The committee will come to order. I want to welcome everybody to todays hearing entitled americas Affordable Housing crisis, challenges and solutions. This is an important issue in this hearing will allow the committee to hear from experienced and welleducated witnesses that can provide more context on Affordable Housing policies and the sections of the tax code with the intent of mitigating this longtime set of problems in our society. As many of you are aware the last time we underwent a National Comprehensive revision of the tax code was in 1986. The passage of the tax reform act, that some Affordable Housing tax incentives were baked into statute with the lowIncome Housing tax credit being chief among them. Since then this important section of the tax code has enjoyed bipartisan support. Still, it is worth examining this particular laws we continue to wrap up our work on tax reform. Throughout todays hearing a one each member to keep in mind some Guiding Principles for tax reform. Ive repeated these principles quite a bit in recent years but for those in the audience who may not have heard me mention them the principles are fairness, efficiency, simplicity and american competitiveness. These principles are important within the context of Affordable Housing tax policy because they should be able to help us improve upon what is currently in the code. I know the prospect of more oversight can be seen as a challenge but i think we should all give this examination an opportunity to determine where we can improve. While some sections of the tax code have undergone changes over the past three decades solutions on Affordable Housing redmayne as elusive as ever. They seem to remain in many households facing cost burdens associated with renting with perhaps as much his 26 of renter households having paid more than half of their income in rent in 2015 for example. The burden seems to fall heavily on lowerincome households and this is not to simply a problem of arithmetic. In 2015, 25 million children lived in households in which rent comprised of a fairly large share of Household Income. This is a problem that should be ready for a bipartisan solution. We have already introduced Bipartisan Legislation to address some of these issues and many are hopeful that cooperation on these efforts will continue. I personally believe they will. Without i would just like to thank everyone for attending today that forward to hearing from our distinguished panel of witnesses. Before we get to that id like to hand it over to the Ranking Member center wyden or his opening remarks at this time. Thank you very much mr. Chairman. Mr. Chairman let me thank you for focusing today on the low Income Housing tax credit which is a key part of the tax reform puzzle. I also want to thank our colleague from Washington State senator cantwell, who has been for years now the goto person on this committee on this issue and im going to talk a little bit or about the history in a minute. Id also like to note there was a lot of talk last week about bipartisanship, bipartisanship on key issues. Thats what this committee is showing today, that we are serious about tackling an issue in a bipartisan way. Colleagues, my bottom line is americas housing policy needs an urgent remodel. Today, millions of americans struggle to pay rent and they cant even dream of purchasing a home. To recall our classes on introduction to economics, a key housing challenge is increasing supply. When housing is scarce in the communities where people want to live and work working people get pushed out. Rent rises faster than peoples income even among those who are earning a pretty good salary and there are few incentives to build Affordable Housing near schools, Public Transit and amenities like parks and retail services. Oftentimes the only places where people can afford housing means that they are going to have to take an hour or more from where they work or where they want their kids to go to school every single day. A lot of americans either spend a small fortune on train tickets and bus fares or they spend an eternity sitting behind the steering will on the daily commute. A lot of our folks wind up in food deserts where its almost impossible to get healthy fresh food. This crisis is a five alarm fire across america and is certainly true in my home state of oregon. In portland band a story at medford in a lot of other places i see it on the faces of families, children, fats and folks that are living on the streets. Senator cantwell and senator hatch have an important bill that i have cosponsored entitled the Affordable Housing credit improvement act of 2017. In effect it supercharges the lowIncome Housing tax credit and it also builds on what the three of us got into the 2015 tax bill which made expanded lowIncome Housing tax credit permanent. In my view this is a bipartisan, smart way to attack the housing scarcity problem and its going to mean more housing goes up in communities for tax folks who want to work and plant roots. In the days ahead i will have other ideas about how to challenge particularly helping the middle class firsttime homebuyers and doing a better job of linking services, Services Like transportation with lowIncome Housing. Today we will talk to her witnesses about some of the ideas that senator cantwell and hatch have put forward and i want to thank the two of them and i will particularly note after the events of last week colleagues it is more important than ever to be very concrete about this issue of bipartisanship and not just make it a rhetorical talking point and thats what we are doing today. Thank you mr. Chairman. Thank you senator. I also would like to thank senator cantwell. She was the one who suggested this hearing and we have gone out of her way to make sure that we have it. I just want to thank you for your efforts in this regard. I would like to welcome each of our five witnesses today. Im confident we have some of the nations greatest on housing and urban development matters. We will hear from mr. Daniel garcia diaz director Financial Markets and Community Investment group of United StatesGovernment Accountability office. Mr. Garcia diaz leads a range of reviews covering mortgage finance, rental, Housing Economic Development and insurance specific way he led recent reviews of Management Issues in the department of housing and urban development of homeowner affordable rental housing. Low Income Housing tax credits and the federal terrorism Risk Insurance program. He is also led reviews and programs and regulatory changes authorized under the emergency Economic Stabilization act in the doddfrank wall street reform act. Mr. Garcia diaz joins the gao in 1998. He hasnt xers degree from Dartmouth College and a masters degree in Public Policy from Harvard UniversitysKennedy School of government. Then we will hear from mr. Granth whitacre president of the National Council of state housing agencies. Mr. Whitaker hails from my home state of utah and has been extraordinarily helpful as we have prepared for this hearing. He has dedicated his career to serving the financial needs of low to moderate income families in our small state of utah. He currently serves as president and ceo of Utah Housing Corporation a selfsupporting statesponsored Public Corporation which has been funding and promoting Affordable Housing in utah since 1977. Mr. Whitaker was appointed to this position or to the position of president and ceo in january of 2009 and has served in that capacity since that time. Mr. Whitakers experience at uh sea started back in 1979 before the last time we reform the tax code. Mr. Whitaker earned a bachelors degree in Business Management from the university of utah school of business process took only worked on postgraduate studies at the university of utah and the universitys professional education division. Third they arent both dr. Catherine or reagan professor of Public Policy and planning it and why use Wagner Graduate School of Public Service where she is also the faculty director of the firm and center for real estate in american policy. She recently served in april 2014 to january 2017 as the assistant secretary for policy development and research at the department of housing and urban development. Her primary Research Interests are at the intersection of poverty in states. Among other she has served on the board of the reinvestment fund, the vice report for and why you institute for poverty, policy and research and the Editorial Board for the journal of policy analysis and management. She has been a visiting scholar at the Federal Reserve bank of boston and economic studies group at the brookings institution. Doctors oregan holds the hd in economics from berkeley and spent 10 years teaching at the yale school of management. They will hear from dr. Curt mcclure of the urban Planning Program at the university of kansas. After mcclure has won several awards for his research on housing and urban planning produce academic careers included an appointment a scholar in residence and resident of the is department of housing and urban development. Serves on the board of editors of housing studies and the journal of planning, education and research. He is associate editor of housing policy and debate. After mcclure holds a masters in city planning degree from the Massachusetts Institute of technology and it ph. D. Degree from the university of california at her glee. Finally mr. Granger mcdonnell board of directors of the National Association of homeowners and president of them donalds companies. Mr. Met donnell is a texasbased donor and 40 years of experience in the homebuilding Affordable Housing for communities in need in the states ware and small metro areas. Mr. Mcdonald also has extensive experience working in the nahb leadership including more than 30 years on the nahb board of directors and cheering the federal government if theres Committee State and local Government Affairs committee the Housing Credit Group the multifamily council. Mr. Mcdonalds holds a degree in real estate and finance from the university of texas school of business. We will start with you mr. Garcia diaz. You will kick this off with your opening remarks if you will. Thank you. Mr. Chairman Ranking Member wyden members of the subcommittee thank you for the opportunity to be here today to discuss the work of the lowincome Tax Credit Program the nations largest source of federal business for developing Affordable Housing to the past three years we have completed three reviews of this program with in a current effort underway working on Development Cost under the program. We afford with a total of 17 different allocating agencies in 14 states and the district in conducting these forward reviews but i want to recognize the corporation of these agencies during our site visits and responding to requests for information. I look over to continuing a productive working relationship with them. The Internal Revenue service is in charge of administering the program. While local allocating agencies are responsible for daytoday implementation of the program my Statement Today focuses on allocating agencies implementation of federal requirements and irs oversight for the program. We found allocating implemented processes to address key federal requirements but we have some concerns i would like to highlight in my remarks in our prior reports the allocating agencies are responsible for learning irs about property noncompliance. Problems with property physical condition of the most common form of noncompliance. We found that agencies. When i submitted noncompliance reports to irs for types of violations were portable and the level of supporting details provided. Because of these differences it is not surprising that number submitted of noncompliance reports nine agencies we examined range from as little as one to more than 1700 a one year period and in fact we are aware some agencies have submitted a few were no complaints reports to irs over a 10 year period and irs has not followed up with them. Furthermore we found irs has done very little to assess the noncompliance information it receives. Iris is no method to determine if the issues reported that been resolved for companies have recurring noncompliance issues. In addition we also found Critical Data on allocation amounts of certification were not complete and reliable. For example we could not tell how often properties are placed within required timeframes. A common problem has been irs oversight of this program has been minimal. Over the past 30 years the irs is on its allocating agencies seven times. Even when these audits were conducted they also yielded multiple findings including Agency Policies that conflicted with the code or treasury regulation incomplete or outdated qualified application plans annual reports to irs with errors and so on. We have some thoughts on how to strengthen oversight and accountability in the light tech program. First with respect to noncompliance we made two recommendations to irs clarified when agencies should report noncompliance and evaluate how it can improve on compliance information by leveraging the physical inspection data system. These recommendations remain open. Second in response to our concern about data quality who recommended the irs stress reduces and control on credit allocations. Iris did not complete its implementation of this recommendation but has taken steps to improve and family and more significantly we continue to believe the irs, continued believe that hud a department of housing and urban development can be a resource to augment irs oversight capabilities. Other tax credit firms such as Neiman Marcus and the stark rehabilitation have a former partnership granted in statute for the relevant subject Matter Agency to assist in oversight Data Collection and analysis and reporting in technical assistance. How does well positioned and efforts to monitor physical and Financial Condition of properties address federal fair housing goals and perform other tasks of managing Affordable Housing programs all areas which irs has no specific expertise. Over the past 30 years itech has been the most tool for Affordable Housing nationwide and we believe investing in oversight and accountability will ensure the agencies made Program Requirements use federal resources effectively and ultimately achieve emissions goal of providing Family Safety and Affordable Housing which is so desperately needed today. This concludes my opening remarks and thank you for the opportunity spoke to speak today and id be happy to take any questions you have today. Mr. Chairman senator wyden members of the committee thank you for this opportunity to testify on the half of the National Council of state housing agencies. I am granted whitacre chief executive officer of the Utah Housing Corporation could also serve as president of nch essay a nonpartisan National Organization that represents state Housing Finance agencies through thank you mr. Chairman and senator cantwell for your steadfast support for the lowIncome Housing tax credit in private activity housing bonds per thank you for your leadership in introducing the Affordable Housing credit improvement act s. 548. I also want to acknowledge senator wyden and the many other members of the committee who have cosponsored this bill. We urge all senators become cosponsors. Bond programs have long enjoyed strong bipartisan support in this bill is no exception. Already nearly on