[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
HOME 2.0: MODERN SOLUTIONS TO THE
HOUSING SHORTAGE
=======================================================================
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
__________
JULY 16, 2025
__________
Serial No. 119-35
Printed for the use of the Committee on Financial Services
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
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U.S. GOVERNMENT PUBLISHING OFFICE
61-136 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
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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
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Wednesday, July 16, 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..... 3
WITNESSES
Ms. Alison George, Director, Colorado Division of Housing,
Department of Local Affairs, on behalf of the Council of State
Community Development Agencies (COSCDA) as Board President..... 4
Prepared statement........................................... 6
Mr. Eric Oberdorfer, Director of Policy and Legislative Affairs,
National Association of Housing and Redevelopment Officials
(NAHRO)........................................................ 11
Prepared statement........................................... 13
Mrs. Ellen Woodward Potts, Executive Director, Habitat for
Humanity of Tuscaloosa, on behalf of Habitat for Humanity
International.................................................. 19
Prepared statement........................................... 21
Ms. Tiffany Bohee, President, Mercy Housing California........... 30
Prepared statement........................................... 32
APPENDIX
MATERIALS SUBMITTED FOR THE RECORD
Hon. Mike Flood:
Associated Builders and Contractors (ABC).................... 60
RESPONSES TO QUESTIONS FOR THE RECORD
Written responses to questions for the record from Ms. Alison
George
Representative Scott Fitzgerald.............................. 62
Representative Maxine Waters................................. 62
Representative Janelle Bynum................................. 63
Written responses to questions for the record from Mr. Eric
Oberdorfer
Representative Scott Fitzgerald.............................. 64
Representative Maxine Waters................................. 67
Representative Janelle Bynum................................. 69
Written responses to questions for the record from Mrs. Ellen
Woodward Potts
Representative Maxine Waters................................. 71
Representative Janelle Bynum................................. 72
LEGISLATION
H.R. ----, the HOME Reform Act of 2025........................... 73
HOME 2.0: MODERN SOLUTIONS TO THE
HOUSING SHORTAGE
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Wednesday, July 16, 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 p.m., in
room 2128, Rayburn House Office Building, Hon. Mike Flood
[chairman of the subcommittee] presiding.
Present: Representatives Flood, De La Cruz, Rose, Timmons,
Fitzgerald, Lawler, Downing, Cleaver, Tlaib, Pressley, Garcia,
Williams of Georgia, Pettersen, and Bynum.
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, ``Home 2.0: Modern Solutions to the
Housing Shortage.''
Without objection, all members will have 6 legislative days
within which to submit extraneous materials to the chair for
inclusion in the record.
I would remind all members and witnesses we do have an open
vote on the floor at this time, so the committee reserves the
right to recess for purposes of that, but we are convening this
hearing today in a spirit of bipartisanship.
I 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
First, I would like to thank all of our witnesses for being
with us today. I very much look forward to hearing your
testimony on the Department of Housing and Urban Development's
HOME Investment Partnership Program. For those who are not
familiar with it, the HOME program was created in 1990 with a
passage of the Cranston-Gonzalez National Affordable Housing
Act. The HOME program provides block grant funding to States
and municipalities for the purpose of building and
rehabilitating affordable housing. In practice, HOME is often
used as a gap financing tool for housing projects often in
conjunction with LIHTC, the Low-Income Housing Tax Credit.
Since the early 1990s, the program has continued to be funded
without many statutory changes and without a reauthorization.
In other words, the HOME program is ripe for a remodeling
itself, a fresh look from this committee.
Our work in this subcommittee this year has been focused on
one thing, and that is addressing rising housing costs in this
country. The one way to curb rising housing costs is to
increase housing supply. No amount of rental assistance, down
payment assistance, or other demand-side subsidies will get us
out of our housing cost problem. We need to build more housing
in this country, and that is the only solution that will move
the needle. The underlying supply problem is what made me so
interested in the HOME program to begin with. HOME is a program
within our jurisdiction that is specifically geared toward
building housing supply. I figured it would make sense to take
a closer look at HOME and figure out what works with the
program, what does not work with the program, and what we could
change.
To that end, I am proud to say that I have been working
very closely with my colleague, Ranking Member Cleaver, to get
to the bottom of those questions. In April--you might have seen
it--the two of us released a video requesting comments from
States, cities, nonprofits, and developers on the HOME program.
We received over 140 letters from organizations across the
country in response. In May, the two of us sat together in a
room for 6 hours, meeting with different requesters and asking
them questions about how they would change the HOME program.
Now, finally, we have a public hearing on this topic.
In the comments we received from a diverse set of
stakeholders, there were four themes that up repeatedly as pain
points that drive up housing costs in the HOME program. They
are what I call the four horsemen of the housing apocalypse.
The environmental review requirements, that is the first one.
These delay a project start and often drive up its costs;
number two, the Build America, Buy America requirements that
drive up the cost of critical construction materials; number
three, the Davis-Bacon requirements that, from what I have
heard, are much more costly due to the associated reporting
requirements than they are for the actual cost of paying the
prevailing wages; and Section 3 requirements that make it more
difficult to find contractors to do the job, particularly in
rural areas with some of the workforce challenges I mentioned.
We all agree that individually, each one of these requirements
has a noble purpose, but when you put them all together, it
makes it harder to address the supply problem in a less costly
way.
The legislation attached to this hearing intends to address
each of these four factors that drive up costs in the HOME
program. Additionally, it seeks to provide a little more
flexibility for jurisdictions to use funds to build more supply
rather than for the permissible demand-side uses of the
program. I expect in our conversation today; members and
witnesses may raise things they would like challenged within
this draft. That is okay. In fact, it is more than okay. That
is why we are here.
As I close, I want to thank Ranking Member Cleaver for
working in such good faith with me over the last several
months. It has been a pleasure to develop a closer relationship
with him through this process. With that, I am excited to hear
testimony from our witnesses on the HOME program and housing
supply, and with that I yield back.
I now recognize the ranking member of the subcommittee, Mr.
Cleaver, for 5 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. Let me thank you also
for creating a very wholesome atmosphere to work on some very
serious pieces of legislation, and I thank the witnesses and
some of the advocates who are concerned about the HOME program
who joined us here today.
I would like to begin by describing for the American public
the process for the legislation being considered. My colleague
has already outlined some of it, but at the beginning of this
Congress, Chairman Flood and I sat down and discussed our
priorities around housing and insurance. Increasing the supply
of safe, decent, and affordable housing is a challenge across
this Nation. Tomorrow, I will join the National Low-income
Housing Coalition to release the 2025 Out of Reach report. The
report will highlight the urgent need for more housing supply.
The high cost of housing is a function of limited supply. In
Missouri, my home State, a minimum wage worker needs multiple
jobs to afford a 1-bedroom rental home at fair market rate. In
April, the chairman and I put out a national request on how to
improve the Department of Housing and Urban Development (HUD's)
HOME program. HOME is HUD's largest program dedicated
exclusively to supporting affordable housing. The program is
often used with the low-income tax credits. Every $1 of HOME
leverages nearly $5 in additional private investment, and HOME
has built more than 1.4 million affordable houses. It is also
operating on an expired authorization and in need of
modernization.
After soliciting feedback, Chairman Flood and I invited
organizations to discuss their needs, their ideas. We came to
an agreement on key areas to be addressed and continue to work
on that legislation. There are a massive number of rules placed
on nonprofits on thin margins, and on low-income housing
providers who are building safe, decent, and affordable
housing. Many rules add little to the goals of the program or
are outright counterproductive. This includes rules that
prevent low-income populations from participating in Federal
projects. Low-income housing programs have also been tasked
with complying with uncoordinated rules across different
programs and agencies that make the goals of providing safe,
decent, and affordable housing more difficult. This is
something that Ezra Klein and Derek Thompson wrote at length in
their book, ``Abundance.'' I advise everybody to read that
book. It will make you happy or, as it did with me, convicted
me.
We saw a HOME rulemaking last year that addresses some of
the issues of the program, but Congress is needed as well. All
the witnesses today report that the HOME program can be
improved and that the program is critical to housing supply,
and I agree. Anyone who knows housing agrees. The witnesses
today are more than 100 organizations, and what they have
provided us in terms of invaluable feedback. The Fiscal Year
2026 Appropriation Subcommittee bill this week would not
provide new homes for the HOME program and would eliminate many
of the HOME programs. This is wrong. I disagree with it. The
White House presented it. It is something we disagree with
strongly.
No matter what we do on HOME, this hearing today is not
occurring in a vacuum. I am committed to working with you on
HOME and on the many issues facing American families. I look
forward to my continuing work with the chairman, and I look
forward to being with him when we cross the line on this
extremely important piece of legislation.
Chairman Flood. Thank you, Representative Cleaver. I now
welcome the testimony of Ms. Alison George, the Director of the
Colorado Division of Housing Department of Local Affairs, here
on behalf of the Council of State Community Development
Agencies as board president. We also welcome Mr. Eric
Oberdorfer, Director of the Policy and Legislative Affairs at
the National Association of Housing and Redevelopment
Officials; Mrs. Ellen Woodward Potts, the Executive Director of
Habitat for Humanity of Tuscaloosa, here on behalf of Habitat
for Humanity International; and Ms. Tiffany Bohee, President of
Mercy Housing in California. We 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 our official record.
Ms. George, you are now recognized for 5 minutes for your
oral remarks.
STATEMENT OF ALISON GEORGE, DIRECTOR, COLORADO DIVISION OF
HOUSING, DEPARTMENT OF LOCAL AFFAIRS, ON BEHALF OF THE COUNCIL
OF STATE COMMUNITY DEVELOPMENT AGENCIES (COSCDA) AS BOARD
PRESIDENT
Ms. George. Thank you. Good afternoon, Chair Flood, Ranking
Member Cleaver, and members of the subcommittee. Thank you for
this opportunity to testify today. I am Alison George. I am the
Board President of the Council of State Community Development
Agencies, COSCDA. We represent States that administer vital
programs doing housing, community development, homelessness
programming, and disaster recovery work. I am from the great
State of Colorado and the director of the Division of Housing
at the Colorado Department of Local Affairs. I am here today on
behalf of State housing leaders across the country who
administer the HOME Investment Partnership Program and to share
how these funds are making a difference in Colorado, an example
from Representative Pettersen's district, Harvest Hill in
Broomfield.
Broomfield is a suburban area between Denver and Boulder
housing over 74,000 residents. Through a $2.6 million HOME
award, we are helping build 152 affordable homes for families
earning between 30 and 70 percent of the area median income.
This income range is $42,000 to $94,000 for a 4-person
household in Broomfield. I particularly want to highlight the
eight 30-percent area median income (AMI) units at Harvest Hill
because these units, at a deeply affordable rate, are not
possible without essential gap funding. In partnership with
Broomfield FISH, a local nonprofit, residents will have access
to food security programs and long-term stability services, and
that is just one piece of the broader ecosystem. HOME is often
the first funding source in and the last piece that keeps a
project together.
Now I will share with the committee what HOME makes
possible in Colorado. In Fiscal Year 2025, we received over $16
million through HOME, $5 million to my department and $11
million directly to our local governments. Public data from HUD
shows that since 1993, Colorado has assisted over 29,000
households, invested over $280 million of HOME funds in over 60
cities and towns, and contributed to over 500 projects. That
funding goes a long way in a tight housing market. Nationwide,
the success of the HOME program is clear: the program is a
great investment. HUD estimated that with $1 billion in FY 2024
funding, the HOME program would leverage about $6 billion in
additional investments. Since 1992, HOME has generated 2
million jobs and over $140 billion in local economic activity.
To strengthen the HOME program, though, COSCDA has outlined
several key priorities. From COSCDA's national network of State
agencies, we fully support modernization and respectfully offer
the following suggestions to improve HOME's efficiency and
impact. First, ease administrative burdens where possible. We
recognize the importance of accountability, but overlapping
requirements, like Section 3, Davis-Bacon, Build America, Buy
America (BABA), and environmental reviews, have become
especially difficult for our small and rural communities to
manage. We encourage consideration of ways to streamline or
better align these requirements to keep projects moving.
Second, support stronger administrative capacity. Many States,
including Colorado, are doing a lot with very limited
resources. We would welcome consideration of increasing the
administrative cap, eliminating the commitment deadline, and
revisiting the Community Housing Development Organization
(CHDO) set-aside to today's operating realities. Third,
preserve flexibility in how States use HOME. The ability to
adapt the program to local conditions is one of HOME's greatest
strengths. We hope any updates to the program maintain the
flexibility while allowing improvements that simplify
implementation.
In closing, HOME is working in Colorado and across the
country. We appreciate the subcommittee's thoughtful efforts to
modernize the program. At the same time, we are concerned about
the House Appropriations proposal that plans to eliminate HOME
funding. The one-time HOME Investment Partnerships American
Rescue Plan (HOME-ARP) program is entirely separate and
distinct from the annual HOME program. We urge this
subcommittee to continue emphasizing the importance of the HOME
program as funding negotiations continue.
On behalf of COSCDA and the Colorado Department of Local
Affairs, thank you for your leadership and for keeping housing
front and center. I will be glad to answer any questions you
have.
[The prepared statement of Ms. George follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. Mr. Oberdorfer, you are now recognized for
5 minutes for your oral remarks.
STATEMENT OF ERIC OBERDORFER, DIRECTOR OF POLICY AND
LEGISLATIVE AFFAIRS, NATIONAL ASSOCIATION OF HOUSING AND
REDEVELOPMENT OFFICIALS (NAHRO)
Mr. Oberdorfer. Thank you. Good afternoon, Chairman Flood,
Ranking Member Cleaver, members of the subcommittee, and thank
you for this opportunity to comment on the HOME Investment
Partnerships Program. My name is Eric Oberdorfer, and I am the
Director of Policy and Legislative Affairs for the National
Association of Housing and Redevelopment Officials, or NAHRO.
NAHRO's 26,500 members play a vital role in providing homes for
more than 8 million people nationwide. NAHRO members include
public housing agencies and community development organizations
serving rural, suburban, and urban areas across the United
States.
NAHRO members use the HOME Program to help expand the
supply of housing and provide essential funding to support
local housing needs. Housing professionals rely on HOME funds
to make affordable housing projects financially viable, often
using HOME dollars to fill critical financing gaps, including
low-income housing tax credit deals. HOME funding has become
increasingly important to affordable housing creation, having
produced and preserved 1.4 million homes since the program
began. Further, since 1992, HOME investments have supported
over 2 million jobs and generated approximately $135 to $140
billion in local income. By modernizing and streamlining the
HOME Program, we can help reduce project costs and stretch HOME
dollars further to create more affordable housing.
Although well intentioned, certain requirements, including
Davis-Bacon, Build America, Buy America, or BABA, and the
environmental review process impact the effectiveness of the
HOME Program. Davis-Bacon requires federally assisted
construction projects to pay prevailing wages and benefits to
laborers, and while NAHRO supports fair and adequate wages, the
current threshold of 12 units that triggers Davis-Bacon makes
lower-volume construction projects more difficult by driving up
costs and adding significant administrative burden. This can
put these smaller but important projects out of reach. As such,
NAHRO recommends increasing the number of units that trigger
the Davis-Bacon threshold to 50 units. NAHRO also recommends
increasing the construction contract threshold for Davis-Bacon
to $250,000, adjusted annually for inflation, so that HOME
remains economically viable with other funding streams.
Build America, Buy America, or BABA, requires the use of
domestically produced materials for projects that use HOME
funds, and while NAHRO supports American manufacturing, BABA
makes it more difficult to build and preserve affordable homes.
Currently, demand for housing materials far outweighs the
supply. The extra costs, increased timelines, and confusing
requirements connected to BABA make it harder for contractors
and private developers to take on federally funded projects.
Exempting HOME and other housing and community development
programs from BABA would ensure funding could be used quickly
and efficiently to address our current housing supply crisis.
Cumbersome environmental reviews can also make HOME dollars
less effective. These reviews often cause delays, leading to
unnecessary costs. NAHRO recommends improving the environmental
review process by shortening the time it takes to complete and
ensuring that only one review is required per project, no
matter how many funding sources are involved.
Beyond streamlining, we also see opportunities to make the
HOME Program itself more effective. Specifically, NAHRO
recommends broadening the list of eligible activities to
include rehabilitating public housing units and supporting
projects that have previously received HOME funds. These
changes would help communities better meet local housing needs.
By allowing HOME to be used for the rehabilitation of public
housing units, the program would provide much-needed support to
units in distress. Using funding for projects previously
assisted with HOME funds, grantees can restore projects that
need modernization.
Lastly, authorizing adequate funding amounts for the HOME
Program would ensure that funds match increasing costs and
need. Providing HOME funding at levels that keep pace with
inflation and rising operating and construction costs would
ensure the program remains effective in our current economic
climate. Proposals to eliminate funding for the program would
be devastating and would significantly decrease our country's
ability to construct affordable housing. The gap financing
provided by HOME is critical to making affordable housing deals
work.
NAHRO thanks the chair and ranking member of the
subcommittee for their efforts to improve the HOME Investment
Partnerships Program. Your commitment to expanding affordable
housing for all Americans is greatly appreciated. Thank you,
and I look forward to your questions.
[The prepared statement of Mr. Oberdorfer follows:]
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Chairman Flood. Mrs. Potts, you are now recognized for 5
minutes for your oral remarks.
STATEMENT OF ELLEN WOODWARD POTTS, EXECUTIVE DIRECTOR, HABITAT
FOR HUMANITY OF TUSCALOOSA, ON BEHALF OF HABITAT FOR HUMANITY
INTERNATIONAL
Mrs. Woodward Potts. Chairman Flood, Ranking Member
Cleaver, and members of the subcommittee, thank you for this
opportunity to testify and share Habitat for Humanity's
recommendations for deepening the impact of HUD's HOME
Investment Partnerships Program. My name is Ellen Woodward
Potts, and I have served as Executive Director of Habitat for
Humanity of Tuscaloosa, Alabama since 2013. I am here on behalf
of Habitat Tuscaloosa and on behalf of Habitat for Humanity's
U.S. network of over 900 affiliates in all 50 States, D.C., and
Puerto Rico.
Our country is facing a record shortage of entry-level
homes, which has driven up prices and pushed the dream of
homeownership out of the reach of millions of families
nationwide. Throughout the United States, Habitat affiliates
are working directly with essential members of the workforce--
teachers, home health aides, military personnel, and many
others--who earn at or below the 80th percentile of AMI and
struggle to find homes that they can afford to purchase. As one
of the few builders in the starter HOME market, Habitat is
working diligently to create and preserve homeownership
opportunities, but both financial and regulatory barriers make
it difficult to construct affordable starter homes. Habitat
makes it work by leveraging corporate partnerships, private
donations, volunteer labor, low-cost public land and other
means, but public resources are essential pieces of the
solution.
The HOME Program's crucial resources have helped create
homeownership opportunities for thousands of households in
rural, urban, and suburban communities nationwide. We received
HOME funds as a community housing development organization, or
CHDO, from the city of Tuscaloosa, which supported the
construction of more than 30 homes for homeownership during my
tenure. These local families would not have been able to
purchase a safe and affordable home otherwise. However, the
scale of our Nation's housing crisis requires us to modernize
the program and make HOME as effective as possible. We are
grateful to see the interest by members of this subcommittee to
modernize the HOME Program and are honored to share the highest
priority recommendations from our written testimony.
First of all, we believe homes should be consistently
available for homeownership purposes. We are fortunate to have
a great relationship with our participating jurisdiction.
However, that is not the case throughout the country, as shown
by the steep declines over the last 10 years, documented by the
Congressional Research Service. We recommend creating a floor
for participating jurisdictions (PJs) to make assistance
available for homeownership activities. We also recommend the
statute make it explicit that the preemptive purchase option
may be used by community development corporations, such as
Habitat affiliates, which have the ability and capacity to
preserve the affordability of for-sale homes for low-to
moderate-income families. This should not be limited to
community land trusts or entities using a shared equity model.
Third, we understand the need for environmental reviews.
However, the expensive process frequently creates significant
delays and complications. Habitat recommends offering
categorical exclusions for new constructions of homes up to 20
units, exempting home repair projects altogether, and allowing
the reuse of ERs. We are pleased to see language in the draft
legislation that would provide categorical exemptions for
several types of projects. Also, as included in the draft
legislation, we recommend easing Davis-Bacon compliance
burdens. Habitat believes in fair pay for workers, but the
challenge lies in the profuse documentation, especially for our
small contractors. We recommend increasing the exemption from
12 to 50 units. Lastly, as in the draft legislation, we
recommend exempting the development of private homes from Build
America, Buy America requirements.
In closing, I would be remiss if I did not mention the
importance of providing robust annual funding for the HOME
Program alongside these wonderful modernization efforts. The
program plays a critical role in expanding housing supply and
pathways to homeownership. With improvements, it will only
become more impactful. I appreciate the opportunity to share my
experience and Habitat's recommendations. I am happy to answer
any questions. Thank you so much.
[The prepared statement of Mrs. Woodward Potts follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. Ms. Bohee, you are now recognized for 5
minutes for your oral remarks.
STATEMENT OF TIFFANY BOHEE, PRESIDENT, MERCY HOUSING CALIFORNIA
Ms. Bohee. Chairman Flood, Ranking Member Cleaver, and
other distinguished members of the House Financial Services
Subcommittee on Housing and Insurance, thank you for the
opportunity to testify before the subcommittee's hearing today.
My name is Tiffany Bohee, and I am honored to address you on
this important modernization effort. I will speak from my
experience as President of Mercy Housing California, the
largest regional affiliate of Mercy Housing and a frequent user
of the HOME Program.
Mercy Housing is a national nonprofit, multifamily housing
developer, owner and manager with a portfolio of 346 rental
communities, including more than 25,000 affordable homes across
21 States serving 40,000 people with low incomes. We are
committed to creating affordable homes and thriving
communities. Our development efforts have leveraged the HOME
Program in high-cost urban areas as well as suburban and rural
areas to develop homes for families, veterans, seniors, and
people exiting homelessness.
Nationally, Mercy Housing has leveraged HOME dollars to
produce 111 multifamily rental communities inclusive of almost
8,000 affordable homes in 10 States. Just last year, we
leveraged a HOME award of $700,000 to recapitalize Timber Creek
Apartments in Omaha, Nebraska, renovating the homes of 180
working families and ensuring that the apartment homes remain
affordable for the long term. In Savannah, Georgia, HOME
dollars helped us redevelop a public housing site into 484
modern homes where hundreds of families and seniors can thrive.
In California, over the next few years, we will leverage
committed HOME dollars to create new, dignified homes for
seniors in the small town of Davis as well as the service
enriched housing for seniors in Oakland.
The HOME Program is one of the only Federal sources
dedicated to providing gap funding for shovel-ready affordable
housing. While Mercy Housing's projects catalyze a great deal
of private investment, including financing made possible by the
housing credit, these Federal HOME dollars still make up a
critical piece of our funding stack. HOME is often the gap
funding that makes affordable housing deals feasible, helps us
break ground, and lease up our homes in less time. We are
encouraged by the expansion of the housing credit in the recent
tax and spending bill and wish to emphasize that this expansion
will be even more impactful for working families and other low-
income people if programs such as HOME are strengthened, fully
funded, and streamlined.
Because HOME funding is rarely the only source of funding
for an affordable housing development, we recommend the
subcommittee consider sensible streamlining reforms that make
HOME dollars work more seamlessly with other kinds of funding.
Firstly, save time by aligning the environmental review
process. The use of HOME dollars often triggers an
environmental review process per National Environmental Policy
Act (NEPA) that is duplicative with existing environmental
review and adds time without achieving environmental goals.
Secondly, reduce complexity by using one set of regulations
focused on tenants. Finally, address building requirements that
make HOME dollars hard to use. Accepting HOME awards often
triggers Build America, Buy America rules as well as Davis-
Bacon regulations, which adds cost and complexity to the
construction process and drives up the cost of producing more
affordable housing.
In conclusion, it is our hope that advancing commonsense
reforms to the HOME Program does not come at the expense of
maintaining adequate funding for this transformational program.
We respectfully urge the committee to work with your colleagues
and stakeholders to support and adequately fund this critical
program. We stand ready to work with your committee to find
meaningful bipartisan solutions. The Federal Government must
partner with our States and municipalities to address housing
shortages and recognize the importance of high-quality
multifamily rental housing for people who are not high earners.
HOME, again, is the only Federal block grant focused
exclusively on providing housing for people with low and
moderate incomes. It is absolutely essential that this resource
be maintained. Thank you, and I look forward to continuing the
discussion.
[The prepared statement of Ms. Bohee follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Flood. I now recognize myself for 5 minutes for
questions.
Every witness with us today is either someone who interacts
directly with HOME funding or someone who represents an
organization whose membership interacts directly with HOME
funds, so I am going to direct the next three questions to each
of our four witnesses. I am short on time, so I would
appreciate it if you would be concise with your answers. The
first question is, due to the environmental review requirements
in the HOME Program, do these requirements increase the cost of
housing construction? Give me a ``yes'' or ``no,'' and then
briefly explain why. Ms. George?
Ms. George. Thank you, Chair Flood. The quick answer is
yes. It is yes because of the uncertainty of the number of
times at this moment that an environmental review might be
required, so there are many different triggers, and so limiting
the environmental review to one per project is critical.
Chairman Flood. Mr. Oberdorfer.
Mr. Oberdorfer. Yes. Thank you for that question, Mr.
Chairman. I would agree it does increase both time and cost. I
think, to Ms. George's point, what is really important is
making sure that there is just one environmental review process
throughout. Otherwise, it can lead to delays, which then will
lead to increased costs and challenges with finishing the
development.
Chairman Flood. Mrs. Woodward Potts.
Mrs. Woodward Potts. Yes. It increases the cost for new
homeownership by several thousand dollars, but then also with
our HOME repair programs. For instance, we have an elderly
couple now who are without heating and air conditioning. We are
trying to replace their HVAC unit, but we cannot do that until
we get an environmental review done just to replace an HVAC
unit.
Chairman Flood. How hot is it right now in Alabama?
Mrs. Woodward Potts. I do not want to say anything ugly.
Chairman Flood. All right.
[Laughter.]
Mrs. Woodward Potts. Very warm. Warmer than here.
Chairman Flood. We will be fair for them, yes.
Mrs. Woodward Potts. Yes.
Chairman Flood. Ms. Bohee.
Ms. Bohee. Yes, Chairman, it does increase the cost and
time to construct. As other folks have articulated, there is a
duplicative nature to a number of these regulations currently
in the statute. It adds cost and administrative burden.
Chairman Flood. Okay. Next round of questions, back to Ms.
George, do Davis-Bacon requirements increase the cost of
housing construction using HOME dollars? Again, ``yes'' or
``no,'' and a very brief why.
Ms. George. A quick answer is yes, and the reasoning is, I
would like to focus on the rural areas of our State where we do
not see the consistency, and oftentimes with States, States
have their own requirements for wages, and so there are
conflicting requirements, and then that also drives up the
administrative burden in reviewing both State and Federal
requirements.
Chairman Flood. Mr. Oberdorfer.
Mr. Oberdorfer. Yes, Davis-Bacon comes with a significant
number of administrative requirements that are attached to it.
What can be especially difficult is, in smaller rural
communities, local contractors or developers may not be willing
to meet Davis-Bacon requirements for a variety of reasons,
meaning that grantees using HOME funds need to go further
afield to get contractors or developers, which then adds
additional cost as well.
Chairman Flood. Mrs. Woodward Potts.
Mrs. Woodward Potts. Yes, and part of the problem is that
even in a community our size, we have 220,000 people living in
our county. We have trouble getting people to bid at all, for
electricians, plumbers, things like this, and it is even more
difficult to find them if they have to comply with Davis-Bacon.
Most of these people are small businesses. It is maybe an
electrician with one helper and a bookkeeper, and so trying to
do all of the Davis-Bacon requirements when you are a really
small business is very difficult, and we like to support our
small businesses.
Chairman Flood. Sure. Ms. Bohee.
Ms. Bohee. Mr. Chairman, yes. We certainly are stalwart
supports of our friends in labor and are committed to paying
prevailing wage in the trades in both high-cost and rural
areas. However, as a national organization, we have found that
the application of that particular statute has really different
impacts in different States, and for us, we have seen
particularly challenges in these high-cost areas where
communities are already rent burdened.
Chairman Flood. Thank you to each of you. I have more of
those kinds of questions, but my time is limited, but let us
just observe what we just saw. We have Democrat and Republican
witnesses get asked the same questions with mostly the same
answers. This is one of those unique issues in America where we
are on the right side because everybody up here wants to see
more affordable housing. I bet we could do this with Section 3
requirements. We could do the same thing with some of the other
issues relating to BABA. With that, my time is up, so I am
going to recognize the ranking member for his opportunity to
question you all for 5 minutes.
Mr. Cleaver. Thank you, Mr. Chairman. I have pastored a
church almost all my adult life, and we have a panel and
probably members who agree on things better than a church
meeting and sometimes church--I should not have brought that
up--church meetings can be difficult, but I am appreciative of
all of the energy that has been put into this effort that we
are laying out. Putting aside my disagreement with
appropriators about the amount of funding currently spent, Ms.
Bohee, do you think that providing new funding, along with some
creative things that we are able to get into legislation, could
ignite a program like those who created this program way back
anticipated?
Ms. Bohee. Thank you, Congressman. Yes, absolutely. We
believe the HOME Program, with the modernization proposals that
have been proposed, will absolutely help to streamline and
build affordable housing cost effectively and faster.
Mr. Cleaver. Thank you. Last night, I had dinner with a
labor leader, the American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO) leader, here in D.C., and
talked about the HOME Program, and I raised the question if
Davis-Bacon was created in 1931 and we are now in 2025, and
2,000 was the key number in 1931--I actually think it was a
little higher than that; I think it went back down--I am asking
all of you, what number would you suggest as the trigger number
on Davis-Bacon?
Ms. George. Thank you, Congressman.
Mr. Cleaver. Considering 1931 until today.
Ms. George. Thank you for that question. One of the biggest
challenges I see is with our rural communities and making sure
that we have enough bids to actually do the work that needs to
be completed in our rural communities; and so, what we are
recommending, COSCDA, is that the threshold be increased to 50
units to ensure that we are able to get those projects moving
in our rural communities throughout Colorado.
Mr. Cleaver. Units instead of dollars.
Ms. George. Focus on units, yes.
Mr. Oberdorfer. Thank you for that question, Ranking
Member. For the HOME Program, NAHRO would agree that 50 units
is an appropriate trigger for Davis-Bacon requirements. Again,
this will help especially smaller communities but also smaller
projects in larger cities and suburban areas be able to build
more units more quickly, which will make those HOME dollars go
further.
Mr. Cleaver. Miss Ellen.
Mrs. Woodward Potts. I completely agree. Fifty units are
what we also recommend. We agree with my colleagues here.
Mr. Cleaver. Ms. Bohee.
Ms. Bohee. Congressman, we do agree that 50 units is an
appropriate threshold. It does work in both our rural areas as
well as in a number of our urban areas.
Mr. Cleaver. Is there greater difficulty in getting workers
in rural areas, even if we were doing a larger project? I have
a town in my district, Marshall, Missouri, 12,000 people, but
they are having difficulty, and I think they might even have
difficulty with 50 units because in a lot of these small towns,
they are going to build 10 under. I would like to conduct a
survey to find out how many 50-unit projects we have in rural
areas. Any of you see that as an impediment?
Ms. George. Thank you, Congressman. By increasing the
threshold, that means that in rural areas where they might be
focusing on a project that is less than 50 units, they would
not be doing the administrative paperwork for Davis-Bacon. That
is the idea of increasing that threshold.
Mr. Cleaver. Thank you.
Chairman Flood. The gentlewoman from Texas, Ms. De La Cruz,
is now recognized for 5 minutes.
Ms. De La Cruz. Thank you so much, Mr. Chairman. Thank you
to all of our witnesses for being here today, and I would like
to talk a little bit about this important topic that I know is
so important to my community. I serve a largely rural
community, a Hispanic community, in fact, one of the most
Hispanic communities in the entire Nation in deep South Texas.
Many of my constituents are impacted by key HUD programs, like
HOME, and it makes me happy to serve as vice chair of this
subcommittee as we work to enhance these programs, making them
more impactful and sustainable, and I know my constituents feel
the long-term benefits. I have represented South Texas here in
Washington, DC. for 2-and-a-half years. I have learned that
change here in Washington can come more slowly than what I am
used to as a small businesswoman. A good example of this is
with the HOME Program, what we are discussing here today and
what has not been reauthorized since 1992. It is just
incredible when I say it out loud. It is as if the world has
not changed in 30 years, and we know it has changed quite a bit
since then.
I appreciate the subcommittee's continued focus on housing
issues as many of our constituents continue to struggle to
purchase a home or make the rent. It is in the strategic
interest of our Nation and our constituents back home for us to
use the resources available to bring high-quality units to the
market as quickly and effectively as possible. The positive
reforms to the HOME Program included in the draft text notice
for this hearing will do just that: shorten timeliness and
increase effectiveness. Looking at this panel before us today,
I see a great slate of witnesses comprised of policy experts
and people with real boots on the ground. I would like to give
each of you the opportunity to share with us one positive
reform included in the HOME Reform Act, and for you to explain
to our constituents watching today how that change will help
enhance the supply of affordable housing. Let us start with Ms.
George.
Ms. George. Thank you, Congresswoman. I love being first
because that does not give me a lot of time to think about
that. There are a lot of modernization aspects that we are
looking at now that are important. I think I want to focus on
the flexibility that the HOME Program has, and it is one of my
many hopes as you are looking at this modernization that you
keep because we have been able to pilot new ideas with HOME
that have grown across our State because of the flexibility
that it has. I want to stress maintaining that flexibility, not
necessarily a change, because I think testimony thus far has
already touched on several of those, so I will let others go
from there. Thank you.
Ms. De La Cruz. Flexibility. Thank you.
Mr. Oberdorfer. Thank you for that question, Congresswoman.
I think what is most important is that the bill does is exempt
HOME from certain requirements, like Build America, Buy
America, increases the threshold to Davis-Bacon, as well as
streamlines environmental review processes. HOME does a lot of
things, and the flexibility in HOME is critical to the program,
but one thing that is incredibly important about HOME is it
acts as gap financing often for low-income housing tax credit
deals. When HOME is applied to make the low-income housing tax
credit work, which we just saw a significant increase in the
tax credit come from Congress, those HOME requirements then
fall onto the low-income housing tax credit, making it more
difficult to move forward.
Ms. De La Cruz. Now, when you said, ``exempt homes from
certain requirements,'' which requirement were you specifically
speaking of?
Mr. Oberdorfer. Build America, Buy America.
Ms. De La Cruz. Build America, Buy America.
Mr. Oberdorfer. Then also just the changed thresholds for
Davis-Bacon and the environmental review processes.
Ms. De La Cruz. Thank you. Yes, ma'am?
Mrs. Woodward Potts. I would agree that the best thing is
to reduce the amount of burdensome paperwork and regulations
associated with using this very critical funding.
Ms. De La Cruz. Good job. Yes, our last witness.
Ms. Bohee. Thank you, Congresswoman. Yes, the streamlining
of environmental regulations, the exemption provided for under
NEPA and certainly making it easier to build so we can deliver
these homes faster for those in need.
Chairman Flood. The gentlewoman's time has expired. Thank
you.
Ms. De La Cruz. I yield back.
Chairman Flood. The gentlewoman from Texas, Ms. Garcia, is
now recognized for 5 minutes.
Ms. Garcia. Thank you, Mr. Chairman, and I am going to try,
frankly, to contain myself because I just cannot believe some
of the words that I am hearing. I agree with the Chairman: we
all want more housing, especially affordable housing, but I do
not think I want to see affordable housing being built in an
old landfill. I do not think I want affordable housing to be
built by young people that are getting meager wages or by
subcontractors and contractors that are not even meeting the
minimum wage. I do not want to see housing built that, frankly,
is goods or lumber or nails that are coming from another
country and not the good old USA, that are going to fall apart
after 2 years of people living in it. I just cannot believe you
all are, basically, wanting us to toss out all the kinds of
protections that we need to make sure that we only not be able
to have affordable housing, but good-quality housing.
I will be honest with you. I have been around for a long
time in local government, State government, and I have never
seen a panel actually talk about tossing all the rules out
because we want to build anywhere, anytime, any way we want,
because that is what I am hearing from you all. I mean, have
not you all heard about how great it is to support American
manufacturing and products and buy American? We have all been
talking about that for years, but you want an exemption from
that? I mean, really, you all do? I mean, I am disappointed in
all of you, especially Habitat. I mean, Habitat is Jimmy
Carter's group. I mean, he was as American as they got. He is
probably rolling in his grave, poor dear, right now.
I ask you first, ma'am, you say you want to protect small
business from Davis-Bacon, but yet you do not want to support
small U.S. businesses by buying American. Can you help me
reconcile that?
Mrs. Woodward Potts. We support our local contractors. We
only hire electricians, plumbers, HVAC contractors, and brick
masons, people like that. All of these people are making above
the prevailing wage for Davis-Bacon. Most of our labor is
provided either by our construction crew, who are all paid
fairly with health insurance, or it is provided by volunteer
labor.
Ms. Garcia. But you are asking us to do away with the Buy
American Act. You want an exemption.
Mrs. Woodward Potts. Our issue with it is that it is very
difficult to determine when we are going to 84 Lumber in
Tuscaloosa, Alabama, where did those nails come from where did
the----
Ms. Garcia. Have you tried just asking the seller?
Mrs. Woodward Potts. It is very difficult for a local
business in Tuscaloosa, Alabama, to know tens of----
Ms. Garcia. Ma'am, just like I said, I am completely
baffled by this panel. I can walk into Home Depot, and they
will tell me what is American made or not. I remember one time
going to four stores just trying to find a button-down shirt
that was made in America. It is hard, but you have to just ask.
I am having trouble reconciling your positions, and you, sir,
you talk about the prices and Davis-Bacon and costs. Do you not
realize that the tariffs alone are going to cost about 40
percent more in building the home? At least that is what the
home builders told us in another hearing about 4 weeks ago, and
then with a lack of immigrant labor, it is going to raise it
another 30 percent.
Mr. Oberdorfer. Yes, I appreciate----
Ms. Garcia. You would not just build any damn thing you
want to any damn place you want to?
Mr. Oberdorfer. No, I appreciate the question, and I want
to reiterate that NAHRO supports American-made products and
manufacturing. The problem is the industry just is not set up
for that yet. We have been working----
Ms. Garcia. Which industry, sir?
Mr. Oberdorfer. The construction industry, manufacturing,
all of the things that we would need to meet the Build America,
Buy America requirements. It is incredibly difficult.
Ms. Garcia. Sir, we have been talking about that since I
was a county commissioner about 15 lives ago.
Mr. Oberdorfer. Although the Build America, Buy America
requirements have just come into compliance----
Ms. Garcia. It is not that hard.
Mr. Oberdorfer [continuing.] a couple of months ago, and so
the system is just not set up at this point for developers or
for contractors to find those products they need----
Ms. Garcia. Do you really want to build on a landfill? Do
you really want to build on a site that is flood prone? Do you
really want to build in a place that has contamination of oil
or gas or some toxic waste because you do not want to go
through an environmental?
Mr. Oberdorfer. No, absolutely not, ma'am, and our
recommendation is not to prohibit environmental reviews, but
rather, to make sure there is one environmental review per
project as opposed to having to go through duplicative----
Ms. Garcia. Sir, I have built a lot of things. I was a
county commissioner. I remember one time, one road that took me
almost 3 years to build because not only did I have to face
environmental, once they started digging, they found a gas
pipe, so then we had to do that review, and then we went
further down the road, and they found an archeological site.
They had to do that review. Those things----
Chairman Flood. The gentlewoman's time has expired. The
gentleman from New York, Mr. Lawler, is now recognized for 5
minutes.
Mr. Lawler. I want to thank Chairman Flood for having this
hearing and prompting us to begin to really take a look at the
programs at HUD. In many ways, the HOME Program exemplifies the
larger problems with many of our housing programs. Despite its
status as HUD's second largest block grant program and seventh
largest program overall, the HOME Program has not been
reauthorized since 1992. We have continued to pump money into
this program while program outcomes have diminished under
outdated regulatory frameworks, administrative burdens, and
inconsistent project tracking.
One of the most common refrains I hear in the 17th District
of New York is concerns about the affordability of housing.
This is a basic supply and demand issue. We are 7-and-a-half
million units underbuilt nationwide. We need to build more
housing, period. With mortgage rates near their highest since
the turn of the millennium, it is perhaps the most difficult
time to purchase a home in our Nation's history. However, so
much of the crisis comes back to the fact that we are not
building enough. The HOME Program, like other programs at HUD
and other Federal policies, needs targeted modernization for
the housing needs of the 21st century. We need to be
structuring these programs to enable Federal, State, and local
partners to work together to incentivize to growing our supply.
Ms. George, Mrs. Potts, and Mr. Oberdorfer, how would you
describe the cumulative regulatory burden of the HOME Program
on participating jurisdictions and developers?
Ms. George. Thank you for that question, Congressman. Time
is money. I have actually worked as a developer doing
affordable housing and at the State, and then represent, of
course, the Council of State Community Development Agencies.
The regulatory items that we have talked about are not the
wholesale elimination of these rules but really trying to
target where they have the most need, and so, like with BABA,
in particular, we are in full agreement. We want things built
and purchased that are made in America, absolutely agree. The
challenge is the uncertainty, and coming from a developer's
perspective, when you are uncertain that you are going to be
able to get the financing or you will get in trouble for
something that you meant to do correctly, you might choose not
to do that deal, and that is a problem because we need more
housing. We are here to talk about doing more housing more
rapidly, and so the proposals that we are considering today are
what we believe from practitioners as ways that we can achieve
something that is better for all of us.
Mr. Lawler. Mrs. Potts.
Mrs. Woodward Potts. After the April 27, 2011, tornado in
Tuscaloosa destroyed a sixth of the city in about 5 minutes,
hundreds and hundreds of houses were destroyed. Habitat wanted
to buy 33 lots on Juanita Drive in the heart of the tornado
zone, and it took more than 2 years, nearly 3 years to complete
the environmental reviews and build homes for homeownership for
Tuscaloosans who had lost everything they owned, and many of
them had lost family members.
Mr. Lawler. Yes.
Mrs. Woodward Potts. That is the kind of regulatory burden
that I would like to see eased. It is not that we want to do
away with environmental reviews.
Mr. Lawler. A thousand percent. Mr. Oberdorfer, what
reforms would best support new single-family construction
through the HOME Program, especially in areas with acute
homeownership demand?
Mr. Oberdorfer. Thank you for that question, Congressman. I
think what makes the HOME Program so critical and important is
the flexibilities that are included within that. What that
allows is for grantees to determine what makes sense on the
ground for them. For areas where single-family homeownership or
single-family building makes sense, HOME would allow them to do
that. I think what is most critical about the HOME Program is
that flexibility that allows communities to do what makes sense
for their local needs.
Mr. Lawler. Look, this is one of the biggest issues facing
the country, the issue of affordability and access to housing,
and the sheer fact is we just do not have enough housing. There
needs to be greater cooperation between the Federal Government,
our State and local partners, and developers to actually
incentivize the construction of new housing----
Chairman Flood. The gentleman's time has expired.
Mr. Lawler [continuing.] or the affordability crisis will
worsen.
Chairman Flood. The gentlewoman from Georgia, Ms. Williams,
is now recognized for 5 minutes.
Ms. Williams of Georgia. Thank you, Chairman Flood and
Ranking Member Cleaver, for this hearing today, and thank you
to all of our witnesses for being here to talk about such an
important issue across the board for all Americans.
Today, my Republican colleagues are holding this hearing
because they want people back home to think that they will
boost the HOME Program to address the affordable housing
shortage, and that will be noble if only my Republican
colleagues' actual actions lined up with this premise. You know
what is not noble? Republicans saying nothing while the
President continues to push an anti-affordable housing agenda,
including eliminating the HOME Program in his Fiscal Year 2026
budget proposal. Before we can talk about expanding the HOME
Program, we need to make sure there is a HOME Program left to
even expand. I have always worked with my colleagues on the
other side of the aisle in this subcommittee, and now I am
calling on my Republican colleagues to do the same: work with
Democrats and hold the Trump administration accountable for
what they are doing in the housing space to make it more
unaffordable for Americans.
In the span of just 6 months, we have seen the Trump
administration fire 700 HUD staff. We saw Trump give his once
bestie, now frenemy, whatever you want to call him, Elon Musk,
his Department of Government Efficiency (DOGE) passion project:
access to sensitive housing discrimination data. We have
watched this administration slash and cancel fair housing
funding grants, and we all know why this is happening. It is
because housing investments are meant to help low-income
families and individuals. It is meant for those who struggle to
afford a roof over their head, and clearly, these are not the
people that Donald Trump has shown us that he fights for
because they are not billionaires, and they are not lining his
pockets. In fact, he does not fight for me or the constituents
that I serve. In my district alone, we have the widest racial
wealth gap in the country and housing prices that continue to
skyrocket, and in the Atlanta area, Trump's plans to gut
housing investments will only make homeownership a more harder
reality for so many people already struggling. If Republicans
want to say today that they truly care about housing supply,
which I think that they actually do, I need them to understand
exactly how important the HOME Program is before they allow
President Trump to totally gut that, too.
Ms. Bohee, HOME Program funds can be used to finance a wide
variety of affordable housing activities that generally fall
into six categories: new construction of homeowner-occupied
housing, rehabilitation of owner-occupied housing, assistance
to homebuyers, new construction of rental housing,
rehabilitation of rental housing, and tenant-based rental
assistance. Are there investments the HOME Program can make
that are not eligible activities under any other Federal
program?
Ms. Bohee. Thank you for the question, Congresswoman. We do
believe one of the greatest tools is streamlining, eliminating
duplicative requirements, absolutely. This program must
absolutely be preserved. It is, again, the only source of
Federal block grant funding specifically targeted to low-and
moderate-income households.
Ms. Williams of Georgia. You all, the HOME Program is very
flexible. It provides funding dedicated exclusively to
increasing the availability of adequate, affordable housing for
low-and very low-income households. The program places a
particular emphasis on giving States and localities flexibility
in how they achieve their affordable housing goals and funds
and can be used for a variety of activities related to both the
rental and owner-occupied housing. Ms. Bohee, can you discuss
instances in which HOME funds were used effectively on any
project? Just give me an example of a project on how it was
used effectively.
Ms. Bohee. Absolutely. Recently in Savannah, Georgia, we
did use HOME dollars to redevelop a public housing site into
484 modern homes. These are multifamily, affordable housing for
families, seniors, and folks exiting homelessness. We leveraged
those HOME dollars in conjunction with housing tax credits. The
layering of those funding sources often takes many, many
multiple funding sources to get affordable housing built, so
the streamlining of those regulations associated with all of
the funding sources is critically important to building those
housing faster.
Ms. Williams of Georgia. So, it is the streamlining that
made this be more effective for you said over 400 people for
affordable housing in Savannah, Georgia.
Ms. Bohee. Over 400 families, yes.
Ms. Williams of Georgia. Thank you, Ms. Bohee. You all, the
HOME Program is just one of the many things in President
Trump's proposed budget that he is looking to eliminate. House
Republicans and this administration are pretending that the
private market can fix the affordable housing crisis. We must
do something about this together, Chairman Flood. Thank you,
and I yield back.
Chairman Flood. The gentlewoman yields back. The gentleman
from Montana, Mr. Downing, is now recognized for 5 minutes.
Mr. Downing. Thank you, Mr. Chair. Thank you for holding
this important hearing. Thank you to the witnesses.
Housing is obviously on all of our minds in solving
problems. I really see it as the basis of the American Dream as
being able to own your own home and finding solutions,
especially for those that have barriers. The United States is
over $36 trillion in debt, and taxpayer dollars are precious. I
support efforts to make sure they are used responsibly, so it
is important that we do think very strongly about how we get
the most bang for our buck. The HOME Investment Partnerships
Program created in 1990 is HUD's largest block grant program
dedicated exclusively toward affordable housing, and the
program receives over a $1 billion in funding annually.
I am going to start with Mrs. Potts. Can you share examples
of how HOME Program funds have been used to attract additional
private or philanthropic capital and what barriers remain in
maximizing that leverage?
Mrs. Woodward Potts. We have lots of corporate partners,
but many of them are not able to fully fund a house. For
instance, Public Supermarket Charities gives us $50,000 a year.
That will not fully fund a house, but we can pair that with
HOME dollars and provide a home, build a home for a family with
that paired funding. We also can build handicap-accessible
housing for families, which they would never be able to even
find, much less afford otherwise.
Mr. Downing. Do you see barriers to this type of
investment, these philanthropic or private investments?
Mrs. Woodward Potts. There is only so much philanthropic
and private investment available, especially in communities
like mine, which are not huge communities. It is a wonderful
thing. Maybe 20 percent of our funding in terms of new
homeownership comes from HOME, and then the other 80 percent
comes from private funders, whether it is foundations,
businesses, faith-based organizations, churches, and others.
Mr. Downing. Thank you. My district, the 2nd District of
Montana, is very rural. In fact, it is the largest
congressional district by landmass, other than Alaska. We have
very long roads, a lot of dirt, small communities, very rural.
Very rural. I am going to move to Ms. George here. Can you
describe any differences you have noticed in the HOME Program's
success in suburban areas versus rural areas?
Ms. George. Absolutely. Thank you, Congressman. We
administer the program for the State, and what we find is that
the developers that are prepared to administer the HOME Program
and meet the requirements of both the environmental review,
Section 3, the four horsemen. As the chairman says----
Mr. Downing. Right
Ms. George [continuing.] they need to be prepared, and so
the number of people or developers that can respond to an RFP,
request for proposals, is smaller because they do not have that
experience to actually administer the program. So, what we find
in our rural communities is we limit the number of contractors
that can actually apply and carry out a construction project,
which is a challenge because you are trying to get as much
competition----
Mr. Downing. Right.
Ms. George [continuing.] in the community as possible to
get the best product.
Mr. Downing. How else could this be reformed to better
serve these municipalities in rural or under-resourced
participating jurisdictions?
Ms. George. Thank you, Congressman. What we are proposing
is that the threshold for these requirements be lifted to 50
units. That way, we can ensure that we are getting the most
people applying to rural projects so that we can actually
complete these projects in a timely way.
Mr. Downing. Thank you. What additional performance metrics
or public reporting would you recommend HUD publish to give
Congress and the public clearer insight into the HOME Program's
cost effectiveness?
Ms. George. Thank you, Congressman. That is a good
question. That is actually one that I would like to come back
with information on at your request.
Mr. Downing. Anybody else would like to respond to that
last one?
Mr. Oberdorfer. Just to make sure I understood, so the
question is, what could HUD provide to make sure that these
dollars are going as far as possible?
Mr. Downing. Exactly.
Mr. Oberdorfer. I think what we have seen with the HOME
Program, especially when you are looking at the economic
benefits, both to the number of new units that have been
constructed as well as the impacts to the local economy, those
are two really critical points that are helpful to understand.
Mr. Downing. Thank you very much. I have run out of time,
Mr. Chair. I yield.
Mr. Downing. The gentlemen yields back. The gentlewoman
from Michigan, Ms. Tlaib, is now recognized for 5 minutes.
Ms. Tlaib. Thank you so much, Mr. Chair, and my colleagues
and the witnesses here today. It excites me to actually talk
about affordability and housing, some of the most real issues
for my residents back home in the 12th congressional District
in Michigan. However, it is hard to sit here and have detailed
policy discussion when the President of the United States has
called for eliminating the HOME Program entirely, in addition
to cutting rental assistance by 43 percent in the middle of a
housing crisis. I am not here to blame anybody because it
existed under the previous President, and now it is here in the
current President, but to cut rental assistance by such a
drastic amount is immoral. Already, this administration has
repealed much of the fair housing protections that many of my
residents--disabled, Lesbian, Gay, Bisexual, Transgender, and
Queer/Questioning (LGBTQ), Black, Latino, moms, the children--
all of it. They canceled grants to organizations that help
enforce fair housing laws and fired hundreds of HUD staffers,
but I do want to take this opportunity, though, to discuss how
we can improve the ``only'' Federal block grant focused
exclusively on affordable housing for our low-income
households, not just in Detroit, in all of our districts.
Under current program requirements, for example, the funds
must be committed within 24 months, or they expire; so,
organizations in my district, for instance, have said that this
makes it very hard for them, for smaller, emerging, affordable
housing developers without mature, what we call capital stacks,
to access funding. Ms. George or Mr. Oberdorfer, do you know of
early stage projects or emerging developers who have
experienced similar difficulties accessing HOME funds? If so,
what are some of those challenges that they face?
Mrs. George. Thank you, Congresswoman, for that question.
It is an excellent question because 24 months, it sounds good.
Ms. Tlaib. Yes.
Mrs. George. The challenge is the development timeline for
a multifamily development takes a while to get all of the
approvals for the funding. In Colorado, we have been trying to
expedite the processes and the approval processes throughout
the timeframe of when you have an idea through when you start
construction and complete construction. The challenge is, it
still takes 24 months if everything works perfectly, so what we
are proposing from COSCDA is to extend that time or to
eliminate that commitment period for the HOME Program.
Mr. Oberdorfer. Yes. Thank you for that question,
Congresswoman, and I would agree. The 24-month commitment makes
it very difficult to make development deals, and especially
when you are already dealing with layered subsidy and layered
funding streams, which are challenging to do in the first
place. That 24-month commitment makes it very hard to get
everything in line. We would agree with COSCDA to eliminate
that 24-month commitment, especially knowing that there is a 4-
year deadline to complete projects with HOME dollars----
Ms. Tlaib. Yes.
Mr. Oberdorfer [continuing.] so you know that things would
move forward anyway.
Ms. Tlaib. I agree. Turning to some of the other proposed
changes I appreciate in the HOME Reform Act, it does aim to
address the housing affordable crisis. I enjoy the intent, but
sometimes implementation, well, all the time implementation
matters. However, I am worried that in expanding the
eligibility up to 100 percent of AMI, the funding will not go
where it is most needed; and so, in the Detroit area, for
instance, the wealthier suburbs push up the AMI, the average
medium income, so you can see already the disparities in that
regard. To any of our panelists, how do we ensure that the
funds are going through where the greatest need is?
Mr. Oberdorfer. Thank you for that question, Congresswoman,
and I think we can all agree that there is a real need for
affordable housing across the board right now. One of the
things that is so important about HOME is the fact that it does
provide affordable housing for lower-income families. I would
recommend if there were conversations or discussions about
potentially increasing the AMI, that would also need to go hand
in hand with an increase to the program. Additional funding
could ensure that you could grow the HOME Program to
potentially have the eligibility go up to 100 percent AMI while
still being able to serve those families, but that funding
would be critical to make that work.
Ms. Tlaib. I do not have much time, but I can tell you, if
anybody has any other remarks, but I just caution my
colleagues, the HOME Program is irreplaceable. It works well
when we implement it the right way, and so I just urge my
colleagues to please reconsider in supporting elimination of
the HOME Program. Thank you.
Chairman Flood. The gentlewoman yields back. The gentleman
from South Carolina, Mr. Timmons, is now recognized for 5
minutes.
Mr. Timmons. Thank you, Mr. Chairman, and thank you to our
witnesses for committing to testifying today, even with our fun
schedule changes. Today's hearing topic is a piece of a much
larger problem: government efficiency and contradicting
regulatory requirements. As I examined the HOME Program, I
discovered that many policies, though often well intentioned,
frequently contradict one another, making it much harder to
solve our Nation's housing supply problems. This creates
unnecessary challenges and places a heavier burden on those
working within the system. Given these complexities, it is
essential to clarify the expectations placed on participating
jurisdictions. To better understand these obligations and how
participating jurisdictions manage program requirements, it is
important to hear from people in the field who work with the
program day in and day out.
Ms. George, what are the core responsibilities of
participating jurisdictions that receive HOME Program funds?
Ms. George. Thank you, Congressman. That is a very broad
question, and so I would say the ultimate responsibility is
ensuring affordable housing is built and is serving the
intended constituents of that State or jurisdiction; and so, it
would be initially ensuring that there is competition in
application, and then it is ensuring and reviewing that there
is a viability of a project that is being done, and then as you
go to contracting, ensuring that people are following through
with what they committed to do through their application and
their contract, and then the long-term viability and ensuring
that into the future, that people are actually being housed as
was the commitment in the original contract.
Mr. Timmons. Thank you for that. Can you walk through the
flow of HOME Program funds from HUD to participating
jurisdictions and then developers or project sponsors, how the
money flows through the system. Am I stretching it here?
Ms. George. Thank you, Congressman. Okay. I believe that
Congress would appropriate the funds, and we are hopeful that
Congress appropriates the funds because there is a tremendous
benefit to people throughout the country for these dollars.
Once they are appropriated to HUD, HUD then goes through an
assessment of how those funds should be divided up throughout
the country.
Mr. Timmons. Is that based off of the Census and population
densities and costs of different areas?
Ms. George. That is correct. It is based on need, based on
the statutes that you all create. Once the funds come to,
whether they are the State or through a participating
jurisdiction, a local jurisdiction, we would know what our
allocation would be. From there, we would have a competitive
process where applicants, whether they are a developer, a
nonprofit like Habitat or Mercy Housing, would apply for those
funds because they have a great idea or they have a pilot of
how they want to serve people, and so from there, they would
apply. They would compete with other applicants. Then that
jurisdiction, whether it be State or a local jurisdiction,
would award those funds. In the State of Colorado, we do that
through our State Housing Board in a public meeting. From
there, we contract for those funds, and so the recipient
developer would actually administer those dollars, whether it
be a project or a program, and then people would move in once
the housing is built.
Mr. Timmons. I would imagine there is continual
verification that they are indeed eligible for the assistance.
I am running out of time. I will finish with this. Ultimately,
it is our responsibility in Congress to streamline government
operations and improve the efficiency of all Federal programs.
We are literally running out of money. We have $37 trillion in
debt, we got a $1.8 trillion annual deficit, and we must
carefully review each agency and program to eliminate waste,
reduce duplication, and ensure that the American people can
easily and fairly access the services the government provides.
I look forward to continuing the discussion on the HOME Program
and working across the aisle to find practical solutions during
this Congress. Thank you, Mr. Chairman. I yield back.
Chairman Flood. The gentleman yields back. The gentlewoman
from Massachusetts, Ms. Pressley, is now recognized for 5
minutes.
Ms. Pressley. Thank you, Chairman Flood and Ranking Member
Cleaver, for this hearing today. Thank you to our witnesses for
joining us today and for your work in our communities.
Our seniors are being displaced from homes that they have
lived in for decades. Young families cannot afford to buy, and
low-income renters have barely enough to get by. Too many
families are one missed paycheck away from eviction. The HOME
Program was created to give cities and States the tools to
build and preserve affordable housing, but for decades,
Congress has underfunded it, and now the Trump administration
wants to eliminate the HOME Program completely. This is the
same administration that has already fired 780 housing agency
staff, slashed half of all fair housing programs, or grants
rather, repealed critical housing discrimination enforcement,
and proposed a budget that guts nearly every rental assistance
program. Make it make sense. You cannot. It is unconscionable.
When we say housing is a human right, I know some people think
that is like a bumper sticker slogan, what we mean is no child
sleeps in a car, no senior is pushed into a shelter, no
survivor is trapped in an unsafe home. We do not lack the
resources to make this vision a reality, simply the empathy and
the political will.
Ms. Bohee, we hear a lot about streamlining the HOME
Program. I agree that excessive red tape can drive up costs and
slow down urgently needed housing. Where do you see the most
opportunity to reduce burdens and delays without weakening
tenant protections or environmental standards?
Ms. Bohee. Thank you for the question, Congresswoman. For
example, in markets where we develop high-cost markets, for
example, in California, it often takes six to eight different
funding sources in order to build that affordable housing. The
Terner Center in California cited a study in which they
examined LIHTC housing credit projects and found that for every
additional funding source, it adds 4 months to the start of
construction and an additional $20,000 per residential unit to
develop, so the streamlining there would be to align
regulations upfront. For example, housing credits are exempt
from BABA, but often we use the HOME Program as a topper and an
essential gap financing in order to make those projects happen
and to target deep affordability for residents; so, aligning
the regulatory requirements to the primary funding source would
be absolutely important.
Ms. Pressley. All right. Thank you, Ms. Bohee. I want to
get one more answer on the record here. Under current HUD
regulations, survivors protected under the Violence Against
Women Act must get jurisdictional approval for external
transfers when survivors request to move to a different
property. From your experience, how long do these transfers
typically take, and have there been instances where this delay
in endangered survivors or prevented them from accessing safe
housing?
Ms. Bohee. That is an excellent question, Congresswoman. I
am actually not prepared to speak on that particular topic
today, but I would be glad to follow up in writing.
Ms. Pressley. Anyone else?
[No response.]
Ms. Pressley. Okay. All right. I want to be unequivocal:
the affordable housing crisis did not just happen on its own.
It is the result of decades of disinvestment in our housing
programs. In Boston and surrounding areas, the average monthly
rent for a 2-bedroom apartment has skyrocketed to over $3,600,
and in the Massachusetts 7th, more than 27 percent of renters
are severely cost burdened, paying over half of their income in
rent. The HOME Program is one of the few Federal tools we have
to change that, but instead of strengthening it, the Trump
Administration wants to do away with it altogether. This is the
moment to increase investments in housing, not defund housing
agencies and programs that are making a difference. This is
deeply consequential for our survivors of domestic violence and
so many more. Thank you, and I yield back.
Mr. Timmons. [presiding.] Thank you. The gentlewoman from
Colorado, Ms. Pettersen, is now recognized for 5 minutes.
Ms. Pettersen. Thank you, Mr. Chairman, and thank you all
for being here today to discuss such an important issue. A
special thank you to Ms. George, who has faithfully served
Colorado and the Department of Local Affairs for over 15 years
and has spent the last 10 years as the director of the Division
of Housing. Alison is set to retire this fall and will be
sorely missed, so thank you so much for your service to
Coloradans.
In our State, housing affordability is the number one pain
point that we hear from constituents. Their inability to afford
to put a roof over their head, the number one most basic
necessity, is becoming harder and harder. According to the
report from the National Low-Income Housing Coalition, Colorado
is now the sixth most expensive State in the country, and the
median sale of a home in Colorado roughly doubled over the past
10 years. People are experiencing homelessness at an increased
rate. Low-income renters and aspiring homeowners are feeling
the pressure of these rising costs, and the HOME Program has
served as a vital lifeline for communities and families in
Colorado by providing homebuyer assistance, housing
rehabilitation grants, and direct rental assistance.
I am grateful to the chair and the ranking member of the
subcommittee for bringing us together in a bipartisan way to
improve the HOME Program, but I am deeply concerned that the
very program we are discussing has been proposed to be cut by
Trump's budget. I hope that we can continue to show bipartisan
support for this program as it goes through the appropriation
process. Unfortunately, with housing, like so many complicated
issues, there is no silver bullet, and it really needs to be an
all-hands-on-deck approach, and investing in expanding programs
like HOME is a critical step forward. With that, I have a few
questions.
Ms. George, as you know, one of the many reasons that the
State and local localities target HOME funds is that the
program is quite flexible to meet the needs of the community,
and I would love to hear from you on how Colorado has explored
different uses for the HOME Program to meet community needs.
Ms. George. Thank you, Congresswoman, and I appreciate you.
What I would really like to highlight is that flexibility that
you mentioned. We have been able to pilot things in Colorado
that we would not have been able to do but for the Federal HOME
Program. Tenant-based rental assistance is something that we
use that HOME allows. We actually piloted a program, first in
Mesa County where we were partnered with the local school
district. In the school district, children were identified as
being homeless. With the HOME funding we were able to work with
the local housing authority, the local school district to
partner that family and provide the housing assistance to
ensure that child had a place to call home. We have been able
to expand that program because of the seed funding from the
HOME funds throughout Colorado, so thank you, and thank you for
your support of the program.
Ms. Pettersen. I love that innovative way of how you are
helping to support families and being able to identify them
through the schools and the education system and making sure
that they get the support that they need; so, thank you for
that. Ms. Bohee, similarly, to our State in Colorado,
California has been confronted with astronomical housing prices
that have priced out not only low-income families but working-
and middle-class families who are now struggling to pay rent
and keep food on the table. How does the current structure of
the HOME Program limit your ability to connect working-and
middle-class families to resources like tenant-based rental
assistance, and how can we expand the income thresholds to meet
that need?
Ms. Bohee. Thank you, Congresswoman, for the question. We
do believe aligning the regulations, really focused on the
tenants, would be very beneficial. For example, often, our
projects across the Nation, and certainly in California, will
utilize tenant-based vouchers, which have a certain level of
income restriction. On the one hand, the HOME Program has a
different level of income restriction. There is a lot of back-
and-forth with the agencies to really figure out how to
implement that, all the while you have residents living side by
side with different sets of requirements in which they live in
their homes, and it creates operational challenges.
Ms. Pettersen. Thank you all for this discussion. I know
that we need to streamline some of these processes. We are not
doing our job if we are directing dollars and trying to help
support communities and they are unable to actually take
advantage of these dollars to meet the need because of the
barriers that they are facing at the local level. I appreciate
the discussion today and look forward to working with all of
you on addressing one of the most important issues that we need
to focus on here in Congress.
Mr. Timmons. Thank you. The gentlewoman from Oregon, Ms.
Bynum, is now recognized for 5 minutes.
Ms. Bynum. Thank you to all the witnesses for your
testimony and thank you to Chairman Flood and Ranking Member
Cleaver for convening this important meeting.
As you can guess, in Oregon, we, too, are struggling with a
lack of housing supply, which has created, of course, a housing
crisis, and buying a home has become out of reach for far too
many Oregonians, and that has become a top priority of mine in
Congress. One area that I am interested in is modular
construction, particularly for multifamily developments,
Unfortunately, many of our housing programs currently do not
support modular construction; and so, the idea behind modular
construction is that, instead of building the entire house at
the location, large sections are built offsite and transported
to the location. Imagine if you wanted to buy a new car but you
had to coordinate with a mechanic, an automotive engineer, an
electrician, a welder, and six other contractors to come to
your driveway to design it. The cost would be astronomical, so
the question really remains is, why would we do that to
housing? So instead, modular housing would potentially bring
down home costs by making building a house easier, quicker, and
cheaper.
My question is for Mrs. Potts. You are on the hot seat.
Currently, HUD programs, including those supporting multifamily
housing, do not explicitly permit or facilitate offsite modular
construction, despite its potential power to lower housing
costs. Given your experience, how do you view the role of
modular and offsite construction in addressing the affordable
housing shortage, and what specific barriers--regulatory,
financial, or otherwise--need to be addressed in order to make
it scalable through HUD programs?
Mrs. Woodward Potts. Thank you for your question. I would
say that modular construction is one of our tools in our
toolshed. In Tuscaloosa, we are very fortunate that we can
build year round outside and on our build sites, but I know
that our friends who live in colder climes in the winter, they
often build their homes inside and then move them out to the
build site. I think that is an important tool. It is not
necessarily for everybody, but I do believe that it could
increase the supply of affordable housing, and it needs to be
one of the tools that is allowed by HOME funding.
Ms. Bynum. Thank you. I yield back.
Mr. Timmons. Thank you. The gentleman from California, Mr.
Liccardo, is now recognized for 5 minutes.
Mr. Liccardo. Thank you. I appreciate, Mr. Chair, and I am
sorry that Chair Flood is not here to hear me praise him, but I
do want to thank Chair Flood for his leadership and convening
this as collaborative efforts and working with Ranking Member
Cleaver, and I am grateful for ranking member's collaboration
as well on this issue and on many others. We are not seeing
enough of it in Congress these days, and it is refreshing to
see it happening here. I also want to thank you for allowing me
to waive on.
Chairman Flood asked me about my experience as a Mayor in
San Jose with HOME funding, and I did not have a lot to say,
and the reason why I did not have a lot to say, and I think a
lot of other large-city mayors would have said the same, is
that it is just not enough money. We do not really see HOME as
being a major mover. At times it provides gap funding in a very
complex stack of financing in projects. According to the Urban
Institute, maybe 20 percent of low-income housing tax credit
projects use HOME funding as a gap source of funding, but for
the most part, there are just not enough dollars there, and so
I join my colleagues in saying we cannot be cutting this. We
certainly cannot. We have already seen HOME funds decline since
2011. In absolute terms, in real terms, they have been
declining for decades, inflation-adjusted terms. Now, we have a
proposal from this President to cut the funding by 43 percent,
and right now, we know there is not nearly enough funding to
address the housing crisis we have.
All that being said, let me just say I really thank the
chair for the HOME Reform Act. The proposal that we see here, I
think, gets a lot right. I certainly support exemptions on the
Build America Act, eliminating duplicative reviews under NEPA.
I probably would have even gone farther than that to explore
categorical exclusions for infill affordable housing. I would
like to see the greater flexibility of the definition of
``community housing development organization,'' lengthening the
24-month commitment deadlines, the expansion of the use of
funds for utilities. I was a little hesitant to support lifting
the threshold in Davis-Bacon, but I think Ms. Bohee's testimony
was persuasive to me, and I know that Mercy does great work. We
have worked with them many times in my neck of the woods.
The one concern I have, though, is the change in the income
ceilings, and I hope that perhaps we can talk about this
further before this bill reaches us for markup. The bottom line
really comes back to what I said at the beginning, which is
there is not enough money. There is not enough Federal money
for everyone. HOME funding, I have already described, has
dropped in several different ways in the last decade and a
half, and the free market is going to provide options for some
families. We know that. If they are at 95 percent, 100 percent
of area median income, those options may be limited, but there
are options. My concern is that for families at 60 percent of
area median income, there are no options except subsidized
housing, except for obviously very, very poor ones, poor
options, I should say.
Right now, we have 9 million extremely low-income families
in this country who qualify for Section 8 funding or vouchers,
and about one-quarter of them actually get vouchers. We have
millions of families without, and that is just extremely low
income. If we go to the very low-income and low-income
categories, now we are into tens of millions of families who
desperately need help with very poor housing options that they
cannot afford; and so, I am very concerned about diluting this
limited pool and expanding it to 100 percent of area median
income when we know that there are developers who can
profitably build in many jurisdictions, not all, but many
jurisdictions to address that market segment.
So my question, I guess I will start with you, Ms. George,
since you have a big portfolio in Colorado, are you finding
that, hey, there is a problem, we do not have enough proposals
for sub-80 percent AMI housing, that we should expand the
eligibility for HOME funds well above 80 percent?
Ms. George. Thank you, Congressman. I will answer the first
question, which is do we have a limited supply or number of
applications for below 60 percent AMI. Absolutely not. There is
a tremendous need for affordable housing. That said, I think
the beauty of HOME is the flexibility of HOME, and so it is a
matter of responding to the local needs of your community. It
might be that first-time homebuyer, and then it also could be
that 30-percent AMI and below. The example that I used, Harvest
Hill in Broomfield, I am most enthusiastic. It is 152 units,
which is fantastic, but it is those 30-percent AMI units. I am,
as a houser, excited about the expansion of the tax credit
program, but the HOME Program provides the essential gap
funding in order to achieve that lower AMI.
Mr. Liccardo. Thank you. I yield, and I look forward to
working with my colleagues on the side of the aisle on this
issue.
Ms. De La Cruz. [presiding.] The chair now recognizes from
Tennessee, Mr. Rose, for 5 minutes.
Mr. Rose. Thank you and want to thank Chairman Flood and
Ranking Member Cleaver for convening today's hearing and thank
you to our witnesses for your time today and for being with us.
I would like to applaud Chairman Flood and Ranking Member
Cleaver for their work on the discussion draft of the HOME
Reform Act of 2025, which is attached, of course, to today's
hearing. It has been over 30 years since the last time the HOME
Program was reauthorized by Congress. The world has changed a
lot in that time, but, unfortunately, many of the HOME
Program's outdated requirements have lived on. These outdated
requirements can increase costs and needlessly add time to
completing housing projects. I am pleased that today's
discussion draft includes commonsense changes to the HOME
Program, including exempting National Environmental Policy Act
mandates, and it creates a small project exemption that will
ease Davis-Bacon workforce requirements as well. The Nation's
shortage of homes is at a crisis level in many parts of the
country, and I think we are all aware of that. I look forward
to working with Chairman Flood as well as Ranking Member
Cleaver to successfully reauthorize the HOME Program, which is
an important step Congress can take right now to help alleviate
our Nation's housing shortage.
Mrs. Potts, one theme that this subcommittee has heard over
and over again is the unaffordability of starter homes in so
many areas around our country. I was really happy to see that
you had an entire section of your prepared testimony devoted to
barriers to constructing or rehabilitating affordable starter
homes. Could you describe your personal experiences with
barriers to affordable starter homes?
Mrs. Woodward Potts. I would be happy to. Thank you for
your question. We have a local developer who is a partner, and
they have been building affordable starter homes in the Cherry
Stone neighborhood for six iterations. They had another area
adjacent that they were going to develop. They started with the
infrastructure, but by the time they got three-quarters of the
way through the infrastructure, they realized that what was
going to be affordable housing, because of the increase in
interest rates and the increase in building materials and
things, they were not going to be affordable houses for the
starter market, so they approached Habitat for Humanity. They
donated some of the 32 lots and they sold others to us, and we
are able to develop those homes for first-time homebuyers.
These are people who work in environmental services, people who
work in food service, our Tuscaloosa City school bus driver for
special needs children. These are people who would never be
able to afford homes otherwise to purchase a home.
Mr. Rose. Mrs. Potts, if Congress, working in partnership
with State and local governments, were to begin removing some
of the barriers to affordable starter homes that you
identified, could this help enhance the effectiveness of the
HOME Program, particularly if Congress is able to successfully
reauthorize the program?
Mrs. Woodward Potts. Yes. It would decrease the amount of
time from when we get to our concept through the environmental
review process, all of those things. It would decrease the
time. It would also actually increase the number of contractors
that we have who want to bid on projects because some of our
contractors just do not want to have to deal with the Federal
regulations, for instance, Davis-Bacon. It is not that they are
not paying those wages. They are, but it is just the amount of
paperwork required to comply. Many of our really small
contractors just do not have the staff to make that happen.
Mr. Rose. Thank you. Mr. Oberdorfer, your testimony focuses
on the significant burdens housing projects face as a result of
the HOME Program's required environmental reviews. You
specifically highlighted that, in many cases, if projects
receive additional funding, they are required to undergo a
second environmental review. Can you discuss the compliance
burdens that environmental reviews place on housing programs
and the importance of environmental review reform in any
reauthorization of the HOME Program? In 30 seconds.
Mr. Oberdorfer. Yes. Thank you for that question,
Congressman, and obviously, we need to find the right balance
with environmental reviews, but what typically occurs,
especially with HOME funds, is that it adds to delays to the
project, and there are two things I would point out. The first
is that, oftentimes, when you are using HOME financing to fill
a financial gap in a project, that means you have other
timelines that you need to meet as well that could slow down
the process. The second is you have oftentimes already done an
environmental review for either of the projects that you are
working on. It is just once you add that additional gap
financing through the HOME Program, because of the
requirements, you need to do that second environmental review,
so it becomes duplicative.
Mr. Rose. Thank you. Our time has expired. I yield back.
Ms. De La Cruz. I would like to thank all of the witnesses
for their 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 response. Witnesses, please respond no later than August
21, 2025.
[The information referred to can be found in the appendix.]
Ms. De La Cruz. This hearing is adjourned.
[Whereupon, at 3:40 p.m., the subcommittee was adjourned.]
APPENDIX
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MATERIALS SUBMITTED FOR THE RECORD
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[all]