>> a healthy democracy doesn't just look like this. it looks like this. where americans can see democracy at work, where citizens are truly informed, a republic thrives. get informed straight from the source on c-span. unfiltered, unbiased, word for word. from the nation's capital to wherever you are. because the opinion that matters most is your own. this is what democracy looks like. c-span powered by cable. >> next test went on the entrance and housing sectors including the impact of the environmental social and governance mandates. esg stanford investment framework for an organizations environmental social and ethical practices for the discussion includes its effects on consumers and markets in the face of natural disasters and climate change house financial services subcommittee hearing is

two hours. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> the subcommittee on housing and insurance will come to order. without objection that chair is authorized to declare a recess of the committee at any time. is hearing is entitled how mandates like esg distort markets and drive up costs for insurance and housing.

without objection all members will have five legislative days within which to submit material to the chair for inclusion in the record. i now recognize myself. the subcommittee has convened today for hearing entitled how mandates like esg distort markets andnd drive up costs for housing and insurance this hearing as part of the committees continued continuing work this month tonu investigate the far-reaching impacts of a nutrient in the financial servicesic world. force government esg mandates. for for those are not familiar with it, esg is the latest progressive buzzword for environmental, social governance factors here esg is a form of virtual signaling where companies proclaim how enlightenedwh they are based on their environmental, social or corporate governance actions,ns

even if you have to ignore their fiduciary duty to their stakeholders or decrease the value of their goods and services to consumers. those that give into esg movement think that it will make their company more popular with progressive agitators and investment companies. those that don't give in our pilloried as protested for having the audacity to focus their business on their business. essentially esg is in many cases a modern shakedown tool brought to you by today's counsel culture. now, some might say what's wrong with the country company becoming more involved in environmental, social or corporate governance issues and telling their customers about

its values? the problem becomes when esg is not being offered as a choice but as a mandate. esg mandates, like so many other government mandates before it, are always offered up as harmless tweaks onle the path towards social enlightenment, free from cost or ill intent. that will make the markets work better. of course the reality is the exact opposite. mandates like esg distort markets, drive the cost of products, reduce consumer options, create scarcity and misalign investment capital. made metrics like esg scorecards are created to determine which companies are in the good graces

of left-wing activists. these modern day social credit systems drive a wedge within open markets by directing investments to companies that satisfy progressive demand. your companys access to capital should not be dependent on being more woke than your competitors are left shouldn't be able to cancel your business because you don't comply. esg scores in mandates create social credit system that makes life harder for american consumers, businesses and retirees with little or no discernible benefits. today's hearing will explore the impact of growing esg movement on two different industries, housing and insurance. and what it means to the consumers. because ultimately that's the job of government regulators, to

protect customers from collusion and from fair practicing. with that i would like to yield one minute to my colleague, mr. huizinga. >> thank you, madam chair pete i appreciate the opportunity to address the subcommittee period last last year the supreme court building west virginia versus dpa government bureaucracy cannot arbitrarily expand their own regulatory reach outside of the legal process. this new form of regulatory activism ignores reality forcing american companies to defend themselves against himself against regulations and rules that are immaterial to the business model the rights to permit esg policies and housingi and interest will come at a price leaving taxpayers and our constituents with your choices and higher costs republicans will continue to defend capitalism as a prisoner for the ideology of the american people through the regulatory process. i appreciate you allowing me to waive onto the committee, and with that ideal tobacco.

>> i yield back. the chilled out recognize wrecking them on the subcommittee on housing and insurance, the gentleman from missouri, mr. cleaver for five minutes for an opening statement. >> thank you, madam chair. the title of today's hearing is how mandates like esg distort markets and drive the cost for insurance and housing. a mandate by definition is a statute, a law, rule, regulation, code or ordinance duly adopted by any government authority the united states as in most nations we have different levels of government and different branches of government in mandates at each level. mandate is the center mandates of costs and benefits which must be debated other individual merit for each of the witnesses withn us today based on what ie seen in their testimony and their own mandate to discuss, scand i would hope that this

hearing will take on clear focus by the end let me just say this. in terms of cost i am very concerned about the severe financial and nonfinancial costs while failure to adequately address environmental, social, and governance concerns. the best things in life are nots always free. major also has some mandates and that we're going to have to deal with whether we want to or not. in recent years we have seen frequent and severe natural disasters in the united states including hurricanes, wildfires, floods due to climate change. an increase in people living in high-risk areas such as coastal areas are vulnerable to severe storms and flooding have worsened the impact. lowering low and moderate income households are disproportionately exposed to risk due in large part to

historical discrimination and underinvestment in infrastructure in our community spirit this is a most material impact on insurance costs. according to fema, roughly two-thirds of communities facing hazardous risk have not yet adopted hazardous resistant building codes which if adopted and all future construction would afford more than $600 billion in cumulative losses from floods, insurance paying out large amounts of money. inne addition, current energy codes extend habitability during these weather induced incidentsd by as much as 120% during extreme cold, and up to 140% during extreme heat while reducing death by 80% and 30% respectively. communities that adopt energy codes also save money for residents and businesses and

approve community health and resilience. 13% of u.s. households are now severely energy burned and paying more than 10% of their income on energy. the crisis of interest costs is not esg mandates that just the e opposite. there are significant costs for failing to implement t esg mandates that are passed on to others and pushed off to be paid at a nether type and esg mandates will continue to be irreplaceable in reducing risk that drives cost and approving the resiliency of current and future housing stock with an eye toward affordability and racial equity. democrats are leading the way on this issue that we are required to address. we went through and approved the infrastructure and investment and jobs act as well as the inflation reduction act to help industry and local government

better address the underlying issues. and housing, social considerations were ignored and discriminatory zoning to increase the costcr of housing development and try both economic and racial segregation has flourished and flourished democrats holding the weight of the solutions as well as the housing supply and affordability act. andfo yes, in my backyard act by american housing economic mobility act in several pieces of legislation put forward by ranking member waters but the reality is that by reducing barriers is essential to fixing the supply problem it will not be enough to address market failures. even with common sense regulatory reforms builders cannot have low enough rent without subsidy and support for housing must be built with the long-term aim and be able to withstand the environments they are built into it i hope we can have a discussion today rather than denying the importance of esg mandates but to factually

discuss how we can best move forward with esg concerns in a sensible way. madam chair, i would like very much for a moment of personal privilege. >> without objection spirit thank you very kindly. i have been here on this committee for almost 19 years, and we've had a lot of people who have been here with us, which of those people have made the committee work, make the committee actually function both on the republican and democratic side from time to time we have to say i do some of our best staff members to activate franklin is having his last day with the committee to he's been here for a while. many of us remember all during the covid crisis he was a first phase we saw every morning, for good or bad. but he was there and gave us

great comfort. he made sure that everyone was connected during a very turbulent time in our country. so i just want to express on behalf of all of us our appreciation for his work, and it may be of some importance to his mom and grandmother to know that your offspring has been very -- [applause] spirit thank you very kindly, madam chair. >> thank you for your service. today we welcome the testimony of mr. bill for the president and ceo of co-industries. we also welcome ms. alicia huey the chairman of the national association of homebuilders and the president of aga homes ink and we welcome mr. jerry said darrow.

mr. said darrow is the director of finance insurance in trade policy program at the street institute and of course we also welcome ms. carolyn nagy. we thank you for taking the time to be here today. you will be recognized for five minutes and you may give your presentation is your testimony through without objection or written statement will be part of the record. you were now recognized for five minutes to give your remarks. >> thank you madam chair ranking member cleaver and members of the subcommittee for the opportunity to testify today. i'm the ceo of co-industries the third-largest u.s. factory built

homes with faster we delivered over 19,000 homes to deserving families. today i'm testifying on the half of the manufactured housing institute where i am vice chair. with regard to esg good companies understand considering all stakeholders including the environment is good business. the challenge lies in the trade and the execution. we have consider mandates and relations which are only focused on one aspect of esg often resulting in unintended consequences. while well-intended to send a liable -- undeniable that a lack of perspective can get in the way of companies being able to move the ball forward on environmental and social improvements while at the same time creating jobs building the economy delivering solutions to problems such as affordable housing. want to discuss the example of the well-intended regulatory mandate that if allowed to proceed as proposed will

directly hurt those were on the cusp of affording a home. this is energy efficiency standards being imposed by the department of energy which will drive up costs to manufactured homes and without achieving energy objectives. the question is not just whether there is a return on the upfront costs. whether the prospective homeowner can afford the cost at all. based on studies at a cost of the doa rules are conservative estimated at $6000 over 900,000 households priced out of homeownership. the trey dopson consequences are very real. want to emphasize and proud of the manufactured housing industry's record. her virtue of our controlled and efficient processes we are inherently more environmentally friendly than other sources of housing. we have a long history of consistent and ongoing quality and energy improvements and we have a strong and positive

working relationship with our regulators. this is an industry that agrees with the objective of continuing to improve energy efficiency. no one needs to be dragged to do the right thing. as result of what i do as a legislative -- we now face to regulators with overlapping -- how does expected to provide one set of federal standards considering product safety, quality costs in the objective increasing affordable housing. however as a result of an unfettered rider into thousands of d.o.e. is separately seeking to singularly drive energy efficiency for lower income families. the d.o.e. rule holds the manufactured housing to more stringent standards than other forms of construction as a burden of homebuyers and its impractical given our unique manufacturing and transportation process.

d.o.e.'s execution of the mandate has many problems. fundamentally the process and what they have been asked to do is flawed. they could be readily corrected with h.r. 3327. clarifying how does the sole regulator requiring d.o.e. human energy mandates to work through the step aside process does not stop our path on energy efficiency. requires one objective to it and established holistic process. the subcommittee's topic this is a microcosm of the esg challenge. well-intended. myopic attempt to regulate singular profits are bound to mislead not subjected to evaluation. they are in a number of esg topics that i think cover but i know my time is limited. for example is the role the federal government to eliminate zoning barriers that prejudicially precluded our homes from needed areas. we are looking forward

advantages to the playing field. or we can compete with quality lower-cost homes. the central point about to make this providing affordable homes is incredibly important social need and manufactured housing is in a position to serve. factory built housing is least expensive form of funds subsidize homeownership. it enables us to do good work. we can dramatically increase affordable housing while modeling corporate responsibility singularly focused on regulations in this holistic process. thank you. and thank you. you are now recognized for five minutes to give your remarks. some may thank you madam chairman and chairwoman de la cruz and ranking member cleaver and members of the subcommittee. pleased to appear before he came came to have the national association of homebuilders to share her views on how

burdensome regulations and mandates for environmental social and corporate governance policy can affect their industry's ability to increase production of quality affordable housing. i am for 2023 chairman of the board. a typical member builds 10 homes per year and in our small businesses and most of us are not directly impacted by esg decisions however esg considerations are given more credence to address climate change and other social issues in becoming increasingly -- as a result government supported the issue is more likely to impact housing production and affordability. as the esg debate was forward in this country members are increasingly concerned about the far-reaching impact in how we will be challenged to comply.

esg policies have cost insurance companies to drop out in some areas and raise rates and others. vendors are being urged to minimize the risks associated with their portfolios in lending in certain locations are increased their borrowing rates. like doing business is publicly. companies may be required to supply their wrist due to larger companies in the supply chain woes -- projects across the nation worried that esg disclosure requirements could further prevent availability and building supplies. finally where concerned over reliance on esg factors often ignores the tenets of consumer choice. project feasibility key considerations for homebuilders. like myself members within the communities in which they build. our local workers and the

diversity price point to run our businesses and responsible way and make contributions to the social and economic fabrics of our towns. however government regulations continued to make it more difficult to bright providing affordable housing project. construction is one of the most heavily regulated industries in the country. we assess the impact of this regulation burden we recently did a study that shows approximately 24% of the press price of a newly built single-family home due to regulatory burdens imposed by local state and federal government to up to 41% of development costs are due to regulation. these actions have been taken over the past two years to enter federal post his revelations that ad more in certainty and cost to the holmdel processing negatively impact the housing affordability. these include recent legislation

that issues the lure of federal dollars to state and local governments pressure to adapt energy codes growing effort by esg policies to gain support for policies that ban propane and existing home greatly limiting choice. a push to that prevent injury to increase energy efficiency standards for electrical distribution plans during a time when a historic development across the country. contaminate three victory uncertainties surrounding the most recent u.s. ruling under the clean water act to recent decision by fema in california to extend a critically important floodplain mapping program that will result in homebuyers need to be having to purchase flood insurance. a proposal being considered by federal agencies that will have the unintended consequence of the discouraging private-sector precipitation in the market and

family i've highlighted already a growing insurance crisis made worse by perceived risk pressures to address esg the making it more difficult for assisting potential new homers to secure available and affordable -- and development of affordable rental housing. thank you for the opportunity i look forward to working with all of you. thank you. you are now recognized for five minutes to give your remarks. the vice chair de la cruz ranking member cleaver chairman davidson just esteemed members of 70 thank you for holding today staring and the invitation to testify. i lead the end city's finance and insurance a treatment program. my focus is analysis of the property and casualty insurance industry paid my research publications public presentations in congressional

testimony that focused on drivers of insurer's performance and the impact of market and external factors on insurers and policyholders and the economy. this hearing is timely to cause environmental social and government factors can influence ensures performance and by extension the availability and cost of insurance for consumers and businesses. government mandates impacting the insurance industry including esg mandates and insurance markets leading to less costs and higher costs -- less choice pick. examples of the way that government and predetermined date can distort insurance markets include monopolies are certain insurance products and an intervention and how insurers may calculate their rates. for example workers compensation insurance is provided by a state-run monopoly in four states ohio north dakota

washington wyoming. the absence of private insurers there deprives employers of product choice in such a noncompetitive market. in north carolina it promulgates insurance rates. the state's rate here has been compared to a cartel because insurance companies set and use the bureau rates. in california regulatory overreach disrupts the insurance market in three ways. by prohibiting insurers from incorporating reinsurance ratemaking and pivoting insurers from factoring current weather trends into rate calculations allowing interveners to challenge rate change requests and implementation of the intervener process and transparency. as a result national insurers are curtailing their california insurance business.

esg mandates can also impact the availability and cost of insurance if insurers are barred from ensuring certain energy risk because power plants cannot operate without insurance and they will find coverage outside the standard market. a surplus of insurance marketplace where costs are generally higher. esg mandates can adversely impact the insurance industries large investment portfolio. property in casualty industry holds $1.2 trillion in bonds. life insurers hold an additional $3.4 trillion in bonds. this is nearly 10% of the aggregate 51 trillion-dollar u.s. bond market. esg mandates compel or prohibit investment in certain issues and ensures income can be compromised leading to higher insurance rates and to meet shareholder expectations for the

core activity of insurers is to allocate capitol to risk. premiums reflect this. past losses and claims payments are signals that inform insurers about risk. government bodies mandate factors that insurance companies may or may not incorporate into pricing. the decoupled risk in the market is constructed. .. there are three critical roles of the economy. there are claims from disasters and other losses, enabling businesses to take on risks that would not otherwise take.

in buying municipal government and corporate bonds to support our nations infrastructure to satisfy america's needs for capitol corporate america. because the insurance i >> need for capital corporate america. because the entrance industry plays a vital role in the economy mandates that may disrupt the industry deserve serious consideration to the expiration of the impact of the esg esg on insurers is therefore a timely and important undertaking. thank you for having this hearing and thank you for listening to my views. i look forward toi your questions. >> thank you. ms. nagy, you are now recognized for five minutes to give your oral report. >> thank you. vice chair de la cruz, ranking member cleaver and members of the subcommittee, like you for the opportunity to present testimony of half of americans for financial reform. we are a nonprofit working to the lay foundation for strong stable ethical financial system. oneness through the economy in the nation as a whole.

our housing and climate change crises are taking a tremendous toll on everyday working people. following years of heavy losses from climate exacerbated natural disasters, injures and states across the country are raising rates and pulling out of markets altogether for just this k farmers insurance announced it will pull out of i florida pick louisiana 11 insurers have gone bankrupt in the last two years and tens of left the state that ththis is just the beginning. this probably continued to grow worse each year, each dedicated to theec climate crisis is mitigated. this hearing also comes at a time of unprecedented housing and affordability and homelessness. in 2021 the number of minutes with1 unaffordable rents reached an all-time high with 49% of u.s. renters paying more than one-third of their income on rent. on the home ownership is still a goal for many, it is increasingly unattainable when hybrids hamper the ability to stay for down payment and home prices continued their ascent

back in terms of factors influencing insurance prices, with the exception of the national flood insurance program entrance is regulated at the state level andur our state chid to a broad diversity of political viewpoints. sunlight california have adopted more stringent consumer protections such as procedural limits onon rate increases, whie other states like florida have passed and i esg loss. yetns insurers are raising rates and withwi growing coverage in both ofte these estates, which indicate esg is not the main driver of insurance on affordability. ind the price increases? first, obviously climate change is contributing to increasingly frequent and severe natural disasters this is translated into massive often unsustainable losses for insurers. climate change is in effect upending the risk calculus our insurance system has been based on. second, reinsurance rates for

catastrophic property coverage greatly increased in recent years. july reinsurance renewal costs have increased as of this july by 30 -- 50% for some u.s. policies. the reinsurance market is global and unregulated meaning we have little to no control over their rates for what they do. third, unsustainable land-use practices common to many states and localities continue to permit or even encourage a new housing construction and disaster prone areas. these problems are obviously very complex there is no one simple solution for this really requires many agencies and levels of government acting in tandem to truly meet this challenge. first we need to support climate efforts. financial institutions must manage and mitigate climate financial risk. many lenders and insurers are contributing to the climate crisis by internalizing short-term profits through their investments in risky carbon

intensive industries while extra wise and the costs on to their consumers and ultimately withdrawing when the physical climate risk it too high. we must also improve insurance data collection. right now we do not even have access to the data necessary to understand insurance trends on a national level. which is why we support the federal insurance offices limited data request for zip code level data on homeowner insurance policies and urge the office to go further and seeking more granular data. we should consider developing a public reinsurance program for states. reinsurance price increases are major driver of insurance pricing in a public reinsurance program could allow states and communities to opt in exchange for agreeing to consumer protections and limiting our ending development in hazardous areas. we must support climate communities the ira provide large amount of federal funding to make our homes more energy efficient and climate resilient. fema has a hazard mitigation grants and buyout programs.

these resources are deeply needed we will need more of them estimate the current demand. we need to support states in lowering disaster losses by limiting your intake new development has her prone areas, vesting climate resilience infrastructure, and requiring insurers to provide premium reductions when property owners undertake home hardening improvements that will improve their bold vulnerability. while my testimony is mostly focused on insurance, with regards to housing we should require tenant protection on fha finance property incorrect on private abuses thank you for the opportunity to provide testimony on these urgent issues i look forward to answering your questions. >> thank you. now we will turn to member questions and they chair it not recognize herself for five minutes of questioning. my background is in insurance and financial services. i have been in that industry or was in that industry for over 20

years. so i find particularly interesting the comments and suggestions and your thoughts of being witnesses for the subcommittee hearing. you know, coming up to washington d.c. comedies is a small business owner myself never having a political position besides this one i have found it very disturbing when i sits in these meetings to answer always seems to be more government regulation. more government involvement. or rolling out the government checkbook in order to help people all over this country. when as a small business owner myself, in the past about the answer was looking at my own business and seeing what i could do for efficiency. how i could help my customers and my consumers.

and you mentioned florida and i'm from texas. so florida and texas have it unique kinship. and how california has had stricter regulations when it comes to price increases for insurance versus california and florida. the first thing that comes to mind is the company i worked with just because something happens in california they regulate more just not mean prices go away or the increases go away. instead the price is distributed all of those other people to absorb decisions in states like california make it. so during a time of historic information is heard how the

president of the association for the builders association said that nearly a quarter of average sales for new family homes have been due to this increasing regulation. this esg policy. in addition add onto that inflation part historic inflation under the biden administration. could you please share with me how we might be able to look at instead of having more regulations, ways that we could cut regulations and reduce costs that would ultimately be handed down to the consumer to be able to purchase more homes, to get more insurance? >> thank you, congresswoman. i think when thinking about the state to state differences sometimes it's hard too make comparisons because florida has

had a lot of hurricanes in recent years, and texas and california have it. if i was going to choose what i would rather be as a consumer of interest i would pick california. in california the insurance premiums are significantly lower. for a home worth $500,000, average rate in california is paying $1822. comparative 4900, $629 spread i'm going to interrupt you right there. you are comparing apples and oranges. we just talked about insurance is based on risk. in the state of florida you have hurricanes. just like south texas where i'm from. there is also high wind risk as well that you do not have in california. it's unfair to compare the cost because the cost of insurance is based on the amount of risk. so you don't have hurricanes you have the same wind elements that

you have in south texas or in florida. it's unfair to compare those two when you are talking about apples and oranges. we saw in the state of texas and fib was recently here asking for more money because they are going broke. they took flood insurance away from insurance companies like my own and made it a government program. and guess what? we were asking, we are asked to waive their debt because they are absorbing, and when i say they, talking about the american taxpayer, is absorbing the cost of these government subsidies. so i am real concerned about further government regulation and the cost ultimately to consumers. with that io yield back. i now recognize the gentleman

from missouri, mr. cleaver, who is also the ranking member of this subcommittee expert thank you very much madam curator i love my grandmother, both my maternal and paternal grandmother. my maternal grandmother loved spending the night over there because i could make no mistake, do nothing wrong. the only problem i had is when she wanted me to go to the store which is not i a bad thing excet i had to pass by ms. nana's house. she had a rottweiler, and i explained to my grandmother over and over and over and over, i was scared of that rottweiler whose name was satan. so she said don't worry about, don't look human face, just walked by she didn't tell him that. [laughter] because he tried to climb the fence on me every time, and so i learned a lesson that ignoring

something about make ites go awy it will not make it friendlier. if they can get out it will be satan on this whole planet if we continue to ignore climate change your ms. maggie, is a growing concern about the lack of capacity in the insurance and reinsurance markets and the downstream impact it's having on consumers and property owners mainly through massive cost spikes, covert limitations and exclusions of risk or even worse, the problem is reaching crisis levels and has begun to raise serious alarm across the entire natural system. withth trillions of dollars and uncovered, uncomfortable risk, how do we stabilize the situation to prevent massive exposure to taxpayers in the wake of these disasters? >> thank you for that question, transects.

-- transects. this week as i can cite before you, i live in a state, new york and i my neighbors in upstate new york and vermont are facing the heartbreaking loss of life, devastation of homes, businesses and beloved local institutions ultimately usually severe rainstorm i think we can say this is no longer an issue that is a hypothetical. it's here right t now. all saw this theory house building shrouded in wildfire smoke from the devastating california -- canadian wildfires integrate everything any previous year on record even before the wildfire season had begun. not to mention we're experiencing we just went to the hottest jew in recorded history. financial regulators and institutions must manage and mitigate climate financial risk. not simply push the cost off to consumers. many lenders and insurers are contributing significantly to the climate crisis by internalizing short-term profits

investments. financial regulators really need to monitor these risks and risk management methods to protect consumers, financial institutions and the financial system. in terms of how we can support localities, the first thing we need to do is support hazard mitigation planning, programs andd buyouts where they are desired by the property owners. land use as a very local issue and there's rare times when federal programs or regimes really impact things at that level. given the incentive for local governments to increase property tax revenue there's always going to be a need to provide better incentives for states to reduce this development. i think also in terms of

planning grants, hazard mitigation and building stronged building codes. one persons unnecessary regulation is another persons life saver. i think as weer all saw in the recent implosion of the, titan submersible, regulations do have benefits. they do protect people and i know where iw would rather be in a safer, more resilient building in the case of any emergency spirit thank you very much for mr. boor, would it be better if we are spending a couple of hours dealing with this problem that is real bad debating whether or not we ought to do anything and all the issues, we don't want to pay any more money, would it be better if we spent the time try to figure out how we deal with this problem that is not going to go away? >> absolutely agree. the industrys position is we

want to make progress. we have made good progress. i'll give you a little bit of background peer when do you leave early on in the process of promulgating visuals -- >> the gentleman's time hasot expired. >> i now recognize mr. luetkemeyer is also the gym at subcommittee on national security. >> thank you, madam . it seemed to have obligatory biased against insurers transferring risk of the balance sheet of the global reinsurance marketplace. one i've seen the activism in california might be the worst of all there right now california is they only state in the county that is not allowing insurers rates to based on the actual reinsurance costs as reinsurance costs go up, injures cannot have those rates reflect the entire cost as a result more reinsurers are starting to treat wildfires,

wildfires as a primary risk and not a secondary peril. the cost of reinsurance has shot on the primary insurance companies of underwriting wildfire risk has stayed more or less flat. and natural result is either insurers have to purchase less reinsurance or they will pull back from issuing new homeowners coverage in the state as three of california's top insurers have done this last year californians get fewer options at higher prices by the willing risk bounty of $366 billionas market is underutilized or transfer does make any sense california would discourage the use of reinsurance when his primary insurers are fleeing it's homeowners market courts would you come out with a great use of global reinsurance risk, reinsurance and risksharing help to benefit california consumers? >> thank you, congressman luetkemeyer for the question indeed, in california where the cost of reinsurance is not

omitted to be included in ratemaking you have a catch 22. the reinsurance rates are going up because the risk is going up, and the insurers have their hands tight and they t more than 6.9% increase that goes into theoe intervenor procs and may be extended beyond 60 days. it's unfortunate that california can't use reinsurance to its benefit to the question earlier about reinsurance, reinsurance capacity is there. the citizens in florida, a billion dollars of reinsurance from warren buffettsur berkshire hathaway, and the texas wind insurance authority secured over a billion dollars of reinsurance protection from the private reinsurance industry, and also from the bond industry but reinsurers do have the capital and are willing to deploy if

they can make a fair margin. and there are people that are standing on the sidelines as berkshire hathaway was last year when he didn't participate in the citizens program because the rates wereau inadequate spirit t would seem to me if you were incentivized to use the reinsurance market more it would drive down your w costs. ii know when i was chairman of this committee six and half years ago we were working on flood insurance and we want to use reinsurance market to help the situation butke if we woulde done over the previous 20 years we would've paid all of our claims, never had anything, any tax bill still to the taxpayers but still would've s had coverae at a minimum rate increase. there's a place for it. once the percentage of increase insurance cost due to esg regulations? >> i don't have a number for this. the main esg legislation is

directed at state public pension funds spirit okay. one of the questions that if god is with regards to the increasing costs of financing homes and how many people are unable to finance a home as costs go up. rules and regulations. can you give me an idea of what the cost of rules and regulations are from thepo standpoint of your average cost of homeowner, will be the average cost for rules and regulation to the homeowner? >> yes, sir thank you for that question for the latest anti-nha b hasas conducted that was published in may of 2021 showed regulations imposed by all levelsf of government accounted for $93,870 of average price of a single-family new home which that average price was around

$397,000. .. ome. our studies also show for every $1000 increase, 149,000 people are priced out of the market. >> okay forever $1000 increase in the cost of financing a home 149,000 people are unable to get themselves into a home is that what you just said? >> guests for. >> thank you very much the gentleman time spired the gentleman from new york is now recognized for five recognized for five minutes. >> thank you. t worsening climate events, natural disasters in this country not just along the coast, the availability property insurance mitigate this. would like family housing indicated average increase nationwide for property insurance coverage was a

staggering 26% to early 2023. some properties like affordable housing community we have seen triple digit increases. adding to the cost of housing. how can this community work toward providing some relief and greater capacity and the market to help across the country? >> the issue of insurance for multifamily housing for new affordable multifamily housing development, that is a major issue in this is another area

protections have a role to play, we are seeing insurers ask questions about how many folks are going to receive section eight benefits. anybe other area, a housing what was insurers, we do not know what formulas they are using, they treat their settings and we have seen a lot in algorithmic sprouts and it is very concerning. state regulators have a concern but so does the federal government and that's why insurance aphesis are so important and why we support it

because we can't even know what the problem is until we get a sense of what's happening so we can compare. >> thank you. is there anything you would like to ask? it's no secret communities of color and affordable housing is proportionately impacted.e how can we leveraged resources ande tools for better disaster protection and mitigation toward

the most horrible? >> could you repeat the question? >> how can the federal government redirect resources to mitigate climate change and ccommunities and community of color? -we leverage resources and tools for disaster protection? >> programs and things, we look at the existing housing and rebuild a tight house because of the regulations we have and we

are happy to do. i can't remember the housing, a lot of climate change and projects we build in the 70s to give incentives for better insulation and things would go a long way in helping climate change. >> thank you, mr. chairman. >> joe different from south carolina now) for five minutes. >> let me ask you a question, do trees have lights? put your microphone on.

do they grow in the time they die? you realize, i said trees have lives. this is no, it's left untouched. the reason california forest fires, he got regulations and it doesn't make sense. the commissioner in california but bureaucrats dictate grades private insurers can charge is ludicrous. you got a great example to talk and you can be maintained for tree lives forever, a proper time to allow major to take

heplace, he then you've got a problem and that's a lot of reason is have the problems they're having. you serve 22 million americans with a manufactured house. you and i were talking the other day, some of the issues you're facing, the most affordable housing market there is a way for go into a manufacturing house, they do an amazing job that builders cannotaz do. tell me the things you are telling me about regulations for most affordable housing housing in the country and appreciate the opportunity. >> manufactured housing is the

lower price points so we talk about affordability, here at the place where the rubber hits the road whether they can or not. pacific examples buddies the galatians, we would have to build thicker walls. >> to increase these and by doing that we have these that frankly would not work for the potransportation of our homes. the equipment that is not available and require.

redesigning hundreds of thousands of plants trying to get through this process, it would be a difficult transition but dramatically change the design and increased the cost of prospective homebuyers. >> someone putting regulations on the matter the agency come to your plan, when ago -- adequate to beer cracks, they would know a nail from the toilet so those making regulations come by and lookt? at it? we have another process of the census committee that have people from industry.

myself and other ceos in the industry and white house an ,error message was ways and standards. >> agencies work for us, we pay this out and a lot of times is forgotten in the real world business. >> thank you, mr. chairman. i think this is our third hearing and one thing i've been appreciative of and manufactured

home and across money up front at least to produce reliance, high utilityty bills, lower bils for families who can't afford it and it's not going out the window. and continue to hear this and it's taken aback because we all knew it existed before so in my district, the closure crisis was unbelievable, these are families who own their homes and cannot pay for the property taxes. there looking like he is she.

is it binding? >> it depends. >> is it binding? >> depends on the legislation. >> but right now. esg policies, are they binding? is a forcingor people -- is it binding? >> it's not. >> it's like you should look into this. >> it can be looked at because of the risk magnitude inconsistent in the investment community. >> how about you? >> yes,? ma'am. >> they are requiring them to look at these things because it's increasing the mortgage payment.ge

>> 11%ct of single-family homesr manufactured homes. >> the manufacturing homes which many claims made them unaffordable but those veimprovements reduce maintenane long-term.si is that correct? the look acting like this environmental policy around the fact that there is a climate crisis increasing manufactured home which we all know of investors, although it existed before that and now that we tell him you got to be more responsible missing you are the

reason we increase costs. >> they are not generally involved. >> it's only 11%. if you are saying of some of the reason homes are arriving, you are saying is esg. >> when did it come up in the manufactured home industry? when? 2019, 18? when did they start talking about esg in your industry? understands this, i've never even heard of it until now. i am curious because to me my family see rising costs of housing not because of esg, it's because of the other issues i wish we would talk about. majority of homes my district are less than $1100 we can't get

thanks to long because it's not profitable. sixty, 70 come together in the rental property. we have a block and to people own their homes and the rest are mentors and they are paying way more, much more than what they would have paid at the got a mortgage. i am not disrespecting you all but don't make it about esg. were failing your industry and your sector by not getting to the root cause of why the cost is going up. >> time has expired, i will notify the committee. there are 12 minutes remaining

so given the number of people here, my plan is to come back if like to ask questions, will continue immediately following folks. get your final vote in early and move forward with questions. before we adjourned, i think we have time for at least one more so i will recognize the gentleman from wisconsin for five minutes. >> 150 years, regulators and companies, it's increasingly aggressive. most recently showing data collection, climate related financial risk. treasuries own proposal to

produce the data. that's why a plan and of the members of the committee will be part of us to reveal the power the coming weeks. could you discuss the federal insurance office accumulation of power in recent years? >> thank you for the question. the federal insurance office was rated as he thought insurance companies were responsible for the global financial crisis. the banking and institutions and the role is to monitor the insurance industry. there has been more intrusion and dataa calls and most of the

large insurers make detailed granule and exposures under 10k or disclosures so the rest of the bodies are going to follow looking for a purpose monitoring, writing reports and the industry i have seen in a material way. >> can you talk about the importance of flexibility, self-sufficient durability to face themselves like floods and wildfires? this is what the industry is looking at, one of the risks associated with what we've seen not necessarily in climate changege but extreme weather wee seen. >> thank you for the question.

decision-making is critical and experts are into to the conditions in communities and municipalities but there must be flexibility to do what makesty sense for the community and the local government must retain to accommodate conditions and cost-effectiveness. consideration of risk and steps to beke taken to reduce those steps and reconsider sony and helping developers overcome. another challenge is that allotment can occur in places suited for community growth in gray the market needs it to be. >> i'll just unanimous consent and press request that the press

release is very telling. >> is the rule from doe affecting mobile homes? will this help anyone currently residing in as mobile home? >> the rules will affect new homes. >> will this help anyone currently residing in a manufactured home? >> probably what you're telling me is you understand and. >> i think they are stated. >> there's an underlying misunderstanding about your industry. >> we feel they were promulgated based on the standards and it doesn't work that way.

we've done a separate study and get to energy sufficiency. >> this is real world tangible stuff whether 11% or another percentage of americans living in manufactured homes, there's real cost associated departments like doe out of touch with what is going on and that's of the committee should be about so thank you and i go back. >> i now recognize the gentleman from california ranking member of the full committee for five minutes. >> thank you very much, mr. chairman for this important meeting on housing and as i

understand it., i would like to bring to your attention a particular issue so many americans are facing right now. number of people paying rent recently reached an all-time high so the average winter paying 30% more of their income on rent. mortgage payments have also reached an all-time high. surpassing $2900. in my state of california someone making minimum wage would need to work nearly three full-time jobs for two bedroom rental home. california's are alone. there's currently not a single state or county in the united

states were minimum wage worker can afford rent. meantime corporate landlords continue to grow housing and use inflation as an excuse to acutely the. last month i introduced housing prices respond act to increase nation's affordable housing supply, reduce rent and help end homelessness. total investments are needed to address the nation worsening housing and homelessness? >> absolutely. people of homes can afford, we

need 7 million homes affordable to americans who live below the poverty line. unfortunately because of actors like blackstone, we lose what remains at a rate faster than we can replace it. homes once affordable to lower income people have seen prices increase and in three years 36 states lost 10% of rent units so we need to build affordable housing and reform because only single-family zoning is allowed. we need to look at the federal government role funding billions purchasing and guaranteeing family properties and we have seen this result in poor conditions for tenants because

some deals only have lower paying or if you skimp on maintenance and repairs. there's a number of requirements receiving guarantees and time to consider well-being of the folks who live in the buildings because while housing is regulated, it is a national problem and federal government does have a role to play. >> the crisis we have, you support the federal, housing crisis response act including investments for green and resilient? housing? >> absolutely.

we are seeing resources in the bill should have been passed earlier because we have a huge need in publicc housing as you know. >> do you support federal investment for affordable housing response act? >> i know we have supported it in the past so we are looking into it. >> thank you, keep looking.te [laughter] >> recognizing we have two full minutes remaining for votes, we will adjourn. it shouldy be roughly 11:00 when we come back. maybe 11:10 a.m. or so.

be prepared in that time range. we won't adjourn, we will recess. we will adjourn at the end. the committee stand in recess.