to underserved markets, including rural multifamily housing. If
            this issue does not get resolved, investments by State and
            local equity funds could also be negatively impacted.
            We request that congress encourage the Treasury Department to
            provide clear guidance on this tax issue so that GSE capital
            can begin flowing again to underserved rural areas.

            (7) Enact the Stop Predatory Investment Act (S. 2224)

            This legislation would preserve the affordable housing stock by
            restricting tax breaks for large institutional investors
            purchasing single-family homes to convert to rentals and
            incentivizing affordable rental housing and the construction of
            new housing supply. Enterprise supports this legislation led by
            Committee Chair Sherrod Brown (D-OH) and Members of the
            Subcommittee.

            (8) Enact the Native American Housing Assistance and Self-
            Determination Reauthorization Act of 2023 (S. 2285)

            The Native American Housing and Self Determination Act of 1996
            (NAHASDA) was the first instance of Congress recognizing that
            the United States' trust responsibility to Tribal Nations
            includes ``working with Tribes and their members to improve
            their housing conditions and socioeconomic status.''
            To meet this responsibility, NAHASDA created the Indian Housing
            Block Grant (IHBG) and eliminated the ability of Tribes to
            access almost all other HUD programs, such as Housing Choice
            Vouchers, HOME, and public housing operating fund dollars.
            However, the authorization for NAHASDA last expired in 2013,
            leaving necessary improvements unaddressed. While last year's
            appropriations saw the largest increase for the IHBG program,
            funding level remained flat in inflation-adjusted dollars from
            2011-2021 and has been a decreasing percentage of the HUD
            budget since its creation. Enterprise supports as much
            increased funding for the IHBG as possible, and the passage of
            the Native American Housing Assistance and Self-Determination
            Act of 2023.

            (9) Enact increased appropriations and modernizations of key
            housing and community development programs

            Section 4

            HUD's Section 4 Capacity Building for Community Development and
            Affordable Housing (Section 4) program enhances the technical
            and administrative capacity of community development
            corporations and community housing development organizations
            (CHDOs) so they can help strengthen rural and urban communities
            across the Nation by developing affordable housing, financing
            small businesses, revitalizing commercial corridors and helping
            address local health care, childcare, education, and safety
            needs. These organizations are critical stakeholders in
            community development, working in neighborhoods across the
            country to address unique challenges and provide critical
            services that create jobs and enhance economic opportunity. An
            example of a successful public-private partnership, Section 4
            leverages more than $20 for every $1 invested by the Federal
            Government, making it very cost-effective. Enterprise urges
            Congress to provide at least $50 million in annual
            appropriations for the Section 4 Program to ensure these
            community development organizations can further expand their
            important work.

            The HOME Program

            No program is better suited to address the wide range of
            housing challenges we face as a Nation than HOME, which is our
            country's most flexible and proven affordable housing program
            for delivering resources to urban, suburban, and rural
            communities. Not only is HOME central to efforts that combat
            the affordable rental housing crisis, but it also meets
            critical home ownership needs by allowing States and localities
            to provide downpayment assistance to creditworthy homebuyers,
            lower mortgage interest rates and assist with homeowner
            rehabilitation. Enterprise urges Congress to provide the
            highest possible funding levels for HOME in appropriations
            legislation. We also urge Congress to enact the HOME Investment
            Partnerships Reauthorization and Improvement Act (S. 3644) led
            by Senator Cortez Masto which would reauthorize and modernize
            the HOME program.

            The CDBG Program

            CDBG is a critical resource for communities nationwide to
            invest in low- and moderate-income neighborhoods, producing and
            preserving homeowner and rental housing, providing fundamental
            infrastructure, vital public services and public improvements
            and spurring economic development and public-private
            partnerships at the local level. The flexible nature of these
            funds also allows them to address a wide range of challenges
            faced by both small rural towns and major metropolitan areas,
            making it an effective tool for localities in their effort to
            stabilize and maintain affordable housing and vibrant
            communities. These funds are commonly also used for water and
            sewer, sidewalks, and other community enhancement projects.
            Enterprise encourages Congress to provide the highest possible
            funding for CDBG in appropriations legislation.

            USDA Rural Housing Service Programs

            USDA's Rural Housing Service (RHS) programs are vital to rural
            communities. The USDA Section 515, USDA Section 514/516,
            Section 521 Rental Assistance Programs, Multifamily
            Preservation and Revitalization Program, provide critical
            affordable rental housing throughout rural America. The 515
            Multifamily Transfer Technical Assistance Program helps
            communities preserve the rental stock. RHS programs that
            support affordable home ownership include the USDA 523 Mutual
            Self Help Program, 502 direct loan and guaranteed loan programs
            and the 504 Home Repair Program provide tremendous opportunity
            for rural residents. The Rural Community Development Initiative
            works to build capacity of housing providers in rural
            communities. Enterprise urges Congress to provide robust
            funding for USDA Rural Housing Service programs in the upcoming
            fiscal year.

            HUD's Native American Programs

            The Indian Housing Block Grant (IHBG) program is one of the
            only dedicated sources of housing construction, rehabilitation
            of rental assistance funding available to Tribal Nations, who
            do not receive money from programs like HOME or Housing Choice
            Vouchers. Enterprise urges Congress to provide increased
            funding for the formula and competitive grants.

            Community Development Financial Institutions (CDFI) Fund

            CDFIs are an essential tool for delivering needed capital to
            historically underserved areas, financing a range of activities
            from consumer and small business credit to affordable housing
            and community projects that support health and education.
            Providing better access to debt relief, working capital, and
            consumer loans to small business and nonprofit borrowers
            through CDFIs increases the capacity for economic growth and
            opportunity that would not otherwise be available in some of
            our Nation's most distressed communities. Enterprise urges
            Congress to allocate robust funding for the CDFI Fund in annual
            appropriations to continue providing transformative resources
            to vulnerable communities.

            Capital Magnet Fund

            Enterprise continues to support efforts to increase and
            preserve the Capital Magnet Fund (CMF). This critical resource
            provides flexible funds to attract private investment into
            developing, preserving, rehabilitating, or purchasing
            affordable single-family and rental housing properties. CMF
            award recipients must leverage their award with other sources
            of capital, and the leveraged amount must be at least 10 times
            the CMF award amount, although in practice it has been 20 times
            or greater. The CMF program has awarded grants totaling nearly
            $1.1 billion to CDFIs and qualified nonprofit organizations and
            of reported projects, awardees have attracted nearly $13.3
            billion in total leverage. Recipients have 5 years to complete
            projects after receiving an award. As of September 30, 2022,
            awardees reported supporting 37,650 affordable rental housing
            units, 5,500 affordable home ownership units, and several
            community service facility projects, such as health care and
            other community facilities that are located near affordable
            housing.
            This public-private partnership is a critical source of funding
            for CDFIs and nonprofit housing developers financing affordable
            housing and related economic activities. The CMF program is
            funded through a very small, annual assessment fee on new
            business revenues generated by Fannie Mae and Freddie Mac. This
            funding source must be protected, with any subsequent reforms
            of the housing finance system ensuring a continued supply of
            funding for this program. Enterprise also urges Congress to
            work with Treasury to encourage streamlining and additional
            flexibilities in the program.

            Preservation and Reinvestment Initiative for Community
            Enhancement (PRICE) Program

            The PRICE program is a competitive grant program for housing
            residents and communities to preserve and revitalize
            manufactured housing and eligible manufactured housing
            communities. The program was first funded in FY23 and received
            additional funding in FY24. The program provides resources to
            support residents of manufactured housing through repairs and
            rehabilitation of homes. Eligible uses of funds include
            infrastructure, planning, resident and community services
            (including relocation assistance and eviction prevention),
            resiliency activities (defined as reconstruction, repair, or
            replacement to protect the health and safety of manufactured
            housing residents and to address weatherization and energy
            efficiency needs), and assistance for land and site
            acquisition. Enterprise urges Congress to provide robust
            funding for this program and to continue to work with HUD to
            ensure that the program remains effective for tenants of
            manufactured housing and manufactured housing communities. We
            also support the passage of the Preservation and Reinvestment
            Initiative for Community Enhancement Act led by Senators Cortez
            Masto, Shaheen, and Smith, which would permanently authorize
            the program.

            Public Housing Capital Fund

            Public Housing remains one the largest source of affordable
            housing for low-income families, the elderly, and persons with
            disabilities. With nearly 900,000 units across all 50 States,
            which is why is it important that Congress provide increased
            funding to the Public Housing Capital Fund. The Capital Fund
            provides funds to Public Housing Agencies for the development,
            financing, and modernization of public housing developments.
            Due to underfunding and disinvestment in Public Housing, it is
            estimated that the backlog of public housing capital needs is
            more than $70 billion. Enterprise urges Congress to provide
            increased funding to the Public Housing Capital Fund and to
            continue to support other forms of Public Housing preservation
            such as the Rental Assistance Demonstration (RAD) program.
            Enterprise thanks Committee Chair Scott for his leadership on
            the ROAD to Housing Act. We particularly appreciate the
            provision to expand the RAD program as a means to help
            modernize and preserve affordable housing units, provided there
            are appropriate tenant protections.
    Conclusion
        While we do need more housing supply, we simply cannot build our
    way out of our housing crisis. Preservation of affordable housing is
    necessary to address the critical lack of affordable housing. We are
    rapidly losing affordable units, and there is a profound need for more
    targeted tools, resources, and policies to mitigate and prevent the
    risk of loss of affordable properties. Preserving existing affordable
    housing is both cost-effective and crucial for maintaining and
    increasing the supply of affordable homes. Preservation also provides
    housing stability and prevents displacement of existing residents and
    families, homeowners and renters alike.
        We at Enterprise are committed to finding solutions and helping the
    organizations on the ground preserve and develop housing in their
    communities. The preservation of affordable housing is a critical
    component of Enterprise's strategy to connect low-income households to
    opportunity. Affordable housing helps households avoid housing cost
    burden and contributes to housing stability, creating positive outcomes
    that can last for generations.
        I am appreciative of the opportunity to share my experiences and
    perspectives today. On behalf of Enterprise Community Partners, I would
    like to thank the Committee, and especially Chair Smith and Ranking
    Member Lummis for their leadership on rural and Tribal housing issues,
    as well as their bipartisan cooperation on issues that affect so many
    Americans in every corner of the country. I hope that the conversations
    we have today will bring more attention to the needs surrounding
    housing preservation and home repair--in addition to the other critical
    housing and community development bills addressed in this testimony and
    that together we make home and community places of pride, power, and
    belonging for all.
                                     ______

                    PREPARED STATEMENT OF CHRISTOPHER VOLZKE
       Deputy Executive Director, Wyoming Community Development Authority
                                 April 16, 2024
    Introduction
        Chair Smith, Ranking Member Lummis, and Members of the Committee,
    thank you for the opportunity to testify today about the Challenges in
    Preserving the U.S. Housing Stock. I am Christopher Volzke, Deputy
    Executive Director of the Wyoming Community Development Authority.
    Since 1975, the WCDA has been championing affordable housing in
    Wyoming. WCDA was created by State statute, as an instrumentality of
    the State, for the purpose of raising capital to finance affordable
    housing. WCDA receives no State funding. WCDA's largest housing program
    is the Single-Family Mortgage Purchase Program for first-time
    homebuyers. In addition to its single-family programs, WCDA currently
    administers five major Federal housing and community development
    programs: the Low-income Housing Tax Credit (LIHTC) Program, the
    National Housing Trust Fund (NHTF) Program, the HOME Investment
    Partnerships Program (HOME), the Community Development Block Grant
    Program (CDBG), and the HOME Investment Partnerships American Rescue
    Plan Program (HOME-ARP). Together, these five Federal programs have
    funded more than 5,500 units of affordable rental and home ownership
    housing across the State, along with dozens of water, sewer, and other
    public infrastructure projects.
        I am grateful for the opportunity to speak about housing, and
    specifically from a rural housing lens, which can be overlooked during
    national scope conversations. I'd like to structure this testimony to
    discuss Wyoming-specific and rural housing needs, provide demographic
    and supporting examples, and finish with contemplation over the role of
    certain pieces of legislation.
        In the aftermath of the Great Recession, construction of new for-
    ownership homes has not kept up with demand. As a result, our Nation's
    stock of for-ownership housing is aging. According to the American
    Community Survey, the median age of owner-occupied homes in the United
    States is 40 years old. A little less than half of the owner-occupied
    homes were built before 1980, and around 35 percent were built before
    1970.
        As homes get older, they require necessary repairs and upgrades to
    remain habitable. Unfortunately, many working families have trouble
    accessing affordable financing to pay for such projects. I applaud
    Ranking Member Lummis for acting to tackle this issue when you
    introduced with Senator John Fetterman the Whole-Home Repairs Act of
    2024 (S. 3871), which would establish a whole-repair grant program for
    low-and moderate-income homeowners.
    Wyoming
        Moving to a more local perspective, the State of housing in Wyoming
    is complex, expensive, and lacking. The WCDA recently published a
    Statewide Housing Needs Assessment. \1\ It is a lengthy report, 300
    pages, which further illustrates the point that this is not a problem
    we can solve with one silver bullet. Rather it is a complex set of
    dials, each needing to be adjusted until we can collectively bring
    about change.
    ---------------------------------------------------------------------------
         \1\ https://www.wyomingcda.com/demographics/
    ---------------------------------------------------------------------------
    Summary of Key Housing Datapoints in Wyoming:

        Housing Supply: Current housing needs indicate the State
            has over 50,000 households under 100 percent Area Median Income
            (AMI) with at least one housing problem including cost burden,
            \2\ overcrowding, \3\ lack of complete kitchen facilities, or
            lack of complete plumbing facilities. In addition, as the State
            is projected to experience moderate population growth in the
            coming years and between 2021 and 2030, the State will need to
            add between 20,700 and 38,600 additional units of housing.
    ---------------------------------------------------------------------------
         \2\ Cost burden is defined by HUD as a monthly housing cost
    (including utilities) exceeding 30 percent of monthly income and severe
    cost burden is monthly housing costs (including utilities) exceeding 50
    percent of monthly income.
         \3\ Overcrowding is defined by HUD as more than 1 person per room
    and severe overcrowding is defined as more than 1.5 persons per room.

        Rental Market: The rental market experienced an increase in
            the amount of cost burdened households overall from 32 percent
            in 2010 to 38 percent in 2021. Among households with incomes
            between $20,000 and $35,000, the increase was from 41 percent
            in 2010 to 67 percent in 2021 and among households with income
    ---------------------------------------------------------------------------
            between $35,000 and $50,000, from 13 percent to 35 percent.

        Home Ownership Market: The typical home value is
            unaffordable to households earning the median income in every
            county in Wyoming in 2023. In addition, 44 percent or close to
            1 out of every 2 homes was sold to someone making 151 percent
            of the AMI. While only 1 out of 4 homes sold went to someone in
            the middle band of 80 percent-120 percent AMI and those making
            less than 80 percent AMI were limited to 12 percent of home
            sales.

        Demographic Trends: The population of Wyoming is aging; the
            proportion of individuals aged 65 and over has risen from 12
            percent in 2010 to 17 percent in 2021. This demographic is
            expected to increase by another 40 percent+ by 2030. The
            percentage of seniors living alone is greater than 1 out of 10
            Wyomingites (12 percent). It is crucial to prepare for the
            growth of that population because they are more likely to
            require housing accessibility modifications, in-home care,
            meals, transportation, health services, and institutional care
            facilities.

        When discussing challenges to housing preservation, the
    conversation can differ based upon what definition we are discussing.
    The first way of looking at preservation is the affordable nature of
    the stock. This is a focus to keep affordable housing that is
    restricted or naturally occurring, exactly that, affordable. The second
    conversation is the actual preservation of the physical unit itself.
    The question becomes, as units age, does the owner have the ability to
    maintain or adapt the housing as needed.
        Typical in Federal rental programs such as LIHTC, HOME, or NHTF is
    at a certain point after the affordability period has run its course,
    the rental community needs large capital inputs to be rehabilitated. We
    have a process for that. By using those same Federal programs in a way
    that can infuse the necessary capital back into the project, we can
    ensure it is rehabilitated to quality and safe standards for the
    tenant, the project has the capital health it needs to operate, and it
    is locked back into a new affordability period--thus achieving the end
    goal of preserving the affordable rental stock. By way of example, in
    my own backyard of Casper, we have partnered with the Wyoming Housing
    Network to use HOME funds to rehabilitate 127 units. This project
    included elements such as shoring up foundations, asbestos mitigation,
    stair access repair, and full interior updates. The rehabilitated units
    will now extend the life of the property and improve the health and
    well-being of the people living there, all while remaining part of our
    affordable housing stock.
        Similarly, single family ownership properties eventually age. We
    have aging housing stock in Wyoming with 32 percent of inventory built
    over 50 years ago (pre-1970) and 66 percent built prior to 1990. They
    need new roofs, furnaces, and windows. Also, the needs of the owner may
    have changed, and conditions for accessibility become a needed upgrade
    for homeowners to age in place. This is a real concern, as demographics
    data in Wyoming demonstrate that the disability rate in the State is
    12.9 percent, with the rate of disability increasing with age. For
    people over the age of 75, the rate of disability exceeds 48 percent.
        As we transition to the discussion around rural capacity, it hits
    home as I come from a fifth generation farming and ranching family with
    roots in rural South Dakota. Rural areas, especially those isolated
    from major cities, face difficulties accessing technical expertise and
    incur high costs for material transport, while also making it
    challenging to attract developers for their smaller-scale housing
    needs. It is common for many smaller municipalities to have part-time
    city positions. A city manager, clerk, or even mayor, can be a part-
    time position while they work their full-time career outside of city
    administration. This creates a barrier for rural municipalities to
    fully participate in the process when programs become available. Part
    of the equation for funding needs to include adequate technical
    assistance to help rural communities to navigate rules that they may
    not be familiar with. Otherwise, even a well-funded program may not be
    properly enacted in these areas.
        Critical infrastructure, including water, sewer, electricity,
    floodplain management, roads, and others, presents a major barrier for
    rural communities in making homes livable, often at prohibitive costs.
    The USDA Rural Development as you can imagine is a strategic partner
    for rural America. Their expertise and specific programs tailored to
    our constituents fill a need that other Federal programs do not. Yet,
    like many other agencies, they are underfunded. Water infrastructure is
    a major concern in a high elevation arid State like Wyoming. USDA-RD
    community development loans can help keep community infrastructure
    functioning. To give an example, the USDA-RD recently helped the
    Wyoming city of Manville with a partial loan and partial grant to fund
    and update their water system. Manville is a community of approximately
    100 Wyomingites. With the cuts to USDA-RD, this program will no longer
    be able to offer the grant portion of the funding had they been
    applying in the upcoming cycle. As you can imagine, even at subsidized
    rates, a community of 100 does not have the tax base to fund a roughly
    $4.7M water project. While this may be a specific example to a Wyoming
    community, there are hundreds of similar sized communities across the
    mountain plains region. These are communities similar to where I grew
    up: ranchers and farmers working hard to provide for our national food
    supply, but with aging infrastructure that their housing depends on.
        As mentioned earlier in my testimony, Ranking Member Lummis, along
    with Senator John Fetterman recently introduced the Whole-Home Repairs
    Act of 2024 (S. 3871), which would establish a whole-repair grant
    program for low- and moderate-income homeowners. A similar yet much
    smaller version of this concept exists within the USDA-RD as the 504
    program. This program allows very low-income persons (VLIP) to qualify
    for low interest loans and grants for necessary home repairs. This has
    shown to be a successful program directly tackling the needs we are
    discussing today. The Whole-Home Repairs Act works to amplify the
    impact of this concept to the low- and moderate-income homeowners. This
    vision of Senators Lummis and Fetterman allows our working-class
    citizens to access the help they need to keep their homes in a safe,
    sanitary, and repaired state.
        The bipartisan legislation proposes establishing a nationwide 5-
    year pilot to assist homeowners facing critical home repair needs and
    combat the housing crisis. Escalating repair and utility expenses often
    compel low-income homeowners and renters to endure conditions such as
    mold, lead paint, faulty plumbing, and other hazards to health and
    safety. When households cannot manage repair costs, it results in
    housing deterioration, contributing to the affordable housing
    challenges.
        This proposed legislation could be instrumental in changing
    communities. I don't need to look any farther than central Wyoming to
    imagine the impact. Mills, WY, is one of the top 20 cities in Wyoming
    in terms of population. The city has a bit over 4,000 residents; and
    yes, you heard that correctly, a city of 4,000 can be in the top 20 in
    Wyoming. We are talking about rural America after all. At the same
    time, Mills is in the bottom 20 percent for income, as the median
    household income of Mills in 2021, was $44,115. The city has an
    increasing property age with 69 percent of households built prior to
    1990. At the same time close to 1 out of 4 property owners are cost-
    burdened and more than 1 out of 3 renters are cost-burdened. This
    example of a rural community with limited resources is exactly the type
    of place that could benefit from the legislation and alter the
    trajectory of its residents.
        While I know this program could help rural Wyoming, similar
    communities exist all across the Nation. Retaining and rehabilitating
    our existing housing stock is urgently important, as in many
    communities there is not the capacity, let alone the ability to absorb
    the higher building expense to add inventory. We must invest in
    transforming the housing stock we have, rather than losing it to
    obsolescence.
    Inventory
        While it may not be the exact focus of this hearing, housing rarely
    can be discussed without a more holistic view. As such it is important
    to also touch on new inventory constraints as an important piece of the
    housing problem. Rural projects lack the density and proximity that
    make most urban projects work. A series of constraints can compound new
    inventory creation.
        Prior to my relocation to Wyoming, I was fortunate to spend nearly
    a decade with the Hopkins family, who are the fourth-generation family
    owners of a community bank serving South Dakota and Minnesota. The
    community bank model is at the heart of lending in rural America.
    Construction costs for housing projects in rural communities can be
    significantly higher compared to urban areas. This challenge is
    amplified in rural regions that already struggle with limited returns
    on investment, hindering small-scale market-rate developments. A
    possible solution is to support rural and small-scale developers by
    offering tools or programs like credit enhancements and guarantees to
    reduce development risks, which could include guarantees on
    infrastructure costs to create buildable lots.
        Additionally, costs for credit can unduly fall on rural borrowers.
    In the scope of rural consumers accessing financing for home
    preservation or necessary updates, two main tools exist. Traditionally
    consumers can access funds from a cash out refinance of the collateral,
    or agree to a home equity line of credit (HELOC). I am excluding
    unsecured personal lines or loans, as they typically have even higher
    borrower costs due to the interest rate needing to offset the lack of a
    security. The majority of cash out refinances are sold on the secondary
    market. These transactions can be caught in appraisal scrutiny by those
    who don't understand that a comparable can be a town away based on
    limited listings and sales in small communities. Rural appraisals can
    also cost more due to the nature of the available appraisers and
    associated travel costs. Secondary market models that allow for
    valuation flexibility could ease some of this strain. HELOC financing
    typically resides on the financial institution's balance sheet,
    allowing for some flexibility in terms of valuation method. However,
    financial lenders must weigh their loan risk with the customer profile.
    High loan to value loans may not meet the lending matrix or may carry
    higher costs. When considering the origination cost to access funds
    either through a cash out refinance or a HELOC, the percentage of
    expense to the loan proceeds can make the cost of borrowing prohibitive
    to consumers.
        The workforce housing crisis extends to nearly all counties,
    particularly impacting households with incomes ranging from 80 percent
    to 120 percent of the AMI. The scarcity of affordable, accessible, and
    quality single-family and multifamily housing in these income brackets
    often forces families into costly housing options that do not
    adequately meet their needs. Moreover, the housing shortages at all
    price points pose significant challenges for businesses in attracting
    new employees and retaining their current workforce.
        The lack of affordable and available housing remains a significant
    barrier to economic prosperity for many, limiting business and
    workforce opportunities in these communities. This shortage hampers
    efforts to attract new workers, potentially leading to reduced capital
    investment in rural projects or businesses opting not to establish
    themselves in Wyoming.
        In Wyoming, both urban and rural counties are grappling with a
    shortage of new and renovated single-family and multifamily housing
    across all price ranges. The lack of affordable, accessible, and high-
    quality housing stems from several factors, including a scarcity of
    shovel-ready land, the steep costs of construction, a limited pool of
    construction workers, and insufficient capital. This situation has led
    developers, investors, and families to hesitate in making new
    investments in construction or renovation, especially in rural areas
    where the high construction costs often outweigh potential returns on
    investment.
        One solution that may hold promise are the technical advances in
    manufactured and modular housing to promote affordable and accessible
    housing in rural Wyoming, addressing workforce challenges. Like many
    States in the mountain plains region, we have a short building season.
    Manufactured housing has the ability to be constructed in a more
    efficient process, in a controlled environment, and can be done in any
    weather condition. In the past, manufactured housing may have simply
    meant constructing a stick-built property using the same methods, just
    under a roof. The process in many businesses now more closely resembles
    that of a car assembly line. This allows for less waste and tighter
    building tolerances. These units are then able to be moved on-site and
    set with utilities, reducing the construction timeline and allowing for
    more housing to come online during a given season.
    Legislation
        The last topic I'd like to visit is that of legislation and how it
    may offer solutions. Legislative reform is multifaceted and even
    considerate bills contain underlying costs. These financial commitments
    must be weighed against the public need for such programs and if viable
    alternatives exist. Oftentimes there are multiple solutions to the same
    problem, so finding the optimal path forward can be complex. With that
    mindset in the forefront, I offer commentary on possible options for
    Committee consideration.
        One of the most important Federal resources we have for
    preservation is the HOME Investment Partnerships program. HOME is a
    flexible block grant which States like Wyoming use to meet our most
    pressing affordable housing needs for rental housing, including new
    construction and rehabilitation.
        Despite how essential the program is, HOME has never been fully
    funded. It was last reauthorized in the mid-1990s at just over $2
    billion, but actual appropriations have never reached that level. In FY
    2024, Congress provided only $1.25 billion for HOME, a $250 million cut
    from the previous year. We expect Wyoming will receive approximately
    $3.5 million. With that amount of resources, Wyoming will again need to
    choose whether it is better to focus those funds on preservation
    activities or new construction.
        In the decades since Congress last reauthorized HOME, we have
    learned much. Needs and priorities have also evolved. This is why I
    want to thank Senator Cortez Masto (D-NV) for introducing the HOME
    Investment Partnership Program Reauthorization and Improvement Act (S.
    3793), which would make a number of changes to HOME, including
    adjusting the authorized funding for the program to reflect inflation.
    Some of the programmatic changes this bill makes would help us to cut
    unnecessary red tape, which will allow us to use these funds more
    efficiently.
        According to the Joint Center for Housing Studies at Harvard
    University, America's rental housing stock has never been older than it
    is now, with the median age of properties as of 2021 sitting at 44
    years. Many of these properties no longer meet habitability and safety
    standards due to structural deficiencies and lack of basic features
    like electricity and hot and cold running water. Others are habitable
    but still in need of major repairs or lack accessibility features
    needed for an aging populace.
        In the last century, our Nation invested billions of dollars in
    affordable rental housing through direct subsidy and insurance programs
    run by the U.S. Department of Housing and Urban Development (HUD) and
    the U.S. Department of Agriculture (USDA). Most of this housing was
    built decades ago. Beginning in the 1980s, the Government largely
    changed the way it supports affordable housing production by instead
    using the tax code to incentivize the production of affordable rental
    housing, creating what became the most successful housing production
    program ever, the Low Income Housing Tax Credit (Housing Credit).
        Today, the Housing Credit is the cornerstone of how we finance
    affordable rental housing. But it is called on to do more than new
    construction. We rely on the Housing Credit to preserve the affordable
    housing we initially financed with HUD and USDA programs,
    recapitalizing and rehabilitating these properties so that they do not
    fall into obsolescence as they age or transition to market rate. State
    agencies receive a finite amount of Housing Credit authority each year.
    With it, they must decide how much to devote to new production in areas
    of opportunity to support economic growth, and how much to use to
    preserve the aging housing stock that we cannot afford to lose. We
    simply do not have enough to do it all.
        That is why I say thank you to the Members of the Subcommittee who
    have cosponsored the Affordable Housing Credit Improvement Act (S.
    1557). This legislation would restore a cut in resources the program
    suffered when a modest temporary increase expired after 2021 and build
    on top of that by expanding the program by 50 percent. It would also
    modify the rules related to the use of tax-exempt Housing Bonds so that
    State Housing Finance Agencies like the WCDA could make more efficient
    use of bond resources. Moreover, this legislation would make
    programmatic reforms that would streamline the way the Housing Credit
    works, increasing its efficacy making common sense changes so that we
    can do more to preserve affordable rental housing for our most
    vulnerable residents. If passed, the Affordable Housing Credit
    Improvement Act would allow a national projection of financing nearly 2
    million additional affordable homes, including preservation of existing
    properties.
        Aspects of this bill--enacted on a temporary basis--are included in
    legislation currently before the Senate, the Tax Relief for American
    Families and Workers Act. Even though temporary, these changes would
    provide financing for over 200,000 additional homes nationally.
        There are two other legislative priorities that, while not under
    the jurisdiction of the Banking Committee, I feel should garner
    consideration in preserving the supply of affordable for-ownership
    homes. With the support of Housing Finance Agencies across the Nation,
    the National Council of State Housing Agencies (NCSHA) urged Congress
    to pass the Affordable Housing Bond Enhancement Act (AHBEA; S. 1805),
    which was introduced by Banking Committee Member Senator Catherine
    Cortez Masto (D-NV) and Senator Bill Cassidy (R-LA). This bill would
    make a number of simple, but effective changes to the Mortgage Revenue
    Bond (MRB) and Mortgage Credit Certificate (MCC) programs. MRBs and
    MCCs are the primary means by which State Housing Finance Agencies
    (HFAs) finance their affordable home ownership programs.
        Among other changes, the AHBEA would increase the MRB home
    improvement loan limit from $15,000, where it has been since 1980, to
    $50,000. The limit would also be indexed to increase with inflation.
    The current loan limit, which has not been increased in 44 years, is
    not adequate to cover the costs of most rehabilitation projects.
    Increasing the loan limit will open up a new avenue for HFAs to
    preserve affordable for-ownership homes.
        Further, the Neighborhood Homes Investment Act (NHIA), introduced
    by Ben Cardin (D-MD) and Todd Young (R-IN), would establish a new tax
    credit, the Neighborhood Homes Credit, modeled after the highly
    successful Housing Credit. It would incentivize developers to construct
    new or substantially rehabilitate housing by closing the value gap, up
    to 35 percent of eligible development costs. In many census tracts and
    rural areas, developers cannot sell homes for what it costs to
    construct or substantially rehabilitate them, known as the ``value
    gap''. It is estimated that the equity raised by the Neighborhood Homes
    Credit would finance the building and substantial rehabilitation of
    500,000 affordable homes nationwide for low- and moderate-income
    homeowners over the next 10 years.
        Finally, for legislative topics, I want to raise awareness about
    another issue that I believe is impacting preservation of affordable
    housing in Wyoming and across rural America. The Government Sponsored
    Enterprises (GSEs) Fannie Mae and Freddie Mac are important
    participants in the Housing Credit program, able to invest up to $1
    billion each in 2024. They are also required by Congress to serve rural
    areas and support preservation under their Duty to Serve obligations.
    However, a little-known tax issue is currently preventing the GSEs from
    participating in multi-investor Housing Credit funds.
        These multi-investor funds are better able to invest in small,
    rural deals because the risk associated with these deals is spread
    across multiple properties and multiple investors, in contrast to
    proprietary funds that have just a single investor and invest in only a
    small number of developments. Fannie Mae in particular has been active
    in multi-investment funds since the GSEs re-entered the Housing Credit
    equity market in 2018. Freddie Mac currently invests only in
    proprietary funds.
        The issue at hand is the question of whether or not the GSEs are
    so-called Tax-Exempt Controlled Entities (TECEs) due to the Preferred
    Stock Purchase Agreement with the Treasury. Other investors in multi-
    investor funds have become worried that they might be TECEs, which are
    ineligible for certain tax benefits that impact the yield investors
    make on these investments. Unfortunately, the inclusion of a TECE in a
    multi-investor fund taints the fund for all participating investors.
    Thus, while this question is open, other investors will not join a fund
    in which the GSEs participate.
        This TECE issue has forced Fannie Mae to pull out of multi-investor
    funds, leaving many of these funds scrambling to make up for the
    investment Fannie otherwise would have provided. This is having a
    direct negative impact on Housing Credit investment. In fact, Fannie
    Mae even reduced its Duty to Serve commitment to rural investment for
    2024.
        Last year, Senators Warner (D-VA) and Moran (R-KS) led a bipartisan
    letter to Treasury signed by a total of 20 Senators urging the
    Secretary to issue guidance that the GSEs are not TECEs. However,
    Treasury has not yet done this, as the legal issues are complex.
    Treasury is continuing to investigate possible solutions. In the
    meantime, we believe that Credit pricing in rural areas is suffering
    because of this. Our last allocated round of Tax Credits had the lowest
    pricing that we have encountered during underwriting review: pricing in
    the low 80s, when not that many years ago credits were priced in the
    90s. While tax credit pricing is driven by a variety of variables, such
    as Community Reinvestment Act (CRA) needs, and the supply of other
    credits in the market, this new development may be an additional cause
    for consternation in the market.
        All of the Legislative initiatives mentioned seek to solve a common
    problem. Yet, they go about the process in unique ways. Open dialogue
    regarding the merits and costs will be necessary to find common ground
    and determine the best route.
    Closing
        In closing, rural housing challenges while sharing many of the same
    constraints as housing in general, have unique nuances. Unfortunately,
    those most greatly affected are Wyoming's most vulnerable populations,
    including the working poor, individuals with physical and mental health
    challenges, those experiencing homelessness, and the elderly.
        In Rural America, we pride ourselves in pulling ourselves up by our
    bootstraps and lending a helping hand when needed. We look to embrace
    the challenges posed by our aging single-family housing stock,
    including how needed repairs that contribute to a healthy and safe
    living environment are financed. We desire to partner with State and
    local home improvement and repair programs that are successfully
    enabling homeowners to age in place, improve the energy efficiency of
    their homes, and make critical health and safety repairs. This includes
    our Federal partners from the U.S. Departments of Housing and Urban
    Development, Agriculture, and Energy. Finally, we look to discuss ideas
    and policy considerations for scaling successful programs, as well as
    opportunities for interested parties to invest in or support home
    improvement and repair programs that work.
        I would be remised if I didn't take a few moments to thank our
    allies in Wyoming and here in Washington, DC, for your willingness to
    engage in this conversation and partner on solutions. I also would like
    to specifically thank all of the team back at the WCDA. You show up
    each day and put in the hard work; work that makes real life impacts to
    your fellow Wyomingites. Be proud and thank you. Finally, to close I'd
    like to quote a recent post by Governor Gordon's team; ``The world
    needs more Cowboys and Cowgirls, and . . . Wyoming needs more housing
    for our Cowboys and Cowgirls.'' Thank You.
            RESPONSES TO WRITTEN QUESTIONS OF SENATOR CRAPO
                           FROM JESSE ERGOTT

    Q.1. The Biden administration recently announced it would cap
    annual income limit and maximum rent increases for LIHTC and
    Section 8 projects at 10 percent year-over-year.
        What impact will this change have on existing properties in
    high-cost areas?

    A.1. While I represent an organization that does not currently
    engage in affordable housing development through the LIHTC
    program or property management utilizing Section 8, I can share
    a response to this question based on general experience in the
    affordable housing space and from insights gathered from
    colleagues who are more directly involved in this work. The
    decision by the Biden administration to limit rent increases
    has generally been well received by tenant advocates as an
    important cost-control measure to protect the most vulnerable
    renters, many of whom are considered severely cost burdened,
    from egregious rent increases. While these protections may be
    especially helpful in the short term to tenants in high-cost
    areas where there is additional pressure for pricing increases,
    there is concern that this cap will also limit the ability of
    developers/owners to keep pace with rising operating costs
    should the need arise. In some areas, especially those where a
    property may already receive a maximum rent and a typical
    increase may be more than 10 percent due to market conditions,
    the cap may ultimately result in lower rental income than is
    needed to sustainably operate a LIHTC property. Many developers
    and property managers also seek to provide other critical wrap-
    around services to tenants, but if normal operating costs can't
    be covered through rents and subsidies, these services are
    often the first to suffer by losing funding.

    Q.2. What impact will this change have on new LIHTC development
    in general and in high-cost areas specifically?

    A.2. In general, while adding protections for economically
    vulnerable renters can be considered a ``win'', there also
    seems to be a level of concern among affordable housing
    developers who now have another factor to consider when making
    a decision regarding whether or not to move forward with a
    project, especially in a high-cost area where price increases
    may need to be factored into the sustainability plan for the
    project. Costs for developing affordable units have risen
    significantly in recent years across the board, and the
    assembly of capital stacks and long-term financing plans for
    the projects tend to already be incredibly complex. For
    properties currently under development, this change will affect
    future anticipated rents which ultimately alters the
    supportable debt of the project.
        If a project in a high-cost area requires a price increase
    greater than 10 percent to be sustainable, then the 10 percent
    cap will likely lead to a larger financing gap and will
    increase the need to seek other types of funding (tax credits,
    soft financing, bonds, grants, etc.) which can be difficult to
    secure. Taking these factors into account during the
    development process, there is concern that this change could
    discourage the creation of additional affordable housing supply
    by adding another challenge to the already long list of
    barriers developers face to bringing (badly needed) new units
    online.
                                    ------

            RESPONSES TO WRITTEN QUESTIONS OF SENATOR CRAPO
                         FROM ROBIN DAVEY WOLFF

    Q.1. The Biden administration recently announced it would cap
    annual income limit and maximum rent increases for LIHTC and
    Section 8 projects at 10 percent year-over-year.
        What impact will this change have on existing properties in
    high-cost areas?

    A.1. At this time, Enterprise does not believe that capping
    annual income limits and rent increases at 10 percent will have
    a negative impact on Housing Credit properties, even for
    properties in high-cost areas. Enterprise Community Partners
    has over 40 years of experience in affordable housing,
    investing $72 billion nationwide and creating one million
    homes. Enterprise is one of the largest Low-Income Housing Tax
    Credit (Housing Credit) syndicators in the country, with more
    than 1,300 properties in our portfolio. We also own and operate
    115 properties serving 24,000 residents in the Mid-Atlantic.
    Many of these properties are in high-cost areas.
        As part of our standard underwriting of a Housing Credit
    property, we assume that expenses and rent will increase at a
    rate well below 10 percent. An in-depth analysis of the
    reasonableness of initial rent levels and operating expenses
    allows us to rely on a more moderate level of annual increases,
    though we model to ensure financial stability even if higher
    levels should occur.

    Q.2. What impact will this change have on new LIHTC development
    in general and in high-cost areas specifically?

    A.2. Enterprise does not believe that the imposition of a 10
    percent limit on increases in income and rents will have a
    chilling effect on the development of new Housing Credit
    properties, even in high-cost areas. Enterprise is a mission-
    based organization with the creation and preservation of
    affordable housing as our central tenet. In general, Enterprise
    has not observed tenant incomes increasing at an annual rate
    close to 10 percent. Because rent limits for a unit are based
    on what would be affordable for a target percentage of AMI,
    rather than the tenant's actual income, allowing rent to
    increase more than 10 percent each year could quickly make
    Housing Credit homes unaffordable to residents if their income
    is not keeping pace. Operating expenses have increased,
    especially in high-cost areas; however, every effort should be
    made to avoid passing off those costs to Housing Credit tenants
    in the form of higher rent. An increase over 10 percent would
    certainly not be sustainable for residents.
                                    ------

            RESPONSES TO WRITTEN QUESTIONS OF SENATOR CRAPO
                        FROM CHRISTOPHER VOLZKE

    Q.1. The Biden administration recently announced it would cap
    annual income limit and maximum rent increases for LIHTC and
    Section 8 projects at 10 percent year-over-year.
        What impact will this change have on existing properties in
    high-cost areas?
        What impact will this change have on new LIHTC development
    in general and in high-cost areas specifically?

    A.1. Thank you for the question. Maintaining the balance of
    resident affordability and ownership costs is an important
    piece of long-term rental preservation. We are understanding of
    the owners and know how much the cost of managing housing has
    increased, especially in insurance, cost of goods, salary, and
    staffing costs. That said, we also have to consider the
    population that we serve, and their capacity to absorb cost
    increases. Many States already have an overlay on rental caps.
    Locally here in Wyoming, our State overlay contemplates rent
    cap restrictions on the non-LIHTC funding sources (HOME &
    NHTF); yet we remain 3-4x oversubscribed on new development
    applications indicating a healthy market. In underwriting a
    multifamily property, long term projections do not expect a 10
    percent year over year increase in rents; rather that type of
    assumption would most likely be a red flag for a new
    development application. While there may be isolated cases
    where these caps pose challenges, I don't view this as a
    widespread industry issue, nor do I perceive it impacting
    investor interest in the Housing Credit. Instead, factors like
    Community Reinvestment Act (CRA) reform and new energy credits
    are more likely to have a lasting impact. So as with other
    policy changes, they should continue to be evaluated to ensure
    they support project viability amidst evolving market
    conditions.
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