Senate Banking Committee Holds Hearing on the State of Housing 2023
This week the Senate Committee on Banking, Housing and Urban Affairs held its first hearing in the new Congress, focusing on the State of Housing. Chairman of the Committee, Sen. Sherrod Brown (D-OH) stated, “We chose the state of housing because that is to me the number one priority on this Committee.” The witnesses included Dr. Christopher Herbert, Managing Director, Harvard Joint Center for Housing Studies; Dr. Robert Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy, National Association of Home Builders; and Mr. Lance George, Director of Research and Information, Housing Assistance Council.
Rent Controls
Sen. Tim Scott (R-SC), the new Ranking Member of the Committee, focused on renters who continue to be impacted by policies that forbid landlords, including Mom and Pop landlords, from setting rents at market rates. The Senator focused on how rent control or rent stabilization, depresses supply, exacerbates discrimination, reduces both quality and safety and makes housing less affordable. Witnesses described how rent control type policies act as a tax on supply in the long run. Sen. Scott agreed that they’re counterproductive if the ultimate solution is adding additional supply, whether it’s rent control or other harmful regulatory policies that show up the local level, the ultimate consequence is that such policies drive production elsewhere.
Exclusionary Zoning
Chairman Brown (D-OH) discussed regulatory cost burdens and estimated that about a quarter of a typical newly built single family homes purchase prices is due to various kinds of regulatory costs. This burden can be even larger for apartment buildings due to delay costs and zoning issues. Growing regulatory burdens such as exclusionary zoning practices, have made it very difficult to build entry level housing for first time homebuyers. Sen. Scott agreed and stated that exclusionary zoning is uniquely and specifically a local issue that many parts of the country face. “The truth is, though, that we need to be able to bifurcate our responsibilities versus somebody else’s–the truth of the matter is some things need to be challenged on the local level, not here in Washington.” said Sen. Scott during the hearing.
Increasing Homeownership Through Down-payment Assistance and Tax Credits
Seeking ways to increase homeownership, Sen. Mark Warner (D-VA) discussed the importance of providing employer-based tax credits for down-payment assistance for first-time home buyers. This would have the additional benefit of worker retainment for employers struggling to hire new workers . Members and witness also agreed about the need to expand the Low-Income Housing Tax Credit and highlighted the potential of the Neighborhood Home Investment Act. The Neighborhood Homes Investment Act would mobilize private investment to build and rehabilitate homes for lower- and middle-income homeowners, with estimates showing it would support 500,000 homes over 10 years. Members also discussed a proposal to take the modified mortgage interest deduction included the 2017 Tax Reform Act and convert it into a broad-based homeownership credit. During the last Congress, Sens. Warner, Chris Van Hollen (D-MD), Rev. Raphael Warnock (D-GA) and Jon Ossoff (D-GA), and Sen. Tim Kaine (D-VA) introduced the Low-Income First Time Homebuyers (LIFT) Act to establish a new program to help first-time, first-generation homebuyers – predominately Americans of color – build wealth much more rapidly. By offering new homeowners a 20-year mortgage for roughly the same monthly payment as a traditional 30-year loan, LIFT would allow them to grow equity twice as fast.
Access to Transportation and Employment
Senator Robert Menendez (D-NJ) questioned witnesses on the challenges of connecting affordable housing to good paying jobs and why affordable housing is increasingly located in areas that are away from job centers, forcing many workers to pay higher transportation costs or work fewer hours. A report by HUD described how low-income families who lived away from employment centers spent 40 percent of their income on transportation costs. Sen. Menendez had previously introduced the Livable Communities Act, which would encourage local communities to partner strategically to develop bold, innovative solutions that reflect their unique character, such as an aging population, while leveraging existing assets — including access to transit to help revitalize neighborhoods, spur economic development, create jobs, and address affordable housing needs.
Renter Protections
Sen. Elizabeth Warner (D-MA) discussed the need for increased investments in housing and highlighted the American Housing and Economic Mobility Act, which she introduced last year. The bill would seek to control the cost of renting or buying a home by leveraging federal funding to build around 3 million new housing units – bringing down rents for lower-income and middle-class families by 10 percent according to an independent analysis from Moody’s Analytics. However, she also stated that the problem that renters face go far beyond the supply issue.
“The severe shortage of homes paired with growing persistence of greedy corporate landlords has made this problem worse, and put housing out of reach for many families.” Sen. Warner stated before the Committee. Sen. Warren had already urged the White House to cap rent increases on millions of units in properties with government-backed mortgages, including those guaranteed by Fannie and Freddie. Prior to the White House’s announcement on the Blueprint for a Renters Bill of Rights, Rep. Jamaal Bowman (D-NY) and Sen. Warren sent a bicameral letter urging President Biden to pursue all possible strategies to address rent inflation, end corporate price gouging in the real estate sector, and ensure that renters and people experiencing homelessness across this country are stably housed this winter.
Sen. Warren stated, “In fact, the day the White House is framework was announced the real estate lobby celebrated and they bragged that they had watered down the administration’s announcement. This is the very same industry that spent over $100 million on lobbying last year, including to fight against wet renter protections and at the National Apartment Association, the organization that lobbies on behalf of corporate landlords said, quote, what we can say with certainty about the Biden administration’s Blueprint for Advancing a renters Bill of Rights is that in a ways advocacy helped avert an executive order…what does it tell you that the landlord lobby is celebrating an announcement that was purported to be about protecting tenants?” Sen. Warren concluded by highlighting a recent House Subcommittee investigation that found corporate landlords had evicted nearly 15,000 families during the COVID eviction moratorium, with some having received federal financing. ”I think that’s fundamentally wrong and that anyone that’s breaking the law should not be permitted to participate in these federal programs.”
Source of Income Discrimination
Sen. Van Hollen (D-MD) discussed voucher discrimination and re-introducing his legislation (Family Stability and Opportunity Vouchers Act), “I can talk about the challenges that we continue to face where there are some homeowners that discriminate against those who are using vouchers, obviously, if we’re going to, you know, work to try to make sure that there are more opportunities here. We need to make sure that there’s that people aren’t discriminating against those who are using a voucher as part of their rent payment… I happy to look at both, you know, a requirement that people not discriminate based on source of income, but also what are some of the carrots that you think that need to be applied?”
To view the full hearing, click here.
Rep. Williams Introduces Broadband Legislation
This week, Rep. Nikema Williams (D-GA), a member of the House Financial Service Committee—introduced the bipartisan Home Internet Accessibility Act. The bill, if passed into law, will gather information on all federally assisted housing that lacks the capacity to support broadband service and will task HUD with producing an action plan, including retrofitting, to close Internet service gaps across our country. “Over the last few years, we’ve seen how vital high-speed broadband is for our daily lives. But too many coverage gaps exist, hurting marginalized communities. I recently hosted a broadband roundtable and my constituents were loud and clear: it’s too tough simply getting their homes connected. Congress must close the digital divide but first we must know where connectivity gaps exist. The Home Internet Accessibility Act is an important step to ensure every home is connected to broadband and everyone can unlock the opportunity at our fingertips—no matter your ZIP Code, no matter your bank account,” said Rep. Williams. NAHMA supports this bill and will continue to monitor its progress in the 118th Congress.
Text of the legislation is available here. To view the press release, click here.