The finance Committee Meets this morning to discuss how this hearing comes at a time when americans are getting clobbered by climbing rent and home prices, key drivers of inflation. Data released last week shows rent increased in june at the fastest rate since 1986. Buying a home is getting more expensive. Many people that have modest incomes for big Student Loan Debt feel like the dream of homeownership has slipped out of the reach. The root causes the United States isnt building enough housing. The shortage is affecting citizens and cities all over america. For example, my hometown of portland the skyrocketing rent and of low supplies is also an issue in the central oregon, Southern Oregon and Eastern Oregon where they cant build enough housing fast enough to keep up with demand. I would be willing to bet we would be talking about a number of issues this morning and i would just like to raise a relatively new issue that deserves scrutiny and that is private equity firms with sophisticated companies armed with terabytes of housing data who bring up properties nationwide. They are using algorithms to outbid americans who just want to own a home. Why do they want to get into the housing market, because they are upward 330 million and there are not enough homes for all of them. Huge demand, limited supply typically people on a budget are going to come out on the losing end of that sort of thing every time. The cost of housing is also pushed up by state and local redtape. The zoning rules band the kind of construction that is most needed and perpetuates segregation. In some places it can take years of tireless work to get a ruling and then you have the big upfront costs. Fortunately others need to do the same. You can save a lot of individuals suffering and taxpayer dollars tomorrow by building more Affordable Housing today. The bottom line when it comes to housing, the u. S. Needs to build and then build some more. The finance committee plays an Important Role in helping get shovels in the ground because much of housing policy deals with tax policy. Ive proposed the decent affordable and safe housing for all bill thats about getting help to the more Vulnerable Children and families experiencing homelessness and it would also create credit for more affordable rental units, housing and encourage more middle Income Housing without taking a single penny away. They tell me they badly need more incentives to build for middleclass families. The committee has had a Bipartisan Coalition working on important housing issues for a long time. Senator cantwell has long been the housing champ leaving big legislative expansions with more than 150,000 new affordable homes. I think she would agree that that is a good down payment for housing. At the same time recognizing theres lots more to do. At the credit improvement act which im proud to sponsor with senator young and one of our colleagues that is here, senator portman. That bill has even more flexibility to build even more housing. Senator cardin and senator portman proposed a bill called the Neighborhood Homes investment act. Finally we continue our bipartisan work with senator leahy, senator collins offering the lifeline act. The bill creates more flicks ability for states, local governments and tribes to use existing firms to get more Affordable Housing bills. Finally while there is bipartisan interest in getting this approach done legislatively, the treasury has substantial authority to accomplish a lot of what we are seeking to do on their own with rule changes, so today we are going to make sure the direction is getting the congress and the Treasury Department to move more quickly together and getting it done will provide important progress again ensuring access to more opportunities for Affordable Housing. Lots of ideas to talk about. Every member has an interest in this, so i hope that we wont be here eating our cereal in the finance room but a lot of my colleagues have lots of interest and i want to thank the senator for his work on another important issue. I appreciate your willingness as you are highlighting once again another of the bipartisan issues here with a strong record in the community. Last week we learned at the Consumer Price inflation despite the 9. 1 of the highest in four years and the Consumer Price index was up relative to a year earlier and rent was up by nearly 6 . To continue battling inflation. The Federal Reserve must aggressively raise Interest Rates and may raise them later this month by as much as a full percent. Inflation must be contained or we are at risk of the fed having to repeat what it did in late 1982 combat runaway inflation. Painfully then overnight Interest Rates were driven to 20 which crushed Economic Activity including housing markets that lead to a deep recession with higher Interest Rates set by the fed the Mortgage Rates follow making it all the more challenging for americans to biomes. Housing affordability is a critical issue in idaho and all across the country. Nationwide theres a shortage of 7 million affordable rental homes available to lower income americans and the gap between the demand and supply increases each year. To provide more Affordable Housing there are existing tools and the tax toolbox that provide incentives to create more affordable homes. The low Income Housing tax credit is responsible for generating a majority of all affordable rental housing created in the United States and enjoys bipartisan support in congress. There are 284 projects located across the state providing 12,000 plus units. These projects vary and are split between urban and rural with about 72 targeted and 28 for seniors and the elderly. One such project in boise targets homeless veterans. Several members of the committee have been active in working to improve existing Affordable Housing credits and to create new incentives. As i indicated on a bipartisan basis. Senators young and cantwell as well as others introduced the Affordable Credit act that would expand and strengthen for developing and preserving Affordable Housing. Senators portman introduced the Neighborhood Homes investment act that would create a federal tax credit that covers the cost difference between building and renovating urban and rural areas. Numerous other finance Committee Members are also interested in finding Affordable Housing solutions and i thank them all for their work. While other credits are part of the solution to develop Affordable Housing, we must address other drivers increasing housing costs generally. For most in the current economy is the need to reduce inflation. Unfortunately its been allowed to run rampant and the necessary Federal Reserve actions are raised the cost of housing. To get materials to the construction sites additionally several economic factors leading led toa shortage of Affordable Housing. One way to alleviate the shortage would be to look into more manufactured housing. During this time, during his time the former secretary created the office of innovation to evaluate new ways to provide housing. They are often uncoordinated and unnecessary and overly cumbersome and present challenges to Affordable Housing by creating excessive cost that restrained development of Affordable Housing. Many of the markets with the most severe shortages and Affordable Housing have the most restrictive state and local barriers to development. We must work to reduce the barriers. The tax credits and jobs act and area where senator scott has done a good deal of work. The data released as recently as may of 2022 or excuse me, march of 2022 by the opportunities directory shows 49. 18 billion has been committed to and dissipate in investments into 60 of the funds target investments and Affordable Housing and Community Development. Homes are more than physical structures, they are a foundation for wealth building, stability and community cohesiveness. To lead the committee to some bipartisan solutions. Let me go through the witnesses. Andrea is here from oregon. To have the executive director she served in differing capacities since 2019 and previously the second witness we welcome the chairman of the National Association of homebuilders in Savannah Georgia we are very pleased he and the homebuilders are participating. The third witness is a senior fellow at the Hoover Institution distinguished professor of economics at the university of los angeles. My mother worked at the institution for many years and it was the ultimate complement of some of the executives that said she is so good with she still is a democrat so we are very pleased that you are here. The fourth witness we welcome you, president and ceo of the association for Affordable Housing and a treasury official working in this area with considerable expertise, so we appreciate the leadership in the fifth witness will be the chief production officer at walker and dunlap who previously served as a commissioner of federal housing in 2020 and is also extensive experience in the executive budget but also the committee on banking so we welcome her because we are going to have so many senators participate, we have to sticks closely to the fiveminute rule. You traveled the furthest, so start us off. Thank you. I want to acknowledge and appreciate the opportunity to testify on the vital role the tax incentives play on the delivery systems. Again for the record im the director of the Community Services and we serve as the health and finance agency. First off, mr. Chairman, thank you for your steadfast leadership and elevating the people of oregon and their Housing Needs collectively. Senator, i want to also acknowledge and uplift your support for Affordable Housing. Your leadership does not go unnoticed. For years, our nation has not built enough rental housing but the conditions and circumstances spurred by the pandemic have made the housing crisis particularly acute to which individuals with low income, individuals with families with moderate incomes are bearing the brunt of that impact. With rising Interest Rates escalating home prices, skyrocketing rent due to the mismatch between the supply and demand many wouldbe homeowners were often stuck left ranting and more the end of 70 of extremely low income renters. 70 . That 70 of individuals that have to make tough decisions every single month throughout the year about what bills they will be able to pay and how they are going to get by. The housing credit and housing bonds are by far the most essential production tool that we have at our disposal. Affordable housing simply has a highly successful public and private partnership and what we know is when we stabilize individuals and families we also stabilize communities which has an economic benefit. In the state of oregon nearly 70 of all financed in the last five years relied on bonds. The costs are increasing due to supply and many things i wish members of the committee are fully aware of. Housing finance agencies and our partners across the nation are doing everything we can to prevent the deals from falling through. They are too large and in some cases there are no resources to pull from to help cure the financing gaps. The most impactful thing congress can do is to pass senator cantwell and youngs yous Affordable Credit improvement act they would both expand and strengthen the housing credit and significantly increase the housing Credit Authority allowing us to build more properties in rural ontario oregon. The Affordable Housing credit improvement act also provide states greater flexibility to spread existing resources to the development by reducing the bond financing test from 50 to 25 and i urge congress to pass the bipartisan lifeline act introduced by senators leahy and collins. This would enable states and localities. By the means of Home Ownership senator cortez mass does Affordable Housing bond would an act simple and impactful improvements to the mortgage Revenue Bonds and mortgage credit Certificate Programs which are essential to serving low and moderate firsttime homebuyers. At the neighborhood investment act would establish a new tax credit model. Simply put, the housing credit crisis simply will not get better if congress does not act. In my last few seconds i would urge both and elevate my appreciation for the committee and we need congress to act. The action is going to come close to the committee and what decisions we will be able to make for the american people. I appreciate the time. Well said. Lets go next. Good morning. And thank you for the opportunity to testify today. Every american deserves access to safe, decent and Affordable Housing. Even after over 40 years in business, i still enjoy nothing more than handing over the keys to the first time home buyer but delivering a product is difficult. 69 of american households cannot afford the median price. But a year ago nearly one quarter of new homes were priced under 300,000. Today it is 10 . We also faced challenges with minority homeownership opportunities. Households under the age of 35 which is the typical firsttime homebuyer, 46 of white households owned a home but 17 of africanamerican households did so. Affordable rental housing creates stability for tenants and the Housing Affordability crisis is a result of failing to produce enough housing to match demand. If we are going to solve our Housing Affordability crisis, we must drive down the cost to build as well as the cost to own to rent. Well structured tax incentives can help achieve this. Many of these incentives serve the Public Interest and remain effective including the low Income Housing tax credit. However, others have failed to keep up with the changes to the tax code such as the mortgage interest deduction. For over a hundred years, they made homeownership more accessible, but it remains rooted in an increasingly outdated displays in the tax code. The changes brought by the tax cuts and the jobs act doubling the standard deduction significantly reduce the number of taxpayers. Prior to those reforms, typically 70 of homeowners with a mortgage today that number has dropped below 27 . In 2017, 80 was deducted by taxpayers earning less than 200,000. Today in 2018, that fell to 58 . Its simply missing the mark. The most effective way to promote and enable homeownership is to eliminate the mortgage Interest Rates deduction and replace it with a tax credit. 15 tax credit claimed against mortgage interest and state taxes would offer a more effective and progressive tax incentive. The credit should be phased out with incomes above 2,000 to 50,000 and joint filers with incomes above 500,000. Along these lines can be enacted on a revenue neutral basis starting in 26. This presents an opportunity to refocus the homeownership tax incentives so that the benefits flow to those who needed. We also recommended acting to boost production of affordable rental housing and the proposal for a middle Income Housing tax credit which addresses a growing need for affordable workforce rental housing. Congress should also address the many housing incentives that are not indexed for inflation such as the gains exclusion and we urge you to reconsider the current limits on assault reduction. Appreciating the bipartisan support to solve the Affordable Housing crisis. After all, shelter is a basic human need and the headwinds we are facing our strong. The index of the sentiment had its second largest drop ever for july in the singlefamily starts filled to a twoyear low. We had an opportunity to do something that not only makes good economic sense but will uplift the lives of millions of americans. Thank you very much for the important point. I know you are the president of your own Home Building firm so we are very glad that you are here. The next witness. Members of the finance committee, thank you for inviting me to testify today. Requiring progress on two fronts, one is expanding housing supply and the other is building that new housing at a much lower cost and current cost levels. The policy reforms that might be implemented in the government incentives that would advance the goals. Today i will focus on the reform areas one is increasing the use of manufactured housing which