    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                     BUILDING OUR FUTURE: INCREASING HOUSING
                                SUPPLY IN AMERICA

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

                                    HEARING

                                   before the

                     SUBCOMMITTEE ON HOUSING AND INSURANCE

                                     of the

                        COMMITTEE ON FINANCIAL SERVICES
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 March 4, 2025

                                   __________

                                Serial No. 119-8

           Printed for the use of the Committee on Financial Services

                     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                www.govinfo.gov

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    59-638 PDF                WASHINGTON : 2025

                     HOUSE COMMITTEE ON FINANCIAL SERVICES

                        FRENCH HILL, Arkansas, Chairman

    BILL HUIZENGA, Michigan, Vice        MAXINE WATERS, California, Ranking
        Chairman                             Member
    FRANK D. LUCAS, Oklahoma             SYLVIA R. GARCIA, Texas, Vice
    PETE SESSIONS, Texas                     Ranking Member
    ANN WAGNER, Missouri                 NYDIA M. VELAZQUEZ, New York
    ANDY BARR, Kentucky                  BRAD SHERMAN, California
    ROGER WILLIAMS, Texas                GREGORY W. MEEKS, New York
    TOM EMMER, Minnesota                 DAVID SCOTT, Georgia
    BARRY LOUDERMILK, Georgia            STEPHEN F. LYNCH, Massachusetts
    WARREN DAVIDSON, Ohio                AL GREEN, Texas
    JOHN W. ROSE, Tennessee              EMANUEL CLEAVER, Missouri
    BRYAN STEIL, Wisconsin               JAMES A. HIMES, Connecticut
    WILLIAM R. TIMMONS, IV, South        BILL FOSTER, Illinois
        Carolina                         JOYCE BEATTY, Ohio
    MARLIN STUTZMAN, Indiana             JUAN VARGAS, California
    RALPH NORMAN, South Carolina         JOSH GOTTHEIMER, New Jersey
    DANIEL MEUSER, Pennsylvania          VICENTE GONZALEZ, Texas
    YOUNG KIM, California                SEAN CASTEN, Illinois
    BYRON DONALDS, Florida               AYANNA PRESSLEY, Massachusetts
    ANDREW R. GARBARINO, New York        RASHIDA TLAIB, Michigan
    SCOTT FITZGERALD, Wisconsin          RITCHIE TORRES, New York
    MIKE FLOOD, Nebraska                 NIKEMA WILLIAMS, Georgia
    MICHAEL LAWLER, New York             BRITTANY PETTERSEN, Colorado
    MONICA DE LA CRUZ, Texas             CLEO FIELDS, Louisiana
    ANDREW OGLES, Tennessee              JANELLE BYNUM, Oregon
    ZACHARY NUNN, Iowa                   SAM LICCARDO, California
    LISA McCLAIN, Michigan
    MARIA SALAZAR, Florida
    TROY DOWNING, Montana
    MIKE HARIDOPOLOS, Florida
    TIM MOORE, North Carolina

                          Ben Johnson, Staff Director

                                     ------

                     SUBCOMMITTEE ON HOUSING AND INSURANCE

                         MIKE FLOOD, Nebraska, Chairman

    MONICA DE LA CRUZ, Texas, Vice       EMANUEL CLEAVER, Missouri, Ranking
        Chairwoman                           Member
    JOHN W. ROSE, Tennessee              NYDIA M. VELAZQUEZ, New York
    WILLIAM R. TIMMONS, IV, South        RASHIDA TLAIB, Michigan
        Carolina                         AYANNA PRESSLEY, Massachusetts
    RALPH NORMAN, South Carolina         RITCHIE TORRES, New York
    ANDREW R. GARBARINO, New York        SYLVIA R. GARCIA, Texas
    SCOTT FITZGERALD, Wisconsin          NIKEMA WILLIAMS, Georgia
    MICHAEL LAWLER, New York             BRITTANY PETTERSEN, Colorado
    MARIA SALAZAR, Florida               JANELLE BYNUM, Oregon
    TROY DOWNING, Montana

                             C  O  N  T  E  N  T  S

                                  ----------

                             Tuesday, March 4, 2025
                               OPENING STATEMENTS

                                                                       Page
    Hon. Mike Flood, Chairman of the Subcommittee on Housing and
      Insurance, a U.S. Representative from Nebraska.................     1
    Hon. Emanuel Cleaver, Ranking Member of the Subcommittee on
      Housing and Insurance, a U.S. Representative from Missouri.....     2

                                   STATEMENTS

    Hon. French Hill, Chairman of the Committee on Financial
      Services, a U.S. Representative from Arkansas..................     4
    Hon. Maxine Waters, Ranking Member of the Committee on Financial
      Services, a U.S. Representative from California................    42

                                   WITNESSES

    Hon. Paul Compton, Managing Partner, Compton Jones Dresher, LLP..     5
        Prepared Statement...........................................     7
    Dr. Emily Hamilton, Senior Research Fellow and Director of the
      Urbanity Project, Mercatus Center at George Mason University...    13
        Prepared Statement...........................................    15
    Mr. Buddy Hughes, Chairman of the Board, National Association of
      Home Builders..................................................    20
        Prepared Statement...........................................    22
    Ms. Tara Vasicek, City Administrator, City of Columbus, Nebraska.    36
        Prepared Statement...........................................    38
    Ms. Nikitra Bailey, Executive Vice President, National Fair
      Housing Alliance (NFAA)........................................    43
        Prepared Statement...........................................    45

                                    APPENDIX

                       MATERIALS SUBMITTED FOR THE RECORD

    Hon. Mike Flood:
        Habitat for Humanity.........................................    98
        National Multifamily Housing Council (NMHC) and National
          Apartment Association (NAA)................................   104
    Hon. French Hill:
        Council of Economic Advisers' Report from January 2024.......   106
    Hon. Maxine Waters:
        National Low Income Housing Coalition........................   137
        National Association of Housing and Redevelopment Officials
          (NAHRO)....................................................   144
        National Association for the Advancement of Colored People
          (NAACP) Legal Defense Fund (LDF)...........................   148
        National Association of Realtors.............................   151
        Letters: Department of Housing and Urban Development
          Department of Government Efficiency Termination Letter.....   171
          Housing Discrimination Complaint...........................   173
        Council of State Community Development Agencies (COSCDA).....   174
        Center for Responsible Lending (CRL) and the National
          Consumer Law Center (NCLC).................................   177
        The National Community Stabilization Trust (NCST)............   180
    Hon. Sylvia R. Garcia:
        National Association of Home Builders: 25 percent Tariff Hike
          on Canadian and Mexican Goods Harms Housing Affordability
          Dated February 1...........................................   185
        National Association of Home Builders: Trump Imposes
          Additional 25 percent Tariff on Canadian Softwood Lumber...   187
        Houston Chronicle: Texas Wants More Affordable Housing.
          Insurance Costs are Getting in the Way.....................   190
    Ms. Nikitra Bailey:
        National Fair Housing Alliance Federal Grants Received
          During/Since FY2022........................................   196
    Hon. Eamnual Cleaver:
        Defense Credit Union Council (DCUC)..........................   197
        National Association of Residential Property Management
          (NARPM)....................................................   199
        The National Community Development Association (NCDA)........   201

                     RESPONSES TO QUESTIONS FOR THE RECORD

    Written responses to questions for the record from Representative
      Mike Flood
        Hon. Paul Compton............................................   206
    Written responses to questions for the record from Representative
      Monica De La Cruz
        Hon. Paul Compton............................................   207
        Mr. Buddy Hughes.............................................   208
        Dr. Emily Hamilton...........................................   209
    Written responses to questions for the record from Representative
      Maxine Waters
        Dr. Emily Hamilton...........................................   211
        Hon. Paul Compton............................................   212
        Mr. Buddy Hughes.............................................   213
        Ms. Tara Vasicek.............................................   214
    Written responses to questions for the record from Representative
      Troy Downing
        Hon. Paul Compton............................................   215

                                  LEGISLATION

    H.R.----, the Identifying Regulatory Barriers to Housing Supply
      Act............................................................   216
    H.R.----, the Housing for America's Middle Class Act of 2025.....   222
    H.R.----, the Housing Supply and Innovation Frameworks Act.......   224

                     BUILDING OUR FUTURE: INCREASING HOUSING
                                SUPPLY IN AMERICA

                                  ----------

                             Tuesday, March 4, 2025

                 U.S. House of Representatives,
                 Subcommittee on Housing and Insurance,
                               Committee on Financial Services,
                                                        Washington, DC.

        The subcommittee met, pursuant to notice, at 2:18 p.m., in
    room 2128, Rayburn House Office Building, Hon. Mike Flood
    [chairman of the subcommittee] presiding.
        Present: Representatives Flood, Rose, Timmons, Garbarino,
    Fitzgerald, Lawler, De La Cruz, Downing, Hill, Cleaver, Tlaib,
    Torres, Garcia, Williams of Georgia, Bynum, and Waters.
        Also present: Representative Liccardo.
        Chairman Flood. The Subcommittee on Housing and Insurance
    will come to order.
        Without objection, the chair is authorized to declare a
    recess of the committee at any time.
        This hearing is titled ``Building Our Future: Increasing
    Housing Supply in America.''
        Without objection, all members will have 5 legislative days
    within which to submit extraneous materials to the chair for
    inclusion in the record.
        Chairman Flood. I now recognize myself for 4 minutes for an
    opening statement.

         OPENING STATEMENT OF HON. MIKE FLOOD, CHAIRMAN OF THE
     SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE
                             FROM NEBRASKA

        I am pleased to call to order the first Housing and
    Insurance Subcommittee hearing of the 119th Congress.
        Before discussing the subject of this hearing, I would like
    to welcome my friends on both sides of the aisle to this
    important subcommittee. The jurisdiction of the Housing and
    Insurance Committee touches every single congressional
    district, and I look forward to working with each of you on the
    issues that affect your constituents.
        I am a straight shooter. I do not hide the ball, and I will
    do my best to be fair to everyone on this subcommittee
    regardless of political affiliation.
        With that, let me pivot to an introduction of today's
    hearing. The issue we are exploring today is one that touches
    the lives of every single American, both in the towering cities
    on the coasts and in rural communities in the middle of the
    country, and that is the cost of housing.
        According to the National Association of Realtors, the
    median annual existing home price in 2024 was up 69 percent
    relative to 1995, and that is adjusted for inflation.
        This housing affordability challenge affects everyone.
    Young people saving up to buy their first home are renting for
    longer. Middle-class workers are struggling to make the rent,
    and Americans today feel less secure about their financial
    future because their bills are going up.
        When it comes to housing affordability, I hope this hearing
    will help contextualize this problem and give members of our
    subcommittee an opportunity to explore root causes.
        Let us start with a few things we can rule out. The problem
    is not that people are not making enough money. Wages are up
    over the last several years. The problem is not that people are
    not saving enough money. Savings exploded during the
    coronavirus disease 2019 (COVID-19) pandemic and have only
    recently trended back downwards. It is also not that the
    government does not spend enough money on Federal programs. We
    are coming off a period with historic levels of government
    spending.
        The reason for high housing costs is simple: We are not
    building enough homes in this country to meet the demand. Some
    estimates put the gap between housing supply and demand at
    around 3.85 million units nationwide. Some put it even higher,
    at more than 5 million units.
        The root of that housing supply problem is a little
    trickier to pin down to just one cause. Regulatory barriers at
    the State and local level, like zoning and land-use policies,
    play a large role in making it more difficult to create more
    housing in places that need it. Another driver is the actual
    cost of materials and the cost of labor used to build a home.
        For projects that use Federal dollars, either through Low-
    Income Housing Tax Credit or funds from a Federal program like
    the HOME Investment Partnership, those dollars are not free.
    They come with regulatory requirements at the Federal level
    that can make it more challenging to actually give taxpayers
    the best bang for their buck.
        Finally, we can explore whether there are any challenges
    related to the financing side that keeps projects from getting
    off the ground.
        I am excited to dig deeper into each of these issues today,
    and I look forward to our witnesses' testimony.
        With that, I yield back.
        Chairman Flood. The chair now recognizes the ranking member
    of the subcommittee, Mr. Cleaver, for 4 minutes for an opening
    statement.

     OPENING STATEMENT OF HON. EMANUEL CLEAVER, RANKING MEMBER OF
           THE SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S.
                      REPRESENTATIVE FROM MISSOURI

        Mr. Cleaver. Thank you, Mr. Chairman and I look forward to
    working with you. I am absolutely elated over the fact that we
    have issues that we both would like to resolve in these key
    positions. Thank you very much for your receptivity.
        This is the first hearing of the Subcommittee on Housing
    and Insurance in the 119th Congress.
        Our Nation is struggling with a fair-housing and
    affordable-housing crisis. In 2023, Americans filed a record-
    breaking number of fair-housing complaints.
        At the same time, the cost of renting and purchasing a home
    has reached historic heights. Since 2019, rents in the United
    States have increased 46.8 percent. The average sales price of
    a home now exceeds half-a-million dollars.
        When a typical family sits at the table to pencil out how
    they will get by for the next month in Missouri or in
    Nebraska--or anywhere else, for that matter--housing is the
    single largest expense.
        I appreciate your willingness, Mr. Chairman, to engage with
    me on what are clearly commonsense solutions. It is my hope
    that we pass bipartisan legislation into law that would improve
    the quality of life for American families. I support the
    Identifying Regulatory Barriers to Housing Supply Act, under
    consideration today.
        Local jurisdictions are rightfully asking the Federal
    Government for funding and resources to tackle this housing
    crisis. It is responsible to ask them to assess how local land-
    use policies are limiting the impact of the Federal funding and
    driving up the very costs they are trying to reduce.
        Some jurisdictions have made developing more housing
    illegal or cost prohibitive. Others are doing an incredible job
    figuring out how to optimize their zoning laws and are
    welcoming innovation in design, technology, and construction.
        I also support the Housing Supply and Innovation Framework
    Act under consideration, which would require Department of
    Housing and Urban Development (HUD) to study, develop, and
    publish guidelines and best practices for local zoning.
        These are constructive pieces of legislation. Zoning
    reforms are absolutely necessary but not sufficient by
    themselves. Senator Elizabeth Warren, Senator Raphael Warnock,
    and I have introduced the American Housing and Economic
    Mobility Act. This legislation would generate 3 million new
    housing units and bring down rents. This is also a constructive
    approach.
        It goes without saying that reported efforts to decimate
    HUD funding, programs, or staff are not constructive. It would
    also not be constructive for Congress to pass housing
    legislation that HUD does not have the capacity or the
    resources to implement.
        Yesterday, I joined Ranking Member Waters and others at HUD
    to elevate current concerns about executive actions. This
    demonstration followed reports that the Department terminated
    hundreds of probationary employees, reportedly plans to slash
    the Department's workforce by one-half, and has already
    withheld funding serving families, seniors, and people with
    disabilities.
        The congressional Public Housing Caucus has also sent a
    letter to Secretary Turner on how cuts would exacerbate the
    housing crisis and increase waste, fraud, and abuse. We have
    requested an urgent meeting with the Secretary. Secretary
    Turner testified to Congress that he would run a transparent
    and accountable Department.
        Thank you again, Mr. Chairman. I look forward to this
    hearing today and look forward to working with you. I yield
    back.
        Chairman Flood. Thank you, Mr. Cleaver.
        The chair now recognizes the chairman of the full
    committee, Mr. Hill, for 1 minute.

      STATEMENT OF HON. FRENCH HILL, CHAIRMAN OF THE COMMITTEE ON
        FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM ARKANSAS

        Chairman Hill. I want to thank my friend from Nebraska,
    Chairman Flood, for assuming the gavel on this important
    subcommittee, our Housing and Insurance Subcommittee.
        Mr. Flood has been long interested, as you can tell in his
    opening statement, in rolling up his sleeves and doing the hard
    work first to understand the challenges before reaching out in
    a bipartisan way and looking for solutions. This hearing is a
    great example of that approach.
        The typical family median cost of a Federal Housing
    Administration ensured (FHA-ensured) home in my home State of
    Arkansas is $175,000. In 2020, a 30-year mortgage rate was 3.1
    percent. With a 10-percent down payment, that family could be
    in that house for $680 a month. Now, after Biden's inflation,
    the mortgage rate is 6.8 percent, and that monthly payment is
    now over $1,000. Plus, in Arkansas, the average homeowner's
    insurance rates were $3,300 in 2023. Now they are up 9 percent
    to $3,600.
        Housing affordability is important, not only in Arkansas
    and Missouri and Nebraska but across the country. I look
    forward to working with my colleagues.
        I yield back to the chair.
        Chairman Flood. The chairman yields back.
        Today, we welcome the testimony of Hon. Paul Compton, a
    Managing Partner at Compton Jones Dresher, LLP.
        We welcome Dr. Emily Hamilton, who is a Senior Research
    Fellow and director of the Urbanity Project at the Mercatus
    Center at George Mason University.
        We welcome Mr. Buddy Hughes, who is the Chairman of the
    Board with the National Association of Home Builders.
        We welcome Ms. Tara Vasicek, who is the City Administrator
    for the City of Columbus, Nebraska, and we welcome Ms. Nikitra
    Bailey, the Executive Vice President with the National Fair
    Housing Alliance.
        We want to thank each of you for taking the time to be
    here. Each of you will be recognized for 5 minutes to give an
    oral presentation of your testimony. Without objection, your
    written statements will be made part of the record.
        I would add that when the Ranking Member of the full
    Financial Services Committee, Ms. Waters, arrives, we will take
    a short break and ask her to make remarks for 1 minute.
        Hon. Compton, you are now recognized for 5 minutes for your
    oral remarks.

    STATEMENT OF HON. PAUL COMPTON, MANAGING PARTNER, COMPTON JONES
                              DRESHER, LLP

        Hon. Compton. Thank you, Chairman Flood, Ranking Member
    Cleaver, Chairman Hill, members of the subcommittee. Thank you
    for this opportunity to testify and share my perspectives on
    increasing the housing supply.
        I have practiced law at the intersection of real estate,
    banking, tax, and affordable housing for more than 30 years.
    After my Senate confirmation in a bipartisan vote in 2017, I
    served as General Counsel of HUD under Secretary Ben Carson.
    Since that time, I have returned to private practice, focusing
    on affordable housing.
        In July 2024, I had the privilege of testifying before this
    subcommittee concerning cutting through government red tape in
    order to increase the supply and affordability of housing. I
    appreciate this opportunity to follow up on that.
        In that testimony, I expressed my view that over-
    regulation, particularly at the State and local levels, has
    driven up housing prices. The biggest part of the solution, in
    my view, lies in restoring checks and balances at those same
    levels to curb the continuous growth in housing regulation over
    the past 40 years.
        Numerous studies establish several facts. The real cost of
    housing construction has not meaningfully increased over the
    past 40 years when adjusted for inflation. The real cost of
    housing has substantially outstripped inflation over that
    period. The core components of that excess cost are land costs
    driven by land-use regulation, the direct cost of regulation,
    and the indirect cost of regulation, raising risk of creating
    homes.
        From community to community, and indeed from Federal agency
    to Federal agency, there is great variation in the nature of
    regulation. How Massachusetts regulates housing is different
    from California, which is certainly different from Texas.
    Moreover, how HUD regulates housing is different from how the
    United States Department of Agriculture (USDA) regulates
    housing.
        One result of this is, the housing market, particularly for
    single-family and smaller multifamily developments, is
    incredibly localized in nature. Thus, I believe that the first
    conclusion for this committee is that there are not one or even
    two or three problems but there are many, many.
        I believe that we must first view this systemically--that
    is, how can our overall governing structures be adjusted so
    that there is not a continuing bias to more regulation?
        Second, we must look aggressively at each opportunity to
    pare back regulations.
        In the Federal context, I can give one example of this.
    Under HUD's National Environmental Policy Act regulations,
    nearly every program, from FHA loans to Community Development
    Block Grant (CDBG) to HOME Program grants, requires a
    governmental environmental review and notification process for
    the public. There are thousands, if not tens of thousands, of
    these each year.
        Yet, over the last 6 years, as this process has delayed
    countless projects by many months and cost millions of dollars,
    it has resulted in a grand total of four environmental impact
    statements. We simply are regulating in a way that is excessive
    in light of the benefits that it is producing.
        In many cases, as I noted, it is not just merely the cost
    of red tape and regulation, but it is the increase in risk.
        There are several other elements that I would like to
    specifically call out.
        As I noted, first of all, it is eliminating most or perhaps
    all HOPE HUD programs from the coverage of the National
    Environmental Policy Act (NEPA). Under the revised definition
    contained in the Fiscal Responsibility Act of 2023, they simply
    do not meet the definition of a major Federal action. This does
    not mean that any of the substantive environmental requirements
    change, but only that the bureaucratic process of notice and
    review does.
        Second, make Federal property available for housing. This
    is more difficult than it sounds, but there is one clear and
    easy way to do it, and that is through the authority of the
    Department of Defense to enter into enhanced-use leases, which
    provide ground leases that could then be combined with FHA
    financing to create housing in these locations.
        We looked, under Secretary Carson, many times at using
    Federal land for housing, and it is incredibly challenging to
    do that, but the military, through its Enhanced-Use Lease
    Program, can easily do that if we can just get HUD and the
    Department of Defense (DOD) on the same page.
        Next, I would reconsider the scope of limitations caused by
    habitat restrictions--in particular, the northern long-eared
    bat. This covers almost the entire eastern United States and
    causes many, many delays in projects.
        Mr. Chairman, thank you. I will be delighted to answer
    questions on this and other topics.

        [The prepared statement of Hon. Compton follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Flood. Thank you, Hon. Compton.
        Dr. Hamilton, you are now recognized for 5 minutes for your
    oral remarks.

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

        Dr. Hamilton. Thank you, Chair Flood, Ranking Member
    Cleaver, and members of the subcommittee. I am Emily Hamilton,
    a Senior Research Fellow at the Mercatus Center at George Mason
    University.
        Outdated land-use and building regulations that restrict
    housing supply and drive up costs are a key driver of the
    affordability problems we are discussing today.
        While State and local governments played a primary role in
    shaping these policies, Federal action matters too. In some
    cases, Federal policies directly limit housing supply, and, in
    others, Congress can provide leadership by supporting State and
    local reformers working to modernize outdated rules.
        Today, I will highlight three areas where Congress can help
    State and local policymakers learn from what is working and
    repeal its own rules that are standing in the way of housing
    construction: first, reforming land-use regulations; second,
    expanding opportunities for siting manufactured housing; third,
    introducing improved analysis into the building code
    development process.
        To the first area, reforming land-use regulations.
        Rules that require each housing unit to use a lot of land
    place a high floor on the cost of building, but we have many
    examples of reforms that facilitate improved affordability. For
    example, Houston reduced the amount of land required for each
    new single-family house by two-thirds. As a result of this
    policy change, 80,000 houses have been built on small lots and
    Houston is the most affordable large Sun Belt metro.
        Congress could facilitate knowledge-sharing by directing
    HUD to publish model policies for facilitating new, less-
    expensive housing construction based on proven land-use reforms
    like this. It could also lead, by example, to repealing the
    Height of Buildings Act for D.C., which squeezes apartments out
    of the city's central business district.
        To the second area, expanding opportunities for siting
    manufactured housing.
        Manufactured housing is the least expensive way to build a
    new home in the U.S. today. However, many localities are
    choosing not to zone land for new manufactured housing.
        Congress Members could sing the praises of policymakers in
    States including Maryland, Montana, and Nebraska who have
    passed laws requiring their localities to allow manufactured
    housing to be used on any lot where site-built housing would be
    allowed, as well as policymakers in States like Arkansas and
    Texas who have banned aesthetic requirements that may make
    manufactured housing impractical.
        Federal statute currently requires every manufactured house
    to sit on a permanent steel chassis, even if the house is going
    to be attached to a foundation, never to be moved after its
    delivery from the factory. Congressional reform could improve
    the affordability of manufactured housing by removing this
    permanent-steel-chassis requirement, reducing costs and opening
    up opportunities for more flexible use of manufactured units.
        Finally, introducing economic analysis into the building
    code development process.
        While HUD's code for manufactured housing provides the most
    economical way to build new housing today, most new housing is
    built according to a State or local building code. In the U.S.,
    these codes are based on model codes published by the
    International Code Council.
        A 2022 survey found that just those building-code
    regulations adopted in the past 10 years make up 11 percent of
    the cost of building new apartment buildings.
        Americans deserve building codes that achieve high safety
    standards while remaining cost-effective, but the model codes
    that provide the foundation of U.S. building codes are not
    based on rigorous analysis.
        HUD could help by creating model codes for areas where
    State and local policymakers are expressing interest in reform,
    including a code for single-stair multifamily buildings up to
    six stories and a version of the International Residential Code
    that could cover up to six units.
        To conclude, the heavy lifting in zoning and building-code
    reform must come from State and local policymakers, but
    Congress can aid these efforts by shining a light on successful
    policies and repealing its own rules that are standing in the
    way of more housing at better prices.
        Thank you.

        [The prepared statement of Dr. Hamilton follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Flood. Thank you, Dr. Hamilton.
        Mr. Hughes, you are now recognized for 5 minutes for your
    oral remarks.

      STATEMENT OF BUDDY HUGHES, CHAIRMAN OF THE BOARD, NATIONAL
                      ASSOCIATION OF HOME BUILDERS

        Mr. Hughes. Thank you, Chairman Flood, Ranking Member
    Cleaver, Chairman Hill, and members of the subcommittee. Thank
    you for the opportunity to testify today on behalf of the
    National Association of Home Builders (NAHB).
        The United States is facing a fever-pitched housing
    affordability crisis. Nearly 77 percent of U.S. households
    cannot afford just the median price of a new single-family
    home.
        Even small price increases have sharp effects. Every time
    $1,000 gets added to the cost of a home, a new home, an
    additional 106,000 households are priced out of the market.
        What is fueling this unaffordability is the rising
    construction costs, which make it increasingly difficult for
    builders to produce housing that is attainable for buyers and
    renters, and lack of supply of over 1.5 million housing units.
        The headwinds placing pressure on builders can be boiled
    down to five categories that we call the ``five L's'': lending,
    lots, labor, lumber, and laws.
        Last year, NAHB released a 10-point plan to tame shelter
    inflation and ease the housing affordability crisis. We must
    work together to tackle these issues to ensure that all
    Americans have access to affordable housing.
        On lending, a lack of capital, particularly for small
    builders, is a key constraint on supply. The Acquisition,
    Development and Construction (AD&C) loan is one of the most
    heavily used financing tools in a builder's credit toolbox.
    Unfortunately, AD&C credit is tightening. Home builders rely on
    community banks for these loan products, but fewer banks mean
    fewer opportunities for a competitive interest rate.
        In addition to AD&C, builders utilize and rely on several
    Federal programs to help them supply new homes and apartments.
    These programs should be preserved and strengthened through
    practical regulatory processes.
        The availability of building lots is a major issue limiting
    housing production. Many metro areas face a shortage of
    developed land. Zoning laws and land-use restrictions make it
    difficult to convert undeveloped land into housing. Passing the
    chairman's Identifying Regulatory Barriers to Housing Supply
    Act will help policymakers identify housing barriers that
    prevent the production of more supply.
        Our Nation's skilled labor force cannot meet our housing
    needs. Month to month, there are over 300,000 open positions.
    We must support programs like Job Corps and legislation like
    the Creating Opportunities for New Skills Training at Rural and
    Undeserved Colleges and Trade Schools (CONSTRUCTS) Act to help
    prepare young adults for rewarding careers in construction and
    other essential trades.
        The cost and availability of materials, particularly
    lumber, significantly affect housing production. While lumber
    prices have fluctuated, supply chain instability and tariffs on
    imported materials continue to create uncertainty for builders.
    Boosting our domestic supply of lumber and negotiating a long-
    term softwood lumber agreement with Canada can help stabilize
    this volatile market, giving builders greater price stability.
        We respect regulation aimed at health, safety, and welfare.
    However, the HUD/USDA minimum energy standards, using the 2021
    International Energy Conservation Code (IECC), offers minimal
    cost savings to homeowners. Instead, this mandate significantly
    increases housing costs, especially in the entry-level market,
    thereby limiting access to mortgage financing and
    disadvantaging buyers.
        HUD and USDA should assist vulnerable home buyers and
    renters, not price them out of the market. This policy will
    deter new construction at a time when increasing the housing
    supply is crucial to lowering shelter inflation cost.
        Thank you again for this opportunity. The five L's--
    lending, lots, labor, lumber, and laws--are significant
    headwinds facing the residential construction industry, but if
    we partner together to address each factor, then we will be
    able to create the housing supply that all Americans need.
        Thank you again.

        [The prepared statement of Mr. Hughes follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Flood. Thank you, Mr. Hughes.
        Ms. Tara Vasicek, you are now recognized for 5 minutes for
    your oral remarks.

        STATEMENT OF TARA VASICEK, CITY ADMINISTRATOR, CITY OF
                           COLUMBUS, NEBRASKA

        Ms. Vasicek. Good afternoon, Chairman Flood, Ranking Member
    Cleaver, and subcommittee members. Thank you for the
    opportunity to testify today and provide a local perspective on
    the nationwide housing crisis.
        I am the City Administrator for the city of Columbus,
    Nebraska. Columbus has made significant efforts to increase
    housing production, recognizing a lack of available housing
    directly impacts our economic growth, workforce attraction and
    retention, as well as quality of life.
        Through strategic initiatives, we have increased housing
    development significantly. However, despite our proactive
    approach and continued commitment to housing, the issue
    remains: Housing production is not meeting demand.
        A few of the actions we have taken locally include removing
    locally controlled regulatory barriers, direct investment in
    housing development, and utilizing and leveraging all of the
    beneficial tools and incentives available to us.
        Over the past 5 years, Columbus has undertaken multiple
    updates to our land-development regulations to remove barriers
    to housing production. Many cities have regulations that limit
    housing density; Columbus does not. Accessory dwelling units,
    mixed-use types are allowed by right in all zones. We have
    changed our codes to make in-fill development and adaptive
    reuse easy to complete.
        Our local permitting process is efficient. All housing
    permits are issued within 2 weeks of the city receiving a
    completed application.
        Currently, the city is leading a workforce housing
    development subdivision. There are currently 325 housing units
    of various densities being constructed--six times the units
    produced annually a short time ago.
        The other major financial tool used for this project: tax
    increment financing, or TIF, similar to tax abatement in other
    States. TIF allows for the capture of up to 15 years of
    property taxes paid on the project's improvements to use as
    funding to build out the project. TIF is the most efficient
    tool available to Nebraska communities for housing development.
        In addition to TIF, the city allocates a portion of local
    sales tax to economic development. Primarily, this funding goes
    to housing. We have also been successful in securing many
    grants. We currently have a significant revolving loan fund,
    which acts as short-term gap financing for workforce housing
    projects.
        Columbus is very strategic when deciding what State and
    Federal grants we pursue. Many grants introduce excessive
    regulatory hurdles, leading to time delays, increased project
    costs, and long-term management challenges. These factors also
    negatively impact construction because they often limit the
    number of builders who are willing to participate. In a housing
    market as dire as the current, builders are going to pick the
    path of least resistance.
        Despite our efforts to increase housing production,
    significant obstacles remain which continue to impede
    development. Locally, rising land and infrastructure costs are
    a significant challenge. At the State and Federal levels,
    complex regulations add additional time and expense.
        The Federal regulation that we hear the most negativity
    about related to cost is the Environmental Protection Agency's
    (EPA's) stormwater management policies, which add hundreds of
    thousands of dollars to subdivisions.
        CDBG is a Federal program the city of Columbus would like
    to utilize more for housing, but the beneficiary requirements
    often prevent us from seeking this funding. In order to provide
    affordable housing to individuals earning 50 to 80 percent Area
    Median Income (AMI), substantial incentives in addition to CDBG
    have to be provided.
        The most affordable housing in any city will always be its
    existing housing stock, not new construction. Affordable new
    housing units can only be built because of substantial
    incentives and subsidies. Supporting workforce housing with
    CDBG could be very successful. By expanding market-rate housing
    in growing cities like Columbus, you will also free up more
    attainable and affordable housing options, which CDBG aims to
    support.
        Finally, I would ask you to consider providing more funding
    opportunities for communities like Columbus who have reformed
    local regulations and are being proactive. By prioritizing
    funding for communities which have embraced reform, you can
    accelerate housing production and ensure local initiatives are
    met with the necessary resources to succeed.
        I strongly believe, today, housing is one of the greatest
    limiting factors to continued economic prosperity for our
    Nation. Please join Columbus and so many other cities in
    thinking more critically about how we can all solve this
    vitally important issue.
        Thank you for your time, attention, and this opportunity.

        [The prepared statement of Ms. Vasicek follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Flood. Thank you very much.
        Ms. Bailey, you are now recognized for 5 minutes for your
    oral remarks.
        While we work on your microphone, we are going to recognize
    the Ranking Member of the full Financial Services Committee for
    her opening remarks of 1 minute, and we will work with Ms.
    Bailey's microphone to get it fixed.

        STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
      COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM
                               CALIFORNIA

        Ms. Waters. Thank you very much.
        Well, Committee Republicans claim to care about increasing
    housing supply, yet the Trump Administration's policies only
    make housing more expensive. Today, Trump imposed taxes on
    imports from Canada and Mexico that will increase housing costs
    and has gutted enforcement of consumer protection and civil
    rights in housing.
        House Republicans are doing nothing as the Department of
    Government Efficiency (DOGE) ketamine clan infiltrates the
    Nation's key housing agency. So far, Musk has stolen funding
    from communities, illegally terminated staff, and accessed
    confidential data, including details about sexual assault
    against women.
        All of this paves the way toward their end goal, evict
    America to put America's housing in the hands of private equity
    investors.
        I urge Republicans to man up and hold Trump and co-
    President Musk accountable and immediately call Secretary
    Turner up to testify.
        With that, I ask unanimous consent to submit four
    statements into the record from the following organizations:
    the National Income Housing Coalition, the National Association
    of Housing and Redevelopment Officials, the NAACP Legal Defense
    Fund, and National Association of Realtors.
        I also request unanimous consent to submit two letters from
    the Department of Housing and Urban Development. The first is a
    notice to a grantee that their fair-housing grant has been
    canceled at the direction of Elon Musk's DOGE----
        Chairman Flood. Without objection----
        Ms. Waters [continuing]. stating that the civil-rights
    funding, quote, ``no longer effectuates the program goals or
    agency priorities.''
        There is more, but I am going to yield back my time because
    I just want to say: Republicans, if you want to do housing, you
    have to get rid of Elon Musk.
        Chairman Flood. Your time has expired.
        Without objection.

        [The information referred to can be found in the appendix.]

        Chairman Flood. Ms. Bailey, is your microphone working?
        Ms. Bailey, why do you and Ms. Vasicek switch seats for
    just a moment?
        There we go.
        Ms. Bailey, you are recognized for your opening statement,
    your oral statement of 5 minutes.

    STATEMENT OF NIKITRA BAILEY, EXECUTIVE VICE PRESIDENT, NATIONAL
                         FAIR HOUSING ALLIANCE

        Ms. Bailey. Thank you.
        Chair Flood, Ranking Member Cleaver, Chair Hill, Ranking
    Member Waters, and other distinguished members of the
    subcommittee, thank you for the opportunity to testify during
    today's hearing on the need to increase the Nation's supply of
    fair and affordable housing for everyday people, including the
    frontline workers such as teachers, nurses, firefighters,
    police officers, and others who sacrificed their lives during
    the COVID-19 crisis to help our economy remain afloat.
        I am Nikitra Bailey, Execute Vice President of the National
    Fair Housing Alliance (NFHA). NFHA leads the fair-housing
    movement, and we work to eliminate housing discrimination and
    ensure equitable housing opportunities for all people and
    communities. NFHA also ensures and represents the voices of
    over 200 local, nonprofit fair-housing agencies throughout the
    United States.
        Our Nation is in a fair-and affordable-housing crisis
    impacting millions. The actions of President Trump's executive
    orders attempting to ban diversity, equity, inclusion, and
    accessibility; punitively and haphazardly throwing together a
    Federal funding freeze; and canceling almost half of funding
    for local, nonprofit fair-housing agencies throughout the
    United States have caused chaos, fear, insecurity, and
    dysfunction around the country.
        Instead of providing our Nation with practical solutions to
    address skyrocketing housing costs, a lack of affordable
    housing supply, increased complaints of housing discrimination,
    and technology's growing role in determining housing decisions
    with solutions, steps on the ladders of opportunity are being
    removed for everyday people. These haphazard executive actions
    will cause serious economic and personal injuries that will
    undermine our already-fragile housing market and our Nation.
        Housing is fundamental to the American Dream, and people
    want elected leaders to quickly implement solutions so that
    they can ensure they can fairly access opportunity and share in
    our Nation's prosperity.
        People are seeking opportunities and solutions that would
    drive down the rising cost of housing and provide fair-market
    risk, expand fair access to mortgage credit in underserved
    communities, reduce homeowners' insurance costs, and produce
    the development of over 5 million affordable-housing units.
        Diversity, equity, inclusion, and accessibility are
    synonymous with hard work, fairness, merit, and standards of
    excellence. They are a cornerstone of our Nation's Constitution
    and civil-rights laws and help to ensure compliance with our
    Nation's robust anti-discrimination laws.
        In fact, many of these concepts are codified in our civil-
    rights laws and regulations as well as the Constitution.
    Congress established fair housing as the national policy of the
    United States with the passage of the Fair Housing Act
    following the horrific assassination of Dr. Martin Luther King,
    Jr. The landmark legislation provides two promises: the right
    for all people to access housing free of discrimination; and
    the creation and inclusion of inclusive vibrant communities
    with life-affirming amenities everyone needs to thrive.
        The President cannot upend our country's national policy,
    the Constitution, or civil-rights laws with executive orders.
        Congress must act quickly to make equitable housing
    investments that promote financial inclusion and stimulate
    economic growth for everyone. As housing continues to drive
    inflation, the Federal Reserve Board is powerless to handle
    housing inflation.
        A housing market in which all people cannot participate
    fairly without regard to race, color, national origin,
    religion, gender, familial status, or disability is a broken
    market, both economically and morally.
        The Housing Prices Response Act, sponsored by Ranking
    Member Waters, provides a sensible path forward. It includes
    $150 billion in relief for the Nation's fair-and affordable-
    housing crisis to ensure people living in urban, rural, and
    suburban communities' housing needs are met.
        Increased support and intervention from our Federal
    Government is needed, not a withdrawal from basic civil rights.
    Fair-housing laws improve people's lives and the communities in
    which they live, especially seniors needing to remain housed,
    women who have been battered and are seeking safety from
    abusers, and people with disabilities who use fair-housing laws
    to obtain accessible housing so they can properly use their
    kitchens and bathrooms.
        They also strengthen our economy and make the Nation more
    prosperous. America is at its best when united and relentlessly
    pursuing a country where everyone--and we mean everyone--
    regardless of their background, has a fair shot at reaching the
    American Dream.
        Thank you for the opportunity. I look forward to answering
    questions.

        [The prepared statement of Ms. Bailey follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Flood. Thank you, Ms. Bailey.
        We will now turn to member questions. The chair now
    recognizes himself for 5 minutes for questioning.
        First of all, I want to say to Ms. Vasicek, thank you for
    your testimony today, and thank you for telling the story of
    the workforce housing challenges in Columbus, Nebraska.
        Let me tell you about this community. Twenty-four thousand
    people live there. It has a huge manufacturing base that pulls
    from well over 50,000 in the region. Last February, this time
    last year, they had 1,200 open jobs; unemployment is at 1
    percent. The number one limiting factor to filling those jobs
    was a lack of housing--a lack of housing.
        If you are a mother and a father, and you are both working
    at a meat-packing plant, in Cargill, and you are working 50
    hours a week, you deserve a home. You deserve a home that you
    can own, in a neighborhood where your kids can walk to school
    and you can take them to the park. We have all of those
    amenities, but we do not have houses. It is not just a housing
    issue; it is an economic development issue.
        Ms. Vasicek, do you have any examples you can share of how
    a lack of housing stock prevented private investment into the
    community, whether it be from a company locating operations in
    Columbus or expanding operations there?
        Ms. Vasicek. I hear about--at every economic-development-
    related visit, meeting, I hear about this. Whether it is a
    current business or a business that we are trying to attract to
    Columbus, the number one topic is housing, followed quickly by
    workforce.
        They go hand-in-hand, in our opinion. We cannot attract
    more workforce if they have nowhere to live. I have heard of
    countless stories of businesses hiring people on and then they
    end up turning the job down because they cannot find housing in
    Columbus.
        Chairman Flood. One of the things I really want to unpack
    here is that Columbus took its own sales tax money that it gets
    through the State of Nebraska, its local share, its local
    option, and you actually went out, bought land, put the
    infrastructure into the ground, and made those lots available
    to reduce the risk home builders would have so that they could
    deliver a better-priced home to somebody in Columbus.
        Is that right?
        Ms. Vasicek. That is correct.
        Chairman Flood. There is an example of a city government in
    a rural area using existing sales tax revenue. Imagine if we
    did this for cities like it across the country, where the
    builder could come in, the infrastructure is in the ground. The
    benefit of that government funding ultimately accrues to the
    new homeowner, building equity and helping them get started.
        The other thing that I think is very important here is that
    we should be building these homes in the middle of the town,
    where there are parks and schools because kids learn better in
    great neighborhoods.
        All right. Let us go to Dr. Hamilton.
        You focused your testimony on zoning and land-use policies
    at the local level. What should the Federal Government do in
    these areas while respecting the authority of localities to
    make their own specific policies?
        Dr. Hamilton. Thank you, Chair Flood.
        That is an important question. While some have proposed
    more radical interventions, I think this area needs to stay
    squarely in the hands of State and local government officials.
    As we are hearing from constituents in so many parts of the
    country, this is a huge problem for American families, and
    there is bipartisan agreement that these rules need to get
    reformed.
        I think there is an important knowledge-sharing role and
    use of the bully pulpit available to Members of Congress to
    point to proven examples of reforms that are making meaningful
    differences in housing supply and affordability.
        Chairman Flood. Ms. Vasicek, you talked a little bit about
    the environmental requirements affecting a small community like
    Columbus.
        What is the real barrier there? What kind of barriers have
    you seen with these environmental regulations?
        Ms. Vasicek. The regulations I spoke of are specifically
    related to stormwater. We have, in the last 10 years, been
    required to--any project that is over an acre, disturbs more
    than an acre of site area, has to go through very stringent
    stormwater management regulations and permanent infrastructure
    improvements so that is that engineering cost, that
    understanding those regulations, and then building out those
    improvements is a considerable cost to developers.
        Chairman Flood. I do not have much time here, but one last
    question: Rehab funding for existing housing stock, how can it
    be used and what would you--is it something you care about?
        Ms. Vasicek. Oh, yes, it is something we care about a lot.
    We use our local option sales tax for that too. We could use
    considerably more for owner-occupied rehab.
        Our local option sales tax has----
        Chairman Flood. Regrettably, I have to stop you there.
        Ms. Vasicek. Okay.
        Chairman Flood. I am out of time, so I have to enforce it
    on myself. Thank you very much for being here.
        The gentleman from Missouri, Mr. Cleaver, the ranking
    member, is now recognized for 5 minutes.
        Mr. Cleaver. Thank you, Mr. Chairman.
        Ms. Bailey--but I want to go to you, Ms. Vasicek. Your
    testimony was extremely significant to me because you talked
    about workforce housing, and you used tax increments--that is,
    using tax increment financing.
        I was a Mayor before I took this demotion, but I am curious
    about what was done in this community. Because when you use tax
    increment financing, when most cities--many cities, it ends up
    being that you draw the Tax Increment Financing (TIF) district,
    and most communities are going to try to draw at least a
    portion of that district, all of it, if possible, into some of
    the older parts of the city.
        Inevitably, if you go down into downtown Kansas City, you
    are going to see all kinds of new buildings going up in Kansas
    City, and they are receiving TIF. If you go into the older
    parts of the neighborhood, even though those areas have been
    designed as TIF districts, not one single project. I have been
    around the country, and I have seen similar things.
        I am just so interested in what Columbus did to attract
    housing TIFs.
        Ms. Vasicek. Specifically for the project that I referenced
    in my testimony, the city of Columbus, we work very hard to
    make connections with housing builders. Then we did--we made
    lots of connections, we built relationships and then we had
    individual meetings, and we put together a request for
    proposals. In that request, we targeted the types of housing
    that we needed--that we need in Columbus.
        Then we put that request for proposals out, and we sent it
    to almost 70 housing builders in our region. We received 10,
    maybe, really good submittals for our subdivision, and we
    selected 5 of those to build in our subdivision. That is who is
    building out this 25-acre project.
        Like Representative Flood said, we are very active in being
    involved with our community because our business community is
    absolutely requiring that of us. That is why we are more active
    than we ever have been.
        Mr. Cleaver. Thank you. I would not mind taking a view of
    what has been done. I think that is--if there is a magical way
    of getting interest, I am certainly interested in it. Thank you
    very much.
        Ms. Bailey, you mentioned in your testimony, that the
    administration has canceled, I think, almost half of the signed
    grants already. Is there anything you can tell us that would
    suggest that this can be recovered? Even if they--even if that
    is reversed today or next week, have we lost ground that may
    not be recoverable, or it may be years to recover?
        Ms. Bailey. Yes, sir. Thank you so much for the question.
        Many of the local fair-housing organizations in communities
    throughout the Nation, some of them rely on their HUD funding
    through the Fair Housing Initiatives Program, which is a
    program that was started under the Reagan Administration to
    provide fair-housing support in their communities-because some
    of these agencies rely 100 percent on the funding, some of
    those agencies will cease to operate. Some of them are already
    taking action to lay off staff and wind down.
        Some organizations that have not even received cancellation
    letters are also taking action now to wind down because they
    are afraid that they will get an abrupt notification. This came
    in the cover of dark, without any notice, so no one could
    prepare.
        In fact, it is an attack on a program that is one of HUD's
    most efficient programs--a program that has helped HUD
    efficiently address redlining, efficiently create solutions for
    appraisal bias, efficiently help survivors of domestic violence
    find safe and fair housing, so this will have harmful
    implications for people throughout the United States.
        Mr. Cleaver. Thank you very much.
        I have lots of questions, but my time is running out.
        Mr. Chairman, I yield back.
        Chairman Flood. Thank you, Mr. Cleaver.
        The gentleman from Arkansas, Mr. Hill, the chair of the
    full committee, is now recognized for 5 minutes.
        Chairman Hill. Thank you, Mr. Chairman.
        Thank you to our good panel for this important discussion
    about housing affordability--certainly a major topic for the
    suppliers of housing and the buyers of housing across our
    country.
        Mr. Hughes, I spent a good part of my life lending money to
    home builders before I was in Congress, and I have had good
    days and bad days in that business. I have finished some
    houses, as a banker, that I did not think I should have.
        You talked a lot about the credit environment and, of
    course, we have talked about price here extensively on it, and
    we think about that from a buyer's point of view--the mortgage
    market and the mortgage price that shot up so highly during the
    days of the Joe Biden inflation. I am curious about talking
    about the supply side.
        You mentioned specifically in your testimony about AD&C
    lending--acquisition, development, and construction lending--
    something, as I say, I spent a lot of years in the middle of.
        What has happened--what is the biggest difference when you
    look back over your career? Are the lines of credit available
    to the members of the National Association of Home Builders?
    Are there fewer specs? More customs only? Are the terms and
    conditions tougher?
        Talk to me about the price and structure and terms for a
    home builder right now in the banking market.
        Mr. Hughes. Well, ``yes'' to all of those.
        We have all had those good days and bad days. Particularly
    what has been difficult for me is the fact that I am a very
    small operator, and it has made it difficult to get lending
    locally--at community banks, savings and loans. I have had some
    success with the Federal credit unions simply when I was turned
    down by the other banks in my area, so having more options,
    more----
        Chairman Hill. more choice for you is important. Like, in
    your own----
        Mr. Hughes. Absolutely.
        Chairman Hill [continuing]. community, if you had more
    competition, more bank choices, that would be a benefit to you.
    Is that what you are saying?
        Mr. Hughes. Absolutely, because our competition in housing
    are the national builders that have moved into our county, and
    we all know are publicly traded.
        Chairman Hill. Yes.
        Mr. Hughes. They do not have to go into the banks----
        Chairman Hill. No.
        Mr. Hughes [continuing]. and beg.
        Chairman Hill. Well, when I started my banking company in
    the late 1990s, there were 295 banks in Arkansas. Now there are
    70 banks in Arkansas. So----
        Mr. Hughes. Right.
        Chairman Hill [continuing]. I know a lot of our communities
    are hurt by that. That is why this committee has made a
    commitment that we want to make community banking, community
    financial institutions great again in this Congress by
    tailoring the regulatory burden so that these institutions are
    growing, that we actually have startup institutions, that the
    institutions that we have can access capital so that you can
    access capital.
        Has the structure of those loans also changed to where a
    builder, based on their financial statement and their track
    record, like, the number of loans, individual homes you can
    start under a line of credit, has that shrunk over the years as
    well?
        Mr. Hughes. I am not as familiar with that because I have
    not done a lot of spec building.
        Chairman Hill. Okay.
        Mr. Hughes. Most of the time, it has been custom building.
        Chairman Hill. Yep.
        Mr. Hughes. I have done some multifamily. One thing that
    has bitten me, in trying to do a rental project----
        Chairman Hill. Yep.
        Mr. Hughes [continuing]. that all of the banks in our
    city--wherein this was after the recession, when Federal
    regulators were clamping down on banks for having over their
    allowed percentage of rental property.
        Chairman Hill. Yes.
        Mr. Hughes. I was turned down by all of these banks because
    it was rental, and they were over their--it did not have
    anything to do with my project.
        Chairman Hill. That is right.
        I mean, this is what I think is so important for this
    committee to understand, that the impact of Dodd-Frank on
    community banking changed dramatically the risk that banks can
    take in very traditional local commercial businesses like
    building a home and that, if it is a rental property, it has
    supposedly higher risk than something that is owner-occupied in
    a custom home that you are going to build.
        Mr. Chairman, I would like to enter into the record the
    Council of Economic Advisers' report from January 2024 that
    talks about the burdens to housing affordability, and one of
    those is the pernicious impact of bank regulations since Dodd-
    Frank.
        Chairman Flood. Without objection.

        [The information referred to can be found in the appendix:]
        Chairman Hill. Mr. Chairman, I yield back.
        Chairman Flood. The gentleman yields back.
        The gentlewoman from California, Ranking Member Waters, is
    now recognized for 5 minutes.
        Ms. Waters. Thank you very much.
        Let us see. Mr. Hughes, President Trump has imposed a new
    25-percent tax on goods purchased by Americans and American
    businesses from Canada and Mexico, which is being characterized
    as, quote, the world's dumbest trade war, unquote.
        Your organization sent a letter to Trump noting that Canada
    and Mexico supply the United States with 25 percent of building
    materials and that his proposed tariffs would increase the cost
    of housing.
        Will your members be able to build more housing than they
    were yesterday with the added costs that come with paying these
    new import taxes?
        Mr. Hughes. Oh, absolutely not and we are very concerned
    about tariffs, because we import goods from Canada and Mexico
    and all over the globe, for that matter.
        I deal particularly in Canada with one product, and I have
    had to spend a lot of money ahead of time to keep from paying
    that tariff.
        We are very, very concerned.
        Ms. Waters. Well, let me just say that we are sitting here
    talking about ``regulations are the cause of a lack of housing
    in this country.'' That is absolutely ridiculous. As a matter
    of fact, we have a housing crisis, and we are here acting
    business-as-usual.
        We have 700,000 people sleeping on the street every night
    who are homeless. We have people with Section 8 vouchers
    waiting for years to try to get a place. We have middle-class
    people who cannot afford to pay 20 percent down on housing, and
    people paying more than 30 percent for housing.
        Yet, we have an administration that is sitting here talking
    about ``make building housing less safe, let us do something
    about regulations that get in the way of big bankers making
    more money, et cetera, et cetera.''
        This is all ridiculous. This does not make good sense. We
    have people, both in rural communities and urban communities,
    suffering.
        It is not regulation. You know who wants to get rid of
    regulations? The biggest banks and financial institutions in
    this country. They want to get us back to where we were before
    we had that meltdown in predatory lending.
        Well, we are going to fight against predatory lending. We
    are going to fight to build more affordable housing. We are
    going to fight against this administration who claims to care
    about housing but are here doing the business of the
    billionaires. It is not going to work. I am absolutely sick and
    tired of it.
        How much time do I have left? I have a lot more time. I am
    going to continue to talk.
        Let me just tell you, I want us to understand there is a
    crisis in this country. Unfortunately, Trump, who has been
    bought and paid for by Elon Musk, has given him the ability to
    go into our areas, all of our departments--the Treasury, the
    Consumer Financial Protection Bureau, the Department of
    Education. Do you know they just closed Social Security offices
    in my district and many of the other districts? Now I add all
    of this to the housing crisis.
        I want to tell you that this country is not going to do any
    better by getting rid of regulations and talking about
    environmental requirements, being opposed to things that have
    kept our homes and our communities safe as we build housing.
        Well, I want everybody to, as we say--I do not kind of like
    the word--man up. It is time to face the crisis for what it is.
    Regulations that will be obliterated have nothing to do with us
    doing what we continue to try and do in HUD.
        I went over to HUD just yesterday with a letter to the new
    Secretary to ask him, what are they going to do? Why are they
    allowing Musk to get rid of over 50 percent of their employees
    there? They would not be able to respond to the developers who
    want to build housing.
        We need to understand, not only is there a housing crisis
    but the cost of supply and materials have continued to rise
    since COVID.
        I want everybody to understand, the government has a role
    to play. If we care about America, if we care about safe homes,
    if we care about children who are sleeping in cars who have to
    get up in the morning and try to go to school, well, stop this
    madness, talking about the regulation. Let us talk about what
    America can do, rather than the President going over and having
    a good time with Putin and Kim Jong-un and with other countries
    that have nothing to do but want to take over our country.
        I have 19 more seconds. I will keep going. I will keep
    going by saying: For those of you who are in housing, who are
    responsible for building and getting money, you should be
    asking for more resources in order to get that done.
        With that said, I do not really have enough to say right
    now, but I will keep saying it, and I want you to listen: Do
    not leave away from here business-as-usual. I want you to
    understand----
        Chairman Flood. The gentlelady's time has expired.
        Ms. Waters [continuing]. a fight is on. We are going to the
    streets.
        Chairman Flood. The gentlelady's time has expired.
        Ms. Waters. Oh, has it expired?
        Chairman Flood. It has expired.
        Ms. Waters. Thank you.
        Chairman Flood. The gentleman from Tennessee----
        Ms. Waters. Okay. All right.
        Chairman Flood [continuing]. Mr. Rose is now recognized for
    5 minutes.
        Mr. Rose. Thank you, Chairman Flood, and thank you, Ranking
    Member Cleaver, for holding this hearing.
        Thank you to our witnesses for your time and being here
    today with us.
        In Tennessee, we are blessed to be leaders in the
    manufactured-housing space. I truly believe that manufactured
    housing serves as the key to unlocking more housing units for
    working families all across this Nation.
        It is for that reason that I plan to reintroduce
    legislation in this Congress that would remove the current
    permanent-steel-chassis requirement for manufactured housing.
        Dr. Hamilton, what benefits would manufactured housing
    without a permanent chassis provide in terms of producing more
    manufactured homes?
        Dr. Hamilton. Thank you, Congressman. That is a great
    question, and there are a couple of benefits.
        First are the most obvious direct effect of the permanent
    chassis requirement, which adds several thousand dollars to the
    cost of each manufactured home, which, when we are talking
    about one of the most cost-effective ways of building housing
    that is a substantial percentage of each unit. Without that
    permanent-steel-chassis requirement, those chassis could be
    repurposed from home to home, taking off that direct cost of
    each new unit.
        Equally as important, I think, removing that steel-chassis
    requirement could open up opportunities to use this housing
    more flexibly. We can find instances of manufactured homes that
    are attached to a permanent foundation with a basement, and you
    can see the chassis poking down into the basement. It is
    ridiculous.
        Getting rid of that requirement would allow people to use
    these homes in the way that works for them.
        Mr. Rose. Dr. Hamilton, from a local zoning perspective,
    are there any specific rules that make manufactured housing
    infeasible to build?
        Dr. Hamilton. Yes, there are a few, and it depends on
    whether we are talking about manufactured housing in parks or
    on owner-occupied lots.
        In the second, on owner-occupied lots, the biggest factor
    is minimum-lot-size requirements. When a house is required to
    sit on a very expensive piece of land, it does not make any
    sense to use a low-cost type of housing that is not going to
    end up in an overall affordable product.
        When we are talking about manufactured housing in parks, we
    are seeing a nationwide trend of existing parks being
    redeveloped when land costs change and the highest and best use
    of the land in that park changes, but localities are choosing
    not to zone additional land for parks.
        That reduces the opportunities that are available for using
    manufactured housing, and it puts residents of parks often in
    very difficult positions when they cannot find a place to site
    the home that they may own.
        Mr. Rose. Sure. Thank you.
        Ms. Vasicek, what steps have you taken in Columbus,
    Nebraska, to incentivize the development of manufactured
    housing that you would recommend for other communities to
    follow suit?
        Ms. Vasicek. Sure. Manufactured housing, and modular homes
    as well, are allowed in all zones.
        Specifically, on our zoning regulations, we have eliminated
    minimum-lot regulations. We have eliminated lot widths, and
    site area per housing unit. We have eliminated all rules that
    limit the ability to do accessory dwelling units.
        Those are a few of the very specific local regulations that
    are going to get in the way of modular and mobile homes.
        Mr. Rose. As a result of those changes, have you seen more
    successful modular or manufactured housing development?
        Ms. Vasicek. It is definitely increasing in Columbus.
        Mr. Rose. Very good. Thank you.
        As a member of both the Financial Services Committee and
    the House Agriculture Committee, I have observed the vast
    difference in execution of how the Department of Housing and
    Urban Development approaches housing versus the Department of
    Agriculture.
        Hon. Compton, what are the negative results of these
    differing approaches to regulating housing?
        Hon. Compton. Thank you, Congressman.
        First, for the builders and developers of housing, it
    simply is different regimes that they have to be familiar with.
    The way that USDA will go about its financing process is
    entirely unlike what HUD would do in a similar context. This
    may even be where you have adjoining sites, one financed by
    USDA, and one financed by HUD; they will be completely
    different processes.
        HUD's tends to be more standardized, whereas USDA, you can
    either have good experiences or bad experiences, but they are
    quite random.
        Chairman Flood. The gentleman's time has expired.
        Mr. Rose. Thank you.
        I see my time has expired, and I yield back, Mr. Chairman.
        Chairman Flood. The gentlewoman from Michigan, Ms. Tlaib,
    is now recognized for 5 minutes.
        Ms. Tlaib. Thank you so much, Mr. Chair, for having this
    important hearing.
        Ms. Bailey, when you think of 50 percent of HUD employees
    being illegally fired--many of them illegally fired--I do not
    think people understand the drastic impact it will have on all
    the housing crisis that we have. I think the private sector
    does not realize what is going to come down the pipes.
        I think getting rid of, again, this sort of oversight is
    also very detrimental.
        I looked at the numbers and said, what does 50 percent
    really mean? I saw it goes from 1,529 Federal workers in HUD
    down to 765 people.
        Even the Office of Public and Indian Housing facilitates--
    get this--3.5 million rental assistance. Mr. Chair, that means
    3.5 million residents who count on those Federal workers for
    that rental assistance program will be wiped out. It is going
    to disrupt services to them and disrupt, again, this effort to
    try to combat the housing crisis.
        When I even looked deeper into it--I looked at HUD's Office
    of Fair Housing and Equal Opportunity, and I was like, okay, so
    they are going to cut them from--that is 572 workers there,
    down to 134 workers. That is a 77-percent reduction.
        I want you to tell, Ms. Bailey, my colleagues and the
    American people, is housing discrimination still happening?
        Ms. Bailey. Thank you for the question.
        Every year, there are over 4 million instances of housing
    discrimination and in most instances of housing discrimination
    are not reported, for fear of retaliation.
        Every year, we have been doing a fair-housing trends
    report, and we see complaints of housing discrimination go up,
    and we are at record highs, with complaints based on
    discrimination for disability being the leading and majority of
    the complaints brought.
        I want to highlight one of the victims that the National
    Fair Housing Alliance recently assisted. She was an older
    American, and she was facing challenges with creating repairs
    to her home, because, as we all know, insurance costs are
    rising----
        Ms. Tlaib. Uh-huh,
        Ms. Bailey [continuing]. she was unable to pay her
    insurance, and she was about to lose her home and be foreclosed
    upon.
        What we were able to do, as a FIT grantee, was to assist
    her in getting the proper repairs done and make sure there was
    no fraud and abuse like we saw during the Great Recession,
    where so many older Americans lost their homes because they
    were doing things like getting repairs on their home and did
    not realize they were signing away a lifetime of equity.
        We were able to help her get those repairs and maintain her
    insurance so that we did not have an older American lose her
    home.
        That is the travesty of the Great Depression--I am sorry,
    excuse me--the Great Recession of 2008. We saw so many
    homeowners in cities like Atlanta who were house-rich but cash-
    poor.
        Ms. Tlaib. Yes.
        Ms. Bailey. These are targets of dangerous and risky,
    abusive predatory lenders who would go to their churches, who
    would go to their community centers as trusted resources and
    meet with them and convince them to take on projects to improve
    their property so that they could retire with the dignity that
    they deserved. They were hoodwinked, and all of their home
    equity was taken away.
        That is why we have the Consumer Financial Protection
    Bureau today, an organization, an agency with the sole mission
    of----
        Ms. Tlaib. I always tell people; it is the 911 for fraud.
    That is where my residents call. I call the Consumer Financial
    Protection Bureau (CFPB). I do not care if it is mortgage fraud
    or targeting them. They get it over and over again.
        I cannot believe they just got rid of this agency that
    pushes back against corporate greed and the scams that target
    our--I mean, I saw them do it to veterans, student loan
    borrowers, and everyone.
        I want to get to a really important question. You know, one
    of the troubling reports that came out, that Elon Musk and
    DOGE, which is--there is so lack of transparency. I do not know
    why we do not have him at this committee hearing. I have so
    many questions to ask him on behalf of my residents, but they
    gained access to thousands of people's sensitive personal
    information.
        Ms. Bailey, you know this, and I want my colleagues to know
    this. HUD enforces civil rights laws and pushes back against
    abuse, but it also enforces Fair Housing Act and parts of the
    Violence Against Women Act and often the records in HUD are not
    anonymous. They are just out there for anybody to have access
    to that work for the Federal Government or has, basically,
    screen tab access to it.
        I am just--I am thinking of all those records of domestic
    violence cases and cases on housing discrimination. Can you
    talk about the safety and privacy issues for so many of our
    families that did turn to HUD for help?
        Ms. Bailey. They would not have protection. Women who are
    trying to escape abusers, and including families with children
    who might be facing abuse, they would not have protection----
        Chairman Flood. The gentlewoman's time has expired.
        With that, the gentleman from Wisconsin, Mr. Fitzgerald, is
    recognized for 5 minutes.
        Mr. Fitzgerald. Thank you, Chairman.
        Thank you all for being here today.
        In 2023--I have a county, it is part of my Fifth
    congressional District in Wisconsin, Washington County--they
    established--the county exec, to his credit, established a
    program to increase the supply of homes that are priced, in
    general, kind of across the board, you would say those were
    middle-income. The goal of the program is to provide quality
    homes within 30 percent of the median household income.
        Under the program, the county provides funding based on
    maximum of $20,000 per owner-occupied dwelling unit, and it is
    capped at $2.4 million for any one site.
        They are thinking out of the box, and they are trying to
    come up with a way of building something, maybe smaller square
    footage and smaller lot size, but still fit kind of within the
    constraints of what would be considered local and State
    regulations.
        This investment is basically a grant to local governments
    and acts as a 0-percent loan for infrastructure, construction,
    and other eligible expenses, and is then returned to the county
    in the revolving fund. It is actually--they have had great
    success already.
        Mr. Hughes, I am just wondering--I know I am kind of
    hitting you with something maybe you are unaware of, but are
    there other things like this that maybe you are seeing, where
    people are thinking out of the box right now in developing some
    new footprints, that is starting to allow us to build some
    affordable housing in some of these counties?
        Mr. Hughes. Probably the most popular of those that I am
    aware of is the increased use of accessory dwelling units. They
    are much smaller; sometimes it is renovating an attic over a
    garage for a mother-in-law or--but, yes, it is becoming very
    common, very common.
        More and more jurisdictions are allowing it, but,
    unfortunately, I would guess that there are more jurisdictions
    that do not want anything to do with it.
        Mr. Fitzgerald. My frustration, I think, is that, when you
    look at certain parts of my State, in my district and outside
    of my district, there is a ton of construction going on, but
    they are building rental units, right? Or they are building
    these multiple duplex units, which is, obviously, kind of
    money-making ventures for a lot of those that are involved in
    the building trades. It is the single-family homes that are not
    being built.
        What we are trying to figure out, I guess, is, are these
    newer units being built--the rental units and the duplexes
    being built in lieu of single-family housing?
        Is that something that you are seeing, as well, kind of on
    a national scale?
        Mr. Hughes. I am not sure on a national scale. I can speak
    to my locale.
        Mr. Fitzgerald. Yes. Yes. That would be helpful.
        Mr. Hughes. We have a pretty balanced mix, I think.
        Of course, we are seeing a lot of growth from Lexington,
    North Carolina. For 100 years our economy was furniture,
    textiles, and tobacco, and they all went away in about a 10-
    year period. We have worked very hard to recruit manufacturing,
    and I would like to say that we are a victim of our own
    success. We have enticed some very large manufacturers. We are
    building a Siemens plant to build locomotives, and we simply do
    not have enough houses to go around.
        We have a good mix in our area of single-family and
    apartments. Now, as far as nationally, I apologize, I would not
    know what the numbers were there.
        Mr. Fitzgerald. Yes.
        I think the other issue that has kind of started to emerge
    is that, in the late 1990s, there were a lot of subdivisions
    that were built, and they were large-square-footage homes--
    McMansions, right?
        Mr. Hughes. Sure.
        Mr. Fitzgerald. There really has not been a shift away from
    that. Yet, the prices associated with a lot of those
    subdivisions are just--they are too high.
        Mr. Hughes. Sure.
        Mr. Fitzgerald. It is not something that a--it is not a
    starter home, right? It is not a starter home.
        Mr. Hughes. Right. Right.
        Mr. Fitzgerald. As builders kind of work through that
    process and come up with a different type of dwelling that
    maybe fits that, it might help to relieve some of the pressure
    that is on right now.
        Mr. Hughes. Right. I think one trend you would be glad to
    see; I think the average size of a custom home today is
    smaller. Maybe people are using a little more common sense.
        Mr. Fitzgerald. Yes. I mean, in the 1950s, a two-bedroom,
    one-bath home was the standard.
        Mr. Hughes. Sure.
        Mr. Fitzgerald. Suddenly that became three-bedrooms, two-
    baths, and it continued to grow. So----
        Mr. Hughes. Sure.
        Mr. Fitzgerald [continuing]. maybe that is an answer.
        I am out of time. Thank you very much.
        I yield back.
        Chairman Flood. The gentlewoman from Texas, Ms. Garcia, is
    now recognized for 5 minutes.
        Ms. Garcia. Thank you, Mr. Chairman.
        Thank you to all the witnesses today and welcome to our
    Capitol and to a big day for many around the complex.
        I just wanted to just kind of talk a little bit about the
    Trump tariffs.
        I know that the ranking member has already asked some
    questions of you, Mr.--is it ``Murray''? No, you are
    ``Harris,'' Mr. Harris, from the--right.
        Mr. Hughes. Hughes.
        Ms. Garcia. I think both of your press releases that I saw
    that came from your organization clearly stated your
    disappointment and displeasure with the Trump tariffs that are
    coming to both Canada and Mexico and the impact that it would
    have on some of the lumber that you purchased.
        Also, of course, combined with that, we know that there are
    some actions that he is planning on doing in terms of mass
    deportations, which could gut your workforce by about 30
    percent.
        Both of those together, it is almost like a double whammy
    for your industry. Can you all survive?
        Mr. Hughes. Yes, I think we can survive, but we are
    definitely going to--it is going to be challenging, maybe the
    best way to put it.
        We are very concerned about tariffs. As I mentioned
    earlier, it is causing me to spend more money already, and it
    just became official. We have so many products that come from
    our northern friends and our southern friends: Portland cement
    for ready-mix concrete--I am in the concrete business--drywall,
    gypsum for drywall. Yes, no question.
        Ms. Garcia. Well, but what about the impact of 30 percent
    of your workforce maybe not being here anymore?
        Mr. Hughes. I have not felt that in our area. We have a lot
    of----
        Ms. Garcia. What has your industry felt? Are you getting
    reports from around the country? Obviously, you represent a
    national organization.
        Mr. Hughes. Sure. Sure, we are getting it, and it varies
    depending on areas.
        We are working very hard to increase the workforce. Our
    association, from coast to coast, is doing a lot of things to
    train and retrain the next generation. I have been coordinating
    carpentry contests for over 25 years to try to train high-
    school kids, which is working very well, but it is a slow, slow
    fix.
        Ms. Garcia. Thank you.
        Mr. Hughes. No question, the immigration----
        Ms. Garcia. Thirty percent is huge, in terms of hit to your
    workforce, and then, what is it, 25 percent in Trump tariffs. I
    mean, like I said, it is a double whammy, and I wish you all
    the best.
        Mr. Hughes. Thank you.
        Ms. Garcia. I know that many of us are very concerned for a
    variety of reasons but thank you for the press releases that
    you have sent out. It made clear about what position you all
    have.
        Recently, a constituent reached out to my office to help
    with casework. She is a mother of three and a veteran. She also
    filed to participate in the HUD-Veterans Affairs Supportive
    Housing program. The program provides homeless veterans with
    HUD's housing choice voucher, rental assistance, along with
    case management and clinical services provided by the
    Department of Veterans Affairs.
        She originally filed to participate in the program because
    she and her children were faced with the risk of homelessness.
    However, due to the shortage of affordable housing in Houston
    and the high demand in the program itself, the waitlist for the
    Housing of Urban Development-Veterans Affairs Supportive
    Housing (HUD-VASH) program has been closed. They just have been
    closed. That left my constituent, a 100-percent-disabled
    veteran who served this Nation, unable to participate.
        Ms. Bailey, your work with the National Fair Housing
    Alliance directly works with families like my constituent. What
    can we do, as a Congress and as a Nation, to better prioritize
    affordable housing so that our vulnerable communities and our
    Nation's heroes can avoid homelessness?
        Ms. Bailey. Thank you for the question.
        One of the things that you can do is make sure the
    administration is not trying to override the rules of Congress.
    Dollars have already been appropriated, and those contracts are
    being taken away. The President does not have the authority to
    do that so to hold the administration accountable for making
    sure dollars that Congress already appropriated are spent in
    the way that Congress has designed them to do such.
        The second thing is making sure things like our
    Affirmatively Furthering Fair Housing provision of the Fair
    Housing Act, which simply requires that every community is
    vibrant, with all of the amenities that everyone needs to
    thrive, is fully enforced. It is actually the key to some of
    the local and State-based exclusionary zoning laws.
        Ms. Garcia. Thank you.
        I yield back, Mr. Chairman.
        Chairman Flood. Thank you.
        The gentleman from South Carolina, Mr. Timmons, is now
    recognized for 5 minutes.
        Mr. Timmons. Thank you, Mr. Chairman.
        Hon. Compton and Dr. Hamilton, during your testimony, you
    touched on some things that I want to expand on a little bit.
        It seems to me that one of the biggest challenges in the
    affordable-housing space is the complex, I am going to say,
    patchwork framework of approaches taken by the Federal
    Government, the State, and the city. While they are all
    intended, well-intended, for the same purpose of facilitating
    affordable housing, they are often contradictory and, in many
    ways, vague.
        I guess the last part--with elections that have
    consequences, some of the State and local rules can change in
    the middle of a development, and the permitting process can be
    overly onerous and complex.
        Dr. Hamilton, is there a way that the Federal Government
    could preempt all of these rules to create an NFIP, National
    Flood Insurance Program-style system through which State and
    local governments can then adopt portions of it to try to
    streamline that?
        Does that question make sense?
        Dr. Hamilton. Thank you, Congressman.
        Part of that is outside of my area of expertise, as far as
    the legal role that Congress could play in a more aggressive
    role in determining zoning and permitting processes, but I
    think there are absolutely lessons that need to be shared by
    States and local governments, and implemented, in terms of what
    is working.
        One thing we often see is that the repeal of one specific
    zoning rule, intended to make a new type of project feasible to
    build, will just reveal the challenges in permitting or
    building codes or subdivision regulations that are still
    standing in the way of the type of housing that the reformers
    were hoping to see.
        Mr. Timmons. Hon. Compton, what are your thoughts on that
    concept?
        Hon. Compton. Yes. Congressman, in my opening remarks, I
    spoke of a systemic or systematic approach to this.
        I think that one of the problems that we have really dates
    back to the 1986 Tax Act. We took out passive-loss--we put in
    passive-loss limitations in the 1986 Tax Act, which essentially
    took individuals and small businesses out of the ability to
    invest economically in real estate. I think that had the
    unintended consequence of disconnecting local investors from
    the local real estate market.
        What we have seen over the last 40 years since that was
    done is an explosion of local regulation. In part, it is
    because many of the builders are the national builders, which
    do not have input into State and local elections, and, thus,
    there is really no political check on the growth of these
    regulations, because many, many homeowners would just as soon
    nobody else ever build near them.
        I think that reexamining the--as part of the Tax Cuts and
    Jobs Act reconsideration, looking at taking passive-loss
    limitations off of residential investment could help restore
    balance.
        Mr. Timmons. Thank you for that.
        It seems that all levels of government are searching for a
    solution to the problem of affordability. In my district, it is
    particularly challenging, as we have gentrification due to
    increased population growth, and we have no public
    transportation to speak of. It is even more of a challenge
    there.
        I have encouraged our State and local government to view
    this challenge from a perspective of, how do you incentivize,
    as opposed to require?
        Because, in my experience, when local governments try to
    require a percentage of affordable housing, it really creates a
    bad environment. Because if you are telling a developer they
    have to do 25, 30 percent affordable, that developer is still
    going to get the rents necessary to make the project work, and
    you are going to have the 70 percent of the people subsidizing
    30 percent and neighbors subsidizing neighbors. I actually
    think it is just immoral.
        If we are going to do this; we should consider it from the
    perspective of general fund tax dollars. If you want to then
    use those general fund tax dollars because you have convinced
    the people that you represent, that is an appropriate use of
    tax dollars--which I think many cities and States can have that
    conversation--then you incentivize developers, using general
    fund tax dollars.
        It just makes a lot more sense than--it is harder to do. It
    is a lot harder to do, because you actually have to defend your
    policy decision to the people that elect you, but it is
    drastically superior to telling developers that they must force
    one neighbor to subsidize another. Yes, I appreciate this
    hearing. I look forward to working with my colleagues across
    the aisle to try to solve this problem for all of our cities
    and counties.
        Thanks.
        Chairman Flood. The gentleman yields back.
        The gentleman from California, Mr. Liccardo, is now
    recognized for 5 minutes.
        Mr. Liccardo. Thank you, Mr. Chair. Thank you for allowing
    me to waive on.
        Thank you also for taking the time last week. I appreciated
    the opportunity--or 2 weeks ago, I think--to speak with
    Democrats about our ideas on housing. I really want to thank
    Ranking Member Cleaver for the invitation to that conversation.
        Mr. Hughes, I appreciate your emphasis on the five L's.
    Thanks for keeping it simple for us. That is helpful.
        I wanted to talk about three of those L's for just a
    moment.
        First, on the lending, I really appreciate NAHB's advocacy
    for full funding for all HUD and USDA rental assistance
    contracts, for robust funding for the HOME Program, for the
    USDA Homeownership Direct Loan programs and multifamily
    programs. I think those are all important, and I certainly hope
    my colleagues on both sides of the aisle will heed your
    advocacy.
        In particular, I was interested about the expansion of the
    Low-Income Housing Tax Credit (LIHTC)--I know that there was
    pending legislation in the last session--and specifically on
    boosting the 9 percent, which I imagine could help a lot of
    small jurisdictions, smaller towns, that do not have a lot of
    access to capital, that still have a gap in the capital stack.
    By boosting it, say, from 9 to 12 percent, it could enable
    projects to actually get a shovel out of the ground much
    faster.
        Have you seen that happen based on the experiment that we
    just went through, through the post-pandemic era, when we saw a
    boost in that tax credit?
        Mr. Hughes. Well, personally, I have not had any dealings
    with LIHTC at all, but I have some friends that have, and they
    love it, to be honest with you. It is one of the best tools
    they have.
        I am sorry, I cannot speak directly to it, but I know they
    would like to see it increased.
        We know, we do not stand a chance furnishing housing for
    low-income families without some kind of government subsidies.
    That is one of the best.
        Mr. Liccardo. Yes, I agree. I think, certainly in my
    experience as a Mayor of a large city and in a very expensive
    place, we had a capital stack sometimes of seven or eight
    different sources. Having that boost could be a real catalyst
    to getting more units built.
        Going to the next L, labor, I think you testified, was it
    300,000 open positions----
        Mr. Hughes. Correct. That is average.
        Mr. Liccardo.--in construction across the country?
        Mr. Hughes. Average. Right.
        Mr. Liccardo. Is it fair to say that has been something of
    a chronic challenge for us since the Great Recession, for about
    a decade and a half? Is that right.
        Mr. Hughes. Sure, exactly because the recession retired a
    lot of people before they wanted to--or, before they would have
    naturally, and it left a huge gap.
        Mr. Liccardo. We can agree that having more immigration
    would probably help for those skilled labor positions. Is that
    fair.
        Mr. Hughes. Absolutely.
        I grew up in the tobacco belt, where we used immigrant
    help, but the outfall of that, a lot of times, was the folks
    that came in for seasonal work--we do not have tobacco anymore,
    but we have Christmas trees, so we still have a big influx. A
    lot of these workers get a job and stick around and learn to
    lay block.
        Mr. Liccardo. Yes.
        Mr. Hughes. That is--I mentioned we are working very hard
    to train the next generation, but it is slow.
        Mr. Liccardo. Yes.
        Mr. Hughes. There have to be some ways that we can take
    advantage of the immigrant force that we have right now.
        Mr. Liccardo. Also, the many people who do want to work.
        Mr. Hughes. Oh, absolutely.
        Mr. Liccardo. Yes.
        Mr. Hughes. No question, they do want the work.
        Mr. Liccardo. I appreciate that.
        I also appreciate your prior testimony that we were not
    helped any with regard to housing construction costs by the
    President's increase in tariffs. We know it affects Canadian
    lumber and many other building materials, and I appreciate your
    testimony in that regard.
        Dr. Hamilton, I appreciated your testimony as well and I
    understand particularly the points around zoning and how that
    can be a real constraint.
        We do have a challenge in many local jurisdictions where
    folks--some may call them Not in my Backyard (NIMBY) neighbors
    who yell because they love their community, of course, but they
    do not like something getting built that is tall next to their
    neighborhood.
        We have existing stock of buildings with 20 percent
    vacancy, right, nearly 20 percent nationally, and that is our
    office stock. There is an opportunity, certainly, to
    rehabilitate those buildings.
        Would it not make sense from a zoning perspective where
    perhaps we could have a Federal program that could stimulate
    the conversion of those buildings with perhaps a by-right
    rezoning requirement?
        Dr. Hamilton. Thank you, Congressman.
        Yes, there are certainly instances where office buildings
    can be successfully converted to residential, to great effect
    sometimes. With historic buildings, it creates beautiful
    opportunities for very cool multifamily projects in what are no
    longer viable office buildings.
        Unfortunately, there are many more instances where the
    floor plate does not work.
        Chairman Flood. The gentlewoman's time----
        Mr. Liccardo. Understood. It only works for smaller floor
    plates, but it is still a significant percentage.
        Thank you.
        Chairman Flood. The gentleman's time has expired.
        I recognize Ms. Garcia for a unanimous-consent request.
        Ms. Garcia. Mr. Chairman, I ask for unanimous consent to
    introduce into the record two press releases from the National
    Association of Home Builders: one dated February 1st, ``25
    percent Tariff Hike on Canadian and Mexican Goods Harms Housing
    Affordability''; the second one, ``Trump Imposes Additional 25
    percent Tariff on Canadian Softwood Lumber.''
        The third article is from the Houston Chronicle, and it is,
    ``Texas wants more affordable housing. Insurance costs are
    getting in the way.''
        Thank you, Mr. Chairman. I yield back.
        Chairman Flood. Without objection.

        [The information referred to can be found in the appendix:]

        Chairman Flood. The gentleman from New York, Mr. Garbarino,
    is now recognized for 5 minutes.
        Mr. Garbarino. Thank you, Chairman.
        Thank you all, to the witnesses, for being here today.
        On average, government regulations account for nearly 25
    percent of the cost to build a typical new single-family home,
    totaling almost $94,000.
        Mr. Hughes, NAHB research has found that approximately 14
    million American households are priced out of the market for a
    new home by government regulations.
        Can you give us examples of regulations either during the
    development or construction phase that have led to these
    increased costs for housing?
        Mr. Hughes. I can give you many. My favorite----
        Mr. Garbarino. I have only 5 minutes.
        Mr. Hughes. I know.
        My target is on energy codes. We debate a lot about codes,
    and, truthfully, 85 percent of those we do not have an argument
    with, as long as it is health and safety. Where we get a little
    sideways is when we get involved with the government, the
    Federal Government gets involved with energy codes, increased
    energy codes. That is where it has really escalated out of
    control.
        We would love to see that--and one of those requirements is
    on the HUD, USDA, and Department of Veterans Affairs (VA) loans
    having to conform to those heavier codes.
        Mr. Garbarino. Absolutely.
        It is not just the Federal Government, but we have seen
    States do it. This past Friday, New York moved one step
    closer----
        Mr. Hughes. Sure.
        Mr. Garbarino [continuing]. to installing a gas-stove ban
    for new buildings. This first-in-the-Nation ban will increase
    energy costs for New Yorkers and stress the electrical grid and
    eliminate consumer choice, all while having a minimal
    environmental impact and pricing out working-class families.
        Mr. Hughes, you just mentioned these standards that are
    coming out and being forced on HUD and USDA, and New York
    energy standards. We see these things coming out of here; they
    do not have the benefit of what the intention is, but they are
    having a lot of negative impact. You talked about--I talked
    about cost.
        What about timing of projects? Viability of projects? Are
    these stopping even things from getting started?
        Mr. Hughes. Sure. If not stopping them, tremendously
    slowing them down.
        Mr. Garbarino. Well, I appreciate that very much.
        The main factor--I am going to switch things here--the main
    factor contributing to housing unaffordability is the ongoing
    shortage of homes required to meet increasing demand. In order
    to right the ship, we must explore innovative solutions to keep
    pace with household needs.
        One such solution to address not only affordability issues
    but also the supply challenges have been manufactured housing.
        Dr. Hamilton, can you please describe how manufactured
    housing could possibly address the high cost of building new
    construction in high-density urban areas such as Long Island?
        Dr. Hamilton. Thank you, Congressman.
        Yes, manufactured housing presents cost efficiencies over
    site-built housing in a variety of ways, one of which is that
    it can be built offsite, where labor costs can be much lower
    than they are on Long Island.
        What is necessary, though, in high-cost places is,
    typically, allowing a dense manufactured-housing development
    that local zoning rules are generally standing in the way of.
    One factor could be outright manufactured-housing bans. Another
    could be minimum-lot-size requirements, which make the cost of
    each piece of land that a house can sit on very expensive and
    make manufactured housing an unviable solution.
        Although, some of HUD's recent reforms to allow for more
    than one manufactured-housing unit to be combined are
    promising.
        Mr. Garbarino. Thank you very much for that answer and I
    just want to make a statement just to finish.
        We have heard a lot of complaints about the cost of homes
    going up, the cost of construction, the cost of buying. Very
    little has been done to solve it, except for--the past
    administration and a lot of State governments controlled by--
    New York, for instance, controlled by a Democratic Governor for
    the last 20-some-odd years--they have gone after the mortgage
    industry, they have gone after the title insurance industry,
    they have gone after the realtors, they have gone after the
    home builders, all to try to--all these groups that help people
    actually achieve homeownership, they have gone after them as if
    they are the problem.
        They are not the problem. Over-regulation by government is
    the problem. They need to get out of the way and let these
    people, who have done a great job for decades of letting people
    buy homes, get them back into the business where they have been
    and been so successful at it. We have to get out of the over-
    regulation that government has done.
        With that, Mr. Chairman, I yield back.
        Chairman Flood. The gentleman yields back.
        The gentleman from New York, Mr. Torres, is recognized for
    5 minutes.
        Mr. Torres. Thank you, Mr. Chair.
        Even though housing is one of the central concerns of every
    American household, funding for HUD represents a mere 1 percent
    of the overall Federal budget. The Fiscal Year 2024 Federal
    budget was in the range of $7 trillion, of which only $70
    billion went to HUD.
        Ms. Bailey, do you think housing is getting anything
    approaching its fair share of Federal funding?
        Ms. Bailey. No and thank you for the question, sir.
        Mr. Torres. The National Low Income Housing Coalition
    reports that America has a housing deficit of 7.3 million units
    for the lowest-income Americans. The United States builds
    somewhere between a million and 2 million units a year, but
    only a small subset of those units is affordable to the lowest-
    income Americans.
        Now, I am all for land-use reform, for reasonable
    deregulation, but the fact is that it is all but impossible to
    build deeply affordable housing for the lowest-income Americans
    without some measure of public subsidy.
        Is that correct?
        Ms. Bailey. Correct.
        Mr. Torres. If we continue to catastrophically under-build
    housing in America and continue to catastrophically under-
    invest in housing in America, then we, as a country, have no
    hope for closing the housing deficit of 7.3 million units. In
    fact, that deficit will only widen over time.
        Now, the greatest sources of deeply affordable housing are
    Section 8 and Section 9 public housing. There are about 5
    million Americans living in Section 8 public housing and about
    2.5 million living in Section 9 housing.
        I can tell you, as a product of public housing, most
    Americans who live in Section 8, in public housing, would be
    homeless without it, because market-rate rent is simply too
    high.
        My question to you, Ms. Bailey, is, what is more expensive
    for the Federal Government, homelessness or those housing
    programs?
        Ms. Bailey. Homelessness, sir. Thank you.
        Mr. Torres. When the Federal Government defunds or under-
    invests in programs like Section 8 and public housing, it is
    not creating a cost saving; it is simply substituting the
    higher cost of homelessness for the lower cost of affordable
    housing.
        Do you agree with that assessment?
        Ms. Bailey. Yes, sir.
        Mr. Torres. Affordable housing is not a cost but a cost
    saving relative to the far greater cost of homelessness.
        Ms. Bailey. I would add ``fair and affordable,'' sir.
        Mr. Torres. The Federal Government must not only create new
    housing supply; we must preserve the existing housing supply.
    Nowhere is the need for preservation more pressing than in
    public housing.
        I grew up in New York City public housing, New York City
    Housing Authority (NYCHA), which has been so chronically
    underfunded for so long by the Federal Government that it has a
    capital need of $80 billion and counting. That is 80
    ``billion'' with a ``B.''
        Housing authorities like NYCHA typically receive only a
    percentage, only a proration of the formula Federal funding for
    which it is statutorily eligible. In fact, there have been
    years when NYCHA has only received 82 percent of its formula
    Federal funding.
        Do you think there is a private landlord in America that
    could operate with only 82 percent of the revenues that it
    needs?
        Ms. Bailey. No, sir.
        Mr. Torres. Why should we expect that of public housing?
        Ms. Bailey. We absolutely should not, and, in fact, we need
    more investment, and we need to be very intentional.
        The Housing Crisis Response Act has $150 billion. It is a
    sensible package that we all need. We need to see increased
    support for housing choice vouchers, and increased support for
    public housing authorities.
        We need to act quickly. Housing is an important pillar of
    our economy. If we allow housing to fail, the economy fails.
        Mr. Torres. Federal public housing is a Federal program and
    a Federal obligation.
        Ms. Bailey. Yes.
        Mr. Torres. If there are bricks falling off a public
    housing building, does the Federal Government have an
    obligation to replace them?
        Ms. Bailey. Yes.
        Mr. Torres. If there are leaking roofs that are causing
    water to penetrate and damage the building systems, does the
    Federal Government have an obligation to replace those roofs?
        Ms. Bailey. Yes, because the people who live in those
    housing places deserve the dignity of a home that is safe.
        Mr. Torres. Safe, decent, affordable housing, which every
    Member of Congress enjoys. Why not wish for every American the
    safe, decent, affordable housing that we, as Members of
    Congress, take for granted?
        I have a question for each of the panelists. There are
    multiple causes to the affordability crisis, right? Insurance,
    construction cost, land use. Which cause would you identify as
    the most consequential?
        I will start with Hon. Compton.
        Hon. Compton. Hearkening back, Congressman, to what I said
    about what we did in the Tax Code 40 years ago, we
    intentionally knew that changes in the Tax Code in the 1986 Tax
    Reform Act were going to cause under-investment in housing, and
    that is exactly what we have gotten.
        Dr. Hamilton. Thank you, Congressman.
        I would point to land-use regulations and permit approval
    processes.
        Mr. Hughes. Excessive codes.
        Ms. Vasicek. I would say, since we have reformed our local
    regulations and we have invested significantly in housing at
    our level, it is some of the----
        Chairman Flood. The gentleman's time has expired.
        Ms. Vasicek [continuing]. Federal and State requirements.
        Chairman Flood. The gentleman's time has expired.
        Mr. Torres. Thank you.
        I have a shortage of housing and a shortage of time, so
    thank you.
        Chairman Flood. Thank you.
        The gentleman from New York, Mr. Lawler, is now recognized
    for 5 minutes.
        Mr. Lawler. Thank you, Mr. Chairman.
        I do not think there is any question that housing is one of
    the most important issues facing our country. We are
    approaching 7 million units underbuilt nationwide, and it
    impacts every community across the country in every type of
    housing stock.
        One of the most common refrains that I hear when discussing
    housing with residents across my district is their concern
    about the affordability of housing. It remains the most
    persistent challenge.
        With mortgage rates near their highest since the turn of
    the millennium, a limited housing supply in many communities,
    and ongoing supply chain and construction issues, it is perhaps
    the most difficult time to purchase a home in our region's
    history.
        This affordability crisis is further complicated by the
    fact that many homeowners remain unable or unwilling to sell
    their homes for fear of losing their fixed, low-rate mortgages
    obtained prior to 2022.
        The median cost to purchase a home is more than 5.6 times
    greater than the median household income nationwide.
        In looking at the growing crisis in my district, in
    Rockland and Westchester Counties, which pay among the highest
    property taxes in America, according to the National
    Association of Realtors, the monthly average cost of a mortgage
    was $1,000 more in 2023 than it was in 2022, and in Putnam and
    Dutchess Counties, it was at least $800 more per month. That is
    anywhere ranging from $10,000 to $12,000 more per year on an
    annual basis. For many families, this is totally unsustainable.
        That is why I will be reintroducing--and I am glad to see
    noticed with today's hearing--my Housing for America's Middle
    Class Act. This bill will improve our understanding of the
    efficacy of Federal housing affordability programs and of any
    gaps that exclude middle-income households.
        Mr. Hughes, given the estimated costs of construction
    continuing to climb, can you highlight why most builders opt to
    produce more expensive housing to remain economically viable?
        Mr. Hughes. I think most builders just address their
    market, what--what market--how they are going to be able to
    sell the homes.
        I deal primarily in western North Carolina, where there is
    no starter housing; everything is large, custom homes. It is a
    great market. You can only build one or two a year, but it is a
    good market.
        Everybody seems to have their expertise, I guess. Spec
    building is not mine. I am more of a custom builder.
        Mr. Lawler. Hon. Compton or Mr. Hughes, what, in your view,
    need to change either at the regulatory or market level to
    ensure that the construction industry can produce homes at a
    price point for middle-income consumers?
        Hon. Compton. Congressman, thank you.
        I think that what is vastly underestimated in terms of the
    regulatory burden is not just the cost or even the time that it
    imposes, but it really is the multiplicative effect that the
    time has on risk.
        Given that profit margins, whether it is an expensive house
    or a less expensive house or similar, is that the margin for
    error on less expensive houses, if you have an unexpected 3-
    month delay due to some regulatory issue, can take that from
    being profitable to a loss. There is simply much greater risk,
    both perceived and real, for lower-cost houses because of less
    of a margin of error.
        I think making the regulatory process not only less but
    more predictable would be helpful in that respect.
        Mr. Lawler. It is estimated that the construction industry
    needs over 400,000 workers next year to meet growing demand. In
    your estimation, how can these goals be met?
        I would direct this to Mr. Hughes.
        Mr. Hughes. As I mentioned before, immigration, we simply
    have to have a short fix. We are doing all we can for the slow,
    long fix, but there has to be a way to figure this out; we have
    been doing it for decades and we have to get a handle on that.
        Mr. Lawler. I do not think there is any question, as we
    deal with the economic challenges facing the country, three of
    the biggest issues that I see are immigration, energy, and
    housing.
        If we actually address all three in a serious and
    substantive way and address the workforce shortages, address
    the energy supply, and address the housing supply, our economy
    will be in a much stronger position, and the cost of housing
    will come down.
        I yield back.
        Chairman Flood. The gentleman's time has expired.
        The gentleman yields back.
        The gentlewoman from Oregon, Ms. Bynum, is now recognized
    for 5 minutes.
        Ms. Bynum. Thank you, Mr. Chair, and thank you to the
    witnesses.
        My State of Oregon has faced some of the fastest-growing
    housing costs in the country. I am concerned that, despite
    State-led efforts like rent stabilization and zoning reform,
    many families are still priced out.
        Ms. Bailey, what additional fair-housing policies or
    Federal support do you think States like ours--like mine--would
    make housing more accessible, particularly for low-income and
    marginalized communities?
        If I could put a finer point on it, this morning we talked
    a little bit about what it takes to give some hope to the
    younger generation. I have a 23-year-old and a 20-year-old and
    when I talked with the realtors a couple weeks ago, they told
    me 38 was the average age of a first-time homebuyer.
        Like--so I am telling kids now--let us say you graduate
    from college or trade school, you are 23. You have to work 15
    years to be able to get into your own home?
        Help me make it make sense, please.
        Ms. Bailey. Thank you so much for the question.
        The Affirmatively Furthering Fair Housing Act provision of
    the Fair Housing Act is critical to being a tool for local
    jurisdictions to actually attack and dismantle the structural
    inequities that have been created by exclusionary zoning laws.
        Fully enforcing the Affirmatively Furthering Fair Housing
    provision, which says that every dollar for housing and
    community development programs expended, they must make sure
    all communities are vibrant and inclusive and that the people
    there can thrive; that is for HUD, Treasury, Department of
    Education, Department of Transportation, and every Federal
    agency.
        The second thing, in response to your question, we need to
    pass the Housing Crisis Response Act. It includes critical
    funding for first-generation downpayment assistance. This is
    downpayment assistance that would help homebuyers whose prior
    generations have been locked out of the system because of
    exclusionary policies that have made it impossible for them to
    build intergenerational wealth that they could pass forward to
    new generations and help them enter into homeownership.
        The number one barrier for people who are interested in
    becoming homebuyers and who are being beaten by investors is
    the lack of a downpayment. First-generation downpayment
    assistance would help people in urban, suburban, and rural
    communities get access to the downpayment assistance that they
    need to enter into and successfully become homeowners.
        Ms. Bynum. Thank you.
        I would also push to say that even middle-class kids who
    grew up in a home, they are having troubles too. I would
    venture to say a lot of the young kids working in the Capitol
    today could hardly afford to buy a home, even with very good
    salaries.
        Did anyone else on the panel want to poke at it? Do you
    have kids that you want to get out of your house, that you
    would like to be able to help them buy a home?
        Mr. Hughes. Well, I will comment. I have three grandsons--
    --
        Ms. Bynum. Okay.
        Mr. Hughes [continuing]. under 10 years old and I am very
    concerned----
        Ms. Bynum. Yes.
        Mr. Hughes [continuing]. that when they get of age, they
    are going to be able to own their own home, even if I am still
    around to build it for them.
        Ms. Bynum. Yes.
        Mr. Chair, let the record reflect that we are all concerned
    about the fate of our young people in this country and their
    ability to buy their own home and stabilize their living
    arrangements for the future.
        Ms. Bailey, you also mentioned a little bit about
    institutional investors, or at least I heard a little bit about
    that. I am really concerned that they own now a significant
    share of rental housing and, fairly or unfairly, have been
    accused of driving up rents and perhaps limiting supply in some
    areas.
        We know that this form of funding is filling a gap, but how
    can we make that more friendly to the people in those
    communities who want to buy homes? How can we adjust what is
    happening in that market fairly?
        Ms. Bailey. Again, providing first-generation downpayment
    assistance and using our fair-housing laws, to actually enforce
    them against harmful practices.
        We have heard allegations that some companies are using
    technologies, for instance, because technology is playing a
    broader role in making housing decisions, and technology is
    driving up the cost of housing in different communities. Using
    things like the Fair Housing Act and the Equal Opportunity Act
    to fully enforce those important civil-rights protections.
        Ms. Bynum. Thank you.
        Mr. Hughes--I think I can see that--Oregon is a national
    leader in mass timber production, and so our State has promoted
    cross-laminated timber as a more sustainable, cost-effective
    building material.
        Any interest in your neck of the woods for cross-laminated
    timber?
        Mr. Hughes. I have seen it, and I have researched it some,
    but, no, I have not seen it used at all, except maybe in a
    couple multifamily----
        Ms. Bynum. Oh, okay.
        Mr. Hughes [continuing]. large, multifamily projects.
    Unfortunately, I have seen a couple failures too.
        Ms. Bynum. Okay. Thank you.
        Thank you, Mr. Chair.
        Chairman Flood. The gentlewoman yields back.
        The gentleman from the great State of Montana is
    recognized, Mr. Downing. You are recognized for 5 minutes.
        Mr. Downing. Thank you, Mr. Chair.
        Thank you to the witnesses for being here today.
        I think about my idea of the American Dream, being able to
    buy your first home, and worry about things that get that
    farther and farther and harder and harder to do.
        I am just looking at some numbers from Montana. We have
    seen--in the 5-year period from 2018 to 2023, we saw about a
    90-percent increase in the median home value in listings. In
    that same period, we saw median household income in Montana
    increase just under 30 percent, so it is almost three times
    more in that period and the median listing price for a home in
    Livingston is about $640,000.
        One of the things that I thought was interesting, another
    data point I saw shows that for every $1,000 increase in the
    cost of building a home, that you are foreclosing on about
    106,000 potential buyers in that, and so limiting the market to
    those folks.
        One final thing that I think is germane to this
    conversation is, about 77 percent of U.S. households are
    already not able to afford a median-priced home and that about
    24 percent of that is from regulations across all levels of
    government. That is according to the National Association of
    Home Builders.
        I am going to start with Mr. Hughes.
        Under the previous administration, Joe Biden saw affordable
    and reliable energy as the problem, in favor of the Green New
    Deal priorities. In 2024, the Department of Housing and Urban
    Development, in concert with the Department of Agriculture,
    promulgated a final rule requiring all HUD-and USDA-financed
    properties to adhere to international green-energy standards.
        How do these sorts of unrealistic energy standards put
    affordable housing out of reach for many families?
        Mr. Hughes. It has added so much extra cost to--and it does
    not pay for itself, simply.
        Now, I have been using innovative, energy-efficient
    products for over 20 years, and I am big believer in them as
    long as they pay for themselves. You simply cannot pay for
    these increases.
        Mr. Downing. Right.
        Hon. Compton, anything you would want to add to that?
        Hon. Compton. We certainly have seen this growth, whether
    it is in the energy space or in others.
        I think one thing that is also under-appreciated is just
    the cumulative burden of all of these things. I have likened it
    to the old tale ``Gulliver's Travels.'' Any one of these
    strings is not enough to kind of hold the housing market back,
    but by the time you have piled several hundred or several
    thousand on someone, the cumulative burden is just enormous.
        Mr. Downing. Right.
        Hon. Compton. So, things that if viewed in isolation we
    would say, ``Well, that is really not such a bad idea, that
    would kind of be Okay,'' is that when you take 500 of those
    ``well, that would not be so bad,'' is that we have really
    ended up at the place that you are talking about, which is this
    24 percent of cost.
        Then, as I mentioned earlier, I think that kind of an
    untabulated cost is the risk that adds due to the delay that is
    inherent in it.
        Mr. Downing. Right.
        Continuing on this, another example of the burdensome
    impact of environmental regulations is the broad application of
    the National Environmental Protection Act, or NEPA.
        NEPA was originally intended for large-scale industrial
    projects like power plants with significant environmental
    impacts. Today, it has expanded to include housing
    construction, which creates costly delays on projects.
        To you, Hon. Compton: How should NEPA be reformed to make
    housing construction faster, more affordable, and still
    maintain sensible environmental protections?
        Hon. Compton. Thank you, Congressman.
        I think, in particular, first is to recognize that NEPA is
    not a substantive environmental regulation. It is, instead,
    simply process. It does not say what you have to do; it simply
    says how you have to do it, and it imposes an enormous burden
    in terms of time on many projects that are subject to it.
        It is even broader than what you mentioned. I mean, for
    instance, a project that has project-based vouchers from HUD is
    now subject to NEPA. This is far beyond, I think, what was
    originally intended, as you mentioned, for nuclear plants,
    hydroelectric dams, and Air Force bases.
        I think that what Congress did in 2023 in the Fiscal
    Responsibility Act really lays the groundwork for meaningful
    change in the regulations. Courts have held that the existing
    Council on Environmental Quality (CEQ) regs are
    unconstitutional. This is the time to really take a new look at
    this, and I think that great progress can be made in this area.
        Mr. Downing. Well, thank you very much.
        Unfortunately, I have run out of time, so, Mr. Chair, I
    yield.
        Chairman Flood. The gentleman yields.
        I would like to thank all of our witnesses for your
    testimony today.
        Without objection, all members will have 5 legislative days
    to submit additional written questions for the witnesses to the
    chair. The questions will be forwarded to the witnesses for
    their responses.
        Witnesses, please respond no later than April 30, 2025.

        [The information referred to can be found in the appendix.]
        Chairman Flood. This hearing is adjourned.

        [Whereupon, at 4:12 p.m., the subcommittee was adjourned.]

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