[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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