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

                    BUILDING CAPACITY: REDUCING GOVERNMENT
                         ROADBLOCKS TO HOUSING SUPPLY
    =======================================================================

                                    HEARING

                                   BEFORE THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   ----------

                                DECEMBER 3, 2025

                                   ----------

                               Serial No. 119-47

           Printed for the use of the Committee on Financial Services

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   ----------

                               www.govinfo.gov

                     U.S. GOVERNMENT PUBLISHING OFFICE
    63-575 PDF               WASHINGTON : 2026
    =======================================================================

                     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

                             C  O  N  T  E  N  T  S

                                  ----------

                          Wednesday, December 3, 2025

                                                                       Page

                               OPENING STATEMENTS

    Hon. French Hill, Chairman of the Committee on Financial
      Services, a U.S. Representative from Arkansas..................     1
    Hon. Maxine Waters, Ranking Member of the Committee on Financial
      Services, a U.S. Representative from California................     3

                                   STATEMENTS

    Hon. Mike Flood, Chairman of the Subcommittee on Housing and
      Insurance, a U.S. Representative from Nebraska.................     4
    Hon. Emanuel Cleaver, Ranking Member of the Subcommittee on
      Housing and Insurance, a U.S. Representative from Missouri.....     4

                                   WITNESSES

    Mr. Kevin Sears, Immediate Past President, National Association
      of Realtors (NAR)..............................................     5
        Prepared Statement...........................................     8
    Ms. Julie Smith, Chief Administrative Officer, Bozzuto, on Behalf
      of The National Multifamily Housing Council, The National
      Apartment Association, and The Real Estate Technology and
      Transformation Center..........................................    19
        Prepared Statement...........................................    21
    Mr. Tobias Peter, Senior Fellow and Co-Director, American
      Enterprise Institute Housing Center............................    34
        Prepared Statement...........................................    36
    Ms. Nikitra Bailey, Executive Vice President, National Fair
      Housing Alliance...............................................   107
        Prepared Statement...........................................   109

                                    APPENDIX

                       MATERIALS SUBMITTED FOR THE RECORD

    Hon. Barry Loudermilk:
        National Association of Residential Property Managers (NARPM)   228
    Hon. John W. Rose:
        Manufactured Housing Institute (MHI).........................   230
    Hon. Monica De La Cruz:
        Housing group in support of H.R. 6132........................   232
    Hon. Mike Flood:
        International Code Council (ICC), dated December 2, 2025.....   233
        American Property Casualty Insurance Association (APCIA),
          dated December 3, 2025.....................................   237
        Coalition statement from the National Taxpayers Union and
          other Conservative advocacy organizations, dated December
          2, 2025....................................................   241
        The American Institute of Architects (AIA)...................   243
    Hon. Maxine Waters:
        Grounded Solutions Network...................................   245
        Habitat for Humanity.........................................   247
        The National Community Stabilization Trust (NCST)............   251
        The National Low Income Housing Coalition (NLIHC)............   259

                     RESPONSES TO QUESTIONS FOR THE RECORD

    Written responses to question for the record from Mr. Kevin Sears
        Representative Bill Foster...................................   271
        Representative Brittany Pettersen............................   273
    Written responses to question for the record from Ms. Julie Smith
        Representative Bill Foster...................................   275
        Representative Brittany Pettersen............................   276
    Written responses to question for the record from Mr. Tobias
      Peter
        Representative Bill Foster...................................   278
    Written responses to question for the record from Ms. Nikitra
      Bailey
        Representative Bill Foster...................................   280
        Representative Brittany Pettersen............................   283

                                  LEGISLATION

    H.R. 638, the Housing Temperature Safety Act of 2025.............   286
    H.R. 1078, the Respect State Housing Laws Act....................   294
    H.R. 2362, the VA Home Loan Awareness Act........................   296
    H.R. 2840, the Housing Supply Frameworks Act.....................   298
    H.R. 3774, the HUD Accountability Act of 2025....................   311
    H.R. 4385, the Helping More Families Save Act....................   314
    H.R. 4568, the Supporting Upgraded Property Projects and Lending
      for Yards (SUPPLY) Act.........................................   324
    H.R. 4646, the Whistleblower Protection Act of 2025..............   330
    H.R. 4659, the Identifying Regulatory Barriers to Housing Supply
      Act............................................................   332
    H.R. 4660, the Unlocking Housing Supply Through Streamlined and
      Modernized Reviews Act.........................................   339
    H.R. 4810, the BUILD Housing Act.................................   347
    H.R. 4989, the Streamlining Rural Housing Act of 2025............   350
    H.R. 5077, the Strengthening Housing Supply Act of 2025..........   354
    H.R. 5263, To require approval from the Secretary of Housing and
      Urban Development for any Federal manufactured home and safety
      standards, and for other purposes..............................   356
    H.R. 5429, the HUD-USDA-VA Interagency Coordination Act..........   359
    H.R. 5577, the NFIP Continuation Act of 2026.....................   362
    H.R. 5878, the HOME Reform Act of 2025...........................   364
    H.R. 5907, To authorize the Secretary of Housing and Urban
      Development to award grants to eligible entities to select pre-
      reviewed designs of covered structures of mixed-income housing
      for use in the jurisdiction of the eligible entity.............   378
    H.R. 5913, the Community Investment and Prosperity Act...........   384
    H.R. 6132, To modify the multifamily loan limits under title II
      of the National Housing Act....................................   386
    H.R. 6269, To require the Secretary of Housing and Urban
      Development to conduct a review of Federal Housing
      Administration construction financing programs to identify
      barriers to the use of modular home methods, and for other
      purposes.......................................................   394
    H.R. 6293, the Expansion of Attainable Homeownership Through
      Manufactured Housing Act of 2025...............................   398
    H.R. --------, the Housing for America's Middle-Class Act of 2025   407
    H.R. --------, To direct the Comptroller General of the United
      States to conduct a study that identifies options to remove
      barriers and improve housing for persons who are elderly or
      disabled.......................................................   410
    H.R. --------, To direct the Comptroller General of the United
      States to conduct a study that identifies how many residential
      dwelling units, and how many dwelling units in public housing,
      are located within 1 mile of a superfund site..................   412
    H.R. --------, the Accountability for NYCHA Act of 2025..........   414
    H.R. --------, To amend the Housing Act of 1949 to make
      modifications to loans and grants for minor improvements to
      farm housing and buildings, and to make modifications to income
      eligibility for such loans and grants..........................   420
    H.R. --------, To amend the Housing Act of 1949 to require an
      annual report on rural housing programs........................   422
    H.R. --------, To require the Comptroller General of the United
      States to submit to the Congress a report on the use of
      technology by the Rural Housing Service........................   424
    H.R. --------, To amend the Housing Act of 1949 to clarify that
      accessory dwelling units which are leased qualify for certain
      loan guarantees under section 502 of such Act, and for other
      purposes.......................................................   426
    H.R. --------, To require the Secretary of Agriculture to submit
      to the Committee on Banking, Housing, and Urban Affairs of the
      Senate and the Committee on Financial Services of the House of
      Representatives a report with respect to the application
      process under section 502 and 504 of the Housing Act of 1949,
      and for other purposes.........................................   429
    H.R. --------, To require the Secretary of Housing and Urban
      Development to require public housing agencies to disclose
      contracts entered into, and for other purposes.................   432
    H.R. --------, To require the Secretary of Housing and Urban
      Development to establish Federal guidelines for point-access
      block buildings, and for other purposes........................   434
    H.R. --------, To require Federal monitors and receivers of
      public housing agencies to testify before the Committee on
      Financial Services of the House of Representatives and the
      Committee on Banking, Housing, and Urban Affairs of the Senate.   438
    H.R. --------, To exempt from the requirements of NEPA the
      provision of certain assistance for the construction or
      modification of residential housing on infill sites, and for
      other purposes.................................................   440
    H.R. --------, To amend the National Housing Act to require that
      certain mortgagors be provided with a deed assurance document
      (Waters).......................................................   444
    H.R. --------, To require the Comptroller General of the United
      States to conduct a study that examines the cost and benefits
      of a Federal uniform residential building code.................   446
    H.R. --------, To require the Secretary of Housing and Urban
      Development to submit to the Committee on Banking, Housing, and
      Urban Affairs of the Senate and the Committee on Financial
      Services of the House of Representatives a report with respect
      to incentivizing small dollar mortgages, and for other purposes   448
    H.R. --------, To amend the Housing and Community Development Act
      of 1976 to require grantees under such Act to maintain a
      database of land...............................................   453
    H.R. --------, To require the Secretary of Housing and Urban
      Development to establish a grant program to assist in housing
      planning activities, and for other purposes....................   455
    H.R. --------, the Build Housing More Affordably Act.............   461

      BUILDING CAPACITY: REDUCING GOVERNMENT ROADBLOCKS TO HOUSING SUPPLY

                                  ----------

                          Wednesday, December 3, 2025

                         U.S. House of Representatives,
                               Committee on Financial Services,
                                                        Washington, DC.

        The committee met, pursuant to notice, at 10:11 a.m., in
    room 2128, Rayburn House Office Building, Hon. J. French Hill
    [chairman of the committee] presiding.
        Present: Representatives Hill, Sessions, Huizenga, Wagner,
    Barr, Williams of Texas, Loudermilk, Davidson, Rose, Steil,
    Timmons, Stutzman, Meuser, Kim, Garbarino, Fitzgerald, Flood,
    Lawler, De La Cruz, Nunn, McClain, Salazar, Downing,
    Haridopolos, Moore, Waters, Velazquez, Sherman, Meeks, Scott,
    Lynch, Green, Cleaver, Himes, Foster, Beatty, Vargas, Gonzalez,
    Casten, Pressley, Tlaib, Torres, Garcia, Williams of Georgia,
    Bynum, and Liccardo.
        Chairman Hill. The Committee on Financial Services will
    come to order.
        Without objection, the chair is authorized to declare a
    recess of the committee at any time.
        Today's hearing is entitled ``Building Capacity: Reducing
    Government Roadblocks to Housing Supply.''
        Without objection, all members will have 5 legislative days
    within which to submit extraneous material to the chair for
    inclusion in the record.
        I now recognize myself for 4 minutes for an opening
    statement.

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

        Today's hearing will explore the various factors
    contributing to the high cost of housing and examine the tools
    the Federal Government might wield in order to alleviate some
    of that burden.
        Over the last decade, housing affordability has rapidly
    become one of the main issues facing our American families,
    which have been primarily driven by a persistent lack of supply
    needed to meet a growing demand. The delta between supply and
    demand has resulted in an affordability challenge many
    Americans face in looking to purchase a home.
        This committee has held numerous hearings on critical
    aspects of this issue, including barriers to building middle-
    class housing, better utilization of modular and manufactured
    housing to meet urgent needs, and the unique housing challenges
    that rural America faces.
        More recently, our Housing and Insurance Subcommittee held
    a hearing reviewing the urgent need to modernize the Federal
    housing construction program, the HOME Program, to make it the
    most effective and responsive to today's market demands.
        Each of these discussions has highlighted a severe,
    decades-long shortfall in housing inventory that has hindered
    many Americans' access to affordable homes. Our goal today is
    to chart a path toward greater development capacity and a more
    simplified regulatory framework.
        Regulatory complexity, particularly those locally designed
    and approved rules, remains a significant obstacle for property
    owners and builders, complicating the development process and
    often resulting in delays and increased expenses.
        Rather than helping development, overburdensome building
    regulations have made it nearly impossible for many housing
    providers to navigate a maze of Federal, State, and local
    rules, leading to less housing development across the Nation.
        Likewise, homebuilders and hopeful homebuyers are being
    crushed by the tailwinds of the 40-year high in inflation
    brought about by trillions in new spending from the Biden
    Administration and excessive laxity on the part of the Federal
    Reserve in late 2020 and 2021.
        This inflationary spike elevated the cost per square foot,
    pushed down real incomes, contributed to higher insurance
    premiums and, obviously, higher interest rates as the Federal
    Reserve (Fed), behind the curve, fought to overcome these
    errors. Inflation is down to 3 percent from its ugly peak of 9
    percent in 2022.
        In line with the committee's ``Make Community Banking Great
    Again'' agenda, committee Republicans have been working
    alongside the Trump Administration to ensure that community
    banks remain viable, competitive, and able to serve their local
    needs to combat rising housing costs. Greater capital, better
    deposit funding, and lower compliance costs mean greater credit
    availability by our banks for our construction industry.
        We are committed to finding new ways to foster a
    homebuilding and buying environment that is conducive to supply
    growth and prudent lending practices. Our focus today is not
    about expanding government control; it is about how our
    government can work through to cutting red tape that is
    stifling innovation and discouraging investment in housing
    projects.
        My Republican colleagues and I understand that the first
    step in creating a well-functioning housing market starts with
    streamlining regulatory processes and eliminating redundant
    layers of bureaucracy. By doing so, we can create a more
    predictable environment for builders, lenders, buyers, and
    renters.
        After we take feedback from today's hearing, we plan to
    hold a markup later this month on a package of housing and
    banking reform solutions for our Nation's housing challenges.
        I want to thank our witnesses, and I look forward to our
    discussion today.
        I now recognize the ranking member of the committee, Ms.
    Waters, for 4 minutes for an opening statement.

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

        Ms. Waters. Thank you very much, Mr. Chairman.
        The cost of living is skyrocketing, and working-class
    families are struggling to pay their rent and mortgages and
    what is Donald Trump doing to solve this crisis? Raising
    housing costs.
        He is imposing tariffs on lumber and other building
    materials, gutting the key civil-rights protections meant to
    end housing discrimination, and unleashing masked Immigration
    and Customs Enforcement (ICE) agents on American cities,
    wreaking havoc on families and communities and fueling labor
    shortages at places like home construction sites.
        Now Trump wants to gut permanent supportive housing
    funding, which would force 170,000 people back onto the
    streets--a move that will significantly harm people with
    disabilities, veterans, survivors of domestic violence, and
    women with children.
        Mr. Chairman, I do not have to tell you how severe the
    housing crisis has become. As it stands, nearly 800,000 people
    are experiencing homelessness, and most American families use
    the bulk of their paycheck for their rent or mortgage. This is
    a serious problem and requires serious solutions.
        Federal Housing Finance Agency (FHFA) Director Bill Pulte,
    who spends more time launching baseless political witch hunts
    than solving the housing crisis, has proposed a 50-year
    mortgage. This is the most preposterous housing policy anyone
    has ever come up with. What is the next brilliant idea? A 100-
    year mortgage? We should not expect any progress on the housing
    crisis when people in charge are unserious and out of their
    depth.
        Committee Democrats are serious about solving this crisis.
    Right after the administration proposed gutting funding for
    permanent supportive housing, I demanded the Housing and Urban
    Development (HUD) Secretary Scott Turner to reverse the
    decision in a letter that I led with 52 other House Democrats.
        At the same time, my Democratic colleagues and I in the
    House and Senate have worked in a bipartisan manner to get the
    Renewing Opportunity in the American Dream (ROAD) to Housing
    bill included in the National Defense Authorization Act (NDAA),
    a commonsense legislative package that would chip away at the
    crisis while we all work in good faith to reach a deal.
        I know there have been some concerns, and, Mr. Hill, I know
    that some of your concerns are my concerns and I know that you
    walked away from the negotiations. Well, while I am
    disappointed in that decision, I am encouraged that you want to
    work with me and committee Democrats to finally get something
    done on housing. What you just said this morning is very
    encouraging.
        So I am looking forward to working with you to solve the
    problem that we all know exists. We must move quickly, because,
    while Congress bickers, rents are still going up, home prices
    are still rising, and mortgage rates are still too high.
        I also encourage my friends on the opposite side of the
    aisle to not play around with the margins of housing policy.
    Let us go big.
        While the ROAD is an important and incremental step, we
    need serious and substantial government intervention to build
    the housing units needed to end this crisis. The private sector
    cannot do it alone and certainly will not build housing for our
    lowest-income families, so we have to be bold with this.
        My housing package is just that. It is the single-largest
    and most comprehensive investment in affordable housing in U.S.
    history and will finally tackle the affordable housing crisis,
    end homelessness, and eliminate the racial wealth and ownership
    gap.
        So I look forward to today's conversation and working with
    my colleagues to get a bipartisan housing bill passed into law.
    It is going to cost some money. Please do not start telling me
    we are going to do it without paying for it. We have to pay for
    it.
        I yield back.

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

        Chairman Hill. The gentlewoman yields back.
        I now recognize the chair of the Subcommittee on Housing
    and Insurance, Mr. Flood, for 1 minute for an opening
    statement.
        Mr. Flood. Thank you very much, Mr. Chairman, and
    especially thank you for your leadership on housing.
        Housing costs, as we have noted today, have been rising for
    the last several years, and this problem is taking its toll.
    Housing affordability affects everyone. For example, the
    American Dream of buying a home is out of reach for many of our
    country's young people. Did you know the median age of a first-
    time homebuyer today is, astoundingly, 40 years old?
        The reason for this affordability problem is simple: We are
    not building enough homes in this country to meet the demand.
    We have a 5-million-unit shortage. This committee and the
    Housing and Insurance Subcommittee have been working on
    solutions that will cut costs, remove government barriers, and
    unleash more building across the country. This hearing today is
    the latest step in our work this year.
        You will note that almost every hearing this subcommittee
    has had has been on housing this year. We have a wide range of
    bills that have been noticed today that will address different
    aspects of the problem.
        I am excited and honored to be a part of this process and
    have enjoyed working with my colleague, Mr. Cleaver, from the
    great State of Missouri. I look forward to our markup at the
    end of this month.
        With that, I yield back.
        Chairman Hill. The gentleman yields back.
        I recognize the ranking member of our Subcommittee on
    Housing and Insurance, Mr. Cleaver.
        You are recognized for a 1-minute opening statement.

       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.
        I have been on this committee for over 20 years, and there
    are at least two things I have found to be unquestionably true.
    One, housing affordability has worsened over the past two
    decades, and it creates an increased affordable housing supply
    need. Number two, there is always a reason for Congress not to
    work together to get something done.
        Congress now has perhaps a once-in-a-generation opportunity
    to advance housing legislation of consequence. This includes
    ROAD to Housing, which includes House legislation such as my
    own and dozens of other bills under discussion today.
        It is right to ask whether Congress can overcome harmful
    administrative action, but I have learned that the reasons not
    to work across the aisle will always be there, and so will the
    need.
        I thank all the members of this committee who are working
    in a bipartisan manner and look forward to open debate on the
    legislation before us today.
        Thank you, Mr. Chairman.
        Chairman Hill. The gentleman yields back.
        Today, we welcome the testimony of Mr. Kevin Sears,
    immediate past president of the National Association of
    Realtors; Ms. Julie Smith, chief administrative officer of
    Bozzuto, here on behalf of the National Multifamily Housing
    Council, the National Apartment Association, and the Real
    Estate Technology and Transformation Center; Mr. Tobias Peter,
    senior fellow and co-director at American Enterprise
    Institute's (AEI's) Housing Center; and Nikitra Bailey,
    executive vice president of the National Fair Housing Alliance.
        We thank all of you for being with us today.
        Each of you will be recognized for 5 minutes to give an
    oral presentation of your testimony.
        Without objection, your written statements will be made
    part of the record.
        Mr. Sears, we are going to start with you. You have 5
    minutes for your presentation.

     STATEMENT OF KEVIN SEARS, IMMEDIATE PAST PRESIDENT, NATIONAL
                        ASSOCIATION OF REALTORS

        Mr. Sears. Chairman Hill, Ranking Member Waters, members of
    the committee, thank you for inviting me to testify today.
        My name is Kevin Sears. I am the 2024-2025 president of the
    National Association of Realtors. I am also a practicing real
    estate broker in Springfield, Massachusetts, where I have
    worked for over 30 years helping families and individuals
    achieve the American dream of home ownership.
        Today, I am here on behalf of our nearly 1.5 million
    Realtor members representing nearly every ZIP code across this
    great Nation.
        Every day, Realtors watch families struggle to find homes
    that they can afford. These are families who have done
    everything right--they have saved for years, they have stable
    jobs, they have good credit--but buying a home is slipping out
    of reach because they cannot find one they can afford. We
    constantly see teachers, nurses, firefighters, police officers
    priced out of the very communities that they serve.
        This is not anecdotal. We surveyed real estate firms from
    across America, and nearly 60 percent of them told us that
    housing affordability is their single biggest challenge. The
    lack of affordability in the market is a systemic crisis
    locking entire generations out of home ownership.
        At the root of America's affordability crisis is an
    undeniable fact: Our Nation has a severe lack of housing
    supply.
        The numbers tell a stark story. There were more homes
    available for purchase in 1995 than there are today, although
    there are millions more Americans. After the Great Recession,
    we experienced 14 consecutive years of severe underproduction,
    creating a shortage, as Chairman Flood said, of nearly 5
    million homes nationwide.
        The impact on families is profound. First-time homebuyers
    have fallen to a record low of 21 percent of purchases.
    According to National Association of REALTORS's (NAR's) data,
    the median first-time homebuyer is now 40 years old.
        Let that sink in. An entire generation is waiting more than
    a decade longer than their parents did to buy homes. Many may
    never get there at all and this 10-year delay translates to
    more than $150,000 of lost wealth--equity that could help them
    educate their children or support them in their retirement.
        The housing shortage also drives rents to record highs,
    limiting ability for families to save for home ownership.
    According to NAR's 2025 analysis, the median net worth of a
    U.S. homeowner is approximately $430,000, while the median net
    worth of a renter is $10,000. So what that means is that a
    typical homeowner is 43 times wealthier than a typical renter.
        This shortage is a result of specific policy choices and
    market barriers that we can and must address.
        Homeowners are increasingly locked in place. The capital-
    gains exclusion, set in 1997 at $250,000 for a single owner and
    $500,000 for married couples, has never been updated, even as
    home prices have surged.
        At the same time, rising interest rates mean that
    homeowners who secured a 3-to 4-percent mortgage rate just a
    few years ago may not be able to afford today's rates if they
    were to move.
        Millions of households with Federal Housing Administration
    (FHA), United States Department of Agriculture (USDA), and
    Veterans Affairs (VA) loans are also staying put rather than
    giving up their low mortgage rates.
        Improving buyers' ability to use existing assumable loans
    would allow them to take over a seller's lower mortgage rate,
    increase mobility, and unlock more homes on the market.
        Builders face barriers at every level of government--
    restrictive zoning, unpredictable permitting and rent control
    at the local level, along with Federal red tape and high
    financing costs, all of which slow construction and limit
    supply of affordable and rental homes.
        Realtors have taken action. We are working to empower
    communities to remove barriers, expand supply, and help our
    clients achieve the American dream of home ownership but local
    action alone cannot close the housing shortage. Federal
    leadership is essential.
        We recommend the bipartisan leadership--we commend the
    bipartisan leadership of this committee, particularly
    Subcommittee Chair Flood and Ranking Member Cleaver, who have
    championed practical solutions.
        We must build on this momentum by unlocking existing homes
    through modernizing the capital-gains policy, boosting new
    construction, Federal and State local reforms, and expanding
    financing for affordable and innovative housing.
        My written testimony details the bipartisan legislation to
    do just that, including the More Homes on the Market Act, the
    Housing Supply Frameworks Act, and the HOME Reform Act, and
    other solutions this committee has championed.
        The housing supply crisis demands action at every level of
    the government. This crisis is not a red or blue issue; it is a
    red, white, and blue issue. NAR and our members stand ready to
    work with Congress and the administration to deliver real
    solutions.
        Thank you.

        [The prepared statement of Mr. Sears follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Hill. The gentleman yields back.
        Ms. Smith, you are now recognized for 5 minutes for your
    presentation.

        STATEMENT OF JULIE SMITH, CHIEF ADMINISTRATIVE OFFICER,
    BOZZUTO, ON BEHALF OF THE NATIONAL MULTIFAMILY HOUSING COUNCIL,
        THE NATIONAL APARTMENT ASSOCIATION, AND THE REAL ESTATE
                  TECHNOLOGY AND TRANSFORMATION CENTER

        Ms. Smith. Chair Hill, Ranking Member Waters, and members
    of the committee, my name is Julie Smith. I am the chief
    administrative officer of the Bozzuto Group. Founded in 1988,
    Bozzuto develops, builds, and operates over 130,000 apartments
    nationwide.
        This morning, I am here on behalf of the 95,000 members of
    the National Multifamily Housing Council, the National
    Apartment Association, and the Real Estate Technology and
    Transformation Center.
        Today, policymakers, housers, and, most critically, the
    residents we serve agree on two things: One, we do not have
    enough housing; and two, now is the time to address our
    Nation's housing crisis.
        We are grateful for today's hearing, and we hope it will
    result in further consideration of legislation focused on
    stimulating housing supply.
        Our goal is to ensure that apartment providers can meet the
    long-term housing needs of the 40 million Americans who
    identify as renters. It is time to take meaningful steps to
    ensure that everyone can have a safe and decent place to call
    home at a price they can afford.
        Regrettably, the current economic and regulatory
    environment makes building incredibly difficult, and that is
    unlikely to change without action that makes production more
    economically viable. CoStar reports that multifamily starts
    were down 32 percent year over year in the third quarter of
    2025.
        On the economic front, continued instability poses a
    serious threat to our ability to leverage private capital
    markets necessary to finance new housing. Elevated interest
    rates have served to drive up the cost of building new housing
    and, additionally, operating expenses have risen by an average
    of 5.1 percent annually over the last 5 years.
        The regulatory burden is also inhibiting housing
    production. Many regulations go far beyond ensuring the health
    and well-being of the public, and regulations imposed by all
    levels of government account for an average of 40.6 percent of
    multifamily development costs.
        There is a clear path to solving this challenge. Rental
    housing providers stand ready to help and we ask Congress to
    prioritize and support pro-housing policies that will, in turn,
    ensure greater housing stability and affordability for renters
    of all income levels.
        Congress took a strong step earlier this year by
    substantially enhancing the Low-Income Housing Tax Credit, but
    there is more to do. Several bills within the committee's
    jurisdiction would be particularly impactful in boosting
    housing supply and affordability, and while a full list is
    included in my written statement, I would like to highlight
    three.
        Representatives Flood and Cleaver have introduced the HOME
    Reform Act of 2025 to make it easier and faster to build
    affordable housing. The bill would expand who qualifies for
    home assistance, allow funds to be used for infrastructure, and
    streamline the National Environmental Policy Act and ``Build
    America, Buy America'' requirements.
        The National Multifamily Housing Council (NMHC) is also
    advocating for the bill to let communities use HOME dollars for
    tax abatements and for studies that help remove local barriers
    to building and preserving housing.
        Representatives Flood and Pettersen have introduced
    bipartisan legislation through the Identifying Regulatory
    Barriers to Housing Supply Act, aimed at reducing
    discriminatory land-use rules that restrict housing production.
        The bill would require Community Development Block Grant
    (CDBG) recipients to regularly report how they are addressing
    these barriers and advancing inclusive affordable housing. This
    added transparency is intended to encourage better, more
    equitable local development practices.
        Three, legislation introduced by Representatives Loudermilk
    and Gonzalez through their Respect State Housing Laws Act would
    strike the Coronavirus Aid, Relief, and Economic Security
    (CARES) Act's 30-day-notice-to-vacate requirement and return
    eviction policies back to the State and local levels, where
    they are more effectively administered.
        I would also like to address three other areas where the
    committee has a role to play.
        One, while we have seen stabilization in the property
    insurance market this year, rates remain at historic highs
    after 27 consecutive quarters of rate hikes over the past 7
    years and while insurance is generally State-regulated, we
    encourage Congress to provide long-term reauthorization of the
    National Flood Insurance Program and the Terrorism Risk
    Insurance Act of 2002.
        Two, capital is the lifeblood of the multifamily industry.
    It is critical that policymakers continue to support Fannie Mae
    and Freddie Mac, which play a vital role in financial housing.
    Policymakers must maintain the liquidity they provide and
    retain at least an implicit guarantee; otherwise, there is
    significant risk that borrowing costs will increase.
        Finally, emerging technologies are helping providers
    improve affordability, enhance resident experiences, and
    modernize operations. These innovations are governed by robust
    existing laws and consumer protections ensuring responsible
    use.
        Thank you. I look forward to answering the committee's
    questions.

        [The prepared statement of Ms. Smith follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Hill. Thank you very much.
        Mr. Peter, you are now recognized for 5 minutes for your
    oral presentation.

       STATEMENT OF TOBIAS PETER, SENIOR FELLOW AND CO-DIRECTOR,
              AMERICAN ENTERPRISE INSTITUTE HOUSING CENTER

        Mr. Peter. Chair Hill, Ranking Member Waters, members of
    the committee, thank you for the opportunity to testify today.
        Housing and affordability are real and worsening. Home
    prices have been rising faster than incomes for years. Low-
    income households and today's first-time homebuyers now face
    record-high prices and much high interest rates, leaving many
    stuck renting instead of climbing the first rung of the housing
    ladder. This is stunting family formation and economic growth.
        The causes are straightforward. Zoning rules often mandate
    large lots, banning multiple homes on a parcel and putting more
    land off limits, while regulations at every level of government
    add cost and adds complexity. In short, buildable land has
    become scarce and homebuilding expensive. As a result, we now
    face a nationwide shortage of several million homes.
        The good news is that the problem is fixable with the right
    policies, but we must focus on solutions that truly move the
    needle, while avoiding costly unintended consequences.
        The answer is to build more homes on smaller lots because
    land costs are costly, smaller lots mean smaller and more
    attainable homes, reducing costs and increasing the supply of
    family size starter homes.
        Consider that, since 2000, the country has built about 12
    million single-family homes in subdivisions. Had we built them
    on slightly smaller lots instead, we could have roughly 9
    million more homes today, and those homes would be priced about
    15 to 20 percent lower.
        Smaller lots are essential to improving housing supply and
    affordability.
        Zoning and land use that determine these outcomes are
    fundamentally State and local responsibilities, but many States
    have already begun to address these issues by changing minimum
    lot sizes, legalizing townhomes, and allowing homes to be built
    where jobs are.
        I applaud Congress and the sponsors of the ROAD to Housing
    Act of 2025 for recognizing the urgency of housing
    affordability and for including some useful elements, such as
    that target at National Environmental Policy Act (NEPA) and
    manufactured housing reforms.
        However, ROAD is too Federal, too subsidy-driven, and too
    apartment-centric. Instead, we need a greater focus on family
    size starter homes. ROAD also risks pushing the Federal
    Government deeper into State and local zoning decisions.
    Washington should not override or micromanage these reforms
    that are already underway in many States.
        At the same time, the Federal Government does have powerful
    levers, several of which are squarely within this committee's
    jurisdiction, that can support, accelerate, and reward States
    and local reforms which have unintended consequences.
        First, to spur new home construction, HUD should offer a
    bounty for States when they plat smaller lots, paying for
    results when they achieve this plain and simple goal. This
    would give States a strong incentive to reform while allowing
    them flexibility in how to use these funds.
        HUD should also expand the supply of starter homes by
    adopting targeted FHA mortgage insurance pricing reductions
    tied to modestly sized new homes. These efforts should be
    funded from already-existing HUD grants and programs.
        This committee can also help by accelerating efforts to
    sell underutilized Federal land.
        Second, the committee can help unlock existing homes. HUD
    should phase out FHA's home retention options, partial claims
    in particular, which have ballooned to over 1 million borrowers
    today. Many of these borrowers could sell and walk away with an
    average of over $100,000 in cash while reducing risk to
    taxpayers and freeing up much-needed homes.
        Beyond this committee's direct jurisdiction, Congress can
    further unlock existing homes through targeted tax changes, and
    I highlight several of them in my written testimony.
        Third, Congress must avoid counterproductive approaches, so
    we do not repeat the mistakes of the past. Federal involvement
    in State and local zoning decisions, as proposed in several
    ROAD Act provisions, is counterproductive. It risks poisoning
    the bipartisan momentum underway in many States and pushing
    policy toward subsidy-driven, government-centric solutions that
    crowd out private and smaller builders.
        Also, before expanding Federal housing programs, HUD should
    conduct a full audit of existing subsidies, so we understand
    what we are getting for the more than $100 billion a year we
    spend across HUD, Treasury, and USDA.
        We should also resist demand-side gimmicks. We cannot fix a
    supply side problem by focusing on the demand side. We will
    only bid up the prices of the same limited number of homes.
        In conclusion, each level of government should focus on
    what is properly within its purview to expand supply. The
    ``Strong Foundations'' playbook released by the AEI Housing
    Center and the U.S. Chamber of Congress provide practical,
    customized paths to affordability for over 6,000 jurisdictions.
    Across the Nation, by focusing on just four key plays, we could
    add more than 1.6 million additional homes a year without new
    subsidies or Federal micromanagement.
        Over 30 of our case studies show that builders can overcome
    labor shortages and high interest rates, but they cannot
    overcome restrictive government regulations. If we legalize
    homebuilding by allowing more smaller lots, builders will
    deliver the attainable homes American families need.
        Thank you.

        [The prepared statement of Mr. Peter follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Hill. Thank you so much.
        Ms. Bailey, you are now recognized for 5 minutes for your
    oral remarks.

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

        Ms. Bailey. Chair Hill, Ranking Member Waters, and other
    distinguished members of the United States Committee on
    Financial Services, thank you for the opportunity to testify
    during today's hearing.
        I am Nikitra Bailey, executive vice president of the
    National Fair Housing Alliance (NFHA). NFHA leads the fair-
    housing movement by working to eliminate housing discrimination
    and ensure equitable housing opportunities for all people and
    communities. NFHA also represents over 200 community-based,
    nonprofit fair-housing agencies throughout the Nation.
        Our Nation is in the throes of a fair and affordable
    housing crisis, and it is impacting millions of people. The
    actions of the current administration have caused chaos, fear,
    insecurity, dysfunction, and rising prices around the country.
        Instead of providing everyday people with practical
    solutions to the housing crisis, the Trump Administration is
    removing rungs on the ladders of opportunity for essential
    workers, including police, teachers, firefighters, and others
    who dedicate their lives to serving their communities.
        The administration's haphazard executive actions are
    causing serious economic and personal injuries that will
    undermine our already-fragile housing market and, ultimately,
    our Nation.
        Housing is fundamental to the American Dream, and voters
    want elected leaders to quickly implement solutions to ensure
    they can fairly access opportunity and share in our Nation's
    prosperity.
        People are seeking solutions that will drive down the
    skyrocketing cost of housing and provide fair market rents,
    expand fair access to mortgage credit in underserved
    communities, reduce homeowners' insurance costs, and produce
    the development of millions of desperately needed affordable
    housing units.
        The Trump Administration's actions are leaving people
    seeking housing free of discrimination unprotected, including
    disabled veterans, seniors, people with disabilities, families
    with children, survivors of domestic violence, and more.
        Congress established fair housing as a national policy of
    the United States with the passage of the Fair Housing Act of
    1968 after the horrific assassination of Dr. Martin Luther
    King, Jr. Yet, the Trump Administration is dismantling our
    Nation's fair housing and fair lending infrastructure and
    making it costlier for everyday people to afford the American
    Dream despite demands for affordability.
        The administration has failed to live up to its pledge to
    make housing cheaper and increase access to home ownership.
        Prior to the start of the administration, home ownership
    was on an upward trajectory for all communities. The Black
    homeownership rate grew 14 percent. The Asian American and
    Pacific Islander homeownership rate grew nearly 9 percent. The
    Latino homeownership rate grew nearly 5 percent, and White home
    ownership was up by 1.57 percent and those are homeownership
    rates.
        This momentum is being reversed. The United States
    Department of Housing and Urban Development rolled back
    critical fair housing rules, eviscerated the Office of Fair
    Housing and Equal Opportunity, closed field offices, and fired
    whistleblowers. It is leaving renters everywhere vulnerable to
    discrimination, at a time when renters already face soaring
    rents and nowhere to go.
        The Federal Housing Finance Agency has abandoned special-
    purpose credit programs that have provided $82 million in
    reduced costs to nearly 60,000 borrowers of all races and
    helped lenders circumvent systemic barriers that limit fair
    credit access for people of color.
        The Consumer Financial Protection Bureau issued a proposal
    to gut a 50-year-old fair lending rule that ensures that women
    can get a loan without needing a male cosponsor.
        The actions are injecting unnecessary risk, locking out the
    people that the health of the housing system depends on and
    over the next 10 years, all future net household growth will be
    from households of color. If they are locked out of the housing
    finance system, the system will fail.
        The Fair Housing Act provides the blueprint to increasing
    our Nation's supply of affordable housing. It is key to
    reforming exclusionary zoning that locks out renters, low-
    income people, and people of color from certain neighborhoods.
    It can drive inclusionary practices that permit entry-level
    homeownership opportunities and missing middle housing,
    including condominiums and triplexes, quadplexes, and accessory
    dwelling units.
        Fair housing laws improve people's lives. They also improve
    neighborhoods block by block. These vital protections also
    strengthen our economy and make the Nation more prosperous.
        Now is the time for Congress to increase its oversight of
    the administration's actions so that more people in America do
    not end up homeless.
        Congress must also pass comprehensive legislation with
    supply side and demand-side solutions like the ranking member's
    Housing Crisis Response Act and other measures to ensure that
    the housing needs of people living in rural, urban, and
    suburban communities are met. Only an all-of-the-above strategy
    can truly tackle the crisis.
        Thank you, and I look forward to answering your questions.

        [The prepared statement of Ms. Bailey follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Hill. Thank you so much.
        We appreciate our panel's contributions to our hearing
    today.
        We will now turn to member questions. I recognize myself
    for 5 minutes for questioning.
        Across our country, families, as we have both, the ranking
    member and I, have noted and you have noted, our families are
    facing housing costs that have really climbed out of reach.
        I outlined several of the macro reasons I believe that cost
    per square foot has gone up, and now they are confronted with
    higher financing costs as a result of the inflation I talked
    about but, also, government subsidies originally intended to
    support households have ended up helping prices rise faster
    than wages, while outdated and duplicative regulations,
    particularly at our State and local areas, have slowed
    development and created a bottleneck that actively prevents
    homes we need from getting built.
        We got to do better, and I believe we can do better and I
    am committed to working with my colleagues across the aisle to
    advance these kinds of meaningful reforms that result in
    increasing supply and responsibly restore more attainable
    housing results in our communities.
        Mr. Sears, you have your experience, your whole career in
    realty, so you know people at all price points in Springfield,
    and there is a supply gap in many communities. What does the
    data tell us about why this gap persists and how that is
    impacting existing inventories and home purchases?
        Mr. Sears. Thank you, Chairman Hill.
        You asked two parts to the question: The lack in existing
    inventory, I can boil it down to three very specific reasons.
        As I mentioned in my oral testimony, we have underbuilt
    significantly over the last decade and a half since coming out
    of the Great Recession. We also face significant regulatory and
    zoning barriers at the local and State level as well as a
    little bit at the Federal level but, also, higher interest
    rates, the construction costs, delays that can be impacting
    builders has also driven up costs, because there is a time
    value to money, and so when it takes longer, it is going to
    cost more.
        You also asked about home purchasing, and you said
    something very significant. I purchased my first home in 1996
    as a 24-year-old. I paid $83,000 for it. Yesterday, I received
    a text from my 25-year-old son, who is looking to buy a home in
    the Boston area, a starter home. The price? $850,000. Ten times
    as much, in 30 years.
        What has happened in 30 years? A lot has happened, but
    there has also been some stagnation.
        Over 30 years ago, I was a college athlete, a Division I
    athlete. I will not have you guess the sport, but I am going to
    tell you, I was a diver and what did I do with that skill set?
    In the summertime, I worked at a small amusement park,
    Riverside Park.
        Chairman Hill. Yes.
        Mr. Sears. So that was Six Flags New England. I worked in
    the stunt and high-dive show. I used to do high dives from 75
    feet, get lit on fire, and got paid for it.
        I do not do that anymore. A lot has changed in 30 years,
    but what has not changed in 30 years is the fact that the
    capital-gains exclusion has remained stagnant at $250,000 for a
    single person, $500,000 for a married couple. It was not
    indexed for inflation.
        We have significantly underbuilt, as we said.
        Chairman Hill. Thank you----
        Mr. Sears. You probably wonder why I talked about my diving
    career, because I used to get lit on fire and paid for it, as I
    said. What I can tell you is that taught me, getting lit on
    fire--you can never quite prepare yourself for the first time
    you get lit on fire, but what it taught me is not to panic.
    Athletics is a great training ground----
        Chairman Hill. Thank you, sir.
        Mr. Sears [continuing]. for business, and I was able to
    help people solve these problems, but I have a great concern
    for my children, your children, my grandchildren, who might
    panic, and their inability to be able to purchase a home.
        Chairman Hill. Thank you, Mr. Sears. Appreciate that and
    your views.
        Mr. Peter, both in Ms. Smith's testimony--she talked about
    40-percent-plus cost per unit comes from, essentially, rules,
    regulations, local zoning, land-use restrictions and you talked
    about that Federal policies spending too much time focusing on
    subsidizing demand instead of focusing on these supply
    constraints. I agree, and we all understand that is kind of how
    the system is built here but you talked about accelerating
    local competition and local change.
        Can you name who you think is doing an outstanding job of,
    as you say, putting--if you have a traditional 50-foot lot
    maybe doing a fourplex instead of a single-family? Talk to me
    about who you think is doing a good job on that.
        Mr. Peter. Yes. So we have done over 30 case studies where
    we have studied these examples and Texas just recently passed a
    bill, SB 15, where they are allowing in new residential
    subdivisions smaller lot sizes of 3,000 square feet. So that is
    number one.
        Number two, another example is Seattle. So Seattle in 1994
    allowed single-family, detached homes to be torn down and
    replaced with townhomes on the same parcels. So, over the last
    20 and 30 years, they have torn down 5,000 single-family,
    detached homes and not replaced them with opulent McMansions,
    but they replaced them with four, five, six townhomes in the
    same parcel. As a result, because they have built more
    housing----
        Chairman Hill. Thank you.
        Mr. Peter [continuing]. the housing has been lower-priced.
        Chairman Hill. I hope all of you will respond in writing
    with good examples of how that is working around the country.
        Chairman Hill. With that, let me recognize the ranking
    member, Ms. Waters, for 5 minutes of questioning.
        Ms. Waters. Thank you. I wish I had 5 days for questions. I
    tell you----
        Chairman Hill. Yes.
        Ms. Waters [continuing]. this is so exciting. You know, I
    am hearing testimony from witnesses brought here by
    Representatives on the opposite side of the aisle that I have
    never heard before.
        Ms. Bailey, if local governments--today's hearing will
    consider my draft bill that would require local governments to
    keep a public, searchable database of undeveloped land that
    they own.
        For far too long, communities have been left in the dark
    while public land sits unused. We should be putting that land
    to use. Without a clear accounting, local officials,
    developers, and the public are missing key opportunities to
    plan and build, and the housing advocates should not have to
    waste precious time trying to track down available housing
    locations that are right in front of them.
        Ms. Bailey, if local governments that receive CDBG funds
    maintained these land databases, what specific opportunities
    could be unlocked for affordable housing production and what do
    we lose when this information is scattered, outdated, or never
    collected at all?
        Ms. Bailey. Thank you so much for the question.
        It provides the opportunity to provide workforce housing so
    that we can ensure that teachers and police and firefighters
    can actually live in the communities where they work.
        Oftentimes, local jurisdictions have a preference for
    single-family development, so we can see the development of
    quadplexes, we can see the development of triplexes, and we can
    see your legislation really solve the Nation's fair and
    affordable housing crisis and be a key solution as part of a
    broader package.
        Your tremendous leadership on the Housing Crisis Response
    Act--$150 billion to address the Nation's fair and affordable
    housing crisis--would be complemented by that legislation, and
    they should move forward together.
        Ms. Waters. Thank you very much.
        Now to Mr. Sears, Ms. Smith, and Ms. Bailey.
        I appreciate our Senate colleagues who have introduced the
    bipartisan ROAD to Housing package to begin to address our
    Nation's affordable housing crisis. Of course, I urge my
    Republican colleagues to help us include it in NDAA and quickly
    pass it into law, but I believe Congress must do much, much
    more if we are serious about solving this crisis for the
    American people. For decades, HUD programs have chronically
    been underfunded and forced to make do with limited resources.
        When I was chair of this committee, I introduced the
    Housing Crisis Response Act, along with my Ending Homelessness
    Act and the Downpayment Toward Equity Act. This package
    represents the single-largest, most comprehensive investment in
    affordable housing in history.
        So let me ask you directly. In addition to the ROAD to
    Housing bill, can we address the affordable housing crisis
    comprehensively without substantial injection of Federal
    funding?
        Mr. Sears, you first.
        Mr. Sears. Ranking Member Waters, thank you very much for
    the question.
        We, the National Association of Realtors, support your
    bill. Obviously, what it would do is help to cut red tape and
    allow us to build more homes, which would open doors to home
    ownership for many more people.
        You know, affordability is a key issue, and the housing
    supply is part of that. So we support any innovation that could
    be--that comes through this bill in order to help Americans get
    into home ownership.
        Ms. Waters. Okay.
        I guess I am back to Ms. Bailey.
        According to the Bloom---well, did anyone else want to
    respond to that, about funding?
        Ms. Bailey. Sure, ma'am. If I could chime in here.
        Ms. Waters. Yes.
        Ms. Bailey. You are absolutely correct that we need a full
    and comprehensive package.
        If this Congress would follow your leadership--this
    committee already passed meaningful legislation, originally the
    Build Back Better Act, which is now the Housing Crisis Response
    Act. You have put together a very comprehensive package, $150
    billion, that will help prevent homelessness, that will provide
    the type of support to subsidized renders who need it today and
    increase the Housing Choice Voucher Program.
        You have done intentional things to really solve our
    Nation's fair and affordable housing crisis and everything that
    you have proposed today will really help us ensure that we do
    not see additional families end up in homelessness.
        Ms. Waters. Thank you very much.
        I only have a few minutes left, and I just want to say how
    important it is for all of you to be here today. When we talk
    about what is going on in this country--and we are certainly
    talking about healthcare and Medicaid and all of that--housing
    is the number one crisis in the country, and we need to do
    something substantial about it. Thank you for being here.
        Chairman Hill. The ranking member yields back.
        I now recognize the gentleman from Texas, Mr. Sessions,
    chair of our Oversight Committee. He is now recognized for 5
    minutes.
        Mr. Sessions. Mr. Chairman, thank you very much.
        I really appreciate you having this hearing today. I think
    both you and Ranking Member Waters agree we have a problem. So
    the question is, what does this committee do to help us focus
    on that problem?
        As a regular part of the National Association of Realtors,
    when they visit me, this is the conversation. When the
    homebuilders visit me, this is part of the conversation.
        I think it has gone away from the problems that we had with
    supply chain to actual rules and regulations, as Mr. Sears has
    talked about, is the problem. Certainly, if you look at
    industry data, it says that government regulations add nearly
    $94,000 to the price of a new single-family home.
        Being from Waco, Texas, I will remember, a few years ago,
    with cities that were struggling to add tax on top of what was
    required for them to prepare for new homes--roads, bridges,
    infrastructure, water pipes, and all these things.
        I think that this panel has brought a country viewpoint of
    this, as opposed to just my viewpoint in Texas, where we have a
    huge housing problem and one that has been talked about--
    certainly, Mr. Peter talked about--it is across the country.
        I think we ought to focus on getting more investment money
    into the pot and I do not think that is Federal money. I think
    that is looking at streamlining--and I have talked to Secretary
    Turner about this--streamlining the housing authorities,
    instead of them holding the bulk of the money and them building
    buildings and them controlling the circumstances.
        I think HUD should look at the rules and regulations about
    rebuilding, and what the rules are related to replacing
    existing housing. I tried to do this with Secretary Fudge to no
    advantage 3 years ago, when we suffered taking away current
    housing to build new housing rather than adding to that
    availability.
        Mr. Sears, please tell us, what do you believe is the
    number one thing this committee should do on a bipartisan basis
    to stop the problems that we have with government regulations,
    whether they be Federal Government, State, or city government?
        Mr. Sears. Mr. Sessions, thank you. You nailed it on the
    head. When it costs $100,000, approximately, before the shovel
    gets in the dirt, that is a significant issue, and it leads to
    the affordability crisis.
        The way that I believe this committee and Congress can help
    is by helping incentivizing localities, States, to streamline
    the red tape, their zoning. If there is anything you can do
    with funding, help with infrastructure costs.
        One of the things--and you touched on this. Investors are a
    little reticent when there is a lot of red tape. They need
    certainty that projects are going to be approved and that the
    shovel is going to get in the ground to produce the housing.
        So anything we can do to help with those issues would be
    welcomed by the National Association of Realtors and my 1.5
    million Realtor members.
        Mr. Sessions. In Texas, Mr. Sears--and I am sure Ms. Smith
    knows this--in Texas, there is this huge pent-up demand for
    housing. When interest rates that President Trump is attempting
    to get the Fed to lower--when interest rates fall to a level
    that they need to be, not are but should be, it is going to
    create--I think could create an investment opportunity to
    where, if we do our job here to support Chairman Hill, then
    that means that the investment community will come in and spend
    that money with streamlined opportunity for them.
        I think it is off of a deal that you and the homebuilders
    understand better than I, but an opportunity to control that
    property, make it available today, streamline the red tape, and
    get people their housing today without the Federal Government
    or a housing authority getting in the way of that opportunity.
        Ms. Smith, please tell me more about what you think we
    ought to be doing.
        Ms. Smith. Thank you for the question.
        There are a lot of, sort of, proven strategies that have
    worked. I was talking with a developer who is working on a
    project in DC, right here where we are, last night, and DC has
    put together a lot of incentives to----
        Chairman Hill. Ms. Smith, I am going to ask you to respond
    in writing, if I might.
        Mr. Sessions. Mr. Chairman, thank you very much. I think
    that the opportunity for us to see this in writing will enable
    us to approach this on a bipartisan basis.
        Mr. Chairman, I thank you for the time.
        Chairman Hill. Thank you, Mr. Sessions.
        Now the gentlewoman from New York, Ms. Velazquez, the
    ranking member of our House Small Business Committee, you are
    recognized for 5 minutes.
        Ms. Velazquez. Thank you, Mr. Chairman.
        So I heard from the other side that the Biden-era interest
    rate is responsible for the--one of the roadblocks to housing
    supply. Then I heard $60 billion in regulations.
        I would like to add, $30 billion--and that is, the Trump
    tariffs. According to Brookings, is adding $30 billion to the
    cost of construction of residential homes, including
    multifamily. I did not hear any of the members of the panel
    mention or discuss the impact that tariffs are having on the
    construction of housing.
        Ms. Smith, one of the issues that multifamily property
    owners in my district are currently struggling with is the
    rising cost of insurance premiums, whether they be for general
    liability insurance or for a specific peril.
        For example, a HUD Section 236 property in my district was
    recently forced to increase rents by 6 percent in part because
    of these premium increases.
        As insurance premiums continue to rise, more and more
    property owners are questioning the financial feasibility of
    participating in HUD's programs.
        First, is this a problem HUD multifamily property operators
    have expressed to you? Second, what steps do you think this
    committee should take to reduce premiums and increase coverage
    specifically for HUD-backed property owners?
        Ms. Smith. We could spend a whole lot of time talking about
    insurance. You are absolutely right, insurance has become so,
    so expensive. Just to illustrate that, I can remember a time
    not too long ago when you might spend $300 on insurance per
    unit, and today it might be $1,300 per unit.
        So the availability of insurance and the cost of insurance
    have been extremely high. So anything that the government could
    do to ensure or even subsidize the insurance on properties
    would be very helpful, but it has become a very large part of
    the operating-expense calculation.
        Ms. Velazquez. Thank you.
        Mr. Sears, can you speak to the high cost of insurance,
    whether it be homeowners' insurance or insurance for a specific
    peril like fire or flood, acting as a barrier to home
    ownership?
        Mr. Sears. Certainly, Ms. Velazquez.
        We have seen over the last 5 years--me personally, I have
    seen my own insurance double in cost. On the rental properties
    I own, It has more than doubled. We cannot pass along those
    increases to the tenants. We just cannot. So mom-and-pop
    landlords are really feeling the pinch and when insurance costs
    for homeowners equals or exceeds the cost of their mortgage, we
    know there is a fundamental problem.
        Ms. Velazquez. So, given the constraints of McCarran-
    Ferguson, what steps can we here on the Federal level take to
    reduce those premium costs in order to increase home ownership?
        Mr. Sears. Seeing as insurance is regulated at the State
    level, what I believe the Federal Government could do is offer
    incentives, grants, low-interest loans for homeowners to
    reinforce their homes, strengthen their homes, and harden their
    homes against natural disasters. With this being done, interest
    rates--I am sorry--insurance rates should decline.
        Ms. Velazquez. Okay.
        Well, Mr. Chairman, I have been a longtime supporter of our
    State-based system of insurance, but when it comes to HUD-
    backed multifamily properties, I think we need to do more here
    at the Federal level to regulate the cost of insurance.
        The Federal Government has a vested financial interest in
    these properties and if the insurance premiums become too
    costly for landlords or, worse, if insurance becomes
    unavailable, we will lose our affordable housing stock. So I
    think that we need to look into that. Otherwise, we are going
    to be here again and again and again discussing this very same
    issue.
        Thank you. I yield back.
        Chairman Hill. I thank the gentlewoman. She yields back.
        I now recognize the gentlewoman from Missouri, Ann Wagner,
    the chair of our Capital Market Subcommittee.
        Ann, you are recognized for 5 minutes.
        Mrs. Wagner. Thank you, Mr. Chairman.
        Welcome, witnesses.
        Earlier this year, the National Association of Realtors, or
    NAR, released its ``Housing Affordability and Supply'' report,
    which found that, while housing inventory is increasing,
    middle-income buyers are still having difficulty finding
    affordable homes.
        This difficulty was especially pronounced for prospective
    homebuyers making less than $75,000, who, according to this
    report, have seen little to no benefit from rising supply.
        In 2024, the St. Louis Federal Reserve reported that the
    median household income in Missouri was $78,390, just over the
    threshold where affordable housing becomes nearly inaccessible.
    In fact, in the St. Louis metro area, NAR found that over 2,500
    more affordable listings would be needed to meet demand for
    households making $75,000 or less.
        Mr. Sears, as former president of NAR, you are aware that
    our housing supply problem is not just about building more
    housing; it is about building the right kind of housing that
    would give millions of Americans the opportunity to own their
    own home, a slice of the American Dream.
        One issue that we have heard is that capital is
    increasingly flowing toward refurbishing existing housing stock
    rather than new construction. What incentives could redirect
    private investment toward the construction of new homes?
        Mr. Sears. In the last 5 years, construction costs have
    increased anywhere between 8 and 77 percent. So, what can we do
    to help with that?
        The other thing is what I talked about earlier: Before a
    shovel goes in the ground, the red tape and regulations--
    approximately $100,000 in red tape costs, and for a single-
    family resident--that is about 25 percent of the cost; for
    multifamily units, it is about 40 percent of the cost.
        What we need to be able to do is, with the median price of
    a home across country around $400,000, the typical buyer would
    need six figures, $100,000, to afford that. So, based on the
    statistics you are citing, that means it is not affordable.
        When builders' costs are increasing--red tape causes
    delays--they are going to focus more on high-end homes, where
    the profit margin is greater and they can absorb those costs.
    We need to incentivize them to build the starter homes and the
    missing middle--the townhomes, the duplexes.
        Mrs. Wagner. As I said to the extent that you can give us
    some ideas that either do legislatively or otherwise to somehow
    redirect private investment toward construction of new homes
    that are the right kind for that middle-income buyer, it would
    be great.
        Again, Mr. Peter, let me ask you this. Middle-income
    homebuyers often fall through the cracks, making too much to
    qualify for assistance but also not making enough to compete in
    a hypercompetitive housing market. What reforms could expand
    attainable home ownership for middle-income buyers?
        Mr. Peter. Excellent question. Small lots. The answer is
    very simple: smaller lot sizes.
        HUD could incentivize States by bribing them, by offering a
    bounty to plat smaller lots, below 5,000 square feet, or even
    lower, townhomes below 2,000 square feet.
        If you have smaller lots, you are going to be--the land is
    costly, but then also you are going to build commensurately
    smaller homes. If you are building smaller homes, the cost goes
    down.
        Typically--and we found this across the whole country--if
    you are building on smaller lots, the price points drop by
    about 20 percent or more.
        Mrs. Wagner. Thank you very, very much. I appreciate that.
    We need to take that under advisement here.
        For many families, home ownership remains the most reliable
    path toward wealth-building and long-term financial stability;
    let us just all be honest. Unfortunately, what has long been a
    core tenet of the American Dream has become harder for younger
    Americans to achieve, as recent data shows that the average
    first-time homebuyer is now 40 years old.
        Mr. Sears, what role can Federal credit and lending policy
    play in helping responsible builders deliver more entry-level
    homes, like we just spoke about with Mr. Peter, for first-time
    buyers?
        Mr. Sears. As I mentioned with my own son, this is an
    issue, when we have seen the average age of a median homebuyer
    up to 40.
        What can we do? Can we offer programs with downpayment
    assistance? Are there low-interest loans that we can give for
    these first-time homebuyers? Can we add incentives for mom-and-
    pop landlords, who might have some units that they would like
    to sell but are afraid of paying the capital-gains tax, and
    incentivize them to sell them to first-time homebuyers?
        There are multiple different solutions, different ways to--
    --
        Mrs. Wagner. My time is expired. Thank you, Mr. Sears. Any
    other ideas, please submit in writing.
        Mr. Chairman, I yield back.
        Chairman Hill. The gentlewoman yields back, and we
    recognize--the chair recognizes the gentleman from California,
    Mr. Sherman, ranking member of our Capital Market Subcommittee.
    You are recognized for 5 minutes.
        Mr. Sherman. Mr. Chairman, thank you for holding this
    important hearing. In fact, I think housing is so important
    that perhaps the name of this committee should be financial
    services and housing. Housing today is built very similar to
    the way that it was built 50 and 100 years ago. There is
    nothing or very few things in our society for which that is
    true. We face Not In My Back Yardism (NIMBYism). We need to
    have higher density where there is transit, and we need to have
    transit where there is density. Density without transit is a
    parking--is a parking disaster, but it is especially a traffic
    jam, and transit without some density is a bunch of unused
    transit.
        I hope that I can find one or two members here to work with
    me on a bill to require insurance companies to identify what
    resiliency improvements will result in lower cost insurance.
    Right now, too many insurance companies, they just pick a ZIP
    code, they pick a rate. They should be looking at the
    individual property because it is their job not just to write a
    check but to be of assistance so that we do not--to make our
    properties more resilient. There are a host of small things we
    can do one at a time. The Appraisal Industry Improvement Act,
    the Yes in My Backyard Act, and the Supply Act so that you can
    finance additional auxiliary dwelling units, and I believe, Mr.
    Sears, you mentioned the importance of changing our tax laws. I
    used to be an estate planning attorney. I understand well how
    many of my former colleagues are telling people, ``Boomers, you
    got to stay in the big house until you die or at least until
    one of you dies,'' We adopted last century a $250,000 exclusion
    on the sale of property, and we have not changed it since last
    century. So it was either bad policy then or it is bad policy
    now, because it is very different policy.
        We--I want to build homes a built differently and focus on
    manufactured housing. The Manufactured Housing Standards Act
    would clarify that only HUD has the authority to establish
    energy efficiency standards, and the Housing Supply Expansion
    Act would eliminate the outdated permanent chassis requirement.
        Mr. Sears, is manufactured housing a way to go to be able
    to build these units more efficiently and at lower cost?
        Mr. Sears. Mr. Sherman, great seeing you again. Thank you
    for what you had to say because we, as the realtors, support a
    lot of the bills and acts that you mentioned. As I mentioned
    you talk about the modular housing. Nineteen Seventy-Four was a
    long time ago, and we have seen a lot of technological advances
    since then, and so I think reforming that act for these types
    of housing is more efficient to build; it can be done quicker;
    and it will cost less. So anything we can do to encourage that
    we are for.
        Mr. Sherman. Is there any purpose to requiring a fixed
    chassis?
        Mr. Sears. I am not an engineer. I am sorry.
        Mr. Sherman. I think it is just there to be there from,
    again, last century.
        Tariffs on building materials is something Ms. Velazquez
    brought up. I had the opportunity to confront the President
    face-to-face and in public on this. He promised he would at
    least consider exempting building materials, at least those
    that would be used in the Palisades where we have to rebuild a
    town, from tariffs on building materials. Labor is already
    subject to a 14 and a half percent tariff. Now Trump wants to
    add another 39 percent.
        Mr. Sears, what do tariffs on building materials do to
    housing availability and costs?
        Mr. Sears. Representative, tariffs are a 2025 issue. We
    have seen construction costs escalating almost unchecked and
    uncontrolled in the last 5 years, and so the lack of supply
    during the coronavirus disease (COVID) certainly has hurt and
    impacted the cost of construction.
        Mr. Sherman. Mr. Peter, studies indicate that 24 percent of
    the costs of a single-family home, 40 percent of multifamily
    home is the result of regulatory costs. What regulations are
    most burdensome and add most to the cost?
        Mr. Peter. I mean, for that I would have to--I would have
    to direct you to the national association of real--builders--
    homebuilders, who have the--who have compiled----
        Chairman Hill. Thank you, Mr. Peter. I appreciate Mr.
    Sherman's good question, and I hope you will respond and share
    that index and the components of it with the full committee.
        The chair now recognizes the gentleman from Kentucky, Mr.
    Barr, who chairs our Financial Institution Subcommittee. You
    are recognized for 5 minutes.
        Mr. Barr. Thank you, Mr. Chairman. That is a good segue
    because my first question is for Mr. Sears, and it is about
    bank regulation.
        Banks and credit unions play a critical role in providing
    access to affordable home ownership. In the aftermath of the
    2008 financial crisis, regulatory burdens like Dodd-Frank
    disproportionately hammered these institutions, especially
    community banks and credit unions that are often the primary
    lenders for first-time homebuyers, low to middle income
    families, and local developers. You talk about the American
    Dream going away. We want the American Dream. We want that
    American Dream for home ownership, and we need lenders to
    create that American Dream.
        In testimony to this committee yesterday, Federal Reserve
    Vice Chair for Supervision Michelle Bowman noted that, quote,
    the capital treatment of mortgages and mortgage servicing
    assets has resulted in banks reducing their participation in
    this important lending activity, potentially curtailing access
    to mortgage credit.
        Mr. Sears, given your understanding of the mortgage market
    and local housing dynamics, I would like your perspective on
    whether reducing the regulatory burden on financial
    institutions would have a positive impact on competition in the
    mortgage lending market.
        Mr. Sears. Thank you, Mr. Barr. Good to see you again.
        Mr. Barr. Good to see you.
        Mr. Sears. Anytime regulation can be streamlined, shrunk,
    or eliminated I think is a good thing for the capital markets.
    We have consumers right now that are struggling to find
    financing and opening it up to more credit unions, local banks,
    and the large national companies as well, gives a consumer
    choice, which is a good thing.
        Mr. Barr. Well, thank you, and this is especially important
    regarding the regulatory capital requirements and the
    finalization of Basel III endgame. We are going to be watching
    the regulators to make sure that they improve on the previous
    version of the proposal where we saw punitive treatment of
    certain mortgages that would have reduced lending and access to
    mortgage credit.
        Let me ask you all about, and, Mr. Peter, I will direct
    this at you, shared appreciation mortgages. This is an
    innovation that I think we ought to really consider. The median
    down payment for first-time buyers is 10 percent, the highest
    recorded level since 1989. Clearly, Americans need innovative
    solutions to finance a down payment, and one solution is a
    shared appreciation mortgage. Now, what is this? It is a type
    of home loan where the borrower agrees to give a lender or co-
    investors a portion of the future appreciation of the home's
    value in lieu of a said interest rate. Using a no-payment
    shared appreciation mortgage as down payment assistance can
    bridge the affordability gap and empower low income or working
    class borrowers to qualify for and can afford a conforming
    first mortgage.
        I think we should incentivize private capital providers to
    invest in these shared appreciation mortgages to encourage this
    down payment assistance for new homebuyers. One way to do this
    is to make the returns attributed to pools of shared
    appreciation mortgages tax exempt. So this would be a tax
    change outside of our committee's jurisdiction, but do you
    agree that such a tax exemption that would encourage co-
    investing and sharing in the appreciation of mortgages is that
    a solution for affordability?
        Mr. Peter. Yes, I think it is certainly a very innovative
    idea, and I do not--I know enough about it to be dangerous, but
    I do not know all the gory details, and to the extent that the
    shared--these mortgages can be used to go along with shorter
    loan terms, that would be very, very beneficial to borrowers,
    because then they buildup equity much faster, and they have to
    stay in power to stay in their homes even when home prices
    decline.
        Mr. Barr. There is an innovative startup called Homium that
    I have become aware of and acquainted with, and they would use
    blockchain technology to actually aggregate co-investment
    capital to help with this down payment assistance and also
    unlock home equity in ways that are less or more consumer
    friendly than, say, a reverse mortgage. So I think we ought to
    explore that.
        Let me finally get to the 10 year. Mortgages 30 or fixed,
    they are tied to the 10 year. It is not the Fed's fund rates.
    It is the 10 year. So, for my friends across the aisle who
    think we need to spend more money, more HUD money, more
    spending, the national debt is driving the 10 year up. If you
    want to--if you want to really achieve affordability on a 30-
    year fixed rate mortgage, let us send a virtuous signal to the
    bond market and start living within our means. Reduce the 10
    year. That is going to improve housing affordability. Not
    blowing up the bureaucracy and spending more money but living
    within our means. Lower the 10 year. Can someone on the panel
    talk a little bit about this, and how does the Fed's interest
    rate policy and a rising 10-year treasury yield impact the
    availability and affordability of mortgages, especially for
    first time homebuyers?
        Mr. Peter. Yes. We have seen it during the pandemic when
    the Fed lowered interest rates and then slammed the brakes, and
    now we have higher home prices, and people are dealing with
    higher mortgages. It is unsustainable and people cannot afford
    housing, but ultimately, the implicit guarantee is also
    providing competition to the 10-year treasury----
        Chairman Hill. Thank you very much, Mr. Peter.
        Mr. Barr. I yield back.
        Chairman Hill. The gentleman yields back. I recognize the
    gentleman from Georgia, Mr. Scott. You are recognized for 5
    minutes.
        Mr. Scott. Thank you, Chairman.
        Ladies and gentlemen, I want you to hear from me this
    morning. For more than 50 years, our Fair Housing Act has stood
    as a civil rights cornerstone meant to guarantee that where you
    live is not determined by the color of your skin, your
    disability, your family status, or your ZIP code but, under
    this rule, under what President Trump and his HUD Secretary--we
    are witnessing today a disturbing shift away from enforcement,
    away from any real accountability, away from the core mission
    of our distinguished HUD Department.
        So, Ms. Bailey, let me come to you. One of the most
    troubling acts is this rollback of HUD's Affirmative Furthering
    Fair Housing rule. Please explain why this is the Achilles heel
    of this legislation.
        Ms. Bailey. Thank you so much for the question. The
    Affirmatively Further and Fair Housing Act provision of the
    Fair Housing Act simply requires that every dollar, Federal
    dollar, used for housing and community development is used to
    further fair housing, which is inclusive and thriving
    communities that all of us can live in. This is not spending
    money. This key piece of the Fair Housing Act can actually
    reform local exclusionary zoning laws. In fact, many of our
    home builder friends are using it in court to sue localities so
    that they can build more affordable units there, and I am so
    grateful for the question that we just had regarding the
    Federal Reserve. We knew for a long time that the Federal
    Reserve could not solve our Nation's housing crisis. During the
    pandemic, the Federal Reserve pumped in over $300 billion on a
    monthly basis into our housing market. Those funds were pumped
    in a way that was exclusionary, Black, Latino, Asian American,
    Pacific Islander, Native communities could not benefit from
    those funds, and as a result, we had people who could have at
    that time got in 2 percent interest rate mortgages, affordable
    housing and, stayed home. They were locked out. So many of the
    ways that our Fair Housing Act applies extend to the Federal
    Reserve and, if Congress provided oversight over those funds
    and made sure they were equitably distributed, part of the
    challenges that we see now today would not be the result. So it
    is very important that Congress continues to provide the
    oversight that it provides.
        Mr. Scott. Absolutely. Ladies and gentlemen, I represent
    Gwinnett County and Clayton County, two of the very many, very
    prosperous, very exciting counties in this Nation, but are
    highly diversified in their populations. HUD's attack on this
    fair housing rule will ensure that there is nothing to stop a
    local jurisdiction from banning new apartment buildings near
    our schools and near our parks.
        Now, this is very serious legislation, and we have to
    understand we are a Nation of many different types of people,
    and we need to be careful in Congress to stop this mongering
    but use our legislative abilities to pull our racial
    populations together. I am at the forefront of that. I
    represent, as I said, everybody in my district. I have even
    Republican minorities in my district. So I want us to use this
    legislation not to dismantle this vital civil rights measure.
    Let us use that. There is a time here, in the words of that
    great Apostle Paul, ``I say to you finally, put on the whole
    garment of God,'' because we have to fight now in a difficult
    time. Thank you, Mr. Chairman.
        Chairman Hill. Thank you, Mr. Scott.
        Another gentleman from Georgia, chair recognizes the
    gentleman from Georgia, Mr. Loudermilk, for 5 minutes.
        Mr. Loudermilk. Thank you, Mr. Chairman, and thanks
    everyone on the panel. I have been looking forward to this
    discussion for quite some time, especially about how Congress
    can actively remove barriers to increase our housing supply.
    One of the areas I have been focused on is the cost of onerous
    government regulations and preventing the Federal Government
    from encroaching in the areas which the States have
    traditionally and constitutionally held that primary
    jurisdiction.
        Now, prior to the passage of the CARES Act in 2020, each
    State had different notices to vacate requirements for rental
    properties. While the Federal Government--Federal moratorium on
    evictions imposed in the CARES Act expired, as they were in
    intended to do, some activist attorneys have argued that
    section 4024C pertaining to the Federal 30-day eviction notice
    requirements remain in effect primarily due to an error in
    drafting.
        Despite the expiration of the public health emergency on
    May 11, 2023, the Biden Administration extended this temporary
    provision thusly nationalizing an eviction process historically
    and constitutionally governed by the State and local laws.
    Continuing the temporary CARES Act notice-to-vacate provision
    bypasses Congress and undermines the clear intent that
    provision be temporary.
        Now, I have a bill, entitled the Respect for State Housing
    Laws Act, that would strike this provision in the CARES Act
    that was never intended to be permanent and would return
    authority to--of notice to vacate back to the States where it
    had been prior to the COVID-19 pandemic.
        Mr. Chairman, I would like to insert for the record a
    letter from the National Association of Residential Property
    Managers in strong support of my bill.
        Chairman Hill. Without objection.

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

        Mr. Loudermilk. Thank you, Mr. Chairman.
        It is important that Congress provides clarification here.
    The inability to collect rent ultimately hurts the tens of
    millions of Americans who work in the industry, renters and
    communities across the country.
        Mr. Sears, the Iowa Supreme Court unanimously ruled earlier
    this year that the CARES Act's 30-day notice provision was
    temporary and expired in 2020 alongside the Federal eviction
    moratorium. From the National Association of Realtors'
    perspective, how has the continued uncertainty around this
    expired provision affected real estate markets and property
    owners?
        Mr. Sears. Thank you, Mr. Loudermilk. The National
    Association of Realtors supports your legislation, and my
    testimony is longer than what your actual bill is, but at the
    end of the day, anytime these mom-and-pop landlords, who are
    already, if they are taking someone to eviction, likely are
    owed money, but the Federal Government imposing an extra loss
    of rent for a month onto this, it can cause irreparable harm to
    these small property owners, and that is what we are seeing. I
    will just mention that, through the CARES Act the eviction
    moratorium was struck down by the U.S. Supreme Court.
        Mr. Loudermilk. What impact do you expect H.R. 1078 would
    have on providing clarity on the housing market by formally
    repealing this expired penalty?
        Mr. Sears. It would give the States back the right to
    oversee the eviction process, which is currently the way that
    it should be.
        Mr. Loudermilk. Thank you.
        Ms. Smith, you represent organizations that manage millions
    of multifamily rental units across the country. Can you explain
    how the continued existence of this expired CARES Act provision
    has created operational challenges for multifamily property
    managers, particularly given that local courts may still be
    interpreting the provision as active?
        Ms. Smith. Well, I would agree. First of all, the National
    Multifamily Housing Council and NAA are very supportive of your
    bill, and I agree with Mr. Sears it would remove some of the
    confusion. Eviction is always an act of last resort. It is the
    last thing we want to do is to move someone out of their home,
    and there are so many discussions that take place before that
    actually happens. So adding that additional confusion of local
    laws, which are very, very clear on evictions, would really
    help, would make a big difference.
        Mr. Loudermilk. So, based on your answer, this bill would
    help clarify.
        Ms. Smith. It would absolutely help clarify.
        Mr. Loudermilk. Thank you. How would restoring these State
    and local governments' eviction procedures impact the supply of
    rental housing going forward?
        Ms. Smith. In our experience, we evict very few people. It
    might even be less than 1 percent a year. So I do not believe
    that would have a significant impact on supply of rental
    housing.
        Mr. Loudermilk. Okay. Thank you.
        Mr. Chairman, I yield back.
        Chairman Hill. Thank the gentleman for yielding back.
        The gentleman from Massachusetts, Mr. Lynch, who is the
    ranking member of our Subcommittee on Digital Assets, Financial
    Technology, and Artificial Intelligence, you are recognized for
    5 minutes.
        Mr. Lynch. Thank you very much, Mr. Chairman.
        To the ranking member, this is a really important issue,
    and I think it is probably one of our best opportunities to be
    bipartisan. This is affecting every one of our States and
    districts, and I think that the housing issue could really be a
    golden opportunity for us to work together.
        I want to thank the panelists for all your testimony. I do
    believe that we need all-of-the-above sort of approach here in
    terms of what we support. I certainly support Mr. Sherman's
    idea on manufacturing housing. I have a bill on modular
    housing. I know Chairman Hill and Ranking Member Cleaver have
    bills as well that I support, but I do really think that there
    is a special amount of need here among first-time homebuyers.
        You know, I bought my first home in 1983 for $14,000, and
    my cousin Sharon told me I overpaid. To call it a fixer upper
    would be generous, but now that same house I still own it. The
    city just assessed it at about $900,000, and I bought it for
    $14,000. It is ridiculous. So my girls do not have a shot at
    trying to buy a home with that type of burden on them, and so I
    really think that we need to focus on that first-time homeowner
    demographic and especially with them--they have to compete now
    with private equity firms and some of these real estate
    investment trusts that are actually, you know, they have more
    leverage than they are able to--they pay more, and they are
    driving up the costs.
        You know, we had a situation in this country right after
    World War II where we had 16 million American servicemembers
    come home. There was not enough housing, and Congress and the
    White House leaned into that problem. They created the VA
    housing program. They created--well, they amped up the Federal
    Housing Administration. They created the GI bill. They created
    the National Housing Act of 1949, expanded it in 1954. They did
    a lot to make sure that people could--you know, these returning
    veterans could own homes, and they also leaned into the
    production of homes as well. I think that we need to do
    something like that.
        I know that President Trump got a lot of heat because he
    suggested a 50-year mortgage. That alone will not work, but I
    think he was on the right track. I think we have to look at
    that mortgage product. You know, back after World War II, they
    created the 30-year fixed, which worked great for a lot of
    people for a long time, but that is not happening right now. We
    need to try to reengineer--I wish we had a mortgage broker on
    the panel, Mr. Chairman, but I think we have really got to look
    at that and try to find a way to maximize the number of
    subsidies that we are putting out there to help the most people
    that we can.
        So, Mr. Sears, good to see you as a fellow Massachusetts
    resident. We will not need a translator, but could you possibly
    talk about areas where we might be able to reach more people
    and create a better opportunity for some of these young people,
    first-time homebuyers to get into the market.
        Mr. Sears. Yes. Thank you, Mr. Lynch. As you said, there is
    not one silver bullet to cure this. It has to be a
    comprehensive approach, and we need all of these different
    techniques and avenues to go down. You know, in the
    Commonwealth, we passed the Affordable Homes Act last year,
    which allows 80 accessory dwelling units (ADUs) by right.
    Accessory dwelling units, and this type of legislation will
    help with the housing inventory. We are seeing more
    multigenerational people looking to live multigenerational in
    their homes, and so this is just one example, but it is only
    one. We need a very comprehensive approach because it has taken
    us 20 to 30 years to get here and we are not going to get out
    of it overnight, but we need to start today.
        Mr. Lynch. Ms. Bailey, could you----
        Ms. Bailey. Yes, sir. We also need to pass the chairwoman's
    Down Payment Toward Equity Act that would provide $100 billion
    for first-generation homebuyers. This is money that would help
    people living in rural, suburban, and urban neighborhoods be
    able to beat out those all-cash investors who are coming in not
    only driving up costs for homeowners but for renters, too. So
    we need to do those innovative things together.
        Mr. Lynch. That is great.
        Mr. Chairman, I yield back. Thank you.
        Chairman Hill. Thank the gentleman.
        The chair recognizes the gentleman from Texas, Mr.
    Williams, who is chair of the House Small Business Committee.
    You are recognized for 5 minutes.
        Mr. Williams of Texas. Thank you, Mr. Chair, and thank you
    all for being here today.
        Over the past several years, builders and multifamily
    developers have faced a financing environment that is
    increasingly difficult to navigate, and high interest rates and
    layers of Federal requirements have made it more expensive for
    lenders to extend credit, and those costs ultimately get passed
    down to the builders and the consumers.
        Now, when bank capital standards are set too high, lenders
    are forced to pull away from housing projects that communities
    urgently need. At a time when the country is facing a serious
    housing supply shortage, we cannot afford policy to choke off
    private capital and stall new development. So, Ms. Smith, could
    you elaborate on how unnecessarily high bank capital standards
    prevent the flow of capital from lenders to builders for
    homebuyers?
        Ms. Smith. One of the challenges that we faced after the
    COVID pandemic was the reduction in lending that required so
    much more equity to go into projects, so getting loans back up
    to 65 percent, even 70 percent lowers actually the cost of the
    capital stack, which really makes a project that much more
    viable. So that would be one thing that I think is really
    important is to be able to provide just a greater amount of
    liquidity.
        Mr. Williams of Texas. Thank you.
        Mr. Peter, Federal energy mandates have introduced
    significant compliance costs to the home building process,
    especially for new single family builds. The cumulative effect
    of these standards can be substantial, often raising the price
    of homes by tens of thousands of dollars placing a steep burden
    on first-time homebuyers as we talked about today, and for many
    families, these added costs shut them out of the dream of home
    ownership. In addition to homebuyers, builders also report that
    the added complexity of these standards slows projects down,
    reducing the number of homes they can build. So, Mr. Peter, can
    you expand on how Federal energy efficiency mandates are
    affecting the production of affordable homes?
        Mr. Peter. Yes, excellent question, sir. So there are
    studies out there that show that these new energy rules add
    about $30,000 to the cost of building a new house, and if the
    average house cost is $400,000, that is a significant increase.
    On the margin, many more housing projects no longer penciled
    out. So the administration is already on the ball. They have
    paused the implementation of the new rules. They should just
    roll it back entirely and the same appliances rules where
    energy standards have increased the costs by $9,000 to build a
    new home, all these things, government just needs to get out of
    the way and let builders build more, and rolling back some of
    these regulations is certainly the right way.
        Mr. Williams of Texas. Thank you.
        Mr. Sears, small and midsized builders have historically
    delivered the majority of entry level homes. Yet they face
    disproportionate regulatory burdens and rising compliance costs
    that limit their participation in the market. So this
    contributes to fewer homes again being built and less
    competition. So how can Congress create an environment where
    small builders and private capital can reenter the entry level
    housing market?
        Mr. Sears. Anytime that the Federal Government can help the
    local and States in their zoning and permitting process would
    be beneficial. Eliminating red tape, as I mentioned earlier, we
    have the missing middle, and when the builders have the red
    tape and the delays often caused by burdensome permitting
    processes, they just avoid building the entry and the starter
    homes, that missing middle, the duplexes, and the townhomes
    that we so desperately need. So anything we can do to
    incentivize the local municipalities to streamline their
    permitting and zoning process I think would be beneficial.
        Mr. Williams of Texas. Thank you for that, and I yield my
    time back, Mr. Chair.
        Chairman Hill. The gentleman yields back.
        The chair recognizes the gentleman from Missouri, Mr.
    Cleaver, who is the ranking member of our Housing and Insurance
    Subcommittee.
        Mr. Cleaver. Thank you, Mr. Chairman. Thank you for this
    hearing. I think it is extremely important.
        For the first time in my political career, 8 years as mayor
    of Kansas City and my years here, there is no push by the
    government to assure that we practice in this country fair
    housing. Whistleblowers have accused HUD for halting major
    investigations, and HUD's Office of Fair Housing has reduced
    its staff by 70 percent, and in theology, there is a school of
    thought that deals with the human condition. What is the human
    condition? You know, we basically are good or basically evil. I
    may be--maybe I am a little polyarchy in my theology, but I
    believe that the overwhelming number of Americans are good and
    decent people and want to do the right thing. The other number
    20 or 25 percent--this issue of the human condition is embraced
    by the monotheistic religions, all three of them: Christianity,
    Judaism, and Islam all embrace this human condition. It is
    disappointing, then, for me to know that on the issue of
    Federal housing--of fair housing that we are just going to
    abandon it.
        Now, if there are those who may believe here that, well,
    that is something that happened in the 1950s or 1930s, or
    whatever, a couple of us were involved deeply in some issues in
    California where one of the largest credit unions in the world
    were practicing bold discrimination in housing loans, and but
    for the fact that CNN went undercover and put--there is film on
    it, audio and visual. It happens every day, and we are
    abandoning it. We seemingly are abandoning it. I hate to--I do
    not want to run around accusing folks. I am telling you what
    the facts are. I am just interested from all four of you--I do
    not have much time, but is not that a problem that we ought to
    face as a Nation and you as influential Americans in the whole
    housing issue?
        Ms. Bailey. Thank you so much for your question, sir. Our
    Nation's fair housing laws are the bedrock to making sure that
    the promises of our Constitution reach everyone. By getting rid
    of housing discrimination, we ensure that children can live in
    communities with well-resourced and high-quality instruction.
    We ensure that people can have access to clean air and clean
    water. We ensure that people can live and get to work at wages
    that will help them sustain their families. We ensure that
    people of faith can actually practice their religion without
    being harmed. So our fair housing laws are fundamental to the
    promises of our Constitution, and they have allowed us to make
    substantial progress. It has always had strong bipartisan
    support.
        It is very difficult in this moment, and my faith is of the
    Christian faith, and one of our principles is that we are to
    love our neighbors as we love ourselves, and when the Secretary
    of Housing sat before his confirmation, he pledged he would
    ensure that Dr. King's legacy, which is the Fair Housing Act,
    would be fully enforced. He has since allowed HUD under his
    leadership to do everything other than, and because of that, we
    are seeing people who are mixed status families being kicked
    out of homes. We are seeing the permission of coordinating with
    ICE to have human beings removed----
        Chairman Hill. Thank you. Thank you, Ms. Bailey.
        Gentleman's time is expired. I thank the gentleman.
        Our Conference chair on the majority side, the gentlewoman
    from Michigan, Ms. McClain, you are recognized for 5 minutes.
        Mrs. McClain. Thank you, Mr. Chairman, and thank you all
    for being here today. Obviously, housing is extremely
    important. It seems to be a bipartisan issue, which is--can I
    say that out loud? Which is a good thing, right?
        I want to talk specifically, Mr. Sears, to you and talk
    about manufactured homes, modular homes--manufactured homes.
    For me, it seems like it has changed quite a bit in the past
    decade or so. Can you talk about the improvements on the
    manufactured home side and how those changes are really
    benefiting all of us?
        Mr. Sears. Thank you, Ms. McClain. Yes, in the last 50
    years, we have seen significant technological advances in
    manufactured homes, and we have statistics that show that they
    are quicker to build. They cost less to build. They make them
    more affordable, and really what we need to do is cut the red
    tape of the regulation so that we can build more of these homes
    as part of an overall solution to the housing crisis and
    housing supply and affordability issue we have.
        Mrs. McClain. It is amazing--we had an event on the mall,
    and I actually went and saw some of these manufactured homes,
    and I got to tell you they were not the manufactured homes,
    right, of when I was growing up. They are beautiful. So I
    applaud that industry. One, manufacturing homes have changed,
    right? Two, do we have a housing shortage? Would you all agree
    on that? Especially low-income housing shortage, affordable
    housing shortage, right? Anyone disagree with that concept?
        Panel.
        [Nonverbal response.]
        Mrs. McClain. Awesome. Look at us. Cats and dogs living
    together.
        Okay. So improvements on manufactured homes, housing
    shortage that we all agree, especially low-income housing
    shortage. Let us talk a little bit about the regulations and
    the red tape. Can you talk a little bit? Red tape and
    regulations are estimated to increase the cost of a new home by
    maybe 60, $70,000. Am I accurate on that assessment that before
    I even put a shovel in the ground, the red tape is going to
    cost me about 60 to $70,000. Am I accurate on that?
        Mr. Sears. You may be accurate for your district.
    Nationally, it is around $100,000, about 25 percent of the cost
    for a single-family home. There are some areas where it is
    more. The Commonwealth of Massachusetts, it is more. So what
    can we do to streamline the process, cut the red tape, make
    permitting easier? I mean, I have had rehabilitation and new
    construction where we have dozens of inspectors that have to
    come in, and it just takes too long. We need to be quicker.
        Mrs. McClain. So the time issue as well as a cost issue. If
    you are telling me it is $100,000 and we want to make sure that
    we have affordable housing, those two concepts are kind of
    working against each other. Anybody disagree with that?
        Panel.
        [Nonverbal response.]
        Mrs. McClain. Okay. Great. So we are all on the same page.
    We got to figure out how to get the regulation down. We have
    got to speed up the permitting process, and we have to figure
    out a way to make sure that we have affordable housing, and
    manufactured housing may just be an answer to that.
        What would be the downside of my legislation, the Modular
    Housing Production Act? What that piece of legislation says is
    let us qualify manufactured homes; let us stop the personal
    property so it is not classified as personal property, and you
    can go and get the same type of loan on a manufactured home
    that you could get on a modular home. What is the downside in
    doing that? Mr. Sears?
        Mr. Sears. I am all in favor because, ultimately, in
    modular homes, the construction is overseen by local building
    inspectors, and so anything we can do to open up availability
    for financing products to the American consumer is a good
    thing.
        Mrs. McClain. I do not say that sarcastically. I am really
    truly trying to say, what is the down time? They are better.
    They are quicker. They are faster; They are cheaper, and they
    are beautiful. Sir?
        Mr. Peter. Yes. So we need to produce more of those
    manufactured houses, absolutely agree, but, if we do not
    produce more housing and we promote looser lending practices,
    we are going to drive up the price.
        Mrs. McClain. How is it looser? I mean, you are having a
    manufactured home versus a regular home that is cheaper, more
    affordable, because you just--how is that looser?
        Mr. Peter. Well, the loan terms are going to be extended.
    So, if you are extending the loan terms, you are bringing down
    the monthly payment, which often times gets capitalized at a
    higher price.
        Mrs. McClain. Which is a good thing to bring down monthly
    payments, right? Because that affordability is kind of
    important.
        Mr. Peter. We need to work in concert by increasing more
    supply.
        Mrs. McClain. Would this not increase the supply?
        Mr. Peter. If it ends up--if we end up reducing more like
    the chassis, removing the chassis requirement would be a good
    step in terms of getting----
        Mrs. McClain. What is the downside on the lending side?
        Chairman Hill. Thank you, gentlewoman.
        Mrs. McClain. Thank you, sir.
        Chairman Hill. The Gentlewoman's time is expired.
        I now recognize the gentleman from Illinois, Dr. Foster,
    who is the ranking member on the Financial Institution
    Subcommittee, for 5 minutes.
        Mr. Foster. Thank you, Mr. Chair.
        To our witnesses. You know, on a typical night, there are
    800,000 homeless people in America. On the other hand, there
    are 22 million empty nesters with a lot more than 20 million
    spare bedrooms. So there is no shortage of bedrooms in this
    country. We are somehow not allocating all the resources we
    have. So what can we do to encourage empty nesters to rent out
    that spare bedroom, not necessarily to a homeless person, but
    just, say, a hard-working single mom who can be a trustworthy
    person that you would be happy to have in your home and thereby
    free up a low-cost rental property that might be appropriate
    for curing homelessness.
        I think one of you mentioned some sort of Federal tax
    benefit as a possible solution. You know, if you are willing to
    rent out that spare bedroom, you are doing something socially
    useful, and maybe you should get a tax break from the income
    from that. Was it you that you mentioned it, Mr. Peter?
        Mr. Peter. Yes, I mentioned it in my written testimony.
    There are about 32 million spare bedrooms in this country, and
    if we allow 10 percent of those, we would have created a lot of
    additional housing. I personally--I lived with an empty nester
    couple when I first moved to DC, and I can attest to this, this
    is a viable option.
        Mr. Foster. Yes. So just even a small preference in the
    Federal Tax Code for that kind of income might be enough. You
    do not need to get every empty nester to do their property. If
    we got 120th of them, that is enough to cure homelessness.
        Mr. Sears, you mentioned mortgage lock-in as a big problem.
    There is a proven solution to that. You know, in Denmark, for
    more than 200 years, the Danish mortgage origination system has
    prevented interest rate lock-in and mortgages, and it does that
    by transferring the interest rate risk from the homeowner to
    the bond market, and there was a serious consideration of that
    following the financial crisis as one of the only feasible
    proven ways that we could have actually have replaced Fannie
    and Freddie with some safer system for the taxpayer in terms of
    bailout. Is that something that has been looked at recently? I
    saw an article in Business Insider talking about the genius of
    the Danish system. Is that something that is getting a serious
    look these days?
        Mr. Sears. I am sorry, Mr. Foster, I cannot speak to that.
        Mr. Foster. If you could--all of you, actually, for the
    record, just go have a look. There is a Wikipedia article on
    it. I know there was a lot of effort put into that, a lot
    written, and it was one of the only feasible ways of replacing
    Fannie and Freddie in ways that did not get us right back to
    the same point where you had a taxpayer-funded bailout
    necessary.
        Ms. Bailey. If I may, sir, one of the things that we have
    seen is that our 30-year fixed rate mortgage has really
    expanded home ownership in our Nation. It is the hallmark of
    opportunity for millions of families. Now, we did not do it as
    well as we could have, and we left behind a lot of people. Now
    we need to be very intentional to make sure those consumers for
    whom the health of the housing system will depend on can have
    access to that very affordable product. It allows for people to
    know what their monthly payment will be without having any risk
    of unforeseen costs associated----
        Mr. Foster. I agree completely. I mean, the 30-year
    mortgage, and actually it was preserved under proposals to
    switch over to the Danish system. Have a look at it. It was a
    good idea 15 years ago when we looked at it, and it is still a
    good idea.
        Mr. Peter, you repeatedly mentioned smaller lot sizes as a
    key to progress on this. So, first off, how much of the
    additional $100,000, or whatever, is just lot size, minimum lot
    size requirements?
        Mr. Peter. Yes. I mean, it is, in Austin, for example, we
    have just studied this. In 2024 they put in place a new bill
    which allows you to put two or three homes in the same--on the
    same parcel. Now, it used to be that a home would cost a
    million dollars to build new, but anecdotally we are hearing
    now if they are putting two or three homes in the same parcel;
    they can sell each of those homes for $500,000.
        Mr. Foster. That is right, and one way to encourage this is
    with the land value tax, which I presume you are familiar with.
    You know, this is very successful in countries that have
    implemented this. You transfer a lot, most of the tax load to
    the unimproved value of the land the property is on. So, if you
    do what they did in Austin or Seattle, then you take what used
    to be occupied by a big mansion and put six townhouses on it,
    you do not pay more taxes, because the tax is on the unimproved
    value of the land and so there are things we can do in the
    Federal Tax Code to encourage that sort of behavior at the
    State and local level.
        If you looked at how States are changing their laws to
    evade the State and Local Taxes (SALT)--that whole issue there,
    we could structure the Federal Tax Code to encourage a land
    value based tax and do a whole lot of good to encourage but not
    mandate the smaller lot sizes that you have identified. I now
    have negative 2 seconds.
        Chairman Hill. The gentleman's time is expired.
        The gentleman from Ohio, Mr. Davidson, who chairs our
    National Security Subcommittee, you are recognized for 5
    minutes.
        Mr. Davidson. Thank you, Chairman.
        Thanks to our witnesses for being here today for your
    testimony and for a critical issue. When we talk about
    affordability, housing is top of mind for families everywhere
    in our country, and when you talk about confronting the
    affordability crisis, I think it is one of the things that
    everyone is serious about from the most basic local government
    to Federal Government to President of the United States. We are
    talking about affordability.
        When I hear some of my colleagues talk about, ``Well, the
    solution to affordability is more subsidies for more people,''
    my mind just wants to break. I am, like, does not compute. Do
    you understand why we have inflation? Clearly people struggle
    with this cause-and-effect relationship. We have $7 trillion
    worth of Federal spending, roughly. We have $5 trillion that
    comes out with revenue, and we put back in $7 trillion. So, if
    you think about it as something like a 10 gallon jug and you
    take 5 gallons of fluid out and you dump 7 gallons in, you
    change the level. You inherently inflated it. So it is not the
    house that you have lived in for the past 15 years massively
    got more valuable if you did not do any improvements in it.
    Fundamentally, what happened is the unit of measure, the
    dollar, got worthless. Our money is worth far less, and it is
    worth far less if you measure it in most commodities. It is
    getting hurt.
        Where does the inflation hit the hardest? It hits the
    hardest in the things we subsidize the most. We have done the
    most subsidies for anything probably in healthcare. Look how
    unaffordable healthcare is. Maybe next would be education, and
    look at that. Federal Government took over lending, and now
    with no equity, no skin in the game, you get as much student
    debt as you can amass, regardless of what your degree is.
    Frankly, barely consideration what your GPA is. So we load
    these kids up with debt, and then say, ``Well, let us go help
    them set up to buy a house,'' and they cannot afford it. They
    do not have any equity. It is all going to student loans.
        So let us subsidize that and pretend that they have equity.
    Who is on the hook for it? The taxpayers. It was a terrible
    plan. You have to have equity in a loan. You have to do real
    underwriting, and you want the private sector to do that.
        I think that is one of the reasons I like Mike Lawler and
    Joyce Beatty working on H.R. 5913. This lets banks do more
    lending that is capped at 15 percent right now. The Office of
    the Comptroller of the Currency (OCC) and the Federal Reserve
    can look at it and say, if you want to do more public welfare
    lending, community good, you could if you have a safe and sound
    bank, because you are taking some of the risk. You are not just
    transferring it on to taxpayers. This is why I think you have
    commonsense regulation like the no chassis bill that we have
    talked about a lot.
        What I do like, when I talk with my homebuilders, they--I
    ask them, ``Why do you build what you build,'' and it is not
    because we need to maximize the number of bedrooms utilized in
    America. They build houses that people want to buy. You know,
    there was a time when Ford just cranked out black model Ts,
    right? Because they could make them faster and that met the
    market for a point, but people wanted to buy other things. They
    wanted colors. They wanted features and they are choosing to
    buy much more robust homes and, for people that have means,
    there is not a shortage at the high-end luxury market, right?
    At the low end, it is, like, well, how are we going to address
    it? So I am concerned that we have colleagues that their
    solution is that the government is going to tell you what you
    are going to build and how you are going to do it.
        I was a little relieved when I hear some of my Democratic
    colleagues say, ``We do not want to enforce it; we just want to
    incentivize it.'' And so, while I do not like the income tax
    because it is a massive invasion of privacy and it is used for
    coercion and control, it does motivate behavior. I think one of
    the useful things we do with the Tax Code is exempt capital
    gains, particularly for single-family homes when it is your
    primary resident. That is a commonsense thing. We have to go to
    Ways and Means to fix that, but I hope they get it fixed soon.
    It should either eliminate it if it is your primary residence
    or massively increase it and index it to inflation.
        I think redevelopment of existing property is one of the
    biggest things. So historic and new market tax credits, I think
    that is a big win that we got this year. We made those
    permanent, and there are a lot of things that we do but I am
    concerned as we look at reprivatizing the Government-Sponsored
    Enterprises (GSEs) that we look at the administration, and I
    would just say, look, if the government is going to continue to
    own the risk, why would the government not own the cash-flow?
    But, if you are going to privatize the cash-flow and let the
    profit flow out, why are you going to socialize the risk? I do
    not think there is a massive demand for more risk in the
    market. So I would caution my decisionmakers there. I yield.
        Chairman Hill. The gentleman yields back.
        Also from the great State of Ohio, the chair recognizes the
    gentlewoman from Ohio, Ms. Beatty, who is our ranking member on
    the National Security Subcommittee, for 5 minutes.
        Mrs. Beatty. Thank you, Mr. Chairman, and thank you ranking
    member, and thank you to all the witnesses here today.
    Certainly, you have had a lot to digest, and you have heard a
    lot.
        I am going to repeat what my ranking member said, that we
    have certainly heard a lot about bipartisanship, all the great
    things that we could do and some things, Mr. Chairman, that
    were very inspiring from you that we can do. Words like ``new
    steps,'' ``new ways,'' the fundamental being ``housing
    fundamental to the American Dream,'' and all of that sounds
    great, but it is going to take us to do some of the things or
    undo some of the things, Ms. Bailey, that you said that this
    administration is doing. Let me thank you for being blatantly
    honest of painting the real picture for what so many of those
    Americans are seeing, and certainly Black Americans and Brown
    Americans and single women and rural Americans are seeing,
    because this administration has been blind to them. I say this
    with facts, not just words.
        If we look at the great State of Ohio from where I am from,
    and I agree with some of the things that my colleague who just
    spoke about what we have to do to increase housing. Will it
    take money? Absolutely. Will it take other partnerships? Yes.
    The latest Gap Report shows that Ohio faces a shortage of some
    264,083 affordable rental homes for extremely low income.
        Now, some of my colleagues want to go straight to home
    ownership. Well, some of our districts we can tell you the
    dream is to put a roof over your head, because they cannot
    afford the mortgage. They cannot walk into a bank. So let us
    get in the real world. If we are going to fix affordable
    housing, yes, it is great to talk about homebuilders and to
    talk about all of those corporate giants, but the last time I
    checked, there are people who are in public housing, and yet
    this administration is doing away with some parts of Section 8
    and public housing. This administration has fired HUD staffing
    at an unbelievable unprecedented rate of those folks who are
    actually doing the work to help us with no rhyme or reason.
        In order to afford a fair market rent, two bedroom
    apartments in the Midwest in Columbus, Ohio, the capital, a
    household must earn at least $27 dollars an hour. As a matter
    of fact, $27.79 an hour, and we know that is not in existence
    for those who are living in poverty above or below by a few
    percentages and the administration has done absolutely nothing
    to improve these statistics or house more American families.
        Now, let me just say this: While I know there is not a rule
    or law that allows--that mandates the HUD Secretary to come
    before us, we are almost at the end of the year, and we have
    not had Secretary Turner come to testify. I do applaud my
    Republican colleagues who have said we should change that and
    have them come as we beat the you know what out of Secretary
    Fudge, who had already sent us videos and a plan.
        Now, I have been on this committee with housing since the
    inception of my being in Congress. I spent 20 years with HUD as
    a housing consultant. Not one response. Not one call from this
    Secretary. So I am just saying we have all kinds of problems
    within this administration that we need to deal with.
        Let me now go to ask the question, Ms. Bailey. When I am
    back in my district, one of the primary concerns that I am
    hearing is directly from my constituents about the cost of
    housing, and so many of my colleagues on both sides of the
    aisle have addressed various legislative solutions today that
    would make minor technical changes to our housing policy
    framework without allocating any additional funds to tackling
    this nationwide crises. Can you tell me, in your opinion, as we
    look at solving the affordable housing crisis in America, can
    we do it without increasing resources? Can we do it with
    gutting the staff?
        Ms. Bailey. Absolutely not. Absolutely not. In fact, we are
    going to push more families into homelessness. You said it.
    There is not a town in this Nation where a person making
    minimum wage can afford a two-bedroom apartment.
        Mrs. Beatty. Thank you. I know my time is up. Can I ask the
    other members to send in writing to me what they think about
    gutting the staff and not having enough money, because it is in
    alignment with their testimony that was very favorable.
        Chairman Hill. Thank you very much.
        Mrs. Beatty. Thank you.
        Chairman Hill. The gentlewoman's time has expired, and the
    gentleman from Tennessee, Mr. Rose, is recognized for 5
    minutes.
        Mr. Rose. Thank you, Chairman Hill, and thanks to Ranking
    Member Waters for holding the important hearing and thank you
    to our witnesses for taking time to be with us today.
        Last week, I was proud to introduce H.R. 6293, the Housing
    Supply Expansion Act of 2025, along with my colleagues Housing
    and Insurance Subcommittee Chair Mike Flood, Subcommittee
    Ranking Member Emanuel Cleaver, Subcommittee Vice Chair Monica
    DeLaCruz, and Congressman Lou Correa, and Congressman Scott
    Peters. My legislation will remove a Federal chassis
    requirement that has served to unnecessarily raise the price of
    manufactured housing.
        Since 1974, Federal law has required that manufactured
    homes include a permanently installed chassis. This has
    significantly reduced the ability of young and low-income
    families to buy their own homes. Removing the permanent chassis
    requirement from manufactured homes will lower construction
    costs, unlock modern design flexibility, and open far more
    locations for quality affordable housing. I want to thank the
    committee for attaching H.R. 6293 to today's hearing.
        Mr. Chairman, I ask unanimous consent to enter into the
    record a letter from the Manufactured Housing Institute
    supporting the Housing Supply Expansion Act.
        Chairman Hill. Without objection.

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

        Mr. Rose. Mr. Sears, your written testimony states that
    H.R. 6293, the Housing Supply Expansion Act, would modernize
    the Federal definition of manufactured housing to include
    modular and prefabricated units not built on a permanent
    chassis opening financing opportunities for innovative
    construction methods. Could you expand on how H.R. 6293 would
    open new financing opportunities?
        Mr. Sears. Absolutely. Thank you very much, Mr. Rose. As I
    stated earlier, by updating old and outdated laws, we can
    certainly open up new housing opportunities for Americans, and
    by eliminating the chassis requirement of the permanent chassis
    requirement, as I stated earlier, prefab manufactured homes are
    cheaper; they are quicker to build, and so anything we can do
    to get more of these types of homes on the market would be
    better for American consumers.
        Mr. Rose. Could you elaborate, though, on financing in
    particular and how this might impact financing opportunities?
        Mr. Sears. Yes. So there is a prohibition on the financing
    of the modular homes, as Ms. McClain was talking about. So how
    can we modernize those rules and regulations to be able to
    allow for more financing products to be available for these
    types of homes, and that is what we need to do, change the
    existing rules.
        Mr. Rose. Thank you.
        Mr. Peter, your prepared testimony recommends adding and
    clarifying language on temporary chassis to the Housing Supply
    Expansion Act. However, the bill already expands the definition
    of a manufactured home to include those built with or without a
    permanent chassis, which I believe encompasses homes using a
    temporary chassis for transport since such a chassis would not
    qualify as permanent. While I remain open to technical
    refinements, I am really having a hard time seeing how the
    Housing Center's proposed language would enhance the bill given
    that its current text already permits manufactured homes with
    temporary chassis. Could you elaborate or explain, with respect
    to your testimony, explain why the Housing Center believes
    additional clarifying language might be necessary?
        Mr. Peter. Yes, a very simple answer, sir. We were
    referring to the bill in the Senate, not to your particular
    bill.
        Mr. Rose. Okay.
        Mr. Peter. So I have now--I have heard your bill. It
    already deals with a lot of these issues. Let me just say, from
    the studies that I have seen, or estimates that I have seen,
    removing the chassis requirement could save between $5,000 to
    $15,000. So that is a good chunk of money for a typical first-
    time homebuyer.
        Mr. Rose. Thank you. Thanks for clarifying.
        Mr. Peter, how can Federal policy better align with local
    initiatives to expand housing supply without imposing new
    mandates or a one-size-fits-all regulatory environment?
        Mr. Peter. Yes, that is also an excellent question.
        So I think, at the Federal level, the best levers we have
    is to pay States for outcomes directly. So, if they plat
    smaller lots and a home is being built on that smaller lot,
    then you receive a bounty from the Federal Government that the
    State can spend to their liking.
        What we have seen in our case studies that we have done: If
    the government gets out of the way, the private sector is going
    to build more housing. We have done 30 case studies. This would
    be a way of allowing builders--giving the builders greater
    access to smaller lots, where they can build housing at lower
    price points which are going to be attainable to first-time
    homebuyers.
        Mr. Rose. Thank you. I completely agree with that.
        Mr. Chairman, my time has expired. I yield back.
        Chairman Hill. Thank you, Mr. Rose.
        I now recognize the gentleman from California, the ranking
    member on our Task Force on Monetary Policy.
        Mr. Vargas, you are recognized for 5 minutes.
        Mr. Vargas. Thank you very much, Mr. Chairman. I appreciate
    the opportunity. I also want to thank the ranking member and
    all of the witnesses here today.
        Yesterday, we did have a hearing, actually, for the
    Monetary Task Force, and I got to listen to my colleagues talk
    about the debt, which is a big deal. Obviously, it is. I agree
    with that.
        But what they--and they preached about it, but what they
    did not say is they all voted for it last time. They all voted
    to raise it by $5 trillion in the ``Big Ugly Bill.'' After it
    passed, they applauded and now there is amnesia, and somehow
    they forgot that they are the ones that created all of that
    debt. It is pretty interesting.
        Today, we get to hear that $7 trillion is coming in and--we
    are spending $7 trillion, but only $5 trillion is coming in.
    Well, yes, you voted for that. You voted for that. Why are you
    telling us? You voted for that.
        Anyway, I hate to bring that up, but, boy, you keep hearing
    this, and there is some amnesia around here.
        Now, about the housing.
        Mr. Sears, I wanted to ask you more about diving; you were
    so excited about that but, instead, I do want to ask you about
    home sizes. Back in the 1920s, what was the average home size?
        Mr. Sears. That is a great question, Mr. Vargas. I do not
    have the answer.
        Mr. Vargas. About 1,048 square feet, according to AI.
    Today, the average house is 2,600 square feet. It has grown
    dramatically.
        Also, the lot size, I agree with you completely on that. I
    mean, in San Diego, they are looking at this finally. They have
    5,000-square-foot lot requirements, and you do not need that,
    especially near areas where you have transit. So I think that
    is a really good idea.
        Again, I think the smaller lot sizes and smaller homes, I
    think, are something that is important.
        However, in parts of San Diego, what they did before was
    this: They took a single-family home, they scraped it, and they
    put in what they called a ``Huffman Six-Pack,'' and that is the
    ugliest thing you could possibly build in the cheapest way.
    They scraped the front of it, they made parking where the front
    yard was, and it became six units.
        That is why everyone is afraid of density, because that is
    what they remember. They did this for a number of years until
    the city stopped it.
        What can we do so that does not happen, so you do have
    some--at least some beauty in these homes? Because that is what
    people did not like, how ugly these damn buildings were.
        Mr. Sears, what can you do?
        Mr. Sears. Yes, so we can talk about smart growth and
    density. You talk about housing near transit centers. That is
    very important for us, especially in the metropolitan areas. I
    am with Mr. Peter. Personally, I sold a lot of homes on 5,000-
    square-foot lots.
        So density is important, but smart growth is as well. How
    do we do this so that it can maintain the fabric of the
    neighborhood without destroying it?
        Mr. Vargas. The other issue is this: We have all been
    talking about this red tape, $100,000. I was looking it up in
    AI. That also includes roads, sewers, parks in that--the
    infrastructure.
        In California, you have to pay for all that because, for
    those of us that have owned a home for a long time, we do not
    pay that much in taxes. I mean, I bought a home in 1993. I paid
    $176,000. I pay less than $3,000 a year in tax for that home.
        When a new home comes in, it has to pay for all the sewer,
    it has to pay for all the roads and the parks and everything
    else, and that really increases the cost dramatically.
        At least, AI is saying that what you guys are considering
    red tape is infrastructure.
        Mr. Peter, go ahead, sir.
        Mr. Peter. Yes, I mean, I agree with you, and--but, in
    California, the problem is that you have distorted the market
    through Prop 13. Of course, yes, new housing that gets built is
    going to be assessed at much higher rates and Prop 13 and
    other--in California, other impediments to building new housing
    has also led to a collapse in building.
        Mr. Vargas. But that is the case in many States where they
    are--I am sorry.
        Go ahead, Ms. Bailey. I will give you some time.
        Ms. Bailey. One other mechanism that is included is
    building for weather-related impacts, which are increasing.
    Those costs are also part of making sure we have structures
    that can sustain the hardship of the weather-related impacts.
        Mr. Vargas. No, absolutely. I was talking about the codes
    here. The code, of course, if you are in places like California
    or certainly in Florida or even in Kentucky or Kansas now
    because of hail, other things like that--so I agree.
        My time is about up, and I appreciate, again, the
    opportunity. I do think that the things that we are talking
    about are important, and we have to figure out how to do this
    together and quit talking about this spending when they are the
    ones doing it too.
        Thanks.
        Chairman Hill. The gentleman's time has expired.
        The gentleman from South Carolina, Mr. Timmons, you are
    recognized for 5 minutes.
        Mr. Timmons. Thank you, Mr. Chairman.
        I want to thank the witnesses for being here today.
        Over the past decade, housing affordability has become one
    of the most urgent challenges facing American families. The
    Nation has not built enough homes to meet demand and rising
    costs, combined with a complex web of Federal, State, and local
    regulations, have made it increasingly difficult for both
    builders and families.
        As I continue to meet with Realtors, builders, and housing
    providers, I hear a consistent concern: a patchwork of zoning
    rules, permitting requirements, and development restrictions
    and they vary widely from one jurisdiction to another. This
    regulatory maze slows construction, increases costs, and limits
    the supply of attainable homes.
        Without a more consistent and predictable framework, we
    risk deepening an already-severe shortage and placing even more
    families out of reach of home ownership or affordable rental
    options.
        Mr. Sears, Realtors see these challenges on the ground
    every day. Regulations at every level of government now add an
    estimated $93,000, which is nearly one-quarter of the total
    price of a new single-family home.
        From your perspective, how does this patchwork of local and
    State regulations affect housing affordability and access for
    first-time buyers and for members of the workforce?
        Mr. Sears. Thank you, Mr. Timmons. There is a lot to unpack
    there but let us start with the patchwork of regulations.
        What we have seen is, there are builders who want to build
    and, because of the disparity in or continuity in these, they
    will walk away from projects, because they do not have the
    time, the money, the resources in order to go through the
    extensive permitting process that happens.
        So--but we are--you know, the National Association of
    Realtors, we support the HOME Reform Act, which would cut the
    red tape and strengthen the public-private partnerships and
    that is something I think is very important and vital for us.
        So anything we can do to streamline the process, to
    incentivize builders, especially the small and medium-size
    builders who can help us with entry-level and the missing
    middle homes, we need to do everything we can to help them and
    cutting red tape is certainly a good start.
        Mr. Timmons. In my time as a small business owner, it is
    actually worse than just the patchwork framework. I think some
    bureaucrats abuse their authority, and they try to find reasons
    to not do a project that they think might not be appropriate
    but is perfectly legal.
        Is that something you have experienced?
        Mr. Sears. One hundred percent.
        Mr. Timmons. That has been very frustrating in my time.
        One follow up question. If Federal incentives or standards
    are necessary, what specific actions would most effectively
    encourage States and localities to streamline their processes
    and expand the supply of housing?
        Mr. Sears. Well, I think part of it--and we were talking
    about it with Mr. Vargas--help with infrastructure costs, if
    the Federal Government were to be able to incentivize and help
    with that. Offering block grants in different communities, that
    could certainly help with buyers.
        When it comes to building, it is how do we incentivize the
    local communities to streamline things. I know there are some
    examples from around the country. We actually worked with the
    American Planning Association (APA) and the League of Cities.
    We have a ``Housing Accelerator'' guidebook with nearly four
    dozen different success stories from around the country on how
    we can incentivize and streamline the processes and so, happy
    to supply that to you in writing.
        Mr. Timmons. Thank you for that.
        If good policies have the potential of positively impacting
    housing supply, I want to point out that bad policies do the
    opposite and in last 4 years, we saw trillions and trillions of
    dollars in spending that caused inflation to go up. They tried
    to run away from that, but we have unnecessary spending related
    to COVID, and that caused interest rates to go up.
        I recently moved. I was in a wonderful home that I grew out
    of; I needed to get a new house. I had a 2.3-percent interest
    rate. Selling my 2.3-percent interest rate was one of the most
    painful things ever. You know what my interest rate is now?
    6.8. You know what is even funnier? I have a 5-year adjustable-
    rate mortgage (ARM), because the cost of me locking in a 30-
    year note was going to be 8.5.
        Again, we can facilitate positive outcomes from Congress,
    but we can also cause negative outcomes.
        Ms. Smith, Bozzuto operates in many different regions, each
    with its own zoning codes, fee structures, and approval
    processes. What specific reforms in permitting, zoning, or
    Federal financing programs would most directly shorten
    timelines for producing new affordable housing?
        Ms. Smith. Thank you.
        Well, certainly anything you could do to fast-track the
    approval process of permitting--you know, actually getting
    projects shovel-ready and in the ground. It can take up to 2
    years to get a project in title today. So that adds a
    tremendous amount of cost just between the time you are
    planning it and the time you are building it. So cutting
    through some of that red tape would make a big difference.
        One of the things that we really believe is a great
    opportunity for building more multifamily housing is
    modernizing the 221(d)(4) program. That is an excellent
    program. We have used it at Bozzuto repeatedly over the years.
    The problem with the program today is it just takes too long;
    it is too administratively burdensome----
        Mr. Timmons. Thank you for that. I have run out of time.
        Mr. Chairman, I yield back. Thank you.
        Mr. Haridopolos [presiding]. He yields back.
        Mr. Green, you have a unanimous consent request.
        Mr. Green. I do, Mr. Chairman.
        I would like to ask that I, with unanimous consent,
    indicate in the record that I will be introducing a statement
    such that I am supporting H.R. 4069, the Downpayment Toward
    Equity Act of 2025; the Ending Homelessness Act of 2025--that
    would be H.R. 4872; and finally, H.R. 4223, the Housing Crisis
    Response Act of 2023, all of which have been introduced by Hon.
    Maxine Waters.
        I yield back. Thank you.
        Mr. Haridopolos. Without objection, that is adopted.
        Mr. Haridopolos. Next we go to the gentleman from Illinois,
    Mr. Casten.
        You are recognized for 5 minutes.
        Mr. Casten. Thank you very much.
        I appreciate everybody being here today. It is an important
    issue.
        It strikes me that we are having basically two of the three
    necessary conversations. If we want to lower the cost of
    housing, we can either increase supply, we can reduce the input
    costs, or we can lower demand. I do not think any of us are
    advocating for policies that would lower demand, but at least
    in theory that is another way to cause housing costs to go
    down.
        On the supply side, I just make the observation that, if
    your goal was to destroy the labor force of the construction
    industry, you should adopt Trump's immigration policies--or if
    your goal was to destroy the labor force for agriculture or
    hospitality. It is going to take a long time to fix that.
        I want to focus for now on the--at least initially, on the
    input costs. Would any of you argue that raising the price of
    bathroom vanities lowers the cost of a house?
        Obviously, the President imposed tariffs on bathroom
    vanities and kitchen cabinets because--I do not know why.
        I guess I would like to start with you, Ms. Smith, because
    you are the one that has the most direct construction
    experience, with Bozzuto, if I am following.
        Ms. Smith. Uh-huh.
        Mr. Casten. I am wondering if you have been able to look--
    all of these tariffs, what impact are those tariffs
    specifically having on your input costs for new construction?
        Ms. Smith. Well, it is an excellent question and one we
    have been trying to answer ourselves.
        The subs have, up until now, been sort of including their
    understanding of what the tariffs are going to be in their
    pricing, but it has been such a moving target that they are a
    little uncomfortable with those kinds of commitments.
        There have been very few starts, and so we have not really
    seen how it is going to be priced in. Once we see demand really
    pick up, we expect to see construction costs go up as a result
    of the tariffs, but no one really knows how it is going to
    shake out right now because----
        Mr. Casten. Okay.
        Ms. Smith [continuing]. it has been sort of moving around.
        Mr. Casten. Because the National Association of Home
    Builders--and this was back in April, so I do not know if this
    is still current. They had surveyed their members, and I think
    they said about a $10,000 price per home but that was April. I
    think there have been more tariffs since then.
        The Bureau of Labor Statistics' (BLS) data--which, of
    course, since BLS is not releasing data as much as they are
    supposed to anymore--in September, they were saying a 3.5-
    percent increase just because of tariffs.
        I am curious if that feels right from your experience as a
    practitioner or if you just do not know.
        Ms. Smith. Well, costs are going up about 3 percent right
    now, but costs went up significantly over the past 5 years.
    Just by example, we would spend about $195,000 a unit on hard
    costs for a new apartment 5 years ago. Today, that is $240,000.
        Mr. Casten. Yes, and--yes, obviously. I do think there is
    a--you know, we had global inflation during COVID that hurt
    everybody. Tariffs, by definition, are only affecting domestic
    inflation----
        Ms. Smith. Absolutely.
        Mr. Casten [continuing]. right?
        Ms. Smith. We think----
        Mr. Casten. So that is a choice, to have tariff-driven
    domestic inflation.
        Ms. Smith [continuing]. we expect costs to go up.
        Mr. Casten. I do also just--I hope that all of us can--and
    this may sound dumb, but I hope all my colleagues will go home
    tonight and reread ``The Three Little Pigs.'' Because some of
    this conversation is we can lower costs if only we did not have
    so many building codes, if only we did not have to build
    climate-resilient homes, if only we did not put efficiency
    codes in so that people could save money on energy. It is true,
    if you build a house out of straw, it is cheaper than building
    a house out of brick but there are big, bad wolves out there
    that we have to protect against.
        My last question is for you, Mr. Peter, as our resident
    economist here. Oh, do not shake your head. Come on.
        Mr. Barr had, I think appropriately, raised the point that
    the 30-year mortgage tracks the 10-year Treasury. I think a
    number of us on this committee have been concerned about the
    growing spread between the overnight Fed funds rate and the 10-
    year Treasury. It is one thing that the 10-year Treasury is
    high; it is something else that we have this increasingly
    inverting yield curve.
        Yes, we have long-term structural debt problems. Do you
    know when the yield curve started inverting?
        Mr. Peter. You would have to tell me.
        Mr. Casten. Well, it was essentially the start of the Trump
    Administration. That was not the start of the structural debt.
    Mike Konczal has famously described this as the ``moron risk
    premium,'' because when you have so many companies who are now
    being told that contract law does not apply in the United
    States the way it used to--``You had a permit, but I am going
    to pull it away because,'' I do not know, ``you had a minority
    CEO''--that is pulling investment. So we are seeing this
    premium that is in there.
        I am out of time, but I guess I would just ask all of you
    to continue to fight for the rule of law, because the U.S. has
    an advantage, as a country, so long as we attract the best and
    brightest to our shores----
        Mr. Haridopolos. The gentleman's time has expired.
        Mr. Casten [continuing]. and because they know that we are
    going to follow the law.
        Mr. Haridopolos. The gentleman from Wisconsin, Mr. Steil,
    chairman of the Subcommittee on Digital Assets, Financial
    Technology, and AI, is now recognized for 5 minutes.
        Mr. Steil. Thank you, Mr. Chairman.
        Not easy right now. Costs of housing are up. People are
    struggling. How do you pay for this? Where are we at, and where
    do we need to go?
        If we look back just at the median home, the median home
    has increased significantly for families and the cost structure
    for families is a huge challenge. So, if we look back a
    generation ago, in 1985, the share of households spending more
    than 30 percent of their income on housing was 28 percent. Now
    it is 37 percent, and we have an undersupply of housing of
    roughly 6 million homes.
        Mr. Sears, if I can start with you. There are a number of,
    kind of bullet shots that we can take at this to chip away at
    the challenge we face. There is no one silver bullet, there is
    no one thing we are going to do where housing prices are
    immediately going to become affordable but in your testimony,
    you have some great nuggets in there--and, in particular, lot
    sizes. Could you comment on what that would do and how local
    leaders could engage to bring down the cost of housing?
        Mr. Sears. Thank you, Mr. Steil.
        As Mr. Peter has talked about, lot sizes certainly have an
    impact and they allow for density and one of the things is, the
    denser we have for housing construction, the more units that
    come on the market. That does impact pricing and affordability.
        Mr. Steil. You also talk about the shot clock, where people
    go in, you want to get approval, and you find yourself gummed
    up in all sorts of red tape. How would that impact housing
    costs?
        Mr. Sears. Yes. By streamlining the red tape, the
    permitting process--you know, on average, we are looking at
    about $100,000 of costs before a shovel goes in the ground for
    a typical single-family home. So, if we can speed that up,
    there is a time value to money, which would allow for more
    affordable housing to be produced.
        Mr. Steil. Could you do some pre-approval--Ms. Bynum, and I
    have looked at pattern books, ways that cities could be
    proactive to do this even on the front end--to further
    accelerate the timeline?
        Mr. Sears. Yes, anything that could be done in advance
    would be beneficial for housing production.
        Mr. Steil. So why would you not do that then? Why would
    municipalities not be doing that in advance today?
        Mr. Sears. NIMBYism, not in my backyard. As one of your
    colleagues talked about, bureaucrats getting in the way of
    projects that they might not particularly agree with even
    though they are legal to do.
        Mr. Steil. Let me shift gears. One of the solutions that we
    have heard talked about by some of my colleagues on the left
    is, why do you not just come in and control the costs? Rent
    controls in particular. We saw this with the mayoral race in
    New York City. That, a-ha, you can just come in, set a price,
    the government can dictate the price, and things will solve
    themselves.
        Mr. Sears, you have examined and studied this. What happens
    when municipalities put in rent controls?
        Mr. Sears. In the early 2000s, I got my MBA at Western New
    England University, and, in fact, my economics professor was a
    tenant of mine at the time. He was a visiting professor. He
    took one session, one class, to talk about how rent controls
    flawed economics.
        I think, universally, economists agree that rent control is
    flawed. Instead, what it does is it makes people stay put.
    Housing inventory shrinks. You have investors that will flee
    from those localities that implement rent control because of--
    --
        Mr. Steil. It dramatically reduces investment in those
    communities that have rent controls, right?
        Mr. Sears. Yes.
        Mr. Steil. What are the long-term ramifications of that?
        Mr. Sears. Higher prices.
        Mr. Steil. So, by putting in these rent controls, what we
    really see is higher prices and lower-quality housing. Is that
    right?
        Mr. Sears. Yes, sir.
        Mr. Steil. All right.
        Let me shift in the allotted time that I have left and come
    to you, Mr. Peter, if I can. Can you walk us through the
    Carpenter Index? I think this is a really helpful framework to
    understand the lay of the land and the challenges that we face
    in housing.
        Mr. Peter. Yes. So the Carpenter Index is one of the
    metrics that we track affordability at the national level, and
    particularly we do it for the largest 100 metros.
        The Carpenter Index asks a simple question: The carpenter,
    they build housing, but can they actually afford to live in an
    entry-level home?
        Back in 2012, they found that the affordability was there
    in 74 metros out of the largest 100 metros, it was affordable
    for an average carpenter household. Today, that number has
    shrunk to about 21, 22 metros. So it has been deteriorating
    massively.
        We lay the fault squarely at the foot of the Federal
    Reserve. By mid-2020, we were warning them that the housing
    market was overheating, and they ignored our calls. They
    maintained that the inflation was transitory. Of course, they
    had to slam the brakes in 2022, and at that point it was too
    late. The home prices were higher; now interest rates are
    higher.
        But, at the same time, the Carpenter Index also shows that
    if we can build smaller lot sizes, housing is going to be
    affordable for----
        Mr. Steil. I am going to cut you off, because we are going
    to run out of time, but I appreciate all of you being here and
    your testimony. A huge challenge.
        I yield back.
        Mr. Flood [presiding]. The gentleman yields back.
        The gentlewoman from Massachusetts, Ms. Pressley, is
    recognized for 5 minutes.
        Ms. Pressley. Thank you to our witnesses for joining us
    today.
        Two-point-five million--Two-point-five million children.
    That is how many children are currently being raised in grand
    families or kinship households in the United States. In my home
    State, that which I share with Mr. Sears, over 100,000 children
    are raised in grandfamily or kinship households.
        Now, these are the children of servicemembers and veterans
    that are living with a grandparent while their parent is
    deployed. These are the children whose parents have been
    impacted by the opioid epidemic and are struggling with
    substance use disorder. These are children who, were it not for
    their grandparents' intervention, perhaps they and their
    siblings would be separated or living in foster care. These are
    the children who are living with grandma while their parents
    are getting back on their feet after losing a job.
        That is exactly why Representative Jim McGovern and I have
    introduced the Grandfamily Housing Act to provide resources to
    those households to help with schoolwork, after-school care,
    and home repairs. This affords us a chance to support those
    grandfamilies, our elders that are living on fixed incomes, who
    are struggling to take care of a child after they have already
    raised their children.
        Ms. Bailey, some people are unaware of this family model,
    which has really quadrupled in the last decade. As the co-chair
    of the Task Force on Aging and Families, I am well aware, but
    do you mind just educating the public on why this is, in fact,
    an issue deserving of our attention? Can you discuss the unique
    types of challenges that elders face when trying to raise young
    children in senior residences?
        Ms. Bailey. Thank you so much for the question. It is very
    important and thank you for your legislation.
        Grandparents living at home oftentimes need home
    modifications for safety so that they can remain there and
    maintain their families and help to keep their families whole.
    Without your legislation and full enforcement of our Fair
    Housing Act to make sure we are doing things to ensure that
    they are not being discriminated against, they are not able to
    stay in those homes. Then that means that we have family
    instability, which is not the outcome that we desire. We
    actually want to make sure we keep families together and that
    we empower them.
        They also, in many ways, support people that might not be
    biologically family and I think that is something that we
    really have to talk about. They are very generous, taking in
    neighbors. So they are having to hold whole communities----
        Ms. Pressley. Whole communities.
        Ms. Bailey [continuing]. together.
        Ms. Pressley. Excellent. Thank you for that.
        Ms. Bailey, across our country, more and more elderly
    people are becoming homeless. So we are talking about the role
    that they play in keeping families whole and providing
    stability to the community and to children, but it is also
    essential to their own stability. What we are seeing is a
    growing gray wave, where our elderly are representing the
    highest rising rate of homeless.
        Could you speak to these challenges and what are you seeing
    and getting in terms of keeping elderly folks in housing they
    can afford to live in?
        Ms. Bailey. I think the administration's most recent
    actions on Continuum of Care really, really should be alarming
    because, as you stated, many older Americans are increasingly
    becoming homeless. Many people are being left without any
    support and what we see is that the recent actions could add to
    those numbers.
        So we already have about 700,000-plus people in
    homelessness every day and the recent way that they have put
    out a proposal to redesign the program would only leave funding
    for about 30 percent.
        Ms. Pressley. Okay.
        Ms. Bailey. And the notice of funding opportunity literally
    cut the program's funding in half.
        Ms. Pressley. Thank you.
        Ms. Bailey. So we can actually grow more homelessness by
    almost an additional 200,000 families just with those changes.
        Ms. Pressley. My goodness. Deeply consequential--and
    preventable.
        Ms. Bailey. Yes, ma'am.
        Ms. Pressley. Thank you.
        Recently, I joined Ranking Members Waters in urging the
    Department of Housing and Urban Development to avoid a gap in
    funding the Continuum of Care programs. In Boston, grantees
    rely on these funds to provide lifesaving housing assistance.
        I am calling on the administration to treat housing like
    the essential priority that it is. It is why I have worked with
    my colleagues to introduce bills like the Innovation Fund Act
    to improve housing supply, the Eviction Helpline Act to create
    a national support hotline, and the Appraisal Modernization
    Act, which would allow homeowners to seek a second appraisal
    when they suspect their home's value is underrepresented.
        These little-to no-cost bills help people remain housed and
    allow them to build wealth and maintain their homes, pass their
    homes down to their children, or move into new homes as their
    families expand.
        I yield back.
        Mr. Flood. The gentlewoman yields back.
        The gentleman from Pennsylvania, Mr. Meuser, who is the
    chair of the Subcommittee on Oversight and Investigations, is
    now recognized for 5 minutes.
        Mr. Meuser. Thank you, Mr. Chairman.
        Thank you all for being here.
        So we are really trying to find solutions, not trying to
    come up with make-believe culpability.
        The fact is that the housing shortage began back in 2008 in
    the so-called Great Recession.
        Mr. Sears, you mentioned that there is a $100,000 cost
    before the shovel hits the dirt. Okay, that is not a tariff
    issue, right?
        Lumber, by the way, as you well know, 3 years ago, during a
    different administration, was at $1,500. Today, it is at $545.
    Last year, it was at $550. So it has come down, to an extent.
    So, yes, most homes are built with lumber.
        Inflation rose from 2021 to 2024 by 20 percent
    cumulatively. Cumulatively, over the last 10 months, with
    President Trump in office, inflation has gone up 2.4 percent.
    Okay?
        So let us just get all that straight.
        Interest rates were very, very high: went up quickly. That
    had a lot to do with people having a shock value of not buying
    homes and with the rapid inflation that took place, incomes did
    not keep up. So the idea of buying a home was very, very
    difficult.
        The fact is that we are short about 4.5 million homes and
    we are building about 1.4 million a year. So we need answers,
    not finger-pointing.
        So, Mr. Sears, from your perspective, here is just one
    thing I want to ask you, representing Realtors on the ground.
    When an American sells their home, $250,000 qualifies for
    capital gains, $500,000 for couples--in profit, that is. The
    rest is considered income. So 30 percent as opposed to, in
    capital gains, 33 percent.
        Should we work on that? Should that be corrected? Would
    that help?
        Mr. Sears. I would encourage this committee and all of
    Congress to support the More Homes on the Market Act. That
    would take a first stab at the antiquated capital-gains
    exclusion from 1997 and raise it to $500,000 and $1 million for
    a married couple.
        There is a proposal out there to eliminate taxes on home
    equity on your primary residence. We would support any of that
    but if we could get the More Homes on the Market Act approved,
    we would be very happy with that start.
        Mr. Meuser. Good. I agree, and I look forward to supporting
    that.
        Ms. Smith, rent control, I know that has been discussed
    plenty already, but housing--I heard housing quality. What
    lessons should we learn from what has occurred in New York, for
    instance?
        Ms. Smith. You could look right at Montgomery County,
    Maryland, right here in this area, that enacted rent control a
    year ago, and there is absolutely no investor interest at all
    in that community. That had been a very robust department, a
    market with very positive results, but the investor community
    has hopped across the bridge over to Virginia.
        Mr. Meuser. Okay. Thanks.
        Yes, while we were sitting here, I texted the Secretary,
    Scott Turner. When he was in his previous role, we worked on
    opportunity zones together. So I said, hey, why do we not try
    talking about some housing area, arena, opportunity zones? So
    creating that type of potential private-sector incentive.
        Mr. Sears, back to you. It is nearly impossible,
    homebuilders have told us, to deliver a home under $250,000.
    Permitting, financing rules have big impacts here on limiting
    affordable starter homes. Thoughts on that?
        Mr. Sears. Yes. Anytime there is red tape, delays in
    construction, difficult permitting that cause delays in this,
    there is a time value to money. So the builders are
    unfortunately fleeing away from starter homes and the missing
    middle homes, and they are going for the higher-end homes,
    where the profit margins are a little larger, but they can
    absorb these additional costs.
        I mean, listen, here is the thing: Housing represents
    nearly 20 percent of Gross Domestic Product (GDP). Every single
    transaction, residential transaction, that occurs generates
    approximately $90,000 of economic activity in every community
    across the country. So anything we can do to streamline it to
    get people into affordable homes will only be good for the
    economy.
        Mr. Meuser. Yes. I agree. I agree. Great multiplier effect,
    and very, very meaningful to quality of life and everything
    else.
        You look online, and there are right-leaning proposals--
    well, we do not have to look online; we are Members of
    Congress. Everybody has different ideas and all, but this is
    important. It is something that we are really focusing on and
    we need to come up with. You have left-leaning proposals, you
    have centrist proposals--well, I am out of time.
        I just look forward to hearing more of your ideas on what
    we can do to help solve this contemporary problem.
        I yield back, Mr. Chairman.
        Mr. Flood. The gentleman yields back.
        The gentlewoman from Georgia, Ms. Williams, is now
    recognized for 5 minutes.
        Ms. Williams of Georgia. Thank you, Mr. Chairman, and thank
    you, Ranking Member Waters, for holding this hearing today
    addressing the housing crisis that is impacting the entire
    country, y'all.
        Thank you to all of our witnesses today for coming to
    testify to provide your perspective on solutions because that
    is what the American people want when addressing this housing
    crisis.
        I know that we have had discussions in our Housing
    Subcommittee where we have had members mention their
    perspectives and their solutions to address housing
    affordability and the housing supply. While I am happy that
    most of my colleagues have talked about proposals to help build
    more housing, both for urban and rural communities, and
    creating more resources to make home ownership more
    affordable--I agree, as evidenced by legislation that I have
    introduced and co-led--I also think a crucial piece of the
    puzzle is ensuring that constituents have the tools to ensure
    that they can maintain and hold onto homes that are part of
    their family's legacy, which builds generational wealth.
        And that is why I have introduced bipartisan legislation,
    the Heirs Estate Inheritance Resolution and Succession (HEIRS)
    Act, to keep homes and families for generations to come and
    build that generational wealth.
        While I represent the Fighting Fifth District of Georgia,
    centered in Atlanta, which is a very urban area, y'all, I grew
    up in rural Alabama and so rural housing is important to me
    personally.
        The home that I grew up in the big city of Smiths Station,
    Alabama, did not have indoor plumbing or running water. I am
    hopeful that we will continue to have conversations around the
    Whole-Home Repairs Act that I am co-leading with Mr. Downing. I
    hope that legislation can be discussed and adopted.
        I also understand the need to tackle the housing crisis on
    multiple fronts.
        Ms. Bailey, what have you found are some of the best
    practices for designing mortgage programs that work for rural
    communities that also tackle the racial wealth gap and
    homeownership gap?
        Ms. Bailey. Thank you so much.
        I think your legislation, the HEIRS Act, is really critical
    for making sure we can preserve homeownership opportunities in
    rural communities.
        I think we need to make sure we are also utilizing special-
    purpose credit programs. This is something that the Federal
    Housing Finance Agency removed liquidity for from the GSEs, and
    the Consumer Financial Protection Bureau (CFPB) just issued a
    proposal that would curb the use of special-purpose credit
    programs, despite them providing access to nearly 60,000
    borrowers with $82 million in savings, particularly for people
    who live in the South.
        What people do not realize is that people in the South have
    lower credit profiles than people across the Nation. What
    special-purpose credit programs allow lenders in those regions
    to do is to remove those unnecessary and arbitrary barriers and
    make sure they can create and design programs to well-serve
    those creditworthy consumers.
        So making sure we put forward the HEIRS Property Act that
    you have led and really is critical to helping preserve Black
    wealth, but also advancing special-purpose credit programs, it
    is extremely important. These programs have been adopted by
    lenders throughout the Nation. They have made a huge impact,
    trillions of dollars in impact.
        So we need to make sure we are providing the oversight over
    the CFPB and the Federal Housing Finance Agency to make sure
    these critical programs can continue.
        Ms. Williams of Georgia. Thank you, Ms. Bailey.
        Mortgage lenders serving residents living in rural
    communities and majority-Black areas know that some homes are
    not even eligible for traditional mortgage financing, so these
    programs are extremely important.
        Many families in the Black community also face challenges
    with estate planning, leading to situations where property is
    inherited informally as heirs' property, as we have discussed.
    So that is why I am still hopeful, Mr. Chairman, that this
    legislation will be brought before the committee so that we can
    move it forward, because it is truly bipartisan.
        I also understand, Ms. Bailey, that transformation of
    heirs' property into formal ownership can contribute to long-
    term wealth accumulation and financial security for
    marginalized communities and so I hope that we can continue to
    gain support from all of the people here, the experts here,
    because that is something that I have found that we all agree
    on.
        Mr. Sears, recently, I introduced the Whole-Home Repairs
    Act with my colleague Representative Troy Downing, which would
    establish a pilot program to empower homeowners to make
    critical repairs, ensuring that homes are safe, efficient, and
    remain livable.
        Can you explain why access to lower-cost financing for home
    repairs is essential for not only homeowner safety and
    stability but also to preserve affordable housing in our
    communities and prevent displacement?
        Mr. Sears. Ms. Williams, I am happy to say that the
    National Association of Realtors supports your legislation.
        Ms. Williams of Georgia. Thank you.
        Mr. Sears. Here is the reality: If we do not assist these
    people to be able to maintain their home, we could lose another
    precious housing unit on the market.
        So anything we can do to incentivize them to rehabilitate,
    to fix up their home, to make it stronger and can handle storms
    and natural disasters, the better off the entire community will
    be, and the homeowner.
        Ms. Williams of Georgia. I agree, Mr. Sears.
        My time is up. I have more questions for all of our
    witnesses that I will submit for the record.
        Thank you so much.
        Mr. Flood. The gentlewoman yields.
        The gentleman from Wisconsin, Mr. Fitzgerald, is now
    recognized for 5 minutes.
        Mr. Fitzgerald. Thank you, Chairman.
        Thanks to the panel. Thank you for being here today. I know
    it is a long morning and early afternoon, I guess, so--and I
    apologize if some of the questions have some redundancy, but
    one of the biggest barriers to improving affordability is the
    sheer lack of developmental lots. That is something I see in
    the district all the time.
        I have draft legislation to create a no-interest,
    revolving, mezzanine loan fund to help responsible developers
    overcome the up-front capital constraints that keep lot
    development out of reach, especially for projects with lot
    costs under $100,000.
        Mr. Sears, I know we have talked about this in the past,
    but can you just--how would increasing the supply of just
    buildable lots through this type of, like, targeted and
    repayable financing impact the entry-level home prices?
        Mr. Sears. Simple economics, supply and demand. The more
    supply we have, the more of an impact it will have on the
    affordability.
        So, if we can designate these lots and get them designated
    to be buildable and then get the builders in there, that will
    help with the missing homes that we are looking for, whether it
    is the entry-level or the missing middle.
        Mr. Fitzgerald. It is very evident that the underground
    portion of any new subdivision just adds astronomical costs to
    the overall development.
        Have you guys seen any strategies on municipalities working
    with developers or, kind of, any new ideas out there when it
    comes to just developing lots in general?
        Mr. Sears. Well, as I mentioned earlier, the coalition that
    we had for the ``Housing Accelerator'' playbook, where we have
    over four dozen examples of the way that municipalities have
    worked with builders and other governmental agencies in order
    to streamline the process.
        I do not know for sure if we have an example about the
    infrastructure issue in there, but anything that can be done to
    reduce the cost of infrastructure or to assist in that would be
    greatly appreciated and will help with construction of more
    units.
        Mr. Fitzgerald. Oh, very good.
        I have been working on legislation to release GSE
    conservatorships, and the goal of a bill that I have right now
    is simply to protect taxpayers--codify the strong reforms that
    we have already had administratively, but take away the
    incentives to stray from their charter--by making Fannie and
    Freddie utilities and allow the GSEs to operate under the
    reforms.
        So your members work directly, I know, with families to
    become homeowners. This legislation aims to build on the
    reforms already in place by moving Fannie and Freddie into
    utility-style entities. It also is preserving the limited and
    paid-for government backstop through the Preferred Stock
    Purchase Agreements (PSPAs).
        How could this kind of utility model strengthen stability
    in the secondary mortgage market and ultimately help more
    families access affordable home ownership?
        Mr. Sears. Yes, I know that them coming out of
    conservatorship has been something we have talked about for a
    long time, but we would fully support the utility-type model.
        With that said, what we would want to make sure is that the
    30-year fixed-rate mortgage remains a bedrock of the financing
    that is available. We would also want to make sure that there
    is the government guarantee.
        Finally, if there is any revenue that is generated from
    this, we would ask that we make sure that money is geared
    toward housing and used for public-private partnerships
    because, from what I understand, anytime there are these types
    of partnerships, the private sector will put in 10 times the
    amount of money as the Federal Government. So we could be
    talking about trillions of dollars of influx into the housing
    economy.
        Mr. Fitzgerald. Just one more, kind of, tail question would
    be: From your vantage point, what are the most burdensome
    regulatory barriers that are actively preventing builders from
    actually moving forward?
        I know they work with Realtors, kind of, in the marketing
    of some of these new developments but what still is, kind of,
    the hardcore thing that really needs to be repealed for this
    stuff to move forward?
        Mr. Sears. A universal one across the country that scares
    builders and investors is rent control.
        Mr. Fitzgerald. Absolutely.
        Thank you so much.
        Mr. Sears. Thank you.
        Mr. Fitzgerald. I yield back.
        Mr. Flood. The gentleman yields back.
        The gentlewoman from Michigan, Ms. Tlaib, is now recognized
    for 5 minutes.
        Ms. Tlaib. Thank you so much, Chairman.
        We all have been talking about boosting our housing supply,
    but we know it is of little value to someone who cannot get a
    mortgage because of their skin color or cannot rent an
    apartment because they have a disability. I know people want to
    pretend it is not happening anymore, but it is.
        The administration is deliberately undermining the
    enforcement of our fair housing laws. You know, this is
    incredibly important because we know that settlements against
    banks have been done in closed doors, from folks giving higher
    interest rates to folks coming in if they have an accent.
        Was that not Wells Fargo, Ms. Bailey, that got sued for
    that, lost? They settled out of court because they did not want
    the public to know.
        In May, ProPublica reported that the administration was
    halting their fair housing investigations, allowing hotlines to
    go unmonitored, preventing staff travel to identify witnesses,
    and ending compliance reviews to ensure housing developers'
    practices and policies are illegal.
        In September, The New York Times reported that employees
    from the HUD's Office of Fair Housing, quote, said that ``Trump
    political appointees had made it nearly impossible for them to
    do their jobs.'' A week later, the administration fired two HUD
    whistleblowers who spoke out about the administration's gutting
    of fair housing enforcement capacity.
        We cannot sit here and act like this is not happening.
        Ms. Bailey, is the Fair Housing Act being enforced right
    now?
        Ms. Bailey. No, ma'am.
        Can I just say, it is not being enforced at a time when
    complaints of housing discrimination that are led by people
    with disabilities are up. So we are at near-record levels of
    complaints about housing discrimination, and complaints based
    on disability continue to lead. Complaints based on national
    origin are also on a significant rise.
        Ms. Tlaib. Yes, I was going to ask you about trends right
    now, and I heard that was one of them.
        Now I want to talk about CFPB, because I think that is also
    really important. We know that the CFPB recent proposed rule on
    Regulation B of the Equal Credit Opportunity Act was important.
        Ms. Bailey, can you talk about some of the proposed changes
    and what did the proposed rule basically allow banks to redline
    again?
        Ms. Bailey. Yes, ma'am. Thank you so much for this
    question, because this is one where I think every woman in our
    country should be alarmed.
        The Equal Credit Opportunity Act made it possible for women
    to get access to credit without needing a male cosigner. It is
    baby, in terms of the years of enforcement.
        Ms. Tlaib. I just want people to know: We could not get
    loans without a man signing the loan with us. Just remember
    that.
        I know, Ms. Smith. I cringe too.
        Go ahead, Ms. Bailey.
        Ms. Bailey. So, for 50 years, we have had this legislation
    that has made credit more accessible, and it has allowed us to
    use fair lending practices that simply made lending fairer. It
    removed obstacles and made lenders help them to choose the
    less-discriminatory alternative and what they have since been
    able to do is design programs that are really profitable.
        Ms. Tlaib. That is literally my next question. I would----
        Mr. Sears. Ms. Tlaib----
        Ms. Tlaib. Yes?
        Mr. Sears [continuing]. could I just say for the record
    that what we are seeing statistically is that the largest
    growth sector for buyers here in the United States are single
    women. In fact, single women are three times more likely to buy
    a home than single men.
        So we are going in the right direction. I would just like
    to say that.
        Ms. Tlaib. Okay.
        Well, Ms. Bailey, because you noted the Black-White
    homeownership gap. I mean, Michigan lost more Black home
    ownership during the last recession than any State in our
    Union, but it is higher now, the lack of Black home ownership
    is higher now, than before the passage of the Fair Housing Act
    and that just makes--is so unsettling, to hear that.
        So simply reducing what they call ``roadblocks'' and
    supporting more of what they have been doing will not cut it. I
    wish my colleagues would understand that, even though they
    think everybody is alone--it is actually still happening
    through the banks and through these institutions and that is
    why we have to create laws to push back against it.
        Ms. Bailey. We were making tremendous progress.
        Ms. Tlaib. Yes. Yes.
        Ms. Bailey. We increased Black home ownership for the first
    time since the Great Recession of 2008. It grew from 2019
    through 2024. The Black homeownership rate grew 14.29 percent.
    That was incredible work that a whole group of us came
    together--this committee's leadership, leadership at the
    Federal Housing Finance Agency under Director Thompson,
    leadership at HUD under Secretary Marcia Fudge.
        So we can do things that are going to give people fair
    opportunities, and they may ultimately benefit everyone. What
    we know for sure is that discrimination distorts and if we
    solve for discrimination targeted at Black communities alone,
    our entire economy will grow by $5 trillion over a 5-year
    period.
        Ms. Tlaib. Yes. I know, for many of our families, it really
    does create a lot of economic stability to be able to own our
    own home.
        Thank you. I yield.
        Mr. Flood. The gentlewoman yields back.
        The gentleman from Michigan, Mr. Huizenga, who is the vice
    chair of the entire full committee, is now recognized for 5
    minutes.
        Mr. Huizenga. Thank you, Mr. Chairman and there is a lot to
    unpack.
        I actually have some personal involvement in the industry.
    When I graduated with my oh-so-employable political science
    degree--pause for chuckles from other political science
    majors--I went into real estate full-time. My family has been
    involved in construction for a very long time. I have done a
    number of single-family housing developments. Mostly recently,
    our family did a duplex/triplex/multifamily development--24
    units, small but I have a lot of personal stories surrounding
    some of those barriers that exist.
        Before I go into that, I do feel like I need to address a
    couple of the points that were made by my colleague from
    Michigan. Mr. Sears, you made one of those, and I believe Ms.
    Bailey actually buttressed that, which is heading in the right
    direction.
        I know when I got my Realtor's license in the early 1990s,
    I was taught something very important: You do not look at
    color. You do not look at national origin. There is one
    standard, and it is green. Either people can afford it or they
    cannot afford it.
        We have seen government policies both make it harder and,
    frankly, way too easy to get loans that people should not have
    gotten. I am not saying that they should not have gotten a
    loan, but that they got a loan that they could not afford and
    that has caused a significant part of that.
        When my colleague is talking about the dip in home
    ownership in Michigan, which was across all races, that was
    part of the reason we had people that had ARMs that could not
    afford them. We have had to step in to tighten that up and that
    pains me, as someone who literally sold houses for a living and
    still develops housing and still is involved in construction at
    a level.
        Ms. Smith, I am going to start with you. In your written
    testimony, you noted that regulatory burdens have been a major
    contributor to the slowdown in new housing production.
        I had that. I have had where a township came in and said,
    ``Oh, I am sorry, we know that this is not legal, but we are
    going to double-assess your property because it is on a
    corner.''
        Ms. Smith. Uh-huh.
        Mr. Huizenga. ``Oh, and you want to fight us? Do you know
    how much that is going to cost in court? So, tell you what. Why
    do you not just give us some extra money, and we will go
    away.''
        You want to know where those additional costs went? Right
    into the cost of the lots.
        Ms. Smith. That is correct.
        Mr. Huizenga. Not to mention, ``Oh, we think the sight
    lines are not good. So we would like you to spend tens of
    thousands of dollars to take down a road, a hill, so it is not
    as steep, so we have better sight lines.'' When I
    inconveniently pointed out that maybe that was the county road
    commission, the answer was, ``Yes, but we think you ought to do
    it.''
        Ms. Smith. Uh-huh.
        Mr. Huizenga. All right?
        Not to the mention when we are talking our values of
    insulation and all of the other requirements that have been put
    in place. There are some structural issues that have caused
    decline in home ownership that have to be addressed.
        So I just wanted to point that out that I appreciated your
    take on this.
        I only have a minute and 30 left, and I have to go through
    this very quickly.
        I want to hit on one thing. When Secretary Fudge testified
    before our committee last Congress, I pressed her on a local
    housing project in Benton Harbor, Michigan, called Harbor
    Towers. Although it did get some immediate press and media
    attention, almost 2 years later, at the start of the
    multimillion-dollar project to rehab it, it continues to be
    stalled. We are working with this administration now to try to
    make that unstuck, but I can tell you firsthand that this
    housing complex is in dire need of immediate renovations.
        It should not take an act of Congress to have Federal or
    any housing projects move forward, but what can Congress do to
    tackle some of these barriers at the Federal level?
        Ms. Smith. I think one of the things it can do is to make
    sure that there are incentives at the local level because so
    many of the regulations that you are talking about are done at
    local permitting departments and that sort of thing, and it can
    really vary depending on where you are.
        So having, like, real incentives to be able to fast-track
    projects and be able to get them built quickly without a lot of
    onerous requirements would make a big difference.
        We have also found that tax abatements are incredibly
    impactful, particularly when we are looking at, like,
    conversions from office buildings to residential, et cetera.
        Mr. Huizenga. My time is expiring, and, Mr. Peter, I am
    going to have to go to you about the increase in private
    capital coming into this. I will take those as written.
        I appreciate what you are doing. We have to tackle this
    issue as a Nation.
        Thank you. I yield back.
        Mr. Flood. The gentleman yields back.
        The gentleman from New York, Mr. Torres, is now recognized
    for 5 minutes.
        Mr. Torres. Thank you, Mr. Chair.
        The single greatest challenge confronting our country is
    the affordability crisis, a crisis so severe that it has become
    the death sentence for the American Dream.
        If you were born in 1940, you had a 90-percent chance of
    out-earning your parents but for Americans born since 1980,
    that fighting chance at the American Dream has collapsed to
    less than 50 percent. The American Dream is dying of cost
    disease, and the leading cause of death is the cost of housing.
        For proof, look no further than America's largest city, New
    York, which has become dangerously unaffordable for working
    families. From 2005 to 2024, the population of New Yorkers ages
    5 and under fell by one-third. From 2010 to 2020, 20 percent of
    Black children and teenagers disappeared from the New York City
    census count.
        America is experiencing a reverse migration. In the early
    20th century, African Americans fled the South for the North in
    order to escape Jim Crow. Now, in the 21st century, African
    Americans are fleeing the North in order to escape the
    affordability crisis.
        The scale of the need for affordable housing in America,
    and especially in New York, cannot be overstated. When the New
    York City Housing Authority reopened the Section 8 waiting list
    in June 2024 for the first time in 15 years, a staggering
    600,000 people rushed to apply.
        In the Bronx, the East Clarke Place Senior Residence
    received a staggering 26,000 applications for just 84 units, a
    ratio of 300 to 1. When 300 families are left desperately
    chasing after a single unit, that is not a housing market; that
    is a humanitarian crisis, pure and simple.
        Mr. Sears, what is the National Association of Realtors'
    latest estimate of the gap between housing supply and housing
    demand?
        Mr. Sears. Mr. Torres, the last 3 years, the National
    Association of Realtors reports that on average of around 4
    million units have sold. The typical average year is 5.3
    million. So just in the last 3 years there have been almost 5
    million--I am sorry--almost 4 million units that have not been
    on the market for consumers to buy.
        Mr. Torres. So over 4 to 5 million units in the aggregate.
    Of course, when we speak about affordable housing, the question
    that my constituents often ask is, affordable for whom? Most of
    the affordable housing that we create is often unaffordable to
    the poorest families in America. The National Low-Income
    Housing Coalition estimates a housing gap of over 7 million
    units for the lowest-income families.
        So, even though the United States has a deficit of more
    than 7 million deeply affordable rental homes, Federal spending
    on expanding the housing supply amounts to a mere fraction of a
    percent of the Federal budget--a mere fraction.
        Ms. Bailey, do you think that housing should only receive a
    fraction of a percent of the Federal budget?
        Ms. Bailey. No, not at all. It is only getting less than 2
    percent. Housing is a fundamental right. As we heard, it is
    accounting for nearly 20 percent of our Nation's GDP.
    Instability in the housing market means instability in the
    economy.
        If you would permit me----
        Mr. Torres. Sure.
        Ms. Bailey [continuing]. there was a statement made earlier
    that people only see green. Our lending experiences and our
    housing experiences show that discrimination complaints are at
    record highs. People see people for who they are, how they show
    up, and they choose to treat them differently oftentimes based
    on their immutable characteristics but also, to your point,
    their source of income.
        Mr. Torres. I also think history flatly contradicts the
    notion that the free market was sufficient to abolish Jim Crow,
    but--you know. That is why we needed the Voting Rights Act and
    the Civil Rights Act.
        But given the----
        Ms. Bailey. The Fair Housing Act and the Equal Credit
    Opportunity Act----
        Mr. Torres. Exactly right.
        Ms. Bailey [continuing]. and the Home Disclosure Mortgage--
    you know, we could go on.
        Mr. Torres. All of which are under assault.
        Given the decades of disinvestment from affordable housing,
    do you think Congress has been part of the solution or part of
    the problem?
        Ms. Bailey. So Congress did something brilliant during the
    CARES Act and the American Rescue Plan. Congress put in an
    infrastructure--this committee, under the leadership of then-
    Chairwoman Waters and then when she was ranking member, put
    together an infrastructure that allowed us to maintain people
    at home.
        During the COVID crisis, that funding was so critical that
    we maintain renters. It is so important because, as we know,
    most renters have little savings. So, if we do things like go
    in today and take back those CARES Act provisions that limit
    the ability to evict families, we are putting more people at
    jeopardy of homelessness. We are ultimately going to pay for
    that.
        We did right by veterans, and now we need to take those
    same lessons and apply those to our lowest-income renters.
        Mr. Torres. I just want to end quickly. Look, I am all for
    regulatory reform, but we need regulatory reform in addition to
    reinvestment, not in the place of reinvestment. Let us not
    create a false choice where one needs not exist.
        Mr. Flood [presiding]. The gentleman's time is expired.
        Mr. Torres. I yield back.
        Mr. Flood. The gentleman yields back. The gentlewoman from
    California, Mrs. Kim, is now recognized for 5 minutes.
        Mrs. Kim. Thank you, Chairman and Ranking Member, for
    hosting this hearing, and I want to thank all of you for
    joining us. We are almost done.
        California's housing market is one of the worst in the
    Nation, and as a Member who represents California, it saddens
    me to say that, just last month, California earned an F rating
    for housing affordability. You know, since I got here as a
    Member, I have fought relentlessly for housing affordability at
    the Federal level, but there is only so much that we can do
    when Sacramento and Gavin Newsom are driving so many failed
    policies.
        Earlier this year, as you know, when we were working on One
    Big Beautiful Bill, I secured four times increase in the SALT
    deductions to $40,000 to make home ownership in California more
    attainable.
        Mr. Sears, as you know, I represent Orange, San Bernadino,
    and Riverside Counties. In my area, a family needs to make
    $367,000 to afford a medium-priced single-family home, and I
    want you to please discuss what the effects of increasing the
    SALT deduction to $40,000 means for housing affordability for
    constituents like mine.
        Mr. Sears. Thank you, Ms. Kim. Good to see you again.
        Mrs. Kim. Good to see you.
        Mr. Sears. Yes, the increase in SALT from $10,000 to
    $40,000 is very important, as well as securing the mortgage
    interest deduction in the bill passed this year. These are very
    real costs, and I always find it ironic that citizens would
    have to pay taxes on taxes they have already paid. So anything
    that can be done to increase that. In 2017, when the Tax Cut
    and Jobs Act was put into place and the $10,000 limit was
    there, there was no indexing for inflation. Again,
    unfortunately, I do not see an indexing for inflation now.
        We do know, based on historical numbers, the cost of
    housing and housing ownership is going to go up. I would
    encourage the Congress to look at any tax measures like this to
    bring up to date, to put indexing in along with the capital
    gains exclusion that was set in 1997. Thank you.
        Mrs. Kim. Thank you very much. You know, as tax filing
    season begins, I hope that Californians remember to utilize
    this key deduction to attain their dreams of home ownership and
    keep more of their hard-earned dollars in their pockets.
        During the recent California fires, there are short-term
    rentals. They play critical role in providing emergency housing
    for displaced residents, fire responders, and relief workers.
    So a question to you, Ms. Smith, how can Congress better
    support and scale partnerships between State agencies, local
    governments, in short-term rental platforms to ensure that
    flexible housing options remain available during natural
    disasters?
        Ms. Smith. Yes, it is a very good question, Representative
    Kim. We, after the wildfires, we housed so many people in our
    Santa Monica communities, and Santa Monica had a 12-month lease
    requirement, and so we had to actually work around that to be
    able to have people sign leases and letting them know that they
    could break their lease so that they could have any lease term
    that they needed in addition to lowering any type of deposit or
    application fees or that sort of thing. One thing Congress
    could do would be to work with local jurisdictions,
    particularly on their lease length requirements, so, when there
    is a natural disaster or something like that, that would--that
    could be overridden so you could have shorter lease lengths and
    working with the short-term providers on streamlining access to
    housing so that they could get into housing very, very quickly.
    I think there are a lot of incentives that would be very, very
    impactful.
        Mrs. Kim. Another incentive that I co-led with my colleague
    Representative Lawler is the Community Investment and
    Prosperity Act. This bill would increase the public welfare
    investment cap on banks from 15 percent to 20 percent. That
    would enable further investments into the LITC, low-income tax
    credit.
        Mrs. Smith, again, to you, how would the passage of the
    Community Investment and Prosperity Act help address the
    shortage of affordable housing units that our country faces?
        Ms. Smith. I cannot speak directly to the act, but we have
    done a fair amount of low-income LITC work over the years, and
    one of the things that is very--it is a fantastic program. It
    has probably been one of the most effective programs in
    producing affordable housing, but one of the challenges is
    lining up all of the capital sources, because it all has----
        Mr. Flood. The gentlewoman's time has expired. The
    gentlewoman's time has expired.
        Mrs. Kim. Thank you very much.
        Mr. Flood. The gentlewoman yields back. The gentlewoman
    from Texas, Ms. Garcia, is now recognized for 5 minutes.
        Ms. Garcia. Thank you, Mr. Chairman, and thank you to all
    the witnesses today, and I apologize I had to step out for a
    few minutes. I hope that some of the areas that I am going to
    cover are not going to be redundant, but I know my first words
    will not be redundant. Mi casa, su casa, a simple phrase that
    is used in my community to simply be proud of their home and
    make it a welcoming home. It simply says ``my house is your
    house.'' In reality, we are currently facing a severe shortage
    of affordable homes, made worse by wages that have not kept up
    with skyrocketing rents.
        Mr. Sears, you put it another way. You said the American
    Dream is slipping away. Our job, of course, is to make sure
    that we ensure that dream for everyone. So I could not agree
    more. Earlier this year, the Housing Subcommittee heard
    directly from the National Association of Home Builders on the
    impact that this administration's mass deportations and the
    very fear of deportations have on housing construction. Mr.
    Sears, you and I both agree the construction workforce is
    stretched thin. The construction trades agree, especially when
    61 percent of plasterers and 61 percent of drywalling and
    ceiling installers in the workforce are immigrants. A recent
    survey found that 92 percent of construction firms cannot find
    enough workers.
        As a district that has the distinction of having the most
    construction workers in the country, I am very concerned about
    this. So, Mr. Sears, do you think that this fear of deportation
    is an obstacle and a barrier to the supply chain, and should we
    not in housing also consider that?
        Mr. Sears. Here is the reality, Ms. Garcia. The average age
    of an American tradesperson is--they are in their 50s. We have
    not done a good job of developing the young people to get into
    the trade. So we need to do that, and what the--what we are all
    for is making sure that the skilled tradespeople that we need--
    --
        Ms. Garcia. I did not ask about the trades. I am asking you
    specifically about the fear of deportation, work sites that do
    not have--that the workers there because they are afraid of
    coming to work. I know about work training. I have done this
    work for a lot for a long time.
        Mr. Sears. I am not in a position to speak about
    deportation. I am sorry, Ms. Garcia.
        Ms. Garcia. So you have not read that people are being
    raided at work sites?
        Mr. Sears. What I would encourage the administration to do
    is to allow skilled workers to be able to legally work here in
    the country, whatever that takes. If the Congress can do
    something, I would encourage them to do that.
        Ms. Garcia. Well, I am intrigued, because all of you all
    have been talking all morning, and you all have not faced up to
    the worker shortage, and if 91 percent of the workers are
    immigrants, it seems to me that it is an obstacle and an issue
    that we also need to address at some level here in this
    committee. I am on the subcommittee, as you know, on Housing
    and Insurance and you--we really should not dance around it.
    The reality is, if you do not have the builders, then you are
    not going to have the homes.
        Mr. Sears. One hundred percent.
        Ms. Garcia. Well, you do agree with that. Good. Sir, do you
    think that we should be looking at that?
        Mr. Sears. In order to keep skilled workers in the country?
    Absolutely.
        Ms. Garcia. No. In order to make sure that we can build
    homes.
        Mr. Sears. We need to build more homes, yes. How do we do
    that? We need the workforce. So any workforce that we have or
    can encourage to be here, we need to do that.
        Ms. Garcia. All right. Well, let me move on to another one
    that you all seem to be dancing around is this whole tariff
    issue, because we also had--I specifically asked the
    homebuilders this question too. Tax Policy Center found that
    tariffs would add roughly $30 billion, $30 billion to the cost
    of investment in rent additional structures or about $8,000 to
    $10,000 per home because, as we know, the white lumber that is
    used for framing most homes comes from Canada, and Canada, I
    believe, had the 10 percent and then plus another 20, 25
    percent. I think Mr. Sherman went through a lot of this. Ms.
    Smith, since you represented multifamily housing, how are
    tariffs impacting your bottom line?
        Ms. Smith. Well, we are trying to figure that out. I did
    want to make a comment about the immigration because not only
    do we need people to build homes but we also need people to
    take care of homes. So, in the multifamily environment, we have
    teams of maintenance workers who are keeping up these
    communities and making sure that people's homes are well cared
    for, and it is very dependent particularly on legal immigrant
    labor.
        Ms. Garcia. All right. So let us get back to your bottom
    line. Tariffs have impacted the----
        Ms. Smith. We believe that they will have a significant
    impact, but like I said, the subs are having a hard time----
        Ms. Garcia. Do you agree that it is going to be between
    $8,000 and $10,000 per home?
        Ms. Smith. We do not know. We do not know because they
    move--they are moving around so much we do not really know.
        Ms. Garcia. Mr. Chairman, I would ask for more detail in
    that response from the witness.
        Mr. Flood. Without objection.
        Ms. Garcia. Thank you. I yield back.
        Mr. Flood. The gentlewoman yields back.
        I now recognize myself for 5 minutes. We have heard a lot
    from our witnesses today about different policy ideas and
    regulatory barriers that hold back the development of more
    housing. I think at the core of many of these ideas is one
    basic fact: We need to build more housing. I mean, it is
    simple. There are many factors that have led to our current
    environment where housing supplies failed to keep up with
    demand. While some of those factors are beyond the remit of
    Congress, there is a universal--there is a universe of Federal
    barriers to housing supply that we are working on addressing in
    this committee. I want to spend my time today focusing
    specifically on one of those Federal barriers that I feel is
    worth some attention: Build America, Buy America, or BABA.
    These requirements were enacted as part of the Infrastructure
    Investment and Jobs Act signed by President Biden in 2021. The
    statute states that BABA applies to infrastructure, but a
    decision by the previous administration has applied Buy America
    requirements to Federal housing projects in addition to hard
    infrastructure projects. Sadly, that decision has had
    disastrous effects.
        While a hard and fast BABA requirement may make sense when
    building a bridge made of steel and concrete, it makes less
    sense when you think about all the different components that go
    into building a home. Fundamentally, this policy betrays a
    basic reality of Federal housing programs. If we are aiming to
    take finite Federal resources and use them to build housing, we
    need to be able to scale those dollars as efficiently as
    possible to make it work. In other words, in order to build
    more affordable housing, we must use Federal resources to build
    housing affordably.
        I recently asked affordable housing groups to bring my
    office anecdotes demonstrating the effects of BABA on projects,
    and I would like to take a moment to share some of those
    stories. One developer in the southwestern United States had
    this to say about BABA costs, and I quote, For a 60-unit
    affordable housing development, we estimate these soft costs
    could be in upwards of $250,000. For example, each project will
    now need to hire a BABA consultant to manage the waivers. That
    is 50 to $100,000 a project. General contractors will need to
    increase their administrative time on projects to manage
    compliance, another $100,000, and architects and designers will
    have additional administrative time, another $50,000.
        We heard the following about a project in Massachusetts
    related to BABA costs, and I quote: The BABA materials cost
    increase is estimated to be $193,000, a 17.7 percent increase
    or greater than one-fifth of the home HUD award that triggered
    the BABA requirement.
        We heard this about a project in Wisconsin: For a 45-unit
    project with a construction budget of around $8.5 million, the
    BABA impact was estimated at over $400,000. The home award that
    would trigger BABA requirements was around $700,000. So more
    than half of the Federal home partnership program money would
    be used to pay for BABA compliance.
        We heard this about a project in California. Quote: On one
    project in central California, 80 units, BABA requirements
    resulted in an increase of approximately $1.3 million, and we
    heard this about a project in Montana. Quote, A project to
    provide homes to families experiencing homelessness lost the
    opportunity to use $360,000 of a $1.3 million housing trust
    fund grant that expired on September 30, 2025. The contractor
    was unable to find products made in the U.S. to complete the
    utility work in time because U.S. products were on back order.
        I have more of these. I could go on and on and on, but the
    reality is that, however well-intentioned it may be, BABA is
    driving up the cost of projects, wasting Federal dollars that
    could be going to building more housing. In some cases, it is
    even killing projects entirely.
        With the little time I have, Mr. Sears, Ms. Smith, Mr.
    Peter, can you briefly please share with us your opinion on the
    costs associated with the Build American, Buy America
    requirements for affordable housing projects. Mr. Sears.
        Mr. Sears. Thank you, Mr. Flood. While the BABA rules were
    well-intended and I think meant for a larger infrastructure,
    the reality is, is that, when builders get stuck waiting for
    waivers or searching for substitutes or having to pay higher
    prices, the impact goes right down to the end consumer.
        Mr. Flood. Thank you very much.
        Ms. Smith.
        Ms. Smith. Yes. We have been talking to our subs, and we
    think that the increased premium would be somewhere around 4 to
    5 percent.
        Mr. Flood. Thank you.
        Mr. Peter.
        Mr. Peter. Yes, I agree. I mean, all the levels of
    government just need to get out of the way, and you highlighted
    a great example there.
        Mr. Flood. Well, I appreciate everybody being here. I
    appreciate my colleagues on both sides of the aisle. While we
    may have disagreements on policy, this committee is functioning
    the way I had hoped Congress would work before I got here. So,
    with that, I yield back.
        The gentleman from California, Mr. Liccardo, is now
    recognized for 5 minutes.
        Mr. Liccardo. Thank you, Mr. Chair. I want to thank the
    chair, both the subcommittee chair as well as the full
    committee chair, for their collaboration. We do not hear that
    word very often in this Congress, and I think, in this
    committee, there is some collaboration, and I really want to
    thank them for their leadership as well as the Ranking Member
    Waters and Ranking Member Cleaver for their very strong
    leadership.
        In particular, we are taking this housing crisis like it is
    a crisis. Perhaps not all the ideas and solutions I would
    prefer are on the table. I understand that is how it works when
    you are not in the majority, but I appreciate the fact that we
    are actually seeing legislation that will be soon coming to
    markup. I am very eager to see that happen and hopefully very
    soon also to the floor, and I want to thank in particular Chair
    Flood for reaching out even to a rookie like me or very early
    on to say we are interested in all our committee's ideas. So, I
    appreciate that effort.
        Obviously, I come from--I know we all probably come from a
    place that is affected by the housing crisis. I am from Silicon
    Valley. We consider ourselves sort of the ground zero of it,
    and there are many fingers to be pointed in different
    directions. We can all talk about supply and the urgency of
    more supply, and I will agree with everything everybody says
    about more supply.
        I am still of the viewpoint that I have not seen an
    economist who thinks that, if we do everything right on supply,
    we are going to see rents fall by more than 10 or 15 percent
    over half a decade and we are still going to have 13 million
    households that are extremely low income that are never going
    to be able to afford market rate rents. So we have to do
    something about things like vouchers, which are badly
    underserving right now our country. I think only one out of
    every four families that actually qualifies gets a voucher.
    Yes, we do need some demand-side solutions as well,
    unfortunately, because the market is just not going to fix it
    all, and no matter how well we fix the market or allow the
    market to operate.
        I do really want to thank and appreciate the fact that and
    thank leadership for the fact that we have several bills that I
    have been leading or co-leading that are in consideration.
    There are other additional bills I am hoping we can discuss in
    the future, including the Unlock Act, H.R. 5150, that Chair
    Flood and I introduced to better utilize existing Federal
    resources for housing construction, which really resulted from
    local response to a request for information (RFI) that the
    chair and Ranking Member Cleaver issued, and a city in my own
    community, city of Mountain View, responded and identified some
    challenges they have, barriers to CDBG, and we are trying to
    fix those. I appreciate the process they started, and I want to
    make sure we finish it. That is responding to local needs.
        Coming soon, there is going to be a bill under draft now to
    incentivize conversions of office and commercial space to
    housing, and I look forward to working with my committee
    colleagues to make that happen, and I really want to
    appreciate, first, Ms. Smith, your company is my landlord. So I
    am hoping that you will let your colleagues and accounts
    receivable know that the check is in the mail.
        I want to appreciate, Mr. Sears, realtors have been very
    supportive of a couple bills that Chairman Flood and I have
    worked on, H.R. 4810 and 4660, both to streamline reviews for
    affordable projects, federally assisted affordable projects. We
    appreciate that. I wanted to ask if you could go back to your
    colleagues over at the realtors and take a look at H.R.--I am
    sorry--H.R. 4568, the Supply Act. You might have guessed I
    introduced it with Congressman Garbarino, another bipartisan
    bill, and this is to expand FHA mortgage insurance to finance
    second lien loans for accessory dwelling units--comes from my
    experience as a former mayor of a large city in San Jose with a
    million folks, and we have a housing crisis, and we thought one
    solution might be to try to make it easier for homeowners to be
    able to get permits and build ADUs or granny flats, as they are
    often known, and what we discovered when we went to the private
    sector, and lots of prefabricated companies came forward with
    20 different models. We put those models on our website, and we
    allowed homeowners to be able to get their permits in a day by
    going online because we streamlined in advance all the
    permitting and approvals so folks could get them. We saw a huge
    increase in permits that went from 15 a year to about 900 a
    year. We thought we are really on to something, and we were
    patting ourselves on the back, and then we discovered only
    about half of them got built because homeowners could not get
    financing, especially if they were modest income. They did not
    have enough equity.
        We know that Fannie Mae and Freddie Mac get in this game,
    we could see a real opportunity and explosion that could enable
    many homeowners to become home providers, and I know that is
    something that the realtors might care about, and so I very
    much appreciate the realtors' engagement on this.
        Mr. Sears. Yes, sir.
        Mr. Liccardo. Thank you.
        Mr. Flood. The gentleman yields back.
        The gentleman from New York, Mr. Lawler, is now recognized
    for 5 minutes.
        Mr. Lawler. Thank you, Mr. Chairman.
        Housing affordability is a serious crisis in our Nation
    right now and gets to the heart of the affordability concerns
    being felt by most Americans. For many, it is the most
    difficult time to purchase a home in a generation, and at the
    heart of this crisis is supply. We are probably over 8 million
    units underbuilt nationwide at the moment, and this is despite
    massive Federal spending to support housing. Over $1.2 trillion
    spent on programs run by HUD since 2000. It is going to take a
    serious reevaluation and reform of our Federal involvement in
    housing to actually focus on the substantive issue, which is
    supply. This has been a key priority of mine, and I am proud to
    have several bills that are attached to this hearing.
        In focusing on unleashing construction to meet our needs,
    we need to be ensuring that we are taking a comprehensive
    review of housing policy and spending, hearing from the
    Secretary and looking not just at the critical programs that
    support low-income housing, but at middle class housing and
    workforce housing as well, housing for the elderly, housing for
    the Intellectual and Developmental Disabilities (IDD)
    community, housing in all communities across our country which
    have unique needs.
        At this time of years--at a time in which we have seen
    raised rates, sustained affordability concerns in the ongoing
    battle to finish bringing down inflation, middle-income buyers
    face a unique challenge causing them to fall through the
    cracks: not poor enough for assistance, not wealthy enough to
    compete. I would echo Ms. Wagner's sentiment from earlier in
    the hearing that we need to pursue reforms that could expand
    attainable home ownership for middle-income buyers.
        Mr. Peter, expanding beyond your earlier answer on
    minimizing lot sizes, how can we ensure we are incentivizing
    the financing and construction of starter homes?
        Mr. Peter. Thank you for the question, sir. The short
    answer is, if we have smaller lots, the builders are going to
    build. That is what we are finding across the country, and we
    do not necessarily need Federal programs. In California, we
    just heard about it. ADUs came out of nowhere, and the people
    find the financing. The same in Seattle, where, back in the
    1990s, zoning law was changed, and the private sectors filled a
    vacuum by providing financing for the builders.
        Mr. Lawler. How can Federal reporting or data collection
    help identify where regulatory barriers exist without implying
    that Washington should dictate how towns and counties plan
    their neighborhoods? New York is a home rule State. I support
    home rule. I support local control of zoning, but how do we
    take the data and actually utilize it in a constructive way?
        Mr. Peter. Yes. So, from our case studies, we have
    distilled the lesson, what we call the housing abundance
    success sequence. It is very simple. You need to allow by right
    zoning; so take the discretion away. The second is you need to
    allow smaller lot sizes, and the third one is you need to allow
    faster permitting and keep it short and simple regulations.
    Once you make it complex and complicated, only the people--only
    the builders with large staff can navigate it. If you keep it
    short and simple, then small builders that may be lawn care
    professionals today might see the opportunity to get into the
    game and build housing. So we do not need a lot more research
    on this. We already know what works.
        Mr. Lawler. I appreciate that. One other measure that has
    had a disastrous impact in New York, for instance, that
    disincentivizes investment in housing and contributes to
    greater housing scarcity is rent control and the concept of
    freezing the rent, which seemingly is all the rage in New York
    City right now. We have seen, in New York City, for instance,
    50,000 vacant units as a result of New York's rent control laws
    that were passed in 2019.
        Mr. Sears, as we prepare for the Mamdani regime to take
    over New York City, can you speak to the impact rent control
    policies have on housing supply and affordability?
        Mr. Sears. It has a dramatic impact. Rent control units
    less frequently come on the market, which excludes people from
    moving into them. It also scares away potential investors and
    builders who would want to build in the community but not
    knowing if they will be able to get a return on investment,
    they will look elsewhere to build.
        Mr. Lawler. I appreciate that. Mr. Sears, in the 3-seconds
    I have left, did you appreciate the increase in SALT?
        Mr. Sears. Thank you, Mr. Lawler.
        Mr. Lawler. I yield back.
        Mr. Flood. The gentleman yields back.
        The gentleman from Texas, Mr. Gonzalez, is now recognized
    for 5 minutes.
        Mr. Gonzalez. Thank you, Mr. Chairman, and thank you for
    the committee, for our witnesses to be here today on such an
    important topic. I know we are talking about a lot of
    interesting and important policies that impact the housing
    shortage in America, but there seems to be an apprehension
    about talking about a root issue, which is the labor shortage,
    which is impacting the construction of new housing in this
    country. I think we cannot fix a problem if we do not admit we
    have a problem. Thirty percent of construction workers in
    America are immigrant labor. In Texas, it is 40 percent. Just
    recently I met with homebuilders in my district that showed me
    videos of job sites that looked like ghost towns, and we cannot
    fix this problem if we do not address it. I know, Mr. Sears,
    you talked about workforce training, and certainly that is
    something that we need to address in this country. It is a
    long-term solution, right? It is not something we are going to
    fix today. What are we doing today to talk about the labor
    shortage? We cannot build homes without people, hard-working
    people, which are immigrants. They are building America. It is
    not American labor force born and raised in America that is
    building this country. It is labor that is coming from other
    countries that are doing the hardest work in this country and
    building homes, and affordable housing as part of it.
        Ms. Smith, are your members talking to you about this, and
    what are we doing?
        Ms. Smith. Yes, they certainly are, and I am experiencing
    it in my own company because it is not only just the immigrant
    labor that is used to build apartment communities, but, again,
    those that maintain them, our contractors that paint our
    apartments, that clean our buildings, that sort of thing. So it
    really does impact our ability to be able to provide the kind
    of experience that we want for our communities. So it is a very
    big challenge that we face right now.
        Mr. Gonzalez. Yes. Also on affordability, I was told, after
    these ICE raids recently in the country that the square footage
    for framing in my district almost doubled because of the labor
    shortage. So that is putting a real squeeze on housing. Mr.
    Sears, we should not be shy about it. We should be honest and
    forthcoming and just tell people we have a labor shortage, and
    I do not know if they are documented or undocumented, but they
    are doing the work, and they are building our country. We have
    to admit it. We cannot be hiding from the issue because we
    cannot resolve it if we do----
        Ms. Smith. It will also increase costs.
        Mr. Gonzalez [continuing]. and it is okay, right?
        Mr. Sears. Thank you, because we do support immigration
    reform. We support having people come in to increase our
    workforce and including work visas. I mean, we need them.
        Mr. Gonzalez. We need more work visas, and we have been
    fighting for them for a long time but the ICE raids that are
    happening right now are having a direct economic impact on
    construction in this country, and we cannot hide from it. We
    have to admit we have this problem or we cannot solve it,
    right? Thank you.
        Mr. Sears, thank you for joining us today, by the way. In
    the Rio Grande Valley, the district that I represent, the
    average home price is $200,000, which on paper looks far more
    affordable than many places in the country, but in this part of
    the district, people's medium income is $55,000. That means
    most families may never have a savings to buy a home with cash
    and, because these mortgages tend to be smaller, many lenders
    will not offer them since they are less profitable under the
    current market conditions. So, even in areas where housing is
    relatively affordable, too many working families are
    effectively iced out of home ownership from every angle. Mr.
    Sears, what steps can Congress take to help financial
    institutions incentivize them to offer smaller dollar mortgages
    in communities like mine and to keep them from shutting out of
    this market?
        Mr. Sears. The affordability crisis is everywhere across
    the country, and in markets that might seem more affordable,
    there is still sticker shock for your constituents, for
    example. So what we can do is open it up for community banks,
    smaller local banks or regional banks, and to incentivize them
    to make these loans. I will just say I have not heard a
    mortgage officer say, no, they do not want to do a loan because
    it is too small, because the bank will still make money, but it
    is a matter of how do they get access to that credit?
        Ms. Bailey. If I may, sir, I need to share that the
    liquidity programs in the equitable housing finance programs of
    Fannie Mae and Freddie Mac actually included support for small
    dollar mortgages. Unfortunately, the Federal Housing Finance
    Agency Director has taken away those equitable housing finance
    goals. So this is why your oversight is so critical because we
    actually had a mechanism for doing it and then the chairwoman
    has a bill where she is recommending that HUD actually conducts
    a study for how we can create more liquidity within the FHA
    program for small dollar mortgages, because there are
    affordable homes throughout our Nation. To your point, without
    having access to safe and responsible financing, people are not
    able to access----
        Mr. Gonzalez. Thank you, and for the record, I am
    sponsoring a bill called the Save the American Workforce Act. I
    encourage you all to look at it. It will--it addresses----
        Mr. Flood. The gentleman's time has expired.
        Mr. Gonzalez [continuing]. undocumented workers who are
    here that have not had any legal trouble. Thank you.
        Mr. Flood. The gentleman yields back.
        The gentleman from Indiana, Mr. Stutzman, is now recognized
    for 5 minutes.
        Mr. Stutzman. Thank you, Mr. Chairman, and thank you all
    for being here.
        I am happy to say that Indiana is one of the most
    affordable States for home ownership in the country, but the
    dream of owning a home is still far off for a lot of Hoosiers,
    especially today, because, during the Biden Administration, the
    median price of a home in Indiana increased by nearly $100,000.
        Ms. Smith, I would like to start with you. During the Biden
    Administration, inflation increased the cost of construction
    materials, labor, and now insurance. It is clear that a big
    reason for our housing problem is a lack of supply. How have
    increased costs impacted the ability of developers to build new
    housing?
        Ms. Smith. Well, I think we are seeing it in the fact that
    our starts are down 35 percent. Just to give you some context,
    you would need about a 6 percent return on costs to get a
    project financed today with a, say, a pension fund or an
    insurance company. With the costs where they are and the land
    and the regulations, the soft costs, we just cannot get there,
    and so it is really just--it is a return-on-cost issue today.
        Mr. Stutzman. Economics is playing a key role in this. To
    follow up on Mr. Lawler, while we are discussing new
    development, pointing out that the newly elected mayor of New
    York City and other far-left mayors in this country have
    endorsed things like rent control.
        Mr. Peter, I would like to ask you, do you think rent
    control or rent stabilization policies encourage development?
        Mr. Peter. No, they discourage development, and there is
    pretty robust economic literature, and that is one of the
    reasons where economists generally do not agree on anything
    except that, on rent control. They agree that it is uniformly
    bad, and there have been plenty of examples from
    internationally where rent control was implemented that shows
    that it had not the desired effect. In fact, in Argentina, The
    Wall Street Journal just wrote about this recently, once they
    repealed rent control, actually, more units came online because
    people were sitting on them not renting them because they could
    not make the costs work, and now they were returning them to
    the market.
        Mr. Stutzman. Sure. Thank you. In addition to increased
    costs, it seems that government roadblocks are exacerbating
    this issue. That is why, in August, I introduced my
    Streamlining Rural Housing Act alongside Senator Moran, and so
    I am pleased to have bipartisan support along with our
    conference chair Ms. McClain as well as Ms. Pettersen and Mr.
    Scott. My bill would require HUD and USDA to develop a joint
    environmental review and inspection process for rural housing
    projects, cutting red tape and making affordable rural housing
    easier to build. This is not only necessary--a necessary
    solution but an important step toward making it easier to build
    new homes.
        Mr. Sears, I would ask, I am honored to have the realtors
    supporting this bill and others like this, but can you discuss
    a little bit how the overlapping rules and regulations across
    Federal agencies make it more difficult to construct new
    housing?
        Mr. Sears. I am very happy to say we support the bill as
    well. Anytime there are duplicative efforts, it takes longer,
    and it costs more. Streamline it. Have one review, and that
    will make things quicker, more affordable.
        Mr. Stutzman. I know one thing coming from a business
    background, it is not that I am--would be frustrated with a
    regulation. It is often the speed of getting to a conclusion
    and getting that permit so you can move forward, and I think
    that is where this is really a key piece to letting the economy
    move quicker. Still having the same regulatory outcome, but
    just much quicker. I want to follow up to that. How do we
    target reforms like my bill, improve--how do these reforms
    improve the environmental review process while still
    maintaining the necessary environmental protections?
        Mr. Sears. Yes. I mean, as you said, we need to make sure
    that the protections stay in place, but having it streamline
    one inspection process, that is very important. That way, we
    make sure that we have the safety that is needed for the
    eventual occupants of the properties.
        Mr. Stutzman. Yes. Anybody else want to comment on the idea
    of streamlining the regulations?
        That is fine. I know that zoning laws are set at the State
    and local levels and the Federal Government has no business in
    micromanaging State and local officials, but I do think it is
    important to emphasize that housing affordability is not an
    issue that can be solely fixed at the Federal level and that we
    need buy in and smart policy from our State and local partners
    to help spur growth.
        Mr. Peter, I am pleased to see you mentioned zoning in your
    testimony today. What are some places that have overtly
    restrictive zoning laws? Can you mention anything quickly?
        Mr. Peter. I mean, in most of the country, that is the
    problem. If you ask me the other places that have less
    restrictive zoning laws, for example, Houston has done a great
    job. Back in the 1990s and the 2000s, they have rolled back
    minimum lot size requirements, and they had a big increase in
    home construction.
        Mr. Stutzman. Thank you.
        Mr. Flood. The gentleman yields back.
        The gentleman from New York, Mr. Meeks, who is the ranking
    member of the House Foreign Affairs Committee, is now
    recognized for 5 minutes.
        Mr. Meeks. Thank you. I am thrilled that the chairman has
    convened this hearing giving us all an opportunity to discuss
    the housing affordability and supply issues as well as our--as
    well as share our proposals to address this crisis. This
    includes my bipartisan bill that I recently reintroduced with
    Congressman Sessions, known as the Mortgage Insurance Freedom
    Act. The Mortgage Insurance Freedom Act is a straightforward
    and commonsense fix that will make a real difference for
    families across the country. It would end the FHA's lifetime
    mortgage insurance requirement and return to the system that
    existed before the financial crisis.
        Under this bill, FHA loans would operate like those in the
    conventional market. Once a borrower has built enough equity,
    they would no longer be required to pay monthly mortgage
    insurance installments, immediately cutting their monthly
    expenses. So, also right now, the FHA borrowers who are often
    first-time homebuyers and young families, must continue paying
    mortgage insurance for the entire life of their loan, even
    after they have gained substantial equity. This policy has
    created or was created during the financial crises, when the
    mutual mortgage insurance fund was under significant strain.
    That is no longer the case.
        According to last year's FHA annual report to Congress, the
    Mutual Mortgage Insurance (MMI) Fund is now more than five
    times above its required capital ratio. Conventional borrowers
    are not subject to a lifetime insurance requirement. Once they
    build sufficient equity, their mortgage insurance ends. My bill
    ensures that the FHA borrowers receive the same fair and
    reasonable treatment and are not burdened by unnecessary
    monthly costs long after they have demonstrated financial
    strength. In today's economy, that relief matters. Ending
    lifetime mortgage insurance means more money for groceries,
    childcare, college savings, and everyday expenses. It helps
    families build equity faster and strengthens their long-term
    financial stability.
        This bill is endorsed by the Mortgage Bankers Association,
    the National Urban League, and the Broker Action Coalition,
    among others. These organizations understand the housing market
    and recognize that this reform will help families keep more of
    their hard-earned dollars. This legislation delivers greater
    fairness, boosts affordability, and accelerates wealth building
    for American families. By allowing mortgage insurance to end
    once borrowers build equity, we give FHA families the same
    pathway to financial stability that conventional homeowners
    already enjoy. So I look forward to talking to you and
    welcoming my colleagues to move this bill forward as we go
    forward.
        I want to switch gears. I am just looking at my time at
    another important issue that I would like to discuss, because,
    back in March of this year, FHA Director Bill Pulte released a
    directive eliminating the GSE's participation in special
    purpose credit programs. These programs provide the down
    payment help, closing costs assistance, and other support that
    many first-time buyers and families in underserved communities
    rely on to get their foot in the door of home ownership. I
    immediately led a letter along with my colleagues to the
    Director urging him to reverse that decision.
        For far too long, structural disparities in our housing and
    lending markets have kept too many low-income families like my
    parents and Rio residents and other historically marginalized
    communities, on the outside looking in. Every single day, it
    seems to me that the Trump Administration finds a way, a new
    way, to make life harder and more affordable for regular and
    average everyday Americans, from cutting off these credit
    programs to pulling back on the CDFI fund to attempting to shut
    down the CFPB. Their actions are making it harder for families
    to get ahead and pushing people further behind.
        Ms. Bailey, what are you hearing from lenders, housing
    counselors, and community groups on the matter of losing
    special purpose credit programs, and how does it impact
    families to get ahead and have the opportunity to home
    ownership?
        Ms. Bailey. Particularly for people who live in the South,
    where people have historically lower credit profiles than
    people in the rest of the Nation, there is deep concern that
    there will not be credit liquidity there. The GSEs have not
    always done a great job of ensuring for liquidity in every
    community at all times, including in the South. So special
    purpose credit programs in that region have really lifted
    credit opportunities for everyone and for people of color, who
    have a history of underservice, and it is important to note
    that these are the people that the health of the housing system
    depends on. So, if they are not able to get access to fairly
    priced loans, the system will fail.
        Mr. Meeks. Thank you. I yield back.
        Mr. Flood. The gentleman yields back.
        The gentlewoman from Texas, Ms. De La Cruz, is now
    recognized for 5 minutes.
        Ms. De La Cruz. Thank you, Chairman. I appreciate you and
    you holding this meeting today and thank you to all of the
    witnesses for being here.
        Where I live, which is in deep South Texas, affordability,
    and specifically housing affordability, is at the top of their
    mind especially for young families and young adults that are
    getting to that age of beginning their life in a new family.
    Affordability is something that we must tackle and
    unfortunately, consumers looking to buy or rent are being hurt
    by all angles, and the primary driver to housing costs have
    been the decades of underdevelopment that has left us short 5
    million housing units.
        That being said, I am sure all of our witnesses would agree
    that the FHA multifamily insurance programs play a critical
    role in incentivizing housing construction nationwide. I have
    introduced the H.R. 6132, the Housing Affordability Act, to
    update FHA's multifamily insurance program for the first time
    in over 20 years. That is quite a bit of time. A lot has
    changed since then. And this is to ensure that they more
    accurately capture the true costs of construction.
        So, Mr. Sears and Ms. Smith, I am proud to say that the
    organizations that you represent are supporting this
    legislation, and I would like you to explain how changes like
    these can leverage and incentivize private investment to expand
    the housing supplies. Mr. Sears, I will start with you first.
        Mr. Sears. Ms. De La Cruz, thank you very much, and, yes,
    the National Association of Realtors does support this effort.
    We see--have talked about too many rules and laws that have
    gone unchanged, and so 22 years is a long time. What we see is
    these outdated limits block the potential of financing for
    these projects, and when financing is blocked, that is going to
    prohibit the construction that is so desperately needed. So
    updating this, unlocking the private investment, would be key
    to helping to solve the housing crisis.
        Ms. De La Cruz. Thank you so much.
        Ms. Smith, would you agree with this?
        Ms. Smith. Absolutely. Like I mentioned earlier, the 221D4
    program is really an excellent one for multifamily because
    costs have gone up so much over the 20 years, as you
    represented, we need to extend the loan limits. So, today,
    there are so many projects that are just--that cost so much
    more to build than would fit into the program today. So we
    think that, in addition to really expediting the process and
    really shortening the waiting period, will make a big
    difference in the use of this program, but we are very
    supportive of it.
        Ms. De La Cruz. Thank you.
        Mr. Peter, to change topics, many people might be surprised
    to learn that most government housing programs focus primarily
    on stimulating demand while ignoring the supply constraints
    that we have. What role can government programs play in better
    incentivizing supply of new housing construction rather than
    just focusing on demand?
        Mr. Peter. Yes. So government is very good at stimulating
    demand. It is very poor at bringing forth new supply and demand
    is relatively easy. All you have to do is lower underwriting
    standards, add down payment assistance, or lower interest
    rates, for example but if you do that against a limited supply,
    economics 101 tells you that you are going to end up driving
    prices higher, and that is bad for first-time homebuyers.
        The supply side, there are certain levers that the Federal
    Government has. For example, you could free up Federal land,
    especially out in the western third that could, over 10 years,
    create 1 million single-family starter homes, and that is
    certainly a very potent option, smaller lot sizes as talked
    about before. There is a whole slew of things that the Federal
    Government can do.
        Ms. De La Cruz. Thank you so much.
        Very quickly, in my short period of time, Mr. Sears, I will
    come back to you, another important cost driver for consumers
    and developers is the ability to access affordable lending.
    From your perspective, what are the key drivers in today's
    market that are increasing the consumers cost to borrow?
        Mr. Sears. Right off the top of my head, interest rates.
    That is one of the most significant. Also, insurance costs.
    That is part of the cost to own, and part of the borrowing cost
    has been significant as well.
        Ms. De La Cruz. Thank you.
        With that, Mr. Chairman, I ask, by unanimous consent, that
    this support letter for H.R. 6132, cosigned by over a dozen
    housing groups, be entered into the record. Thank you.
        Mr. Flood. Without objection.

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

        Ms. De La Cruz. Thank you. I yield back.
        Mr. Flood. The Gentlewoman yields back.
        The gentlewoman from Oregon, Ms. Bynum, is now recognized
    for 5 minutes.
        Ms. Bynum. Thank you, Mr. Chair.
        Thank you to all the witnesses for your testimony, and
    thank you to, Chairman Hill and Ranking Member Waters, for
    convening this important hearing, and, to Mr. Flood, for
    presiding.
        In my home State of Oregon and across the country, we are
    struggling with a lack of housing supply, as has been
    mentioned, which of course has created a housing crisis. In a
    recent study of housing affordability and home building, led by
    the National Association of Realtors, Oregon earned an F
    ranking, ranking 45th out of the 50 States. I am really
    competitive, and I do not like that. It is estimated that
    Oregon will likely need to build over 140,000 single-family
    homes by 2030 in order to meet demand. Moreover, delays caused
    by complex and restrictive permitting processes and other
    regulatory burdens have resulted in a nationwide housing
    shortage of nearly 5 million homes.
        In communities across the country, local governments are
    investing in a process called pattern zoning, in which
    architects and local governments develop pattern books full of
    preapproved standardized plans and designs. So, recently, I
    introduced H.R. 5907, the Accelerating Home Building Act, with
    my colleague Congressman Steil. H.R. 5907 would establish a
    grant program within HUD to fund the creation of these pattern
    books, speeding up the permitting and home-building process and
    lowering the costs for homebuyers.
        It is clear that we need to be using every tool in our
    disposal to tackle the housing affordability crisis, and this
    bill is an example of how the Federal Government can cut red
    tape and provide local communities with the resources they need
    to get more housing built faster.
        So my question is for Mr. Sears. The housing market is
    facing historically low inventory, especially for starter
    homes. How would a significant increase in the predictable
    supply of missing middle housing facilitated by H.R. 5907, the
    Accelerating Home Building Act, impact our market dynamics and
    create new opportunities for first time homebuyers?
        Mr. Sears. Ms. Bynum, thank you, I could not agree with
    your statement more about what we need to do. As a
    practitioner, I have seen how long it takes for housing
    projects to get approved, to get the permits, and we need to
    take advantage of any lever that can be pulled to unleash some
    of the housing inventory that is needed, especially that
    missing middle that you are talking about. We do support your
    bill, yes.
        Ms. Bynum. Okay. Well, I just have to be honest and humble
    here for a moment. I have a 24-year-old daughter and a 21-year-
    old son, and I am trying to get them off the payroll. Like, we
    are really working. You know, they are still in school, but
    when you think about it, what do our 21 and 24-year-olds have
    to look forward to? It used to be 38 was the average first time
    homebuyer age, and maybe it has pushed up to 41ish, something
    like that.
        Mr. Sears. Yes. The current median age is 40, and we have
    seen it increase. It had been between 27 and 30 for a very long
    time. So we are--an entire generation is missing this
    opportunity to work toward intergenerational wealth and home
    ownership.
        Ms. Bynum. So parents and grandparents out there are
    looking to us to make sure that we can get these kids off
    payroll and get them launched, right?
        I think the other question that I have is realtors are
    seeing the direct relationship between housing supply and
    median crisis. How important is the bill's goal of accelerating
    the time to market for new units? How important is that goal in
    stabilizing and lowering the housing costs for Americans?
        Mr. Sears. There is a time value to money. So the faster
    that units can get on the market, the less they will cost to
    build. The less they cost to build, the more affordable they
    will be. I hate to say it, but very simple economics.
        Ms. Bynum. Thank you. All right. So thank you to all of the
    witnesses for your expertise and time, and I will leave the
    last 40 seconds if you want to share your story about getting
    them off payroll or any other interactions that you have had
    with young people or their parents in the community. Mr. Peter?
        Mr. Peter. Oh, I am just a proud parent of a 1-year-old.
        Ms. Bynum. Well, we better solve this problem now, right?
        Mr. Peter. I hope, by 20 years, we are going to have this
    problem under control, but it is probably going to take years
    until we get there.
        Ms. Bailey. I would say HUD's Affirmatively Furthering Fair
    Housing rule could really go a long way in making sure we are
    doing everything to create inclusionary zoning, so having
    oversight and community hearings, because jurisdictions are
    actually seeking the guidance. They want to give them the
    guidance.
        Ms. Bynum. Thank you. I yield back.
        Mr. Flood. The gentlewoman yields back.
        The gentleman from Iowa, Mr. Nunn, is now recognized for 5
    minutes.
        Mr. Nunn. I want to begin by thanking both the panel and
    the chairman for holding what I think is a very important
    hearing on housing. It is one of the most vibrant things that
    we talk about in a rural community like Iowa, and it is
    something that impacts this entire Nation coast to coast.
        The challenge here is that everyone who has been doing this
    right, saving up, trying to buy that first home, or maybe
    transitioning from their last home to their final home, is
    having a harder and harder time doing this with interest rates
    up, with housing stock down. Currently, in the State of Iowa,
    nearly 40 percent of our renters are spending a third or more
    of their take-home salary just to be able to afford the rent
    while still trying to save on the side.
        Look, folks in Iowa and across the Midwest, they are not
    asking for a handout. They are asking for a fair opportunity to
    become homebuyers and buy into the American Dream. Today I want
    to discuss five proposals that we have come up with to help
    particularly in rural communities like Iowa.
        One, expanding access to inventory through accessory
    dwellings, this is the so-called mother-in-lawsuite, but giving
    people the opportunity to be able to stay on their own property
    and build a facility.
        Two, increasing loan amounts for critical home repair
    programs that keep inventory vibrant.
        Three, updating USDA's outdated technology process, which
    today still requires a mountain of paperwork just to be able to
    get in that first home.
        Four, auditing the rural housing program and five, ensuring
    better reporting.
        I think, in tandem, we are able to bring these together in
    a really meaningful way, because we have to face the reality
    that, candidly, there are just not enough homes on the market
    right now for a first-time homebuyer to be able to get into it.
        I fully support the efforts to increase the housing supply,
    but we must also effectively ensure that U.S. Department of
    Agriculture's rural housing tools are modern and effective. In
    Iowa, these commonsense reforms can help, and I think it
    becomes a model for the entire Nation.
        Now, Ms. Sears, I want to begin by saying we have several
    multigeneration farm families that need flexible housing
    options. One of the things we have highlighted here is what is
    called the ADU, or mother-in-lawsuite, and you can see it can
    be something that is an external building, or it can be for, as
    was noted earlier, a kid who just wants to live over the garage
    with a little bit of modification or providing another housing
    unit in an area that has already been platted for it.
        ADUs are cheaper. They are quicker to build, and they are
    solutions that can immediately provide a solution for our
    housing stock necessity. My legislation clarifies the accessory
    dwelling units qualify for USDA loan guarantees. I would like
    to ask, do you think this would help address Iowa's housing
    shortage and increase the housing supply?
        Mr. Sears. Yes, Mr. Nunn. Very good seeing you again, but I
    need to let you know it would increase the supply across the
    country, not just Iowa. My home State of Massachusetts last
    year passed the Affordable Cares Act, which made ADUs by right,
    so people could put that in, but the financing is an issue, as
    some of your colleagues have talked about. So we strongly
    support your legislation to expand the opportunity for your
    constituents but also everyone across America to take advantage
    of these loan products when it comes to ADUs.
        Mr. Nunn. Thank you, Mr. Sears, and thanks for what you are
    doing on this.
        I would like to just ask the panel, by a show of hands, has
    anyone worked with rural housing before or had the opportunity?
    I would not discredit you for this because the challenge is we
    do not talk about it enough. I think we talk about great things
    that HUD does, but I also like to talk about the important role
    that USDA plays in this. Rural housing really has not been
    discussed, and whether you are living in Ringgold County, Adams
    County in Iowa or across America, there is--every community
    that has an opportunity to succeed here. The current system,
    candidly, is broken and needs a fix.
        Ms. Smith, one of the things I would like to say thank you
    very much for our effort on our rural housing bill, the support
    that you have given to this, and the bipartisan effort that we
    have worked with Mr. Cleaver on. This is not only endorsed by
    the Iowa Habitat for Humanity; it also is something that a lot
    of Iowans can take advantage of and Americans. Critical repairs
    would be increased by 100 percent. So this means repairs that
    would go to a septic system, a roof, electrical, all in order
    to improve the housing stock, means that we get to identify a
    home that might be on the brink of dilapidation now is on the
    market for development. We are not destroying rural America by
    asking a new builder to come in. We can keep what is already
    there.
        To put all this in perspective, fixing a septic tank today
    in Iowa costs about $20,000 on a home that is worth $149,000.
    By being able to increase something we have not seen happen for
    over 20 years can start with this legislation. Do you think
    that these type of critical repairs are something that are in
    need of update, and would it improve the housing stock for
    America across the board? Ms. Smith.
        Ms. Smith. I would certainly hope so, yes.
        Mr. Nunn. Here is what I want to do going forward. Right
    now, I also want to address the issue of bureaucracy. Right
    now, in Iowa, it takes about 12 months to get through the USDA
    process. We can update the system to make it digital, cleaner,
    more efficient, and get families into homes faster. Together,
    Mr. Chair, this is important legislation that America needs. I
    look forward to working with this committee in a bipartisan way
    to make it happen. Thank you. I yield my time.
        Mr. Flood. The gentleman yields back.
        At this time, I move for unanimous consent to enter the
    following statements into the record: a statement from the
    International Code Council, dated December 2, 2025; statement
    from the American Property Casualty Insurance Association,
    dated December 3, 2025; and a coalition statement from the
    National Taxpayers Union and other Conservative advocacy
    organizations, dated December 2, 2025.

        [The information referred to can be found in the appendix
    on pages XX]

        Mr. Flood. With that, the committee will stand at recess
    for 5 minutes, and we will reconvene at 2:14 p.m.
        [Recess.]
        Mr. Flood. The committee will come to order.
        I appreciate our witnesses staying with us and doing such a
    good job today.
        The gentleman from Montana, Mr. Downing, is now recognized
    for 5 minutes.
        Mr. Downing. Well, thank you, Mr. Chair.
        Thank you to the witnesses.
        Montana has certainly not been immune from skyrocketing
    housing costs that are really pricing out more and more of my
    constituents. In fact, Montana, since 2018, has seen a 90-
    percent increase in the median home value, which is--you know,
    ``Congratulations, here is your new property tax bill.'' It has
    been a struggle.
        One of the things that I have heard from constituents of
    mine that are developing affordable housing is that a huge
    driver of costs is HUD's application of the Build America, Buy
    American, or BABA Act, on federally backed housing projects
    from the 2021 Infrastructure Investment and Jobs Act.
        I appreciate the comments that Chairman Flood made on this
    issue, but I am going to go a little deeper here.
        I am going to start with Ms. Smith.
        Can you please elaborate how BABA, while well-intentioned,
    makes housing less affordable?
        Ms. Smith. I mentioned earlier that we have not actually
    had to build a project using BABA, but we have been talking to
    a lot of our contractors about what they anticipate the
    additional costs will be, and they are saying anything from,
    like, 4 to 6 percent.
        So that is just going to add more cost to building
    affordable housing, which is already very expensive. I think it
    is important to note that it is more expensive to build an
    affordable housing unit today than it is to build a luxury
    market-rate unit today.
        Mr. Downing. Appreciate that.
        Do you believe that the BABA provision was intended to
    apply to housing projects or only to hard infrastructure?
        Ms. Smith. I am sorry, but I really cannot--I really do not
    know.
        Mr. Downing. Okay. Appreciate that.
        Should Congress rescind this provision for federally backed
    housing projects?
        Ms. Smith. I think that Congress should rescind anything
    that is adding cost to building more affordable housing.
        Mr. Downing. Thank you.
        Ms. Smith. Unnecessary cost.
        Mr. Downing. Thank you.
        Mr. Sears, part of solving the housing affordability crisis
    is ensuring that homeowners are able to stay in their current
    homes rather than move and compete with first-time homebuyers.
        According to the Montana Department of Commerce, over
    230,000 homes were built before 1980, and only 40 percent of
    existing homes are in good or better condition in Montana.
        Can you please discuss how repairing and renovating the
    existing stock of homes is also an important part of the
    equation?
        Mr. Sears. Thank you very much.
        It is very essential for us to maintain our existing
    housing stock. The last thing that we would like to see happen,
    as I said to Ms. Williams when she brought this legislation up,
    was that--we need to keep people in their homes. So, if there
    are any grants, low-interest loans that can be given so that
    necessary repairs are made, strengthen the property against
    natural disaster, we are in full support of that.
        Mr. Downing. Do you see any disparities between urban,
    suburban, and rural areas in terms of aging housing or homes in
    disrepair?
        Mr. Sears. No, sir. It is equal opportunity when it comes
    to older homes and especially as the population ages, they
    might not be in a position to be able to make the necessary
    repairs.
        Mr. Downing. What can Congress do to help with this issue?
        Mr. Sears. Well, this legislation, the Whole-Home Repair
    Act, is certainly a step in the right direction.
        I know in the past there have been block grants that have
    been made for local municipalities to be able to assist lower-
    income folks with maintaining their property. So any of those
    types of grants or access to low-interest loans would be great.
        Mr. Downing. Well, thank you. Thank you for your comments.
        I want to end my remarks by talking about communities that
    are often left out of these discussions--namely, Tribes.
        Montana is home to seven federally recognized Indian
    reservations, and Indian Country faces many unique challenges
    that make housing affordability some of the worst in the
    Nation. In fact, Native Americans in Montana experience 12-
    percent lower home ownership compared to the rest of the State.
        The primary law governing Federal support for Indian
    housing is the Native American Housing Assistance and Self-
    Determination Act of 1996, and this authorizes the Indian
    Housing Block Grant, among other critical programs.
    Authorization for these programs expired over a decade ago, and
    the law has not been updated since 2008.
        This is simply unacceptable. I look forward to working with
    my colleagues to finally get these programs reauthorized and
    modernized.
        I just want to thank you all for being here today and
    participating in this. This is an incredibly important topic,
    not just to us on this committee but to our constituents, to
    this country. So I appreciate you being here.
        On that, Mr. Chair, I yield back.
        Mr. Flood. The gentleman yields back.
        The gentleman from North Carolina, Mr. Moore, is now
    recognized--when he walks in the door.
        Mr. Moore is the former longtime speaker of the North
    Carolina House of Representatives. He joins us today as a
    member of the House Financial Services Committee.
        Mr. Moore, you are recognized.
        Mr. Moore. Before my time starts, Mr. Chairman, I will say
    that down here at the bottom it is pretty tight quarters.
        Mr. Flood. Turn your microphone on, Mr. Moore.
        Mr. Moore. Well, thank you, Mr. Chairman.
        I just want to, first of all, thank our witnesses for being
    here.
        I represent the 14th District of North Carolina. Our State
    is actually one of the fastest-growing States in the country,
    and the region that I represent is one of the fastest-growing
    regions in the State. Families are moving in, businesses are
    expanding, really because at the State level we have lowered
    taxes, we have cut red tape.
        What we have also seen is, a lot of the pain with growth
    and prosperity are the limits in terms of housing--I mean, a
    lot of problems that have been talked about today and the
    housing supply simply has not kept up. As a result, housing
    costs have just climbed far beyond anything that a lot of
    working families can reasonably afford.
        It is not regional. You all have testified already to how
    this is a national problem, probably because, I mean, the last
    4 years--I will try not to be too political here, but the last
    4 years were probably just out of control in terms of what
    happened with inflation but the problems that we have are
    longer and systemic and so forth. So I think my understanding
    is, right now, nationwide, there is a shortage of as many as,
    what, 5.5 million homes.
        I will start with Mr. Peter.
        You have written extensively about the constraints created
    by zoning restrictions and land-use policies. In a nutshell,
    what tools do you think could encourage localities to modernize
    the outdated zoning frameworks?
        Mr. Peter. Yes, that is an excellent question.
        So, at the local level, it boils down to just getting out
    of the way. There are certain jurisdictions that are always
    going to be against building more housing, but in those
    instances the State preemption can play a role in overcoming
    some of these concerns.
        We are seeing lots of movement from Washington, Oregon,
    California, Montana, Texas that have all moved in that
    direction.
        Mr. Moore. I will tell you, before I came here, I was a
    State legislator for 22 years. I was also an attorney and
    handled a lot of land-use and a lot of real estate work for
    folks. At one time, you used to have either commercial or
    residential, R4, R5 breakdowns.
        Now, it seems like I have noticed more and more folks want
    to do all these UDOs, unified development ordinance. They want
    to do a, kind of special variance for this development or that
    development. I cannot help but imagine that is passing along
    significant costs that end up being borne on the taxpayer.
    Anybody wants to--or, excuse me, on the homebuyer.
        Anybody want to comment on that?
        Mr. Peter. I can make another point about this. From a city
    perspective, if you allow a little bit greater density--we call
    it ``light-touch density''--you are going to be able to broaden
    your tax base.
        In the jurisdictions that we studied, in some of them, they
    were able--because they have a broader tax base, they have more
    taxable value, they were able to lower the tax rate for the
    citizens. So that has resulted in positive externalities.
        Mr. Moore. In addition to zoning, I think my understanding
    is a lot of, like, permitting delays, zoning issues,
    environmental reviews, and outdated Federal requirements add
    cost and also years to projects and, of course, adding time
    adds cost.
        Ms. Smith, I will ask you this question. Multifamily
    developers face multiple layers of environmental review at the
    Federal, the State, and at the local levels. How do these
    overlapping requirements impact the timing and the financial
    feasibility of large, multifamily projects?
        Ms. Smith. They obviously add tremendous cost. We had
    talked about that 40.6 percent of the cost of a multifamily
    dwelling unit is tied up in soft costs or regulations.
        It also moves--it sort of moves development around too. I
    was going to mention that your State of North Carolina is
    getting a lot of attention from developers from this region
    because it is easier, it is faster, it is just a better
    development process. As a result, North Carolina is getting a
    lot more housing--high-quality rental housing.
        Mr. Moore. Yes.
        Mr. Sears, a question for you. I hear Realtors often say
    that it is nearly impossible today to deliver a home for under
    $250,000, which blows my mind. What are the most common
    regulatory or permitting obstacles that prevent builders from
    meeting that price point?
        Mr. Sears. Regulatory. It is the patchwork of zoning across
    municipalities and localities. Not knowing that they are going
    to have a streamlined process. Sometimes inspectors get in the
    way. There is a myriad of reasons why it can be more difficult
    to build and there is a time value to money. So anything that
    can be cutoff from the length of time before the shovel gets in
    the ground and then the final occupant moves in will make
    things more affordable.
        Mr. Moore. Thank you.
        I had other questions. My time is nearly over. I do think
    it is important, and I appreciate these witnesses here today
    and my colleagues, frankly, on both sides of the aisle who
    acknowledge that affordability is a huge issue and that we need
    to find more ways to make home ownership the reality for more
    and more Americans. I appreciate the work.
        Mr. Chairman, I appreciate your work, because I know this
    is something you and your subcommittee are working on very
    hard. So thank you on that. Count me as an ally in this whole
    process.
        With that, I yield back.
        Mr. Flood. The gentleman yields back.
        The gentleman from New York, Mr. Garbarino, who is also the
    chairman of the full House Homeland Security Committee, is now
    recognized for 5 minutes.
        Mr. Garbarino. Thank you, Mr. Chairman and thank you to all
    the witnesses for being here today.
        Access to housing is an increasing issue across the United
    States, especially in areas like where I am from on Long
    Island.
        I was excited to see the SUPPLY Act, the bill I co-lead
    with my colleague Rep. Liccardo, attached to this hearing. This
    bill expands Federal Housing Administration mortgage insurance
    to finance certain second-lien loans for accessory dwelling
    units, also known as backyard cottages, granny flats, or in-
    lawsuites. This will provide government-backed, flexible
    financing options to help homeowners of modest means overcome
    what is often the last hurdle to breaking ground on an ADU.
        Mr. Peter, how would ensuring second liens for ADU
    construction help homeowners who want to add housing units but
    face financing barriers?
        Mr. Peter. Yes, for some homeowners, financing is certainly
    a hurdle but in other examples, in California, which has passed
    ADU laws, they were able to overcome--they were able to find
    financing without Federal guarantees or Federal lending
    programs.
        So my concern with ADU financing through a Federal program
    is that it may encourage lower-income homeowners to take on
    more than they can--to bite off more than they can chew. It is
    one thing to be a homeowner, but to be a homeowner and a
    landlord can be somewhat dangerous to make the payments. Your
    renter may not pay, but you are stuck with the cost. So there
    are certain cost concerns to be considered.
        Mr. Garbarino. Absolutely. I mean, I actually have an
    accessory dwelling unit, accessory apartment at my house and
    there were initial costs. You know, you have to separate, get
    the--there are permit fees, there are construction fees to get
    that done, to actually get the house built but I will tell you,
    having that extra--having that tenant there, as someone who is
    never home, is a nice--helps me have peace of mind. It also has
    income when they pay, and he always does pay but, again, it is
    something that definitely helps, especially with taxes keep
    going up.
        So I do understand there are concerns about initial costs,
    but I think the financing, definitely, here--and government-
    backed financing--will help them with that initial cost. Yes,
    there are always bad actors. Tenants sometimes do not pay. I
    think in most of the cases, to address someone who cannot
    afford a full mortgage, having this access for someone who
    needs to live in an apartment is great for them but also for
    someone who is struggling to pay their mortgage, having an
    accessory apartment, that extra income could also be helpful.
        So I think that will address--that could address the
    challenging shortage in a way that does not require a lot of
    investment but from your perspective, does this legislation
    complement existing HUD and FHA programs?
        Yes, Mr. Peter?
        Mr. Peter. Yes, there is another option that HUD and FHA,
    in particular, could do that we have not talked about. So the
    mortgage insurance premium is another way where HUD could crowd
    in more starter homes.
        By rejiggering the mortgage insurance premium toward homes
    that are under, let us say, 1,800 square feet and lowering the
    premiums on these new constructions, HUD and FHA could play a
    role in getting more starter homes built.
        Mr. Garbarino. Thank you.
        I was also excited to see my bill, the National Flood
    Insurance Program (NFIP) Extension Act, included in this
    hearing. Flooding has long been the most significant cause of
    property damage from natural disasters in the United States,
    and homeowners rely on the National Flood Insurance Program to
    protect their homes.
        In districts like mine, many homeowners are required to
    purchase flood insurance to obtain a mortgage. However, since
    2017, Congress has only extended the NFIP on a short-term
    basis, leading to lapses in the program, including a recent 43-
    day lapse during the government shutdown this year.
        Mr. Sears, what did the lapse mean for people trying to
    purchase a home during that time?
        Mr. Sears. Thank you, Mr. Garbarino.
        The lapse created uncertainty in the market, especially
    when the banks requiring the mortgagee to obtain flood
    insurance. Some of them were slow to realize that restriction
    had been lifted temporarily but even if the consumer closed,
    that would expose them to the potential liability without
    insurance coverage.
        So we support your effort to extend the NFIP until
    September 30, because since 2017, as you said, there have been
    34 short-term extensions, and that just causes too much
    uncertainty.
        Mr. Garbarino. Uncertainty and also extra cost to the
    homeowner if there is a lapse, with delay of closing and other
    things like that, which a lot of these homeowners--that extra
    cost they just cannot afford.
        I thank you for your answer.
        I thank you again, all, for being here.
        I yield back.
        Mr. Flood. The gentleman yields back.
        I would like to thank all of our 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 then be forwarded to the witnesses for
    your response. Witnesses, please respond no later than January
    8, 2026.

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

        Mr. Flood. This hearing is adjourned.

        [Whereupon, at 2:30 p.m., the committee was adjourned.]

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