Transcripts For CSPAN Housing 20240705

Hours and 20 minutes. [inaudible conversations] the subcommittee on housing and insurance will come to order. Without objection the chairs other is to declare a resource recess from the anytime. Without objectio on members have five legislative days to submit extraneous material to the chr for inclusion in the record. I now recognize myselfor five mites to give an opening statement. Today t subcommitteeill hold a hearing to discuss the lack of affordab housing in many communities acrosshe country. In particular we will examine governmental barris as well as rketbed solutions to bring down the cost ofousing. Americans spend more in housing than a other household expense representing 33 of that the familys budget. Historically. Families in many areas of the country would love to get back to that level. The rising home prices and rents as far exceeded, as far exceeded the rate of wage growth, so in cincinnati of iowa city once consider affordable to medium home prices 2,270,000 which is approaching four times the annual median Household Income. Such on affordability is spreading far beyond parts of the country in the high cost of living like new York San Francisco washington d. C. Nationwide median home prices are six tis the median Household Income. Historically the advice was three times. So this is maybe one of the most emblematic markers on the lack of Affordable Housing. Thats why the committee has held multie affordability hearings. Last spring on prident bidens misguided policy of increasing mortgage costs on creditworthy borrowers. That idea was an insult to affordability and the house responded by passing her middleclass borrower protection act to eliminate harmful cause and the senate has so far failed to act. The market is facing similar challenges renters are now cost burden than theyve been in over two decades. While rents have gone up in some areas by doubledigit growth in Median Income for renting households went down between 2019 and 2021. For many housing is becoming unattainable across the country. One in three young alts age 18 to 34 still live with parents. This impacts their ability to start a family, build wealth and contribute more intentionally to the national economy. Seniors with fixed incomes and the burden of increasing Health Care Costs are even more cost burden than ever when it comes to housing. In rural areas where land is abundant price pressure still exists. As we confront these affordability challenges which seems to get left out of the conversation and all that expensive efforts of government have not solved this problem. Back to they have added some solutions for neither marketbased solutions where we have remove government barriers construction of housing and encourage privatesector investment in housing. Many of my colleagues on the other side of the aisle in particular are likel to see things differently and suggest suggests we have more government war rules and more spending. Maybe thats their msure of success. I hope we focus on affordability. These solutions have been pushed for years and its interesting they are the same affordability crisis and it continues to get worse but not only have those policies fail but it seems the bite of frustration wants to avoid congressional accountability for the failure of their policies and oversight. Case in point from ostia the committee has requested a housing and urban Development Secretary marsha fudge discusses the Housing Affordability plan. Since may the committee offered it every month the secretary make an appearance here only to have her repeatedly declined to testify for outright refused to respond to our request. If the silence is a poor response to the crisis. Their gornment operates a special and has to do with their ability to birth a ford housing. Ensuring accountabilitys one of purposes of this committee and i hope the secretary will finally agree to appear before committee next year. In the meantime even without the demonstrations input this committee will continue to explore how Government Policies are contributing to the high cost of housing in what privatesector efforts can do to address the critical issue for those most in need. I yield the balance of my time and i now recognize the Ranking Member for this hearing m presley for four minutes. It shouldnt be news to anyone that we are housing crisis. Millions of americans in urban suburban and burr neighborhoods are finding shelter to be in increasingly unaffordable. Homebuyers are facing record high home prices and millions of renter households are cost rdened. Amounts of income on housing. Several factors to Affordable Housing democrats and republicans agree on the needo address barriers to increasing Home Construction but that is not enough. The joint center for housing studies at Harvard University testified before Congress Even if measured such as zoning reform and land use policies they will not be sufficient to bring down the cost of housing within reach of the lowest income americans. Central to the question of how to address the Affordable Housing crisis is answering the questions, of portable to whom . And to close the Affordable Housing gap to lobree come households there needs to be development in rental income over time. To put this clearly expanded public subsidies will be needed to increase and preserve access to Affordable Housing for millions of americans. I believe housing is infrastructure. We must adequately support and fund federal progrs that have been successful in expanding Affordable Housing access but its vital to continue to strengthen and improve others but but this includes federally subsidized housing. I also hear from my constituents across massachusetts a quarter of all residents have had their income spend their income or more and housing. Boston is the second most expensive city to rent in. The median rent for one bedroom apartment is over 3000. 3000. Between 2011 and 20211 data shows the cost of a Single Family homes shot up 226 . I hope today we can have an honest conversation about the affordab housing crisis and the extent to which publicprivate and publicprivate solutions are adequate to address these challenges. I look forward to hearing from our witnesses today. I yield the balance of my time. Thank you. Today we welcome the testimony of setappleton the president of the u. S. Mortgage insurers. Dr. And multihamilton is a senior resrch fellow and director of the urban project at the mercado center. Mr. Mitchell is the Vice President director of the center for monetary and financial alternatives at the Cato Institute. Arianna royster, ms. Royster is the present of she is here on behalf of the National Apartment association. And diane yentel. Ms. Yentel is the presidency of the low Income Housing coalition. Thank you for taking time to be here and without objection or written statements will be made part othe record. Mr. Appleton you are recognized for five minutes to give your aura remarks remarks. Thank you chairman davis and Ranking Member pressley thank you for inviting me to testify today. Its great to see my longtime former boss mr. Luetkemeyer on the subcommittee. The previous step i served in policy was including assistant secretary of hud and now president of the u. S. Mortgage insurers. Though companies in the market every day to plan private capitol to ride access to mortgage financing primarily t firsttime low to moderateincome buyers will sum up things they protecting taxpayers from credit risk. But we cannot solve the scarcity of Affordable Housing supply in for hayek as trades we c solve for what its has been the primary impediment for many borrowers the need for large cash down payment. With private and my homebuyers can put down as little as 3 to build intergenerational wealth as homeowners. We are critical partnerso lenders agency and another Son Initiative to sustainably be get access to homeownership are getting with a 1. 5 trillion in mortgages are back or private and my improper diet provides borrowers access to incredible credit also protects lenders and taxpayers from credit risk by deploying private capitol. One prominent example is the way private and my his help to derisk the gsa. The conservatorsp private and my sustained 60 million in claim and every dollar paid by a private demise of dollar to the taxpayers who stand behind the need to pay. The mouse is from the urban institute found that severity of gse loans without private and my was 11. 2 higher than the severity of losses for loans with it. To that end if Congress Takes up gse reform maintaining the congressional charter provision d establishing standard coverages as a requirement would ensure private capitol would contain just the support safety and soundness and system productionalk briefly about steps policymakers could take to ensure private and my supports affordability. While conventional mortgages backed by private mi is most utilized option for low down payment borrowers several u. S. Government agencies directly inre low down payment loans by the federal housing administration. We recognize that target the role of f and the taxpayerfunded backstop. Its an important complement to private mi work particularly those who may not have access to the conventional market but that Government Agency backed by taxpayers cost of capitol required capitol levels is significantly different than those in the privatesector. Policymakers should pmit promote consistent and coordinated thatrevents undue competition between different programs in the privatesector. Private capitol is edlessly crowd of the marketplace by governmentbacked programs and leads to increased risk to the taxpayer. In the conventional market that programs can shift risk to the taxpayers who would otherwise be formed by private capitol. Fhfa finalized a rule on approval of products which members of this committee take an interest. We believe papal invitation results in proper oversight and more transparent process for approving new products. One other area of concern is recently proposed basel iii in game resolion. Members of this committee of rightly observed the proposal would negatively impt the ability of certain banks to originate and hold high loantovalue ratio portfolios. U. S. Bank capitol grill should recognize the risk to mitigating benefits of private mi and promote a level Playing Field among the Government Programs and portfolio execution. Whatever Action Congress could take up to this committees jurisdtion is to score in income tax reduction available for textures 2007 at 2021. Congressman buchanan and panetta have legislation to do just that. The act of which several members this committee or cosponsor. Id be remiss if i didnt thank members of the committee for their work with the fec and the conflict of interest rule. We greatly appreciate your engagement on this issue. To close mi inc. Urges policymakers to contue recognize the Important Role private mi place and the protection affords to lenders and the stability of the overall nance. Thank you. Thank your. Appel tempered dr. Hamilton you are recognized for five minutes for your full remarks. Thank you chair davis and Ranking Member pressley emirs of subcommittee i Emily Hamilton a Research Fellow at george mason codirector of beer project that local governments have imposed numerousimits on whatinds of housing can be built where. Zoning rules including bans on multifamily housing restrictions on manufactured housing and requirements for minimum lot size can limit how much housing the market can provide and drives up the price of housing. These rules are contributing to securing affordability. While the share of households that rent has held steady since the 1950s the share of income of median renter has increased by 25 pay privatesector mebuilders can play a primary role in addressing this growing affordability problem but only with zoning out of the way. Ill provide two examples of landuse restrictions making it infeasible to build for housing at lower prices. First minimum lot size reduction second multifamily construction for development in the washington d. C. Region and third legalization of units in california. First reducing minimum lot size requirements. In 1998 policymakers reduced minimum lot special permits from 5000 square feet down to 1400 square feet within the citys interlude. These are forms set off a boom in smallot singlefamily construction. Based on success within the interlude policymakers needed this or form to cover the entire city in 2013. Nearly 80,000 small lot houses have been built since then. The median house price is lower than the National Median despite decades of higher population and Economic Growth than the country as a whole. Thats in part due to the small lot construction. Second allowing transit to develop in the washington d. C. Region. Ill be the first to say that the d. C. Region has plenty of opportunity to reach barriers to new Housing Construction however relevant to most other highend coasl regions here we excel at permitting multifamily construction particularly along transit corridors. Beginning in the 1960s officials in Arlington County virginia began planning for multifamily construction in areas that were oginally developed with lowrise commercial buildings. In part based on arlington success policymakers in Montgomery County maryland and Fairfax County virginia have also embraced development and more limited areas. We see the follow suit allowing new neighbors to be built in Industrial Areas like the navy yard. Among the regions where many of the counys highest paying jobs are located including boston, los angeles new York San Francisco seattle and washington washington has the lowest median house price in one recent is because it permits multifamily housing a double or more the rate of boston los angeles new york and San Francisco. And third legalizing accessory units in california. Given the growing housing supply and affordability problem americans are facing state licymakers are beginning to set limits on localities to Housing Construction. California are these challenges are the most dire have led the way. The state has been particularly successful in legalizing accessory dwelling units. Youre typically small apartments located at the site of a singlefamily house. In some parts of the state most notably los angeles adu construction drastically accelerated following these reforms in 2017. Today one in four residential permits in the city of l. A. Is four and a duo. To wrap up local zoning rules are a key contributor to the u. S. Housing affordability challenge. Zoning rules limit Housing Construction especially relatively low cost Housing Construction. Examples from across the country show that where policymakers have lowered these barriers Housing Construction is increased. Places that are more open to Housing Construction and improved affordability compared to their peers with more barriers in housing. The private market can improve access to housing and reduce house prices when and wherets allowed to. Thank you dr. Hamilton. Mr. Michelle you are recognized for five minutes f your oral remarks. Good morning chairman davis and Ranking Member of pressley and members of the committee. Im Vice President and director of the center for monetary international ternatives at the Cato Institute and the views i express here today are my own and should not be construed or representative up any official position of the Cato Institute. My test was the best way for the federal government to make housing more affordable is to reverse course on longstanding federal policies. Its true thatome equity frequently represents a large portion of Many Americans wealth but it does not follow the federal licy should promote homeowrship or especially housing. In fact home equity pitch and this depends onrice apprection and at odds with Affordable Housing. Federal policies make housing as well asther goods and Services Less affordable. Particularly because they artificially boost demand and inhently supply cotrained markets. Over pxima in the last decade growth ratwas nearly double the Income Growth rate. As much othe last several decas but its like to highlight three particular problems with recent federal policies. First there only three institutions Fannie Mae Freddie mac and fha the level of fedel involvement housing has been baffling for decades along with housing costs. Coined just fannie and freddie stood behind more than halff outstanding mortgage debt for decades. Someears being responsible for share of closeo 70 of the market. From 2090 2020 fnie and freddie alone had an annual share of the mortgagebacked Security Market averaging 70 . If we include jennie mae securities backed b f worker es in the federal share of the mbs market average2 per year over that period. Second wasteful federal spending since 2020 has only worsened the effect of using policies. Congress passed five masve spending bill starting in november of 21 toting 7. 5 trillion. The endingpreeorsen inflation and exacerbated labor market pblems and pandemic related supplychain problems leading to abnormally high price creaseamericans continue to experience today. Through the Federal Reserve has contbuted higher housing costs by continuing to support thebs market and therefore fueling more leverage to buy homes. The d is guilty of this poly mistake even in the lowInterest Rate environment. Prices naturally tender price despite lower rates. Prior to the 2008 crisishe fed rarely held any mbs on its Balance Sheet but now it acts a though it cant operate without holding massive quantities of those gse securities. Between 2010 and 2022 the lowest amount held with 827 billion. From march of 2020 to march of 2022 the fed went from holding 1. 4 trillion to 2. 7 trillion. Although the amount has declined it still stands at nearly 2. 5 trillion. In the fe of rapidly rising price levels and steady rising home prices this mortgagebacked security purchase policy made ry little sense. More broadly the problem with virtually all the federal housinpolici that we have is that they argeared toward increasing demand. Housing markets are almost always supply constrained to these policies constantly put upward pressure o prices and rents previou posts include everything from supporting the gse to providing housing allowances to military and other governmental employees as well as providingection 8 vouchers but the economic principals are the same for eggs distance and subsidies to payor houng. It places upward pressure on prices because it increases the number of dollars in the same amount of housing. They do nothing to address the broadeeconomic or social issues that affect people ability to earn higher income and build wealth. Nothing except put peoplento riskier economic suation. Coress should pare back fedel involvement in the housing mket and a close with three what i call seible changes. First, find and enforce the excessive use provisions that are in fannie and freddies chters and second year of the gses focus to t financing of only primary homes in other wordorganizational financing. Third, limit the lone loan ls coverage and fha Mortgage Insurance Program to 50 down from 100 per thank you for your consideration and im happy to answer any questions you may have. Thank your. Michel. Ms. Royster are recognid for five minutesor your oral remarks. Members of subcommitteehank you you for the opportunity to teify today. My name is arianna royst but im pleased to testify in behalf of the nearly 100,000 combined members of the National Association andhe national multihousing. Id like to share wityou today the housing perspective and the affordability challenge. Me obstacles we face in meeting this challenge are severa potential solutions. My written statement contas greater detail iall of these areas. The Nations Housing affordabity challenge boils do to one simple fact theres simply not enough residential units to meet the growing consum dand. Decades of undersupply have set us back tohe nation needs 4. 3 million new Apartment Homes by 2035. At the same time our members report that economic and regulatory challenges are causing them to cut ba significantly by developing inactivity and in some casesy as much as 50 . King mters worse is the increasing challenge in operating apartments Industry Data shows on average extensive increased 9. 3 with insurance and lor costs as leading ntributors. Insurance is especially troubling to some multifamily property insurance premiums soared 26 yearoveryear. Out of every dolla of recollted, 93 cents was allocated towards opetional expenses. Th such a slim margin rising operating costs impacted the sustainability of renl housi for placing upward pressure on rents. Expanding federal Regulatory Environment is a growing challenge as well state and local la alrea heavily regate the relationship betwe the rental Housing Provider and their residents. Adding federal requirements creasemarket uncertainty and disincentivized is investment in housing. For example the white hou blueprint for renters bill of rights issued earlier this year greatly concerns the rental housing issue. While well intentioned to contemplate sweepg changes to the federal housing pocy including significant reach by e federal governmen into the relationship between residents d Housing Providers and even rent control for properties by fannie mae and freddie mac for the most significant rate of. Ministero political barriers to the development of new housing are often proposed that the state and local levels of government. These must be addressed to expand access to housi. We urge congress to consider several strategieso address the housingffordability chlenge. First redouble efforts into localities to remove or mitiga local barriers to development by passing thgas in my backyard or507. Industry things are presented flooding killed more forheir leadership on this important bill. Second improve t section 8 Housing Choice Voucher Program which the primary mhod for adding 2. 1 million low income household. Imprements are needed to encourage more voluntary privatesector participation to streamline regulions of these fedel dolls are used effectively andfficiently. The choice of Affordable Housing act h. R. 4606 addresses many of the issues. We appciate the leadership of Ranking Member cleburne representative chavez. For the sterdship on the bill we urge the committee to consider this important legislation. Ird, congress and the frustration must keep the housing provide president retionship at the state and local level. On proactive step is to support a bill sponsored by representatives loudermilk h. R. 802 the respect state housing act which gives a 30day notice to vacate requiremt for turning the eviction policy back to the state and local levs where it belongs. Finally congress and the Administration Must reject rate control is viable solution to Housing Affordability. Decades of research of [roll ll] world case studies show regulations of the patrons of housing in harms affordability ensuring adequate supply of qualified using is critical to continued prosperity and household stability for americans nationwide. Federal policymakers should focus on Sustainable Solutions and avoid annew policies that further exacerbate the chlenges and inadvertently harmonsumers in the process. I thin you for the opportunity testify todaynd i look rward youruestions. Thank you ms. Royster and mrs. Yentel you are rognized. Ranking member pressley a members the many thank you for the opportunity to testify today. Housing sts are out of reach for too many of lowincome or justmerica but in yr district in your hometown rents are far higher than the lowest income and marginalize people including seniors, people with disabilities veterans and working families. As a result 10 million at the lowestncome nter households pay it least half of their limited income on rent leaving them without the resources they need to put food the table needed medicatns or otherwise ma ends meet. Paying so much for rent puts e lowest income person when it away fm facing eviction in the worstcase homelessness. During the pandemic polymaker responded to unprecedented needs to historic protections and resours that cut evictions in ha for millions of renters a moved many to safety. Many of these essential measures are bipartisan in the significantly reduced housing instability an unnecessary during the pandemic ngress showed that when it has the will they can meaningfully help lowincome renters and people experiencing homelessness access housing. Congress also showed that this can be done in a bipartisan way. Today renters are struggling more than ever. Just as the pandemic protections pired an emergency resources were depleted renters reentered her brutal Housing Market. Skyrocketing rents and high inflation. As a rents increased so too has homelessness. The u. S. Gao has found a 100dollar per month median increase in rent was met with a 9 increase in homelessness in that community. As the use ofents ireasedy arly 0 a month. Even with the recent stabilization rent caused the rapid inflation during 2021 in the first half of 2022 has done significant damage to affordility especially for the lowest income renter. While reducing restrictive local zoning isecessary to ensure the market can respond accurately to housg demand in many communitiesuch improvementsn their own wont make housing affordable to extremely lowcome households. The market on its own ct build and operate apartments affordable to households with low comes becausehe rent such households can pay doesnt cover the cost for this is the basimarket guide that requires the federal government t fill in the gaps to protect and prevent homelesess. This c be done through longter investmts. So juan rental assistance univsally ailable for all logical households and preserve and expand Affordable Housing for those incomes and provide Ongoing Research to prevent evictions in homelessness and four strength in and enforce regulatory action. There a numbe of bipartisan bills before the subcommittee th would advance these goals and what have the measurable impact on the housing cris and urge the committee to advance them. Bill such as the family stabily and opportunies that you act and other bipartisan bills to improve and streamline exting housi programsuild housing for people with the lowest incomes improve oversight of federal disaster help and increase access to fair and Affordable Housing. I alsurge this committe and congress to advance comphensive solions such as those in representive waters to essential bills, the housing crisis reform act and the ending homelessness act. The bottom line is this, rents have skyrocketed. Eviction filings are rising holessness is increasing. The countrys lowest income people are struggling to stay housed but there is a path forward. Congress can just it did during the pandemic act in a partisan way to save lives, save money and prode housing stability for many. Thank you can for the opportune to be here tay and i look forward to your questions. Thank you ms. Diane yentel. The chair recogzes the member the full cmittees. Waters from california f one minute for an opening statement. Thank you very much mr. Chairman. I would like to request the ability to take a moment of personal privilege to notes the announcement by the chairman who do who will be retiring. Thank you very much. Like to take this moment of personal privilege to acknowledge the announcement the chairman will retire at the end of this term. I can say when republicans took control early this year many demoats on this site including myself were wondering what type of cirman would be into words that are offering usedair a reectful. He has run this committee and a wave that respects the imports of debate and although our te has sometimes abuse t rules to extend that debate he ensure that a members democts and republicans had a chance to shareheir views. While we dont agree on every policy for many fo that matter i have personally worked well with t chair on many isss. A National Emergency genal assistan program and significant resources for Community Development fincial institutions during thpandemic to reauthorizing the terrism Risk Insurance act andhe portimport. Eventually weoto tt. Hend i were up uil 3 00 a. M. In the morning and that felt and he may not know that we worked closely together passing legislation beforheros to his leadership position to improve rules and to enable investors to support small businesses. I will also say that i recogniz what this desion to retire was likely not an easy one the American Public appreciates the server said he and s family have given over the past 2 yearsnd i hope that the chairman knows that we still have work to do and i know they a many things that are possible to continue to prove to the American People the bipartisanship policy. With that of go onto my one minute from urban to Rural America there simply arent enough Affordable Homes the gap between supply and demand continues to grow. One of the worst housing and homessness crisis we have seen. The House Republicans have put forth forward proposals that only exacerbate the problem namely they want to slash federal housing programs by 30 and hope the privateector fixes it. Its telling rates quadrupleto 8 and housing costs are going up 47 since the pandemic. This is the first hearing we had that we focused on Housing Affordability. Im hopeful this hearing remained tmy friends on the opposite side of the aisle ready to join his democrats to pass legislation to end the Affordable Housing crisis. Thank you and i go back for the rest of my time. I think the rank membrane will turn to member questions i recognized myself for five minutes. I thought your testimony highlighted the consequences for some of our aroach. We spend money as if tax collection doesnt matter is that deficits dont matter we rack up massive debt. We spend money more than we can collect in taxes and we end money more than we can have people buy up up in debt so the Federal Reserve as a lender of last resort and has monetized debt debt not just the 2. 5 trillion mortgagebacked securities. Loaded up on treasuries back when they were really low. We have shown i think we can money. That part of monetary theory is true that we have shown you cant necessarily buy the same amount of stuff with the money that you this is shing up in b ways in ilation and the price distortions of the fedal reserves ongoing buying the market back mortgageback securities are exacerbating the proble of mortgagebacked securities the discovery of the Interest Rate. We are sure whether the rate is artificially high for artificially low becau you cant get a true discovery of the pricing market. I just wonder if you could tie together the idea that this does inflate therice and we are seeing across the country as much a six times the Median Income, essentially to incomes ishe only way you can afford to purchase a house in the historic metrics. Could you talk more about the price discovery with the demand side policies and doesnt that lead to a problem of supply . You always have supply constraints in the Housing Market whether lack of available land or whether its it takes a well to build a house or an apartment building. So layering on top of that everythinge do from the reentry perspective makes it easier. Theres constant pressure to lower down payment requirements to increase down payment assistance to relax underwriting restrictions and make it easier to get a loan with a lower income than previously. All of this seems to take away any incentive for any seller to lower the price. They increase the incentive to increase the price and best we have been saying for decades and decades and decades. This is thing going on for a ng time. We sort of have a short memory that this happened with fha in the late 6. We took a break and then we came back and did begin. Thank you for that and i would turn to mr. Appleton when you look at a situation where youve got 82 of the market has an insist rate below 5 and rates are closing at this is a dynamic affecting prices and availability and supply as well. Historically people want their homes built are ready have a me in go with new construction often and that turns into more Affordable Houses. What is that dynamic like right now and affecting aordability . I take your point theres a lot in effecfor those who he homes with historically low Interest Rates coupled with the fact that we have historically under built supply since the great financial crisis paicularly erylevel supply as we discussed earer. Ths why the private mortgage insurance isedicated to helping creditworthy america, home rdy america access the market with les than a 20 down payment. Thank you for tha and appreciate the emphasis on the privatesector there there but one things we will highlight extensively this is a need to increase supply and affordability challenges in one way we do that is through zoning reform and mandating high density hsing often something hud wants tdo. How do we strike this balance between efforts in washington that have central planners say we know right here you need highdensity housing and ability for local governments and local communities to make their own decisionsbout pnning and zoning . Thankou chair. I think thi needso be primarily an issue of state and local. Generallyhe proposals that we hear from th federal govnment are to encourage localities to rerm their description through federal spending programs that theres a mismatch between this tool and thelaces where we most need to see reform to ensure t most exclusionar policies are the higst income calities whereederalrant may mean the lease. Eres absolutely a role for members of congress and other leaders to use tir bully pulpit to drawttention to this matter. Thank you for that. My time has eired and i now recognize the gentwoman from massachusetts ms. Pressley for five minutes. Thank you mr. Cir. Thank you all for joing us for this hearing. Ive been in congress now for five years freshman orientation was the process of legislang in governing is very easy long days and the plot and the plot is the people. I belie that the issue ofousing this committee has lost the plot. It has taken us 11 month to have one hearing, on housing when this is an issue of great consequence determining Health Outcomes social and economic mobility. It is a transcendent issue. It is herb and it is rural and when im in community iad town hall last night with thousands of my constituents and housing dominated that discussion. Let me make it plain. Housing is the fundamental human right. Since home prices have risen rents have skyrocketed its right has become less attainable fo working comes across t country especially in the massachusetts area. Th cost of a Single Family home is 11 times greater than it was in 1980. In a family integrated boston area a Single Family would need an annual income of 300,000. So we are pring out an entire generation rum homeownership f this is one of the greatest challenges of our time and we have got to confront it and do so thoughtfully and with urgency. Conclusion or zoning laws are a major contributor to ouhousing shortage there for decades Inclusionary Zoning laws that exclude people of color immigrants people displaced in lowincomeamilies. How is Single Family zoning raised housing prices . One of the challenges iour housing mart is supply of apartments by keeping off the demand. In many communities there arent enough apartment for the people who live there or who want to move there. Its often rtrictive local zoning and these local laws restrict the construction of often any kind of apartment and especially affordable apartments which drives up costs for everyone they lowincome peopl the most in these restrictive local zoning laws often maintain and worsen segregation and racial inequities. So the federal government should do all it can to incentivize or require state localities to remove these descriptive local zoning laws so that the market can build apartments for middle income people. But even when that happens, housing will not be affordable for extremely lowincome households because even if those restrictions arent in place the private market on its own cant operate apartments that are affordable to people of low income because the rentshat they can pay doesnt cover the cost to operate and maintain those costs. Fothis kind of a market failure Government Intervention, federal Government Intervention in subsidies are necessary to make artments affordable for peopleith extremely low comes. Thank you and the racial wealth gap connues to grow and im concerned about the reality of modernday redlining. Id like to eer 2002 article entitled black and people are more likely to be knighted mortgage loans. This is a modern date read it whining. How does it impact homeownership with communities of color. What forms do you recommend t curtail his practices . What discrimination leading us against theaw but it absolutely continues in practice. And i would share some stattics from our colleagues at National Fair Housing Alliance that have shown fair housing complnts in 2022 have been at theighest record ever. And comaintsround sorts of income discrimination or dirimination for pple experiencing violence has been espeally pronound. Even with filing rateseing as high as they are many more cases of discrimination go unrepord so the problem is prounced. Occidental it is time has expired the gentleman from florida is recognized for five minutes. Think it mr. Chairman and i want to thank and i want to thk the witnesses here today. Th may be one of the best panels we have ever hadn the subject. Uslly we just hear send more money you have really good suggestions. I do wis we hav quite an impact and noted it. Next time i wl include them. You all the really good i appriate yr sugstionsre very enlightening. Much bader tn usual. But especially good t hear what me of the loc and sta governments are srting to actuallyo to take action to be part of theolution and the problem. But i wonder if congress could do just one thing. To address the homeless problem what would that one thing be . And id like to ask each of you to answe that. Xes, if it could do one thing fr a fincing persptive the clear coordinated and on these supplyside make sure you drink evythingo encoura the construction and development of entrylevel. And that is what we have been missing. Thank you. Is an opportunity for the federal government to take a more active role in encouraging state or local zoning refm. Such arogram should be designed to a race to the top program to reward housing marking outcome rather than reforms on paper. More housing being built at wer prices. Wi take a slightly different tack to there. Will take a slightly different tactic there perspective is important. Th politicians and members o congress have an important job giving that perspective. In tms of homessnes acrding to hud we have roughly 2. 1 and i dont consider that she housing crisis. Of 333 million. So that perspective is vy important. Thank you. I would sayf we could ask the yes in my backyard act because as we stated the supply is the major issue in terms of houng affordability. I think most of the panel has recognize that. We need 4. 3 million new multifamily units by 2035. This lowered t barriers for Housing Development would be helpful. Thank you for the question. Ending homelessness was extremely low income. That requires subsidy and rental assistance, section eight vouchers preserving and expanding our Public Housing program andther Affordable Housing solutions for the lowest income people. Creating an access to the type of Affordable Housing with a wraparound Supportive Services has been shown again and again and the research and evidence be highly effective in ending homelessness. In your district and your state that have effectively ended veteran homelessness using the Housing First aroach. Very od. Again i think the witnesses and yelled back. The chair now recognizes the nking mber ms. Waters for five minutes. What we say here calmly talking about housing i dagree with ms. Michelle i dont know what you call a crisis. People on the ground and the greater los angelesrea is a cris. 600,000 people on the ground every night is a crisis. I dont know how you do findne but we cannot have aearing on Affordable Housing and what we y talk about homelessness. Last congress under my Leadership Committee democrats critical new investments on housing, through the American Rescue plan act which help rehouse people experiencing homelessness and kept over 11 million struggling renters and homeoers housed. We have proven time and time again we invest in federal dollars we can prevent homelessness and we can save taxpayer dollars over the long ran. Despite to promote housing during the pandemic the fact of the matter is with pushing more people out of theiromes but these, the Government Accountability office found that with every 100ollar increas in rent theres 9 increase in homelessness. So, can you explain what the research tellss about the leading causes of homelessness in the examples of costeffective solutions of whether or not you agree with me the is a housi cris. Quick theres absolutely housing cris thank you for the question. Housing costs are the primary driver of homelessness. The one thing all people experience homelessnes have in common is a lack of access to safe and stable accessible affordable home. The research and the data and best practices show again and again the best way to address homelessness and end homelessness is to prode access to an affordable home with when needed supported wraparound services. Using the Housing First strategy to address homelessness. In the city of l. A. Ery day they are able to house about 207 people experiencing homelessness, get them into permanent housing. When on the same date in l. A. 225 people become newly homeless. Address individual homelessness among communities are not able to do the stem the tide because housing costs are so high. Unbilled like yours the housing crisis would effectively and homelessness in the United States. It provides a level of resrces and the proven solutions. I understand someone here said the federal government is spending moneynd they have not been able to solve the housing crisis. Can you explain if you have time whether its inflation, whether it is the loss of a job at. Whether it is covid or what have u. No matter what money you have spent you may have to spend more because there is crisis. With all the things combined ms. Impacts people differently. In the lowest income people that 7. 3 million Homes Affordable and available to the low income people. A way of sayin the same numbers for every 10 of the lowest income householdshether s households are living double or triple doubt. Sixty, 7080 of the very limited income you spend so much of your limited income you are always one financial shock. Facing eviction and that worse case. Worst case. Critics are we talking about this is a probl that could occur with any American Family just up urban living the shortage of housing is pervasive. In rural urb committees alike. Think rachel yelled back. That seone from a jury in the chair on subommitted National Security is never get us in five minutes. Sort of previousounds in my work mind has been the concept of the framework developed by International Bureaucrats outside of the oversight of congress and the American Public. Endgame proposed in july by the Federal Reserve and the f dic is even more excessive than previous versions. The diverters by properly recognizing our American Financial system in particular Housing Market. Th right know that makes our country unique gold putting ghost about by bureaucrats in switzerland. Mr. Appleton do you care to comment on how the excesses of the impact the Housing Market . Sure thank you for the question for you are exactly righ the endgame fails to recognize our market one of the most significant failures as a lack of credit for private mortgage insurance but strenh and resilience at the end of the day basel three endgame as proposals limit to access credit from commercial banks depriving them of the options and shifting businesses to loans directly or indirectly bacd by the federal government. Thank you. I know one of the concerns i have is or seems to be at no cost benefit analysisone on this. You talk to the regulars that assumehey have not connected your entity what kind of cost you anticipate. The pvate mortgage Insurance Industry adopted a number of enhcementsnto the last round of bank capitol regulations were implemented. Those regulations could cognize your enhanced with robust capitol and operation standard at the sam time the new proposal provides your credit for it. It is totally disconnected from ality. The rule itself is a bad deal there so many bad things need to start over in my opinion for ite thank you for that. This morning and the wl street theres an article heained San Francisco developers tackle housing woes. And in the talks about a new 71 sto rental towerhey wan to build. It makes a comme anduote elsewhere 10 conversionlants have been subtted to the city later on it says Property Developer say the pla for the projects reflect government efforts to reduce cost and limit redtape and conversion of Office Buildings to apartments. Doctor hamilton with the situation here points to t problem y have i thi in building housing. We have rulesnd regulations and the situations to enable people to dohis. Can you give me an example of the perceage of rules and regulations thank you congressman for thats a fantastic question. Unfortunat only ask fantastic questions. [laughter] has been a real barrierf solids estimates only portion of housing costs due to zoning and other permitting process barriers. But one estate that is now 20 years d find in the most expensive metros in the u. S. About half the cost of housing is due to regation. 50 of t ct of each one the spring talked about rules andegulations andonings is a cost. You are quantifying it as about half the cost of a home or artmen is 50 due to rules and regulations of zoning requirents . That is what one study for about 20 years ago found for the san fraisco bay area pick. At the 20yearoldigure per. That is right we know its got much worse. Can somebody give me a figure of what percentage the average income in this country what percentage of that is used for housing . Of individuals income and erage individual making whatever it i in this country avere rat what would go to housing . Experts would say no more than 30 of income should go towards housing costs because they dont know how much im asking wh the figure is today does anybody know what the figure is today . More than half. The average individl spending more than half of the income for housing is out you just said . Okay weve got a rule here rules and regulations cost about half of what the cost is. That is our problem, that is her problem thank you yelled back. A gentlewoman from new york is not recognized five minutes per. Affordable Housing Communities across the country have faced a volatile Insurance Market for many years now. Insurance carriers are walking away fm affordable have become out of reach can you talk about what congress cano t address this . And how we can ensure Affordable Housing properties and rente are not bng unfairly treed the insurance mket. Thank you congresswoman. Looking at recent data that shoa Property Owners face 15 and Liability Insurance increases and 17 and umbrella covere yearoveryear. Its also not uncommon to see triple digit increases. Especially i Affordable Housing communit this was information reported by our members. But i will speak to you on my personal experience inerms of the rising insurance costs we manage a number of properties and portfolios in washington d. C. And first the cost of got up for us from 15 32 . T mor importantly to note there are only a fewarriers there were actually right picy in washiton, d. C. Hich makes the cost unaffordable. I will give you anxample of it National Church residences have seen their properties and liabilities increase over four 100 . Do you have any advice in terms of what congress can do to reverse this issue . Congress should use the Regulatory Oversight and authority to monitor activity in the Insurance Market while looking for ways to drive increased capacity in the insurance and reInsurance Market. Increased capacy in the insurance and reInsurance Market. As you know the Housing Affordability crisis requires action. Unfortunately there are significant data graphs in puertoico. They have responsibily. For Housing Affordability persists for over threepoint to million american citizens. With the American Housing survey. Which it provides critical information of the Nations Housing stock. Can you elaborate and puerto rico in the survey will help upset the housing challenges includg lack of affordable housg . The amerin Housing Survey is the only National Representative survey that gives us information. Not only on Housing Stock. The sample size for the is small. We are onlyble to get specific formation on the 15 largest metro areas in some states. Be useful for got information on puer ricos Housing Stock and having it increase to get that information is important that hud would need additiona reurcesn order too that. Thank you. It is notecret communities of color are often the most impacted. And other clima related events. We think this commuties affordableousing or small Real Properties can be disproportionately impacted and is often directed elsewhere. How can we leverage fair resours andools to drive after mitigation. [inaudible] toward t most vulnerable . Lowering communities and often communities of color are often located in lower lht areas. There also communities that historically have not been given the level of infrastruure dollars needed in order to protect people from the subsequent flooding. This creates a vicious cycle. Not only keeping people in harms way, it increase cost when it comes to Emergency Response and rebuilding. Defying cbd gr program would be an important step in ensuring people in these communities get the resources that they need. Those precious few federal resources for rebuilding in some cases resilience are targeted to communities of the greatest need for. Thank you, mr. Chairn i yelled bk too. Demo from South Carolina mr. Norman is no recogtion or five minutes per. Own to thank all the panelists were coming. You talk about affordable, we talk aut housing shortage this is not that complated. What we have awhere from 23 28 regulory costs governmt compliance going into the cost of 400dollar house thats 98000. The homeowns are havingo bear. So what happened to mufactured housing or attpted to make it mo energ efficient in mandating the test. Mandating carbo emissions from a manufactured hou is one of the few that can beuilt. When you seek credit reports there is an attempt toake ay a medical debt thats unpd. It is insane. Its vy simple, you get government out of the way. Youet federal regulations out the way. And politicians iris would put a football analogy i had a talk show host who was lecturing and nick save it over wt he needed to d to improve his team. I thought this is how politicians are. A lot of times we dont know what weont know. We wt to increase the dand increase housing to me them serveviction notices can go out spring you he to get paid ba somebody pays for this. The other thing we talk about homelessness what about the 8 llion coming across its border . Ere a they going to go . New yk city is fighting it out. At are they going to do wit it . So getovernment out. Stop this flo of people in this cotry that have not paid into the sysm. Andet the regulators out of the way. You go to your experts the person calling in nick sabin is not the best one to tell him what to do. He is in it. So go to the experts had actually do it and have their money invested. Let me ask you, you mentioned make housing affordable. Two things define what affordable is. And secondly you call for more rental assistance more federal subsidies does it set the Gold Standard for financial accountability . Affordability it means a household does not pay more than 30 of their income towards rent. Give me affordable whats in Affordable House . Or apartment . Give me in you term because i dont whathat is for. It depends what a persons take on this different people can afford different amounts towardser house and costs. But no one should pay more than 30 of their income towards rent or towds their mortgage. The feral government the answ to that . Extrely low income households went on what useholds with extreme low income i am talking but in your district for example a single pers who has a disability or is a senior in on an extmely limited fixedncome without 12 15000 regrets and running out of time too. What householdncome of no more tn 25000. For these households the private mark on i own you c a any hsingevelops they will agree the cant on their own make housing affordable pickwick to maketffordable by having subsidies fund the federal government as i would you say . Requires an intervention from the federal government too. Wheres that money coming from . Was the form of subsidies. Per. Where is that coming from . Outlays for Housing Assistance is about 1 . Wheres the money coming from on subsidies that you say a federal government which i think is in the red to a tune of 36 trillion, or is it coming from . 1 f out laid progress or usg percentagesut n answer my question. You real arent to be just ll me its coming from the taxpayers. Sure wean absolutely incrse taxes and corporations and f high income earners. In order to afford to have it people but. Th its a utopian dream youre talking about. Keep a roof roof over your head regrets pting it further in debt on the number one indicor of his economy. Housg is a more federal government thas the opposite you want to do in the real world to update yelled back. A gentleman from new york mr. Do you think providing every child with an education is utopian dream . You bieve hsing run every child with housing costs are. Note for you believe like education no one cant resell b6 expected to succeed in america without access to safety deferrable housing . Absolutely the Research Shows again and again progress on a personal level i would not be in congress were not for pubc housing. In the stability and opportunity against he and my family my own a life journey from pubc housing to the house of representatives of washington d. C. As a product of public investments in Affordable Housing. My republican colleagues would have you belve there is excessive Government Intervention in housing. Now i will concede when it comes to landuse the research and exclusionary zoning. Which has been a barrier t address the aordabity crisis but when it comes to funding the republican talking point cannot be further from the truth. The problem is not to mention Government Investment in Affordable Housing. The problem is too little for there is insufficient housing supply and insufficient housing subsidies. What is the extent of the gap between the demand for Affordable Housing and the supply ofhe affordabl housing in the United States . For househos with the lowest income the is a shortage of 7. 3 million homeless affordable and available to them. So another way of saying that same number is for every 10 of the lowest income households throughout the country there are fewer than four apartments that are affordable to them. And if i could just say we talk a lot about the cost of providing housing t be affordable for extremely low income people. But we do not talk enough about the cost of an action for its not like were not providing housing for extremely low income people we are not paying, we are. We pay as a country to allow for homelessness and housing of poverty to exist and we pay for it through lered educational attainment. Through Health Challenges for children and families and increase health costs as a result. And families with wellpaying jobs. There is a health watch but showed over the next 10 years. We will pay 111 billion in avoidable healthcare costs because we allow homelessness to continue to exist. So we are paying one way or another. I think a better use of funds is to invest in solions t keep hosffordable for the lowest incomeeople per. Homelessness and housing and security are not only bad moral but bad economic space during covered was essential workers manyarning minimum wage b their lives at risk ding the peak of the pandemico the whe colored workforce could safely shelter in place and work from home. Is there a single county in america it were an essential worker earning minimum wage could afford a one bedroom apartment . There are very, very few communities throughout the country were that i possible. What about a two bedroom apartment . No commit to pray. Are 30 counties minimum wa could afford a two bedroom apartment apartmentickwick si is right progress y believe its wise for congress to stand by idl while america becomes dangerously unaffordable to i essential workforce . And noaa. Housing is a basic han need. As you said vyell people cant succeed in oth areasf their lives if they don have a home to go to at the end of the day. Evence very clearly says the opsite ppose there was no government intervtion ithe form of Public Housing, with30 less or more hsing insecurity and homelessness . At what ifhere was no section 8. More. What if there was no c credit. All of these are essential ways tt the federal government provides resources to ensure that me people with extremely w housing but the funding is far under the need, the federal government only provides funding for wine and every for household who needs Housing Assistance and eligible to receive that piece that we have what is essentially a housing lottery system in our country. Where only the lucky 20 gets the help they need. Thank you. Gentleman from wisconsin mr. Fitzgerald is not recognized for five minutes. Thank you mr. Chairman. I want to take the questioning in a different direction. Last month i sent a letter with 16 of my colleagues on the committee tohe banking regulators to raise concerns about endgame proposed hirisk wage. For residentl mortgage one of the majoissues that the proposal removes is the ability of banks to use mortgage surance to reduce the risk waves for low down payment mortgages. Departure from existing bank capital rules on the fedel using finance Agency Capital framework for the gsc. Mr. Appleton, you mentioned in your testimony that private mortgage insurance is been around for 66 years. What the committee might not know is the industry actually was created and it has deep roots in mhome state of wisconsin. Why is it important for bank capital rules to recognize private mortgage insurance . Thank you for the question congressman fitzgerald and thank you for sending that letter. By failing to recognize private mortgage insurance in the endgame proposal the Bank Regulators are making it more difficult for banks to serve low down payment Borrowers Service mortgages or lines of credit for independent mortgage banks. Limiting Consumer Choice and access to credit. Current roles as you mentioned written before the mri industry adopted significant enhancements to capital and operational standards for underwritten mortgage with them to receive 50 risk weight. The new proposal to totally ignore the reality should be rescinded. As of the Third Quarter the industry already holds 169 of its required capital and to your point, fhs saying own capital rule recognize the wrist and capital benefits of online if anything regulators should brecoizing the strength and resiliency of private mortgage insurance more, not ss. We have a situation where, this has come up in the committee before where u have a lot of young adults those that have atteed school put themselves in a position many of them couples that find themselves in situatn unable to raise the actual monies f nonpayment on a minimal house which is out of control as a result of the inflation that weve been experiencing across the nation resolved in the housing. They are unable to come up with the money to make the down payment. The builders arent incentived to create enough starter homes, it doesnt exist. There is not two americas out there. I wish my colleague from new york were still here. He would he everyone think that there is simply this one take on what going on across the nation its happeng everywhere right now. Ms. Hamilton, you havent specifically discussed the need for housing th 2 to 4 units per building which is becoming the rm right now for anyone thats developing anything close to aubdivision anywhere in america and looking at the amount of hoing that gets built in total right now about four units per 100 people i being permitted acro the country as a whole. We are talking about modest communities that no longer can put a subdivision in place with housing thats any less than and a half Million Dollars pe unit which is clearly out of the reach of almost all americans that find themselv trying to get the marks. Whats the reason for the drop of ese types of housing and is there any federal solution that could help with that . Thank you, you are absotely right thepermitting rates are way down from what weve seen relative times when housing was more broadly affordable. This is due both to local billing rules the rules on the bookthat limit how much housing can be felt and limit the availability of relatively low costtypes of housing. Such as duplexes trylexus for collections or small block velopments. s also due toocal permitting procses that really lengthen the time and at cost to e building of any type of new housing. I do think this needs to be addressed primarily athe state and local level, although, efforts to eourage this reform frocongress are more than welcome. Thank you, the gentleman from nevada, mr. Horst right is recognized for five minutes. Mr. Chairman to the Ranking Member, 122 days nearly a year into 118th congress and we are finally having our first hearing on Housing Affordability. Congratulations. Will the gentleman yelled . No i will not because during the previous chair leadership chair waters theommittee democrats help 55 hearings on housing relateissues last congress. That means i wouldve had 275 minutes to talabout the issues that prime importance to my constituents so i onlyave five minutes so no i will not yield. We are amid a Housing Affordability crisis that scribbling our country. Its drin Many Americans even further away from the dream of homeownership. Far too many households are focused force to continue and face unique challenges of their own as limited supply of housing simply cannot meet the evergrowing demand for National Multifamily housing estimates that we need to add nearly 3. 7 million new Apartment Units a year to keep up with the demand. 21. 6 million american households that spend over 30 . This hearing is long overdue. My district in las vegas ha been one of the hottest real estate markets in the countr since the pandemic. Since 2015 data shows that there have been a drastic 75 jump in the typical rent in s vegas to over 1800 a month and with an average renters Household Income at 51,000, the rent affordable at that income is well ort of the 1286. When we look at the most vulnerable and lowest income renters the stats from the national low Income Housing coalition become even more alarming with staggering 90 of the households facing a difficult cost burden. This should come as no surprise as home sales volume remained deprsed. The average household spends the burden of 29. 6 perce sign of their income on mortgage or rent. Wean see that most of these lowincome households are severely cost burden which means they are spending over half the income each month just to remain housed. The families are trapped paying outside portion of their income on rent which limits their ability to build up enough savings or down payment and further perpetuate the ratio homeownehip gap. Yet thus far the subcommiee has been uninterested in advancing y meaningful housing policy during the first session of this congress. I call ou thats why i introduced a housing oversight and mitigating exploitation act the homect together hard data necessary to understand the severity of our houng shortage and to prote eryday nevadans from being exploited by outofstate corporate speculators. These massive corporations have been able to pay cash durin this period of high Interest Rates which have allowed them to purchase almost a thi of the homes sold in certain zip codes, one in three and its unlikely the homes they purcsed will ever appear on the housinmarket again. Im deeply concned by reports ancorrobated by the re send data that these corporate speculators predominantly target neighborhoods of color and single mothers. The home actgives hud the tools necessy to investigate the allegations. Noonly will hud be able to collect the necessary data on who the speculators are targeting but also give hud the tools necessary to ensure we have an equal level Playing Field. I know my time is concluding d i want the American People to know when we get five minutes, this is the first hearing, had we had 55 hearings i would have 295 minutes to make my case. But because house reblicans dont want to talk about this issue, we dont have the time to advance the policies that maer to the American People i am mad, i am past, the American People are pierced and my constituents are pest if we dot make housing more of a priority the gentleman times has expired. The gentlemans time is thoroughly expired and the gentleman from new york mr. Garbarino is recognized for five minutes. Thank you mr. Chairman. There is no sugaoating it, our nation is raising housing choice with Housing Affordability at historic lows for both homeowners and renters. By district on long island is no different just a little over a month ago the meeting on home price in Suffolk County reach an increase of over 9 compared to a year ago. Combined with the fact that the average Interest Rate for 30 year loan is still well above the four percent tax rate at home buyers are used to seeing a couple years go. It a befits homeowners to come to the closing table with tens and hundreds of thousands ofdollars for down payment. Ahead of the gse and the taxpayers who ultimately have stand. Establishing a clear consisnt to cause the enterprises to dsipate the primary market compete with the private sector and shift risks to the taxpayers. I apprecia if it wasnt for bmi i wouldnt be able to buy my home and now i wouldnt be able to afford the increase weve seen over the past couple years. Given how highly reguted the Housing Mortgage markets are owner focus for a minute on the flip side of the issue. What corrective action could the fh ha take to pave the way to more private Market Innovations as we seek t reduce the cost of homuying and homeownership for people all over the country. Whether we are talking about the construction mortgage insurance space. You agree that more competition will benefit consumers . Yes they would and youre not can i have that unless if you keep, i dont mean you, if the government keeps crowding out the private sector. Producing conforming loan limits isne way. The original charters he excessive use provision it was never meant to replace the entire market it was ant to supplement the market and it hasnt ever done that its always increased until its dominated. That provision has never been defined and its never been enforced. Those would be two ways right off the top. I was in the private practice i did a lot of closings and the rtgage market as well as pmi really help people with homeownership fha i saw the problems and issues, it really cost a lot to a consumer. They really do work with the coumers and help them get the best deal not just buy a home but keep it. I want to make a quick statement in support of the lowIncome Housing tax before i close i like to raise one other solution oside of this committees their jurisdiction the Affordable Housing tax credit since president reagan housing credit has been a successful private Publicprivate Partnership that leverages the e to develop more affordab homes for seniors disabled veterans and working people. The problem is and nowhere is this the dand for Affordable Housing aggressively outstrips supply. Thats why we need to pand the credit by enacting hr 328 Affordable Housing improvement act and i like to yield to the chairman my remaining. I think the gentleman i will point out this in before hearing on housing while it doesnt quite keep a 13 i will note that 13 didnt fix the housing crisis. The young woman from colorado ms. Patterson recognized for five minutes. Thank you all for your time and experte i really appreciate being here having the opportunity to hear from you. Represent colorado seventh congressionadistrict is very lucky to have been born in colorado and what weve seen in the time that i lived there birthday so 42 years of living in colorado. Weve seen exponential increase in the value homes. When iven think back when i bought my first house hoing has tripled in just a short amount of time to stop its really the perfect storm i know we talked at length about this today. We still havent recovered from that. We also saw our economy expand with the investments to keep our economy afloat during the pandemic. One of the very easy ways that we could help addresshe issue is actually coming together on legal pathways. For people to work i hear from the Construction Industry constant but this is something that really hits home for me, i think far too often people in congress havent had personal experiences that so many people are struggling with. When we talk about if we dont pay the upfront cost of investing in this it comes on the backend tenfold. Local government state and federal dollars. I want to thank you for highlighting that. The mb act thank you for calling that out as an important first ep forward on actually having our local and state governments look at the restried land use policies but what in addition to this should we be doing . Talked about restricting the ability to actually have policies at the local level trying to bring carrots to incentivize to move in the right rection what specific policies for all of you what can we do at the federal level beyond it general ideas to help support the local invements. Im glad to take the First Response to th. Ppy birthday by the way. We support the mb act essentially think it should be an active. We often think we can go for theiown requiring local communities to do more to remove restrictive local zoning and we can do that by tying those requirements more incentive to roll llars and we should look outside of the housing dollars to big infrastructure dollars, the kind of dollars that were exclusive communities want to receive and would be more willing to make anges in order to do so. Also, we need to expand subsidies and make Homes Affordable to extremely low income people and we should do that through expanding rental assistance to make it universally available to all households in need. Should preserve and build more housing affordable to extremy low income peoplehrough programs like the National Housing trust fund we should continue highly effective programs like emergency rental assistance to prevent evictions and homelessness and wehould push forward robust. Mr. Appleton wanted to ask you about what you all are doing to make sure people know you are advertising access to loans without a 20 down payment. They are once again far out of reach to be able to qualify. It would take the average household earning the national Median Income 35 years for the down paent for the average National Median price stop we are active in local communities with homebuyer Education Resources spreading the word that you do not 20 to become a homeowner right now. Thank you. The gentleman from new york mr. Lowe is recognized for five minutes. Apparently my colleagues seem to thinthat the number of hearings we hauled translates to actual legislation passing. In the last congress there were ughly 55 hearings on housing and Housing Affordability. Yet zero bills were enacted into law under better with the ira the former chair of the committee was pushing for. New york city has 50,000 units in part because of its draconian rent control laws and thlaws passed by the state legislature. That require the units to be brought up to codeaxes go up energy costs, yet there are capped at what they can charge and rent. So what happens . They choose toleave it vacant take the tax write off instead. Bang up job good policy these are really working out well. We have 6 llion units how do you meet the supply needed when the cost of living is through the roof the cost of doing business is through the roof, the cost of goods and construction and the cost of energy all driven by horrifically bad policies when democrats had complete control of washington complete control in albany complete control in new york city. Yet they are shocked that we have a housing crisis. That we have affordability crisis. Maybe we should consider changing our policies maybe we should look at how to reduce the cost of living reduce the cost of construction reduce the cost of doing business. I dont know, maybe increase Domestic Production of energy. That might help. No, why would we think about this logically . So when i hear my colleagues complain about the number of hearing, my god, stop worrying about the number of hearings and start worrying about the laws we are passing. Thats a better idea. Housing affordability is persistent challenge. With Mortgage Rates at multidecade highs limited supply and continued supply chain and construction issues, for many it is the most difficult time to purchase a home, in a generation. The market is further complicated by the extraordinary circumstances of many homeowners unable to sell their home for fear of losing their low fixed rate mortgages obtain prior to the rapid increase in Interest Rates. These among other factors have forced many potential buyers into the market. Driving up rental demand and prices within. In rockland and westchester counties in my district according to the National Association of realtors the monthly cost of a mortgage is 1000 more today th it was last year. And in putnam in Dutchess County since at least 800 more per month. These are additional housing costs of almost 10,000 or more a year, for many families its totally unsustainable. This topic is critical which is why last month i held a conference roundtable discussion in my District Housing issues that have gnificantly affected the local area and which included a Diverse Group of stakeholders elected officials, Government Agencies nonprofit organizations and keep figures from the Real State Agency including developers and others. While there are existing efforts that should be improved and expanded upon such as the Affordable Housing we need to be working to move the governmental barriers that drag approvals out for years. Drive up costs and just incentivize the investment introspection our constituents need. I mentioned a number of times the impact that regulation on the cost of housing and incentivize action of building and the flawed attempts of government to intervene. This is been at the forefront of new york in the last few years that we see a blend of heavy regulation with attempts by the governor to circumvent regulation with unrealistic arbitrary mandates to build housing in areas that dont have the requisite situation to do so including a lack of frastructure. We have to look at this holistically and we need to change course. These policies are not working. We already know the avere renter n pays over 30 of their income ont. My communities there are three extremely low income renter households for each unit available and affordable. The housing crisis is real that sothing we can all agree on. What i fi very questionable is the assertion motivating todays hearin strikes me odd to hear criticism on an outside government present hoing market by supporting lowincome families with billions of dollars for Government Intervention manof the foundational elements of our housing Financial System like secondary Mortgage Market simply didnt exist when did the longterm fixed mortgage option become widespread, who created it . It was under the new deal that we started to have longerterm Mortgage Rates of 15 year the new deal era reforms are tycal mortgage has variable rates and came in 3 to 5 year fixed rate mortgages were virtually nonexistent. This is just one of many examples demonstrating the limits of what we ca private Market Solutions even if we eliminated all relatory barriers today holding back our Housing Markets with market rate housing be affordable for all families. It wouldnt be affordable for extremely low income households if you stated in your testimony the federal subsidies arnecessary to fill the gap between the lost income people can afford to pay the cost developing an operational renter rental home, why . Private operators can build and operate housing on their own without subsidies and make the Homes Affordable for the low income people. We heard today several republicans talk about the importance of the line, housing tax credit program. Which is an Important Program that can be further improved to serve the low income people but i believe thats helpful recognition that federal subsidies and intervention is necessary. I believe Government Intervention are not without shortcomings, i agree on that historically the housing policies in particular have been undermined by racial exclusion when congress provides Housing Assistance to only one out of four eligible households while battling Public Housing 70 million capital backlog we must be honest with ourselves about where the problem lies. Another example of the limits of private market relates to dividing sma dollar mortgages be subject to thsecretary about th for banks the sixth cost fed cost of the same t ordinate a flaw loan versus big loan this makes small loans le profitable. Watepolicy levels available to increase support for sml dollar mortgages be stuck in my community over 30 in some communities are less than 100,000. But they are not getting access to the mortgages. Thats a question i would be glad to get back to you with further information. Other federal subsidies right now they can be provided from loan origination and servicing. Thats outside my area of expertise. I know millions of americans right now families are struggling right now buits a fact that we have se of these amendments and policies in place that really awhat i dont like the fact that we think the private market ineffective. Ive seen it in my own community when we see over and over again thanks and other institutions have policies in place that are geared toward one community over the othe michigan lost more black homeownership than any other state in the country. I really believe its because of the weekend cra its because we are noenforcing the Fair Housing Act like it should be. This is where we come in as a committee to talk about the real obstacles. Theres nothing wrong in saying weve got to do better. You should literally talk about where you function in wake county and over 50 of the Housing Market is less than 100,000 the home is worth putting out for sale then why are we sending to our day, lets get the loans out and homeownersp increased. Thank you and happy birthday to our colleagues from Colorado Stop Housing Affordability has become the number one issue in nebraska and am pleased we are focusing on the problems at hand in this committee. We talk about housing of poability we need to have a conversation thats really focused on whats driving the st in my home state unlike my colleagues from new york lack supply of housing in the market place. We can summarize all the housing we want but regardless of how much money t federal government spends to get Housing Stock doesnt increase the problem persists. You want to makeousing more affordable increase supply. Befo jumpi to a conversation abouzoning restrictions want to briefly mention mafactured housing. Manufactured housing has the potential to be an affordable alternative that lowers the cost of housing overall fo singlefamily units and im pleaseto see the manufactured housing as part of the discussion today and that tre is some hope and legislation attached to the hearing on that topic. Back to zoning, the program bubblegum lead on the yes in my backyard act with congressman kilmer. This bill would require counity Development Block grant recipients to report on the policies they use relate to zoning restrictions. It will be easier to identify the full impact the polics will havon houng costs. The witnesses come froall different unique perspectives and i enjoy hearinfrom some of them on this important bill. Mr. Royster. Could you please explain how zoning restrictions can impede the development of rental housing. Thank you congressman. I will give you examples where barriers were lower and increased development in rental housing. Several states anlocalities in 2023 enacted young be relatelegislation to spur Housing Developments. Californ passed reforms to allow groups tbuild Affordable Housing on their property and legislators in montana passed series of bills which woulallow for backyard accessory dwelling units or add use, allowing commercial areas. On the other coast of vermont bundled zoning are formed into a single sweeping ll which will take effect next year. Dropping lot sizes legalizing duplexes for taxes and limiting minimal parking requiremts. These are just a few states were begun to recognize the importance nexus between the discriminatory land use actices and under supply of housing. Ashe other landuse reforms take effecte will see increase in housing pply. Can you explain the national low Income Housing Coalition Support for the yes in my backyard act. We do support the bill is an important way for communities to have more resources and increase incentives to address e hamilton you included examplesf localities that cut landuse regulations in your testimony. Can you walk through some of those examples for us, what were the resulting effects of the policy issu . In places that rece barriers to housing instruction the market responds by providing more housing and more reasonable prices acceible to more households. Thank you for your attention on exact housing one piece of getting the rules right to facilitate broadly accessible using. Nebraska is one of the few states that requires the calities to allow manufactured housing to cited anywhere tt the site house would be built allowe congress could further by removing the permit requiment on manufactured housing. To make this type ohousing more flexiblend able to serve a bigger variety of households. Mr. Michelle, the you also mentioned zoning restrictions in your testimony would you care to add your perspective on how government restrictions decrease housing supply in europe 30 seconds. I dont necessarily think its a particularly mainly a federal problem but they are real in a matter. Records show we have extensive support on the yes in my backyard act from witnesses today, i appreciate all your testimony and time that i yelled back. Miss williams is not recognized for five minutes. Thank you. To all of our witnesses for joining us today for this very imrtant conversation. Without it the racial wealth gap will continue to grow. Over 2000 and heightens our experiencing homelessness due to the lack of Affordable Housing. Nearly half of atlanta renderings are cost burden. Despite these challenges atlanta short of more than 100 30,000 Affordable Housing units. 130,000. Some that we do have been deemed uninhabitable. Last year all the residents of forest grove afrdable housing complex in my distct were forced to relocate because of excessive mold, broken windows, burning buildings and other issues that made the complex unlovable. This is unacceptable. Affordable is not a synom for poor, lowquality or unsanitary. Affordable means inexpensive and reasonably priced to meet peoples budget. To build our lives and have the opportunity to build wealth my constituents need Affordable Housing thats also safe and comfortable and even desirable. What can we pect to happen if Congress Continues to kick the can down the road on this housing crisis if republicans are successful in slashing the federal housing budget edifice continued fingerpointing at local governnts to do the work alone. Housing crisis will worsen anby all measures. Shorr version housing for the low income is worse th its be on record not only need to be providing new subsidies for re families to have housing thats affordable to them but we have to cus onpreservation of existing Affordable Housing stock and in the Public Housing Capital Needs are beyond billion, just tfix uphe existing public housin infrastructure to make it safe and satary and habitable for the pele who live there toda anpreserve it for future generatis. And cause we so woefully underfunded preservation of Public Housing and also rental assistance and other types of Affordable Housing we are losing 10 to 15,000 units a year of Public Housing to obsolescence or decay. By not further vesting in maintaining our critical Affordable Housing infrastructure we are worsening the shortage of homes with the lowest income people. Thank you, im glad you as well as one of my colleagues brought up inventory. Because the inventory plays a crucial role in Housing Affordability when complexes like ait forces families to find more expensive places to live and putting more strain on our limited supply of Affordable Housing. Dwindling inventories of Affordable Housing werent enough, too many families in my district and across the country are facing outside competition from massive investment firms when they think they are ready to make to buying the home they are cut off at the ankles by investment bonds. Families are being outbid by Investment Companies buying up singlefamilhomes that are over a 10 year period the important legislation will reduce the number of singlefamily homes owned by hedge funds putting the power to purchase back in the hands of families. So they can build equity and more importantly, building their lives and helping to close the racial wealth gap. How has the rapid entrance of hedge funds and other Institutional Investors into the singlefamily Housing Market impacted the ability of low and middle income families to buy a home. In many other ways that you raised i would add that it also creates challenges for the people who rent the singlefamily homes owned by institutiol investors and in general Institutional Investors e among the worst actors in the Housing Field when it comes to landlordtena relations. In the research the data shows that those a¦ unfortunately im out of time i have more questions i will submit for answers for the record. Thank you, i yelled back. Gentlewoman from texas ms. Delacruz is recognized for fe minutes. Thank you for holding this hearing today. I think our witnesses appearing before us, this is anssue that is close to me as i believe that south texans ople in south texas americans understandhe very real impact of ring housing costs. More and more americans continue to see their housing expenses rise as theisingle most expensive monthly cost. Inflationary pressures have pushed intest rates up and added premium unafrdable to some wouldbe homebuyers and since the pandemic washington has only made this issue works. By pumping trilons of dollars of democrat sponsored spending into the economy. Mr. Appleton, as you know, there are several factors in the Mortgage Market simultaneously an increase in the housing supplies. Our current high Interest Rate environment both increases cost to borrowers and also the incentivizes existing home sales from homeowners locked into lower rates. We now ao see the potential fothe basel three proposal to dramatically increase Capital Requirements and in turn potentially increase the sk of singlefamily mortgages. My question is this, can you elaborate on the negative impact this would have on mortgage affordability and mortgage availability. Thank you for your question. If finalized, the proped present banks to provide access to credit for low down payment borrowers including many firsttime low income aait should recoize in determining the value ratio but it doesn restoring the recognition will encourage innovaon portfolio and level the playg field to ensure consumers have access to a broad array of low down payment financinoptions across the gse and Government Agency executions. Im to have you repeat this you said that the basel three could have a Significant Impact on minorities . Communities of color and minorities are less likely to have intergenerational wealth to bring a large down payment to the closing table. Its going to make it uneconomical and very difficult for banks to engage in that type of. So we we have my colleagues on the other side of the aie saying basel three helps minorities what im hearing from you ithat its actually going to hinder minoritiesn their dream of having their home. Is that correct . Yes there is largely an alignment among consumer groups Mortgage Market participants and members of the committee on both sides of the aisle that its going to be negative for low down payment borrowers includg low and modete income minority borrows texts now that we are in agreemt that Housing Affordability is at historic lows, its now the right time for foregulars to further restrict access to capil. Absolutely not. Along the same lineof Government Intervention impacting the Housing Market we also saw President Biden and congressional my colleagues on the other side pumped trillions ofdollars into the economy the past two years of course at led to Inflationary Pressure and contins to impact and is a reason we are here righnow given this high Interest Rate environment would you say that or im going to ask what marketbased recommendations do you have to bring down the cost of housing . I think its a crowding out problem. I have several recommendations alluding to the testimony that was during the past but youve got roughly 90or more the market dominated by the federal government. Thats one way, you have to start paring it back. The excessive use provision is one thing that could be defined and enforced. Reducing fha insurance to match aathat wld be another. The gentleman from california mr. Burgess has recognized according to th october 2023 Consumer Price index housg cost remain key driver in the country. All of our constituents are feeling this. I have to say that we all have our personal stories situation with myself was that my mom and dad worked themselves to the bone to make sure they had a house and that little house financed 900 graduate degrees, numerous advanced degrees, scores of logbooks engineering books finance books social Services Books and ultimately, it ally was the ability to take money out of the house and the generosity of my parents that all of my brothers and sisters and i got a decent education. It was the house that gave the opportunity. It really was. And they worked hard for that. I was a little intrigued with the provocative statements you are making saying that federal policy should noencoage homeownership, i dontant to take words out of your mouth but i believe thats what he sa. What others agree to that . It seems to me that that is mewhatwrgheade see somebody is anxious to aa would you like to comment . I think the feral reserve survey Consumer Finance found that the average network of the homener is 40 timethe average network from the renter i think we need to make sure we ve consistent and clear Housing Finance policy to mak sure the private capital is not crowded out of the marke unnecessarily by Government Programs but i think homeownership when done sustainably and responsibly is an excellent mechanism for wealth building you said but i agree th a lot of what you said i do a government should be involved for those that can afford it. The down payment is really what kills like peop. They cant afford it and im not against private surance. I used it when i bought my first home. Manufacturing housing im not against it. The federal government has to be involved because there are somepeople who made very low money and for a lot of people wont be able to own a home because they donmakes much more money. Having all these people in the streets whether its. 001 or whatever it is, its a huge amount of people on the street living in a way thats disgraceful. Travel significantly around the world you dont even see this in deloping countries. It really is awful and we have to do something about it. But i do think the restrictive laws we have on zoning are problematic but i also understand a lot of people dont wanto change the character of the neighborhood. Thats why we have to encourage homeownership but also in a way that the neighborhood will accept that means you have to tell people stacking homes is okay making a lot smaller its okay all these things are important and subsidizing for those that need subsidies we should do that. Who can disagree with that . If it followed inflation would be 373,000 home down the street fromine, the same sold for 1. 85 million. I would say it was a very good investment. It is a house that certainly benefited myself and my family. It did increase significantly. Thats why think to argue against the American Dream is provocative to say the least. Thats the way weve been doing it. My time is up. I thank you for the courtesy. T gentleman from tennessee mr. Rose is recognized for five minutes. Thank you for holding this hearing and thank you to our witnesses for being here i would also like to thank the subcommittee for the opportunity to waive on todays hearing. The growing scarci of Affordable Housing in this country for both homeowners and interest in the serious crisis. Helping to alleviate this cris well require as our hearing title suggests knocking down government barriers that are standing in the way of helping to supply more Affordable Housing. One such government rrier ms. Hamilton has made reference to this to more affordable using is hugs outdated requirement that manuctured housing be built on a permanent a permanent chastity allows manufacturer housing to be mor easily transport. This is helpful if the manufactured home will be moved multiple times during its lifetime. However, as i think most people are aware, many manufactured homes are now built with the intention of being permanently placed in one location and thats not does not need to be built with the permanent astity. Eliminating the permanent chastity from fedel construction code administered by hud will help to save thousands of dollars on new manufactured homes made without permanent chastity. Im proud of introduced bipartisan ll hr 5198 the expansion of attainable homeownership through manufactured housing act of 2023 along with my colleague congressman carina of california that will elinate the outdated requirement. I think the subcommittee for attaching the delta todays hearing and look forward to woing with colleagues to advancthis important piece of legislation. Ms. Hamilton, i know youve already spok about this but the latest fures show america a short 3. 9 million homes stop for shortages especially on starter homes for firsttime homebuyers meanwhile, the hardcode on manufactured homes to be built for 20 to 50 less than what site built home. Expands on how the current statutorily requirement chastity for every hardcode prevents broader adoption of this cost and Building Trades manufactured housinis the most costeffective way to deliver a new unit of housg in the u. S. Today. In lge pardue to the hardcode focus on affordability over other types of policy priorities. The permanent chastity requirement is intended for manufactured housg that will be moved from site to site when ths often not the case particularly in Rural Communities where manufactured housing is a very importan source relatively lowost hoing. Eliminating also opportunities for manufactured housing to serve as accessory dwelling unit eliminating the requirement means different types and different sizes of units can be produced under the hardcode creati a poly thatcan rk handinhand state local accessility form. I see the time winding down i think anyone has er hadhe opportunity to tour or be present at one of the manufacturing facilities were manufactured housing is produced will understand what im trying to get out here and that is we all know theres a shortage today of skilled tradesmen in our country necessary for building aome. My wife and i are renovating a home on our farm that we hope to move into supposed to be ready in august apparently forgot to tell the builder which year we wanted to be in august. But there is a shortage of trades. Im wondering if you might expand in a few seconds we have left on how the adoption of nufacturing modular homes helps to fix the problem in Rural America. Manufactured housing allows a unit of housing to be built in a different location than where it will be cited. Opening opportunities for housing in california for examplbuilt at a lower cost place is a very positiv outcome. Id le to thank our witnesses for their testimony that today greatly appreciated and helpful. Without objeion all members have a higher legislative days in which to submit additional questions witnesses to the chair. Which will be forwarded to the witnesses for response i asked witnesses to please respond as promptly as you are able to hearing his knowledge or