hours and 20 minutes.

[inaudible conversations] the subcommittee on housing and insurance will come to order. without objection the chairs other is to declare a resource -- recess from the anytime. without objection on members have five legislative days to submit extraneous material to the chair for inclusion in the record. i now recognize myself for five minutes to give an opening statement. today the subcommittee will hold a hearing to discuss the lack of affordable housing in many communities across the country. in particular we will examine governmental barriers as well as market-based solutions to bring down the cost of housing.

americans spend more in housing than any other household expense representing 33% of that the family's budget. historically. families in many areas of the country would love to get back to that level. the rising home prices and rents as far exceeded, as far exceeded the rate of wage growth, so in cincinnati of iowa city once consider affordable to medium home prices $2,270,000 which is approaching four times the annual median household income. such on affordability is spreading far beyond parts of the country in the high cost of living like new york san francisco washington d.c. nationwide median home prices

are six times the median household income. historically the advice was three times. so this is maybe one of the most emblematic markers on the lack of affordable housing. that's why the committee has held multiple affordability hearings. last spring on president biden's misguided policy of increasing mortgage costs on creditworthy borrowers. that idea was an insult to affordability and the house responded by passing her middle-class borrower protection act to eliminate harmful cause and the senate has so far failed to act. the market is facing similar challenges renters are now cost burden than they've been in over two decades. while rents have gone up in some areas by double-digit growth in median income for renting households went down between 2019 and 2021. for many housing is becoming unattainable across the country. one in three young adults age 18

to 34 still live with parents. this impacts their ability to start a family, build wealth and contribute more intentionally to the national economy. seniors with fixed incomes and the burden of increasing health care costs are even more cost burden than ever when it comes to housing. in rural areas where land is abundant price pressure still exists. as we confront these affordability challenges which seems to get left out of the conversation and all that expensive efforts of government have not solved this problem. back to they have added some solutions for neither market-based solutions where we have remove government barriers construction of housing and encourage private-sector investment in housing. many of my colleagues on the other side of the aisle in

particular are likely to see things differently and suggest suggests we have more government war rules and more spending. maybe that's their measure of success. i hope we focus on affordability. these solutions have been pushed for years and it's interesting they are the same affordability crisis and it continues to get worse but not only have those policies fail but it seems the bite of frustration wants to avoid congressional accountability for the failure of their policies and oversight. case in point from ostia the committee has requested a housing and urban development secretary marsha fudge discusses the housing affordability plan. since may the committee offered it every month the secretary make an appearance here only to have her repeatedly declined to testify for outright refused to respond to our request. if the -- silence is a poor response to the crisis. their government operates a

special and has to do with their ability to birth a ford housing. ensuring accountability's one of purposes of this committee and i hope the secretary will finally agree to appear before committee next year. in the meantime even without the demonstrations input this committee will continue to explore how government policies are contributing to the high cost of housing in what private-sector efforts can do to address the critical issue for those most in need. i yield the balance of my time and i now recognize the ranking member for this hearing ms. presley for four minutes. it shouldn't be news to anyone that we are housing crisis. millions of americans in urban suburban and burr neighborhoods are finding shelter to be in increasingly unaffordable. homebuyers are facing record high home prices and millions of

renter households are cost burdened. amounts of income on housing. several factors to affordable housing democrats and republicans agree on the need to address barriers to increasing home construction but that is not enough. the joint center for housing studies at harvard university testified before congress even if measured such as zoning reform and land use policies they will not be sufficient to bring down the cost of housing within reach of the lowest income americans. central to the question of how to address the affordable housing crisis is answering the questions, of portable to whom? and to close the affordable housing gap to lobree come households there needs to be development in rental income over time. to put this clearly expanded public subsidies will be needed to increase and preserve access to affordable housing for

millions of americans. i believe housing is infrastructure. we must adequately support and fund federal programs that have been successful in expanding affordable housing access but it's vital to continue to strengthen and improve others but but this includes federally subsidized housing. i also hear from my constituents across massachusetts a quarter of all residents have had their income -- spend their income or more and housing. boston is the second most expensive city to rent in. the median rent for one bedroom apartment is over $3000. $3000. between 2011 and 20211 data shows the cost of a single family homes shot up 226%. i hope today we can have an honest conversation about the

affordable housing crisis and the extent to which public-private and public-private solutions are adequate to address these challenges. i look forward to hearing from our witnesses today. i yield the balance of my time. >> thank you. today we welcome the testimony of seth appleton the president of the u.s. mortgage insurers. dr. and multi-hamilton is a senior research fellow and director of the urban project at the mercado center. mr. mitchell is the vice president director of the center for monetary and financial alternatives at the cato institute. arianna royster, ms. royster is the present of -- she is here on behalf of the national apartment association. and diane yentel. ms. yentel is the presidency of the low income housing coalition. thank you for taking time to be

here and without objection or written statements will be made part of the record. mr. appleton you are recognized for five minutes to give your aura remarks remarks. >> thank you chairman davis and ranking member pressley thank you for inviting me to testify today. it's great to see my longtime former boss mr. luetkemeyer on the subcommittee. the previous step i served in policy was including assistant secretary of hud and now president of the u.s. mortgage insurers. though companies in the market every day to plan private capitol to ride access to mortgage financing primarily to first-time low to moderate-income buyers will sum up things they protecting taxpayers from credit risk. but we cannot solve the scarcity of affordable housing supply in for hayek as trades we can solve for what it's has been the primary impediment for many borrowers the need for large cash down payment. with private and my homebuyers can put down as little as 3% to build intergenerational wealth as homeowners.

we are critical partners to lenders agency and another son initiative to sustainably be get access to homeownership are getting with a $1.5 trillion in mortgages are back or private and my improper diet provides borrowers access to incredible credit also protects lenders and taxpayers from credit risk by deploying private capitol. one prominent example is the way private and my his help to de-risk the gsa. the conservatorship private and my sustained $60 million in claim and every dollar paid by a private demise of dollar to the taxpayers who stand behind the need to pay. the mouse is from the urban institute found that severity of gse loans without private and my was 11.2% higher than the severity of losses for loans with it. to that end if congress takes up gse reform maintaining the

congressional charter provision and establishing standard coverages as a requirement would ensure private capitol would contain just the support safety and soundness and system production talk briefly about steps policymakers could take to ensure private and my supports affordability. while conventional mortgages backed by private mi is most utilized option for low down payment borrowers several u.s. government agencies directly insure low down payment loans by the federal housing administration. we recognize that target the role of fha and the taxpayer-funded backstop. it's an important complement to private mi work particularly those who may not have access to the conventional market but that government agency backed by taxpayers cost of capitol required capitol levels is significantly different than those in the private-sector. policymakers should permit

promote consistent and coordinated -- that prevents undue competition between different programs in the private-sector. private capitol is needlessly crowd of the marketplace by government-backed programs and leads to increased risk to the taxpayer. in the conventional market that programs can shift risk to the taxpayers who would otherwise be formed by private capitol. fhfa finalized a rule on approval of products which members of this committee take an interest. we believe papal invitation results in proper oversight and more transparent process for approving new products. one other area of concern is recently proposed basel iii in game resolution. members of this committee of rightly observed the proposal would negatively impact the ability of certain banks to originate and hold high loan-to-value ratio portfolios.

u.s. bank capitol grill should recognize the risk to mitigating benefits of private mi and promote a level playing field among the government programs and portfolio execution. whatever action congress could take up to this committee's jurisdiction is to score in income tax reduction available for textures 2007 at 2021. congressman buchanan and panetta have legislation to do just that. the act of which several members this committee or co-sponsor. i'd be remiss if i didn't thank members of the committee for their work with the fec and the conflict of interest rule. we greatly appreciate your engagement on this issue. to close mi inc. urges policymakers to continue recognize the important role private mi place and the

protection affords to lenders and the stability of the overall finance. thank you. >> thank you mr. appel tempered dr. hamilton you are recognized for five minutes for your full remarks. >> thank you chair davis and ranking member pressley emirs of subcommittee i'm emily hamilton a research fellow at george mason codirector of beer project that local governments have imposed numerous limits on what kinds of housing can be built where. zoning rules including bans on multifamily housing restrictions on manufactured housing and requirements for minimum lot size can limit how much housing the market can provide and drives up the price of housing. these rules are contributing to -- securing affordability. while the share of households that rent has held steady since the 1950s the share of income

of median renter has increased by 25% pay private-sector homebuilders can play a primary role in addressing this growing affordability problem but only with zoning out of the way. i'll provide two examples of land-use restrictions making it infeasible to build for housing at lower prices. first minimum lot size reduction second multifamily construction for development in the washington d.c. region and third legalization of units in california. first reducing minimum lot size requirements. in 1998 policymakers reduced minimum lot special permits from 5000 square feet down to 1400 square feet within the city's interlude. these are forms set off a boom in small lot single-family construction. based on success within the

interlude policymakers needed this or form to cover the entire city in 2013. nearly 80,000 small lot houses have been built since then. the median house price is lower than the national median despite decades of higher population and economic growth than the country as a whole. that's in part due to the small lot construction. second allowing transit -- to develop in the washington d.c. region. i'll be the first to say that the d.c. region has plenty of opportunity to reach barriers to new housing construction however relevant to most other high-end coastal regions here we excel at permitting multifamily construction particularly along transit corridors. beginning in the 1960s officials in arlington county virginia began planning for multifamily construction in areas that were originally

developed with lowrise commercial buildings. in part based on arlington success policymakers in montgomery county maryland and fairfax county virginia have also embraced development and more limited areas. we see them follow suit allowing new neighbors to be built in industrial areas like the navy yard. among the regions where many of the country's highest paying jobs are located including boston, los angeles new york san francisco seattle and washington washington has the lowest median house price in one recent is because it permits multifamily housing a double or more the rate of boston los angeles new york and san francisco. and third legalizing accessory units in california. given the growing housing supply and affordability problem americans are facing state policymakers are beginning to

set limits on localities to housing construction. california are these challenges are the most dire have led the way. the state has been particularly successful in legalizing accessory dwelling units. you're typically small apartments located at the site of a single-family house. in some parts of the state most notably los angeles adu construction drastically accelerated following these reforms in 2017. today one in four residential permits in the city of l.a. is four and a duo. to wrap up local zoning rules are a key contributor to the u.s. housing affordability challenge. zoning rules limit housing construction especially relatively low cost housing construction. examples from across the country show that where policymakers have lowered these barriers

housing construction is increased. places that are more open to housing construction and improved affordability compared to their peers with more barriers in housing. the private market can improve access to housing and reduce house prices when and where it's allowed to. >> thank you dr. hamilton. mr. michelle you are recognized for five minutes for your oral remarks. >> good morning chairman davis and ranking member of pressley and members of the committee. i'm vice president and director of the center for monetary international alternatives at the cato institute and the views i express here today are my own and should not be construed or representative up any official position of the cato institute. my test was the best way for the federal government to make housing more affordable is to reverse course on long-standing federal policies. it's true that home equity frequently represents a large portion of many americans wealth

but it does not follow the federal policy should promote homeownership or especially housing. in fact home equity pitch and this depends on price appreciation and at odds with affordable housing. federal policies make housing as well as other goods and services less affordable. particularly because they artificially boost demand and inherently supply constrained markets. over proxima in the last decade growth rate was nearly double the income growth rate. as much of the last several decades but it's like to highlight three particular problems with recent federal policies. first there only three institutions fannie mae freddie mac and fha the level of federal involvement housing has been baffling for decades along with housing costs. combined just fannie and freddie stood behind more than half of

outstanding mortgage debt for decades. some years being responsible for share of close to 70% of the market. from 2090 2020 fannie and freddie alone had an annual share of the mortgage-backed security market averaging 70%. if we include jennie mae securities backed by fhm worker does in the federal share of the mbs market average 92% per year over that period. second wasteful federal spending since 2020 has only worsened the effect of housing policies. congress passed five massive spending bill starting in november of 2021 totaling $7.5 trillion. the spending spree worsen inflation and exacerbated labor market problems and pandemic related supply-chain problems leading to abnormally high price increases americans continue to experience today. through the federal reserve has contributed to higher housing costs by continuing to support

the mbs market and therefore fueling more leverage to buy homes. the fed is guilty of this policy mistake even in the low-interest rate environment. prices naturally tender price despite lower rates. prior to the 2008 crisis the fed rarely held any mbs on its balance sheet but now it acts as though it can't operate without holding massive quantities of those gse securities. between 2010 and 2022 the lowest amount held with $827 billion. from march of 2020 to march of 2022 the fed went from holding 1.4 trillion, to 2.7 trillion. although the amount has declined it still stands at nearly $2.5 trillion. in the face of rapidly rising price levels and steadily rising home prices this mortgage-backed security purchase policy made very little sense.

more broadly the problem with virtually all the federal housing policies that we have is that they are geared toward increasing demand. housing markets are almost always supply constrained to these policies constantly put upward pressure on prices and rents previous posts include everything from supporting the gse to providing housing allowances to military and other governmental employees as well as providing section 8 vouchers but the economic principals are the same for eggs distance and subsidies to pay for housing. it places upward pressure on prices because it increases the number of dollars in the same amount of housing. they do nothing to address the broader economic or social issues that affect people's ability to earn higher income and build wealth. nothing except put people into riskier economic situation. congress should pare back federal involvement in the

housing market and a close with three what i call sensible changes. first, find and enforce the excessive use provisions that are in fannie and freddie's charters and second year of the gse's focus to the financing of only primary homes in other words organizational financing. third, limit the lone loan loss coverage and fha mortgage insurance program to 50% down from 100% per thank you for your consideration and i'm happy to answer any questions you may have. >> thank you mr. michel. ms. royster are recognized for five minutes for your oral remarks. >> members of subcommittee thank you you for the opportunity to testify today. my name is arianna royster but i'm pleased to testify in behalf of the nearly 100,000 combined members of the national association and the national

multi-housing. i'd like to share with you today the housing perspective and the affordability challenge. some obstacles we face in meeting this challenge are several potential solutions. my written statement contains greater detail in all of these areas. the nations housing affordability challenge boils down to one simple fact there's simply not enough residential units to meet the growing consumer demand. decades of undersupply have set us back to the nation needs 4.3 million new apartment homes by 2035. at the same time our members report that economic and regulatory challenges are causing them to cut back significantly by developing inactivity and in some cases by as much as 50%. making matters worse is the increasing challenge in operating apartments. industry data shows on average extensive increased 9.3% with insurance and labor costs as

leading contributors. insurance is especially troubling to some multifamily property insurance premiums soared 26% year-over-year. out of every dollar of recollected, 93 cents was allocated towards operational expenses. with such a slim margin rising operating costs impacted the sustainability of rental housing for placing upward pressure on rents. expanding federal regulatory environment is a growing challenge as well. state and local laws already heavily regulate the relationship between the rental housing provider and their residents. adding federal requirements increases market uncertainty and disincentivized is investment in housing. for example the white house blueprint for renters bill of rights issued earlier this year greatly concerns the rental housing issue. while well intentioned to contemplate sweeping changes to

the federal housing policy including significant reach by the federal government into the relationship between residents and housing providers and even rent control for properties by fannie mae and freddie mac for the most significant rate of. minister to political barriers to the development of new housing are often proposed that the state and local levels of government. these must be addressed to expand access to housing. we urge congress to consider several strategies to address the housing affordability challenge. first redouble efforts into localities to remove or mitigate local barriers to development by passing the gas in my backyard or 3507. industry things are presented flooding killed more for their leadership on this important bill. second improve the section 8 housing choice voucher program which is the primary method for adding 2.1 million low income

household. improvements are needed to encourage more voluntary private-sector participation to streamline regulations of these federal dollars are used effectively and efficiently. the choice of affordable housing act h.r. 4606 addresses many of these issues. we appreciate the leadership of ranking member cleburne representative chavez. for the stewardship on the bill we urge the committee to consider this important legislation. third, congress and the frustration must keep the housing provider president relationship -- at the state and local level. one proactive step is to support a bill sponsored by representatives loudermilk h.r. 802 the respect state housing act which gives a 30-day notice to vacate requirement for turning the eviction policy back to the state and local levels where it belongs. finally congress and the administration must reject rate control is a viable solution to housing affordability. decades of research of

[roll call] world case studies show regulations of the patrons of housing in harms affordability ensuring adequate supply of qualified housing is critical to continued prosperity and household stability for americans nationwide. federal policymakers should focus on sustainable solutions and avoid any new policies that further exacerbate the challenges and inadvertently harm consumers in the process. i think you for the opportunity to testify today and i look forward to your questions. >> thank you ms. royster and mrs. yentel you are recognized. >> ranking member pressley and members of the many thank you for the opportunity to testify today. housing costs are out of reach for too many of low-income or just america but in your district in your hometown rents are far higher than the lowest income and marginalize people

including seniors, people with disabilities veterans and working families. as a result 10 million at the lowest income renter households pay it least half of their limited income on rent leaving them without the resources they need to put food on the table needed medications or otherwise make ends meet. paying so much for rent puts the lowest income person when it away from facing eviction in the worst-case homelessness. during the pandemic policymakers responded to unprecedented needs to historic protections and resources that cut evictions in half for millions of renters and moved many to safety. many of these essential measures are bipartisan in the significantly reduced housing instability and unnecessary -- during the pandemic congress showed that when it has the will

they can meaningfully help low-income renters and people experiencing homelessness access housing. congress also showed that this can be done in a bipartisan way. today renters are struggling more than ever. just as the pandemic protections expired an emergency resources were depleted renters reentered her brutal housing market. skyrocketing rents and high inflation. as a rents increased so too has homelessness. the u.s. gao has found a 100-dollar per month median increase in rent was met with a 9% increase in homelessness in that community. as the use of rents increased by nearly $200 a month. even with the recent stabilization rent caused the rapid inflation during 2021 in the first half of 2022 has done significant damage to affordability especially for the lowest income renter.

while reducing restrictive local zoning is necessary to ensure the market can respond accurately to housing demand in many communities such improvements on their own won't make housing affordable to extremely low-income households. the market on its own can't build and operate apartments affordable to households with low incomes because the rent such households can pay doesn't cover the cost for this is the basic market guide that requires the federal government to fill in the gaps to protect and prevent homelessness. this can be done through long-term investments. so juan: rental assistance universally available for all logical households and preserve and expand affordable housing for those incomes and provide ongoing research to prevent evictions in homelessness and four strength in and enforce regulatory action. there a number of bipartisan

bills before the subcommittee that would advance these goals and what have the measurable impact on the housing crisis and urge the committee to advance them. bill such as the family stability and opportunities that you act and other bipartisan bills to improve and streamline existing housing programs build housing for people with the lowest incomes improve oversight of federal disaster help and increase access to fair and affordable housing. i also urge this committee and congress to advance comprehensive solutions such as those in representative waters to essential bills, the housing crisis reform act and the ending homelessness act. the bottom line is this, rents have skyrocketed. eviction filings are rising in homelessness is increasing. the country's lowest income people are struggling to stay housed but there is a path forward.

congress can just as it did during the pandemic act in a bipartisan way to save lives, save money and provide housing stability for many. thank you can for the opportune to be here today and i look forward to your questions. >> thank you ms. diane yentel. the chair recognizes the member the full committee ms. waters from california for one minute for an opening statement. >> thank you very much mr. chairman. i would like to request the ability to take a moment of personal privilege to notes the announcement by the chairman who do -- who will be retiring. thank you very much. like to take this moment of personal privilege to acknowledge the announcement the chairman will retire at the end of this term. i can say when republicans took control early this year many democrats on this site including myself were wondering what type of chairman would be into words

that are offering used fair and respectful. he has run this committee and a wave that respects the imports of debate and although our site has sometimes abuse the rules to extend that debate he ensure that all members democrats and republicans had a chance to share their views. while we don't agree on every policy for many for that matter i have personally worked well with the chair on many issues. a national emergency general assistance program and significant resources for community development financial institutions during the pandemic to reauthorizing the terrorism risk insurance act and the export-import. eventually we got to that. he and i were up until 3:00 a.m. in the morning and that felt and he may not know that we worked closely together passing legislation before heros to his

leadership position to improve rules and to enable investors to support small businesses. i will also say that i recognized what this decision to retire was likely not an easy one the american public appreciates the server said he and his family have given over the past 20 years and i hope that the chairman knows that we still have work to do and i know they are many things that are possible to continue to prove to the american people the bipartisanship policy. with that of go onto my one minute -- from urban to rural america there simply aren't enough affordable homes the gap between supply and demand continues to grow. one of the worst housing and homelessness crisis we have

seen. the house republicans have put forth -- forward proposals that only exacerbate the problem namely they want to slash federal housing programs by 30% and hope the private-sector fixes it. it's telling rates quadrupled to 8% and housing costs are going up 47% since the pandemic. this is the first hearing we had that we focused on housing affordability. i'm hopeful this hearing remained to my friends on the opposite side of the aisle ready to join his democrats to pass legislation to end the affordable housing crisis. thank you and i go back for the rest of my time. >> i think the rank membrane will turn to member questions i recognized myself for five minutes. i thought your testimony highlighted the consequences for some of our approach.

we spend money as if tax collection doesn't matter is that deficits don't matter we rack up massive debt. we spend money more than we can collect in taxes and we spend money more than we can have people buy up up in debt so the federal reserve as a lender of last resort and has monetized debt debt not just the 2.5 trillion mortgage-backed securities. loaded up on treasuries back when they were really low. we have shown i think we can money. that part of monetary theory is true that we have shown you can't necessarily buy the same amount of stuff with the money that you. this is showing up in big ways in inflation and the price distortions of the federal reserve's ongoing buying the market back -- mortgage-backed securities are exacerbating the problem of mortgage-backed securities. the discovery of the interest rate. we are sure whether the rate is

artificially high for artificially low because you can't get a true discovery of the pricing market. i just wonder if you could tie together the idea that this does inflate the price and we are seeing across the country as much a six times the median income, essentially to incomes is the only way you can afford to purchase a house in the historic metrics. could you talk more about the price discovery with the demand side policies and doesn't that lead to a problem of supply? >> you always have supply constraints in the housing market whether lack of available land or whether it's it takes a well to build a house or an apartment building. so layering on top of that everything we do from the re-entry perspective makes it easier. there's constant pressure to lower down payment requirements

to increase down payment assistance to relax underwriting restrictions and make it easier to get a loan with a lower income than previously. all of this seems to take away any incentive for any seller to lower the price. they increase the incentive to increase the price and best we have been saying for decades and decades and decades. this is thing going on for a long time. we sort of have a short memory that this happened with fha in the late 60s. we took a break and then we came back and did begin. >> thank you for that and i would turn to mr. appleton when you look at a situation where you've got 82% of the market has an insist rate below 5% and rates are closing at 8% this is a dynamic affecting prices and

availability and supply as well. historically people want their homes built are ready have a home in togo with new construction often and that turns into more affordable houses. what is that dynamic like right now and affecting affordability? >> i take your point there's a lot in effect for those who have homes with historically low interest rates coupled with the fact that we have historically under built supply since the great financial crisis particularly entry-level supply as we discussed earlier. that's why the private mortgage insurance is dedicated to helping creditworthy americans, home ready americans access the market with less than a 20% down payment. >> thank you for that and appreciate the emphasis on the private-sector there there but one things we will highlight extensively this is a need to increase supply and affordability challenges in one way we do that is through zoning reform and mandating high density housing often something

hud wants to do. how do we strike this balance between efforts in washington that have central planners say we know right here you need high-density housing and ability for local governments and local communities to make their own decisions about planning and zoning? >> thank you chair. i think this needs to be primarily an issue of state and local. generally the proposals that we hear from the federal government are to encourage localities to reform their description through federal spending programs that there's a mismatch between this tool and the places where we most need to see reform to ensure the most exclusionary policies are the highest income localities where federal grant may mean the lease. there's absolutely a role for members of congress and other leaders to use their bully pulpit to draw attention to this matter.

>> thank you for that. my time has expired and i now recognize the gentlewoman from massachusetts ms. pressley for five minutes. >> thank you mr. chair. thank you all for joining us for this hearing. i've been in congress now for five years. freshman orientation was the process of legislating in governing is very easy, long days and the plot and the plot is the people. i do believe that on the issue of housing this committee has lost the plot. it has taken us 11 month to have one hearing, on housing when this is an issue of great consequence determining health outcomes social and economic mobility. it is a transcendent issue. it is herb and it is rural and when i'm in community i had town hall last night with thousands of my constituents and housing

dominated that discussion. let me make it plain. housing is the fundamental human right. since home prices have risen rents have skyrocketed its a right has become less attainable for working comes across the country especially in the massachusetts area. the cost of a single family home is 11 times greater than it was in 1980. in a family integrated boston area a single family would need an annual income of $300,000. so we are pricing out an entire generation rum homeownership for this is one of the greatest challenges of our time and we have got to confront it and do so thoughtfully and with urgency. conclusion or zoning laws are a major contributor to our housing shortage there for decades inclusionary zoning laws that exclude people of color immigrants people displaced in low-income families. how is single family zoning

raised housing prices? >> one of the challenges in our housing market is supply of apartments by keeping off the demand. in many communities there aren't enough apartment for the people who live there or who want to move there. it's often restrictive local zoning and these local laws restrict the construction of often any kind of apartment and especially affordable apartments which drives up costs for everyone they low-income people the most in these restrictive local zoning laws often maintain and worsen segregation and racial inequities. so the federal government should do all it can to incentivize or require state localities to remove these descriptive local zoning laws so that the market can build apartments for middle

income people. but even when that happens, housing will not be affordable for extremely low-income households because even if those restrictions aren't in place the private market on its own can't operate apartments that are affordable to people of low income because the rents that they can pay doesn't cover the cost to operate and maintain those costs. for this kind of a market failure government intervention, federal government intervention in subsidies are necessary to make apartments affordable for people with extremely low incomes. >> thank you and the racial wealth gap continues to grow and i'm concerned about the reality of modern-day redlining. i'd like to enter 2002 article entitled black and people are more likely to be knighted mortgage loans.

.. this is a modern date read it whining. how does it impact homeownership with communities of color. what forms do you recommend to curtail his practices? what discrimination leading us against the law but it absolutely continues in practice. and i would share some statistics from our colleagues at national fair housing alliance that have shown fair housing complaints in 2022 have been at the highest record ever. and complaints around sorts of income discrimination or discrimination for people experiencing violence has been

especially pronounced. even with filing rates being as high as they are many more cases of discrimination go unreported so the problem is pronounced. occidental it is time has expired the gentleman from florida is recognized for five minutes. >> think it mr. chairman and i want to thank and i want to thank the witnesses here today. this may be one of the best panels we have ever had on the subject. usually we just hear send more money you have really good suggestions. i do wish we have quite an impact and noted it. next time i will include them. you all the really good i appreciate your suggestions are very enlightening. much broader than usual.

but especially good to hear what some of the local and state governments are starting to actually do to take action to be part of the solution and the problem. but i wonder if congress could do just one thing. to address the homeless problem what would that one thing be? and i'd like to ask each of you to answer that. x yes, if it could do one thing from a financing perspective the clear coordinated and on these supply-side make sure you drink everything to encourage the construction and development of entry-level. and that is what we have been missing. >> thank you. >> is an opportunity for the federal government to take a more active role in encouraging

state or local zoning reform. such a program should be designed to a race to the top program to reward housing marking outcome rather than reforms on paper. more housing being built at lower prices. will take a slightly different tack to there. will take a slightly different tactic there. perspective is important. the politicians and members of congress have an important job giving that perspective. in terms of homelessness, according to hud we have roughly 2.1% and i don't consider that she housing crisis. of 333 million. so that perspective is very important. >> thank you.

i would say if we could ask the yes in my backyard act because as we stated the supply is the major issue in terms of housing affordability. i think most of the panel has recognize that. we need 4.3 million new multifamily units by 2035. this lowered the barriers for housing development would be helpful. >> thank you for the question. ending homelessness was extremely low income. that requires subsidy and rental assistance, section eight vouchers preserving and expanding our public housing program and other affordable housing solutions for the lowest income people. creating an access to the type of affordable housing with a wraparound supportive services has been shown again and again

and the research and evidence be highly effective in ending homelessness. in your district and your state that have effectively ended veteran homelessness using the housing first approach. >> very good. again i think the witnesses and yelled back. >> the chair now recognizes the ranking member ms. waters for five minutes. >> what we say here calmly talking about housing i disagree with ms. michelle i don't know what you call a crisis. people on the ground and the greater los angeles area is a crisis. 600,000 people on the ground every night is a crisis. i don't know how you do find one but we cannot have a hearing on affordable housing and what we y talk about homelessness.

last congress under my leadership committee democrats critical new investments on housing, through the american rescue plan act which help re-house people experiencing homelessness and kept over 11 million struggling renters and homeowners housed. we have proven time and time again we invest in federal dollars we can prevent homelessness and we can save taxpayer dollars over the long ran. despite to promote housing during the pandemic the fact of the matter is with pushing more people out of their homes but these, the government accountability office found that with every 100-dollar increase in rent there's 9% increase in homelessness. so, can you explain what the

research tells us about the leading causes of homelessness in the examples of cost-effective solutions of whether or not you agree with me there is a housing crisis. quick there's absolutely housing crisis thank you for the question. housing costs are the primary driver of homelessness. the one thing all people experience homelessness have in common is a lack of access to a safe and stable accessible affordable home. the research and the data and best practices show again and again the best way to address homelessness and end homelessness is to provide access to an affordable home with when needed supported wraparound services. using the housing first strategy to address homelessness. in the city of l.a. every day they are able to house about 207 people experiencing

homelessness, get them into permanent housing. when on the same date in l.a. 225 people become newly homeless. address individual homelessness among communities are not able to do the stem the tide because housing costs are so high. unbilled like yours the housing crisis would effectively and homelessness in the united states. it provides a level of resources and the proven solutions. >> i understand someone here said the federal government is spending money and they have not been able to solve the housing crisis. can you explain if you have time whether it's inflation, whether it is the loss of a job at.

whether it is covid or what have you. no matter what money you have spent you may have to spend more because there is a crisis. >> with all the things combined ms. impacts people differently. in the lowest income people that 7.3 million homes affordable and available to the low income people. a way of saying the same numbers for every 10 of the lowest income households the other six households are living double or triple doubt. sixty, 7080% of the very limited income you spend so much of your limited income you are always one financial shock.

facing eviction and that worse case. worst case. critics are we talking about this is a problem that could occur with any american family just up urban living the shortage of housing is pervasive. in rural urban committees alike. >> think rachel yelled back. >> that someone from a jury in the chair on sub committed national security is never get us in five minutes. sort of previous rounds in my work mind has been the concept of the framework developed by international bureaucrats outside of the oversight of congress and the american

public. endgame proposed in july by the federal reserve and the f dic is even more excessive than previous versions. the diverters by properly recognizing our american financial system in particular housing market. the right know that makes our country unique gold putting ghost about by bureaucrats in switzerland. mr. appleton do you care to comment on how the excesses of the impact the housing market? >> sure thank you for the question for you are exactly right. the endgame fails to recognize our market one of the most significant failures as a lack of credit for private mortgage insurance but strength and resilience at the end of the day basel three endgame as proposals limit to access credit from commercial banks depriving them

of the options and shifting businesses to loans directly or indirectly backed by the federal government. >> thank you. i know one of the concerns i have is or seems to be at no cost benefit analysis done on this. you talk to the regulars that i assume they have not connected your entity what kind of cost you anticipate. >> the private mortgage insurance industry adopted a number of enhancements into the last round of bank capitol regulations were implemented. those regulations could recognize your enhanced with robust capitol and operational standard at the same time the new proposal provides your credit for it. it is totally disconnected from reality. >> the rule itself is a bad deal there so many bad things need to start over in my opinion for ite thank you for that. this morning and the wall street there's an article headlined san

francisco developers tackle housing woes. and in their talks about a new 71 story rental tower they want to build. it makes a comment and i quote elsewhere 10 conversion plants have been submitted to the city later on it says property developer say the plans for the projects reflect government efforts to reduce cost and limit redtape and conversion of office buildings to apartments. doctor hamilton with the situation here points to the problem you have i think in building housing. we have rules and regulations and the situations to enable people to do this. can you give me an example of the percentage of rules and regulations thank you

congressman for that's a fantastic question. unfortunate. >> only ask fantastic questions. [laughter] has been a real barrier of solids estimates only portion of housing costs due to zoning and other permitting process barriers. but one estimate that is now 20 years old find in the most expensive metros in the u.s. about half the cost of housing is due to regulation. >> 50% of the cost of each one of the spring talked about rules and regulations and zoning's is a cost. you are quantifying it as about half the cost of a home or apartment is 50% due to rules and regulations of zoning requirements? >> that is what one study for about 20 years ago found for the san francisco bay area pick. >> at the 20-year-old figure

per. >> that is right we know it's got much worse. >> can somebody give me a figure of what percentage the average income in this country what percentage of that is used for housing? of individual's income and average individual making whatever it is in this country average rate what would go to housing? >> experts would say no more than 30% of income should go towards housing costs because they don't know how much i'm asking with the figure is today does anybody know what the figure is today? >> more than half. the average individual spending more than half of the income for housing is out you just said? okay we've got a rule here rules and regulations cost about half of what the cost is. that is our problem, that is her problem thank you yelled back. >> a gentlewoman from new york is not recognized five minutes

per. >> affordable housing communities across the country have faced a volatile insurance market for many years now. insurance carriers are walking away from affordable have become out of reach can you talk about what congress can do to address this? and how we can ensure affordable housing properties and renters are not being unfairly treated in the insurance market. >> thank you congresswoman. looking at recent data that shoa property owners face 15% and liability insurance increases and 17% and umbrella coverage year-over-year.

it's also not uncommon to see triple digit increases. especially in affordable housing community. this was information reported by our members. but i will speak to you on my personal experience in terms of the rising insurance costs. we manage a number of properties and portfolios in washington d.c. and first the cost of got up for us from 15 -- 32%. but more importantly to note there are only a few carriers there were actually right policy in washington, d.c. which makes the cost unaffordable. i will give you an example of it national church residences have seen their properties and liabilities increase over four 100%. >> do you have any advice in terms of what congress can do to reverse this issue? >> congress should use the regulatory oversight and authority to monitor activity in

the insurance market while looking for ways to drive increased capacity in the insurance and reinsurance market. increased capacity in the insurance and reinsurance market. as you know the housing affordability crisis requires action. unfortunately there are significant data graphs in puerto rico. they have responsibility. for housing affordability persists for over three-point to million american citizens. with the american housing survey. which it provides critical information of the nation's housing stock. can you elaborate and puerto rico in the survey will help upset the housing challenges including lack of affordable housing?

>> the american housing survey is the only national representative survey that gives us information. not only on housing stock. the sample size for the is small. we are only able to get specific information on the 15 largest metro areas in some states. be useful for got information on puerto rico's housing stock and having it increase to get that information is important that hud would need additional resources in order to do that. >> thank you. it is not secret communities of color are often the most impacted. and other climate related events. we think this communities affordable housing or smaller

rental properties can be disproportionately impacted and is often directed elsewhere. how can we leverage fair resources and tools to drive after mitigation. [inaudible] toward the most vulnerable? >> lowering communities and often communities of color are often located in lower light areas. there also communities that historically have not been given the level of infrastructure dollars needed in order to protect people from the subsequent flooding. this creates a vicious cycle. not only keeping people in harms way, it increase cost when it comes to emergency response and rebuilding. defying cbd gr program would be an important step in ensuring people in these communities get

the resources that they need. those precious few federal resources for rebuilding in some cases resilience are targeted to communities of the greatest need for. >> thank you, mr. chairman i yelled back too. >> demo from south carolina mr. norman is no recognition or five minutes per. >> own to thank all the panelists were coming. you talk about affordable, we talk about housing shortage this is not that complicated. what we have anywhere from 23 -- 28% regulatory costs government compliance going into the cost of 40000-dollar house that's $98000. the homeowners are having to bear. so what happened to manufactured housing or attempted to make it

more energy efficient in mandating the test. mandating carbon emissions from a manufactured house is one of the few that can be built. when you seek credit reports there is an attempt to take away a medical debt that is unpaid. it is insane. it's very simple, you get government out of the way. you get federal regulations out of the way. and politicians iris would put a football analogy i had a talk show host who was lecturing and nick save it over what he needed to do to improve his team. i thought this is how politicians are. a lot of times we don't know what we don't know. we want to increase the demand increase housing to make them serve eviction notices can go out spring you have to get paid

back somebody pays for this. the other thing we talk about homelessness what about the 8 million coming across its border? where are they going to go? new york city is fighting it out. what are they going to do with it? so get government out. stop this flow of people in this country that have not paid into the system. and get the regulators out of the way. you go to your experts the person calling in nick sabin is not the best one to tell him what to do. he is in it. so go to the experts had actually do it and have their money invested. let me ask you, you mentioned make housing affordable. two things define what affordable is. and secondly you call for more rental assistance more federal subsidies does it set the gold

standard for financial accountability? >> affordability it means a household does not pay more than 30% of their income towards rent. >> give me affordable what's in affordable house? or apartment? give me in your term because i don't what that is for. >> it depends what a person's take on this different people can afford different amounts towards her house and costs. but no one should pay more than 30% of their income towards rent or towards their mortgage. >> the federal government the answer to that? >> extremely low income households went on what households with extremely low income i am talking but in your district for example a single person who has a disability or is a senior in on an extremely limited fixed income without 12 -- 15000 regrets and running out of time too. >> what household income of no more than $25000. for these households the private market on its own you can ask any housing developers they will

agree they can't on their own make housing affordable pickwick to make it affordable by having subsidies fund the federal government as i would you say? >> requires an intervention from the federal government too. >> where's that money coming from? was the form of subsidies. >> per. >> where is that coming from? outlays for housing assistance is about 1%. where's the money coming from on subsidies that you say a federal government which i think is in the red to a tune of $36 trillion, or is it coming from? >> 1% of out laid progress or using percentages but not answer my question. you really aren't to be just tell me it's coming from the taxpayers. >> sure we can absolutely increase taxes and corporations and for high income earners. in order to afford to have it people but.

>> that it's a utopian dream you're talking about. keep a roof roof over your head regrets putting it further in debt on the number one indicator of his economy. housing is a more federal government that's the opposite you want to do in the real world to update yelled back. >> a gentleman from new york mr. >> do you think providing every child with an education is utopian dream? >> you believe housing run every child with housing costs are. >> note for you believe like education no one can't resell b6 expected to succeed in america without access to safety deferrable housing? >> absolutely the research shows it again and again progress on a personal level i would not be in congress were not for public

housing. in the stability and opportunity against he and my family my own a life journey from public housing to the house of representatives of washington d.c. as a product of public investments in affordable housing. my republican colleagues would have you believe there is excessive government intervention in housing. now i will concede when it comes to land-use the research and exclusionary zoning. which has been a barrier to address the affordability crisis but when it comes to funding the republican talking point cannot be further from the truth. the problem is not to mention government investment in affordable housing. the problem is too little for there is insufficient housing supply and insufficient housing subsidies. what is the extent of the gap between the demand for affordable housing and the supply of the affordable housing in the united states? >> for households with the lowest income there is a shortage of 7.3 million homeless affordable and available to them. so another way of saying that

same number is for every 10 of the lowest income households throughout the country there are fewer than four apartments that are affordable to them. and if i could just say we talk a lot about the cost of providing housing to be affordable for extremely low income people. but we do not talk enough about the cost of an action for it's not like were not providing housing for extremely low income people we are not paying, we are. we pay as a country to allow for homelessness and housing of poverty to exist and we pay for it through lowered educational attainment. through health challenges for children and families and increase health costs as a result. and families with well-paying jobs. there is a health watch but showed over the next 10 years. we will pay $111 billion in

avoidable healthcare costs because we allow homelessness to continue to exist. so we are paying one way or another. i think a better use of funds is to invest in solutions to keep homes affordable for the lowest income people per. >> homelessness and housing and security are not only bad moral but bad economic space during covered was essential workers many earning minimum wage but their lives at risk during the peak of the pandemic so the white colored workforce could safely shelter in place and work from home. is there a single county in america it were an essential worker earning minimum wage could afford a one bedroom apartment? >> there are very, very few communities throughout the country were that is possible. >> what about a two bedroom apartment? >> no commit to pray. >> are 3000 counties minimum wage could afford a two bedroom apartment apartment pickwick side is right progress you

believe it's wise for congress to stand by idly while america becomes dangerously unaffordable to its essential workforce? >> and noaa. housing is a basic human need. as you said very well people can't succeed in other areas of their lives if they don't have a home to go to at the end of the day. evidence very clearly says the

opposite: suppose there was no government intervention in the form of public housing, with 30 less or more housing insecurity and homelessness? what >> what if there was no section 8. >> more. >> what if there was no cra credit. >> all of these are essential ways that the federal government provides resources to ensure that some people with extremely low housing but the funding is far under the need, the federal government only provides funding for wine and every for household who needs housing assistance and eligible to receive that piece that we have what is essentially a housing lottery system in our country. where only the lucky 20% gets the help they need. >> thank you. >> gentleman from wisconsin mr. fitzgerald is not recognized for five minutes. >> thank you mr. chairman. i want to take the questioning in a different direction.

last month i sent a letter with 16 of my colleagues on the committee to the banking regulators to raise concerns about endgame proposed high-risk wage. for residential mortgages. one of the major issues that the proposal removes is the ability of banks to use mortgage insurance to reduce the risk waves for low down payment mortgages. departure from existing bank capital rules on the federal housing finance agency capital framework for the gsc. mr. appleton, you mentioned in your testimony that private mortgage insurance is been around for 66 years. what the committee might not know is the industry actually was created and it has deep roots in my home state of

wisconsin. why is it important for bank capital rules to recognize private mortgage insurance? >> thank you for the question congressman fitzgerald and thank you for sending that letter.by failing to recognize private mortgage insurance in the endgame proposal the bank regulators are making it more difficult for banks to serve low down payment borrowers service mortgages or lines of credit for independent mortgage banks. limiting consumer choice and access to credit. current roles as you mentioned written before the mri industry adopted significant enhancements to capital and operational standards for underwritten mortgage with them to receive 50% risk weight. the new proposal to totally ignore the reality should be rescinded. as of the third quarter the industry already holds 169% of its required capital and to your point, fhs saying own capital rule recognize the wrist and capital benefits of online if anything regulators

should be recognizing the strength and resiliency of private mortgage insurance more, not less. >> we have a situation where, this has come up in the committee before where you have a lot of young adults those that have attended school put themselves in a position many of them couples that find themselves in situation unable to raise the actual monies for nonpayment on a minimal house which is out of control as a result of the inflation that we've been experiencing across the nation resolved in the housing. they are unable to come up with the money to make the down payment. the builders aren't incentivized to create enough starter homes, it doesn't exist.there is not two americas out there. i wish my colleague from new york were still here. he would have everyone think that there is simply this one take on what's going on across the nation. it's happening everywhere right

now. ms. hamilton, you haven't specifically discussed the need for housing with 2 to 4 units per building which is becoming the norm right now for anyone that's developing anything close to a subdivision anywhere in america and looking at the amount of housing that gets built in total right now about four units per 100 people is being permitted across the country as a whole. we are talking about modest communities that no longer can put a subdivision in place with housing that's any less than and a half million dollars per unit which is clearly out of the reach of almost all americans that find themselves trying to get the markets. what's the reason for the drop of these types of housing and is there any federal solution that could help with that?

>> thank you, you are absolutely right the permitting rates are way down from what we've seen relative to times when housing was more broadly affordable. this is due both to local billing rules the rules on the books that limit how much housing can be felt and limit the availability of relatively low cost types of housing. such as duplexes try plexus for collections or small block developments. it's also due to local permitting processes that really lengthen the time and at cost to the building of any type of new housing. i do think this needs to be addressed primarily at the state and local level, although, efforts to encourage this reform from congress are more than welcome.

>> thank you, the gentleman from nevada, mr. horst right is recognized for five minutes. >> mr. chairman to the ranking member, 122 days nearly a year into 118th congress and we are finally having our first hearing on housing affordability. congratulations. will the gentleman yelled? no i will not because during the previous chair leadership chair waters the committee democrats help 55 hearings on housing related issues last congress. that means i would've had 275 minutes to talk about the issues that prime importance to my constituents so i only have five minutes so no i will not yield. we are amid a housing affordability crisis that scribbling our country. it's driven many americans even further away from the dream of homeownership. far too many households are focused force to continue and

face unique challenges of their own as limited supply of housing simply cannot meet the ever-growing demand for national multifamily housing estimates that we need to add nearly 3.7 million new apartment units a year to keep up with the demand. 21.6 million american households that spend over 30%. this hearing is long overdue. my district in las vegas has been one of the hottest real estate markets in the country since the pandemic.

since 2015 data shows that there have been a drastic 75% jump in the typical rent in las vegas to over $1800 a month and with an average renter's household income at 51,000, the rent affordable at that income is well short of the $1286. when we look at the most vulnerable and lowest income renters the stats from the national low income housing coalition become even more alarming with staggering 90% of the households facing a difficult cost burden. this should come as no surprise as home sales volume remained depressed. the average household spends the burden of 29.6 percent sign of their income on mortgage or rent. we can see that most of these low-income households are severely cost burden which means they are spending over half the income each month just to remain housed. the families are trapped paying

outside portion of their income on rent which limits their ability to build up enough savings or down payment and further perpetuate the ratio homeownership gap. yet thus far the subcommittee has been uninterested in advancing any meaningful housing policy during the first session of this congress. i call oul. that's why i introduced a housing oversight and mitigating exploitation act the home act together hard data

necessary to understand the severity of our housing shortage and to protect everyday nevadans from being exploited by out-of-state corporate speculators. these massive corporations have been able to pay cash during this period of high interest rates which have allowed them to purchase almost a third of the homes sold in certain zip codes, one in three and it's unlikely the homes they purchased will ever appear on the housing market again. i'm deeply concerned by reports and corroborated by the red send data that these corporate speculators predominantly target neighborhoods of color and single mothers. the home act gives hud the tools necessary to investigate the allegations. not only will hud be able to collect the necessary data on who the speculators are targeting but also give hud the tools necessary to ensure we have an equal level playing field. i know my time is concluding and i want the american people to know when we get five

minutes, this is the first hearing, had we had 55 hearings i would have 295 minutes to make my case. but because house republicans don't want to talk about this issue, we don't have the time to advance the policies that matter to the american people. i am mad, i am past, the american people are pierced and my constituents are pest if we don't make housing more of a priority >> the gentleman times has expired. the gentleman's time is thoroughly expired and the gentleman from new york mr. garbarino is recognized for five minutes. >> thank you mr. chairman. there is no sugarcoating it, our nation is raising housing choice with housing affordability at historic lows for both homeowners and renters. by district on long island is no different just a little over a month ago the meeting on home price in suffolk county reach an increase of over 9% compared to a year ago. combined with the fact that the average interest rate for 30 year loan is still well above the four percent tax rate at home buyers are used to seeing a couple years go.

>> it a benefits homeowners to come to the closing table with tens and hundreds of thousands of dollars for down payment. ahead of the gse and the taxpayers who ultimately have

stand. >> establishing a clear consistent to cause the enterprises to dissipate in the primary market compete with the private sector and shift risks to the taxpayers. >> i appreciate if it wasn't for bmi i wouldn't be able to buy my home and now i wouldn't be able to afford the increase we've seen over the past couple

years. given how highly regulated the housing mortgage markets are owner focus for a minute on the flip side of the issue. what corrective action could the fh ha take to pave the way to more private market innovations as we seek to reduce the cost of homebuying and homeownership for people all over the country. whether we are talking about the construction mortgage insurance space. you agree that more competition will benefit consumers? >> yes they would and you're not can i have that unless if you keep, i don't mean you, if the government keeps crowding out the private sector. producing conforming loan limits is one way. the original charters have excessive use provision it was never meant to replace the entire market it was meant to supplement the market and it hasn't ever done that it's always increased until it's dominated. that provision has never been

defined and it's never been enforced. those would be two ways right off the top. >> i was in the private practice i did a lot of closings and the mortgage market as well as pmi really help people with homeownership fha i saw the problems and issues, it really cost a lot to a consumer. they really do work with the consumers and help them get the best deal not just buy a home but keep it. i want to make a quick statement in support of the low-income housing tax before i close i like to raise one other solution outside of this committees their jurisdiction the affordable housing tax credit since president reagan housing credit has been a successful private public-private partnership that leverages the e to develop more

affordable homes for seniors disabled veterans and working people. the problem is and nowhere is this the demand for affordable housing aggressively outstrips supply. that's why we need to expand the credit by enacting hr 328 affordable housing improvement act and i like to yield to the chairman my remaining. >> i think the gentleman i will point out this in before hearing on housing while it doesn't quite keep a 13 i will note that 13 didn't fix the housing crisis. the young woman from colorado ms. patterson is recognized for five minutes. >> thank you all for your time and expertise i really appreciate being here having the opportunity to hear from you. i represent colorado seventh congressional district is very lucky to have been born in colorado and what we've seen in the time that i lived there birthday so 42 years of living in colorado.

we've seen exponential increase in the value of homes. when i even think back when i bought my first house housing has tripled in just a short amount of time to stop it's really the perfect storm i know we talked at length about this today. we still haven't recovered from that. we also saw our economy expand with the investments to keep our economy afloat during the

pandemic. one of the very easy ways that we could help address the issue is actually coming together on legal pathways. for people to work i hear from the construction industry constantly but this is something that really hits home for me, i think far too often people in congress haven't had personal experiences that so many people are struggling with. when we talk about if we don't pay the upfront cost of investing in this it comes on the backend tenfold. local government state and federal dollars. i want to thank you for highlighting that.

the mb act thank you for calling that out as an important first step forward on actually having our local and state governments look at the restricted land use policies but what in addition to this should we be doing?we talked about restricting the ability to actually have policies at the local level trying to bring carrots to incentivize to move in the right direction what specific policies for all of you what can we do at the federal level beyond it general ideas to help support the local investments. >> i'm glad to take the first response to that. happy birthday by the way. we support the mb act essentially think it should be an active.

we often think we can go for their own requiring local communities to do more to remove restrictive local zoning and we can do that by tying those requirements more incentive to roll dollars and we should look outside of the housing dollars to big infrastructure dollars, the kind of dollars that were exclusive communities want to receive and would be more willing to make changes in order to do so. also, we need to expand subsidies and make homes affordable to extremely low income people and we should do that through expanding rental assistance to make it universally available to all households in need. should preserve and build more housing affordable to extremely low income people through programs like the national housing trust fund we should continue highly effective programs like emergency rental assistance to prevent evictions and homelessness and we should push forward robust.

>> mr. appleton wanted to ask you about what you all are doing to make sure people know you are advertising access to loans without a 20% down payment. they are once again far out of reach to be able to qualify. >> it would take the average household earning the national median income 35 years for the down payment for the average national median price stop we are active in local communities with homebuyer education resources spreading the word that you do not 20% to become a homeowner right now. >> thank you. >> the gentleman from new york mr. lowe is recognized for five minutes. >> apparently my colleagues seem to think that the number of hearings we hauled translates to actual

legislation passing. in the last congress there were roughly 55 hearings on housing and housing affordability. yet zero bills were enacted into law under better with the ira the former chair of the committee was pushing for. new york city has 50,000 units in part because of its draconian rent control laws and the laws passed by the state legislature. that require the units to be brought up to code taxes go up energy costs, yet there are capped at what they can charge and rent. so what happens?

they choose to leave it vacant take the tax write off instead. bang up job good policy these are really working out well. we have 6 million units how do you meet the supply needed when the cost of living is through the roof the cost of doing business is through the roof, the cost of goods and construction and the cost of energy all driven by horrifically bad policies when democrats had complete control of washington complete control in albany complete control in new york city. yet they are shocked that we have a housing crisis. that we have affordability crisis. maybe we should consider changing our policies maybe we should look at how to reduce the cost of living reduce the cost of construction reduce the

cost of doing business. i don't know, maybe increase domestic production of energy. that might help. no, why would we think about this logically? so when i hear my colleagues complain about the number of hearing, my god, stop worrying about the number of hearings and start worrying about the laws we are passing. that's a better idea. housing affordability is persistent challenge. with mortgage rates at multi-decade highs limited supply and continued supply chain and construction issues, for many it is the most difficult time to purchase a home, in a generation. the market is further complicated by the extraordinary circumstances of many homeowners unable to sell their home for fear of losing their low fixed rate mortgages

obtain prior to the rapid increase in interest rates. these among other factors have forced many potential buyers into the market. driving up rental demand and prices within. in rockland and westchester counties in my district according to the national association of realtors the monthly cost of a mortgage is $1000 more today than it was last year. and in putnam in dutchess county since at least $800 more per month. these are additional housing costs of almost $10,000 or more a year, for many families it's totally unsustainable. this topic is critical which is why last month i held a conference roundtable discussion in my district housing issues that have significantly affected the local area and which included a diverse group of stakeholders

elected officials, government agencies nonprofit organizations and keep figures from the real state agency including developers and others. while there are existing efforts that should be improved and expanded upon such as the affordable housing we need to be working to move the governmental barriers that drag approvals out for years.drive up costs and just incentivize the investment introspection our constituents need. i mentioned a number of times the impact that regulation on the cost of housing and incentivize action of building and the flawed attempts of government to intervene. this is been at the forefront of new york in the last few years that we see a blend of heavy regulation with attempts by the governor to circumvent regulation with unrealistic arbitrary mandates to build housing in areas that don't have the requisite situation to do so including a lack of infrastructure. we have to look at this holistically and we need to

change course. these policies are not working. >> we already know the average renter now pays over 30% of their income on rent. my communities there are three extremely low income renter households for each unit available and affordable. the housing crisis is real that something we can all agree on. what i find very questionable is the assertion motivating today's hearing. strikes me odd to hear criticism on "an outside government present housing market by supporting low-income families with billions of

dollars for government intervention many of the foundational elements of our housing financial system like secondary mortgage market simply didn't exist when did the long-term fixed mortgage option become widespread, who created it? >> it was under the new deal that we started to have longer-term mortgage rates of 15 years. >> the new deal era reforms are typical mortgage has variable rates and came in 3 to 5 year fixed rate mortgages were virtually nonexistent. this is just one of many examples demonstrating the limits of what we call private market solutions even if we eliminated all regulatory barriers today holding back our housing markets with market rate housing be affordable for all families. >> it wouldn't be affordable for extremely low income households if you stated in

your testimony the federal subsidies are necessary to fill the gap between the lost income people can afford to pay the cost developing an operational renter rental home, why? >> private operators can build and operate housing on their own without subsidies and make the homes affordable for the low income people. we heard today several republicans talk about the importance of the line, housing tax credit program. which is an important program that can be further improved to serve the low income people but i believe that's helpful recognition that federal subsidies and intervention is necessary. >> i believe government intervention are not without shortcomings, i agree on that historically the housing policies in particular have been undermined by racial

exclusion when congress provides housing assistance to only one out of four eligible households while battling public housing $70 million capital backlog we must be honest with ourselves about where the problem lies. another example of the limits of private market relates to dividing small dollar mortgages be subject to the secretary about this for banks the sixth cost fixed cost of the same to ordinate a flaw loan versus big loan this makes small loans less profitable. water policy levels available to increase support for small dollar mortgages be stuck in my community over 30% in some communities are less than $100,000. but they are not getting access to the mortgages.>> that's a question i would be glad to get back to you with further information. >> other federal subsidies right now they can be provided from loan origination and

servicing. >> that's outside my area of expertise. >> i know millions of americans right now families are struggling right now but it's a fact that we have some of these amendments and policies in place that really ãwhat i don't like the fact that we think the private market is ineffective. i've seen it in my own community when we see over and over again thanks and other institutions have policies in place that are geared toward one community over the other. michigan lost more black homeownership than any other state in the country. i really believe it's because of the weekend cra it's because we are not enforcing the fair housing act like it should be. this is where we come in as a committee to talk about the real obstacles. there's nothing wrong in saying we've got to do better. you should literally talk about where you function in wake county and over 50% of the housing market is less than $100,000 the home is worth putting out for sale then why

are we sending to our day, let's get the loans out and homeownership increased. >> thank you and happy birthday to our colleagues from colorado stop housing affordability has become the number one issue in nebraska and am pleased we are focusing on the problems at hand in this committee. we talk about housing of portability we need to have a conversation that's really focused on what's driving the cost in my home state unlike my colleagues from new york lack of supply of housing in the market place. we can summarize all the housing we want but regardless of how much money the federal government spends to get housing stock doesn't increase the problem persists. you want to make housing more affordable increase supply. before jumping into a conversation about zoning restrictions i want to briefly mention manufactured housing. manufactured housing has the

potential to be an affordable alternative that lowers the cost of housing overall for single-family units and i'm pleased to see the manufactured housing as part of the discussion today and that there is some hope and legislation attached to the hearing on that topic. back to zoning, the program bubblegum lead on the yes in my backyard act with congressman kilmer. this bill would require community development block grant recipients to report on the policies they use related to zoning restrictions. it will be easier to identify the full impact these policies will have on housing costs. the witnesses come from all different unique perspectives and i enjoy hearing from some of them on this important bill. mr. royster. could you please explain how zoning restrictions can impede the development of rental housing. >> thank you congressman. i will give you examples where

barriers were lowered and increased development in rental housing. several states and localities in 2023 enacted young be related legislation to spur housing developments. california passed reforms to allow groups to build affordable housing on their property and legislators in montana passed a series of bills which would allow for backyard accessory dwelling units or add use, allowing commercial areas. on the other coast of vermont bundled zoning are formed into a single sweeping bill which will take effect next year. dropping lot sizes legalizing duplexes for taxes and limiting minimal parking requirements. these are just a few states were begun to recognize the importance nexus between the discriminatory land use practices and under supply of housing. as the other land-use reforms

take effect we will see increase in housing supply. >> can you explain the national low income housing coalition support for the yes in my backyard act. >> we do support the bill is an important way for communities to have more resources and increase incentives to address the hamilton you included examples of localities that cut land-use regulations in your testimony. can you walk through some of those examples for us, what were the resulting effects of the policy issues? >> in places that reduce barriers to housing instruction the market responds by providing more housing and more reasonable prices accessible to more households. thank you for your attention on exact housing one piece of

getting the rules right to facilitate broadly accessible housing. nebraska is one of the few states that requires the localities to allow manufactured housing to be cited anywhere that the site house would be built allowed congress could go further by removing the permit requirement on manufactured housing. to make this type of housing more flexible and able to serve a bigger variety of households. >> mr. michelle, the you also mentioned zoning restrictions in your testimony would you care to add your perspective on how government restrictions decrease housing supply in europe 30 seconds. >> i don't necessarily think it's a particularly mainly a federal problem but they are real in a matter.

records show we have extensive support on the yes in my backyard act from witnesses today, i appreciate all your testimony and time that i yelled back. >> miss williams is not recognized for five minutes. >> thank you. to all of our witnesses for joining us today for this very important conversation. without it the racial wealth gap will continue to grow. over 2000 and heightens our experiencing homelessness due to the lack of affordable housing. nearly half of atlanta renderings are cost burden. despite these challenges atlanta short of more than 100 30,000 affordable housing units.

130,000. some that we do have been deemed uninhabitable. last year all the residents of forest grove affordable housing complex in my district were forced to relocate because of excessive mold, broken windows, burning buildings and other issues that made the complex unlovable. this is unacceptable. affordable is not a synonym for poor, low-quality or unsanitary. affordable means inexpensive and reasonably priced to meet people's budget. to build our lives and have the opportunity to build wealth my constituents need affordable housing that's also safe and comfortable and even desirable. what can we expect to happen if congress continues to kick the can down the road on this housing crisis if republicans are successful in slashing the federal housing budget edifice continued finger-pointing at local governments to do the

work alone. >> housing crisis will worsen and by all measures. shorter version housing for the low income is worse than it's been on record. not only need to be providing new subsidies for more families to have housing that's affordable to them but we have to focus on preservation of existing affordable housing stock and in the public housing capital needs are beyond $70 billion, just to fix up the existing public housing infrastructure to make it safe and sanitary and habitable for the people who live there today and preserve it for future generations. and because we so woefully underfunded preservation of public housing and also rental

assistance and other types of affordable housing we are losing 10 to 15,000 units a year of public housing to obsolescence or decay. by not further vesting in maintaining our critical affordable housing infrastructure we are worsening the shortage of homes with the lowest income people. >> thank you, i'm glad you as well as one of my colleagues brought up inventory. because the inventory plays a crucial role in housing affordability when complexes like ãit forces families to find more expensive places to live and putting more strain on our limited supply of affordable housing. dwindling inventories of affordable housing weren't enough, too many families in my district and across the country are facing outside competition from massive investment firms when they think they are ready to make to buying the home they are cut off at the ankles by investment bonds.

families are being outbid by investment companies buying up single-family homes that are over a 10 year period the important legislation will reduce the number of single-family homes owned by hedge funds putting the power to purchase back in the hands of families. so they can build equity and more importantly, building their lives and helping to close the racial wealth gap. how has the rapid entrance of hedge funds and other institutional investors into the single-family housing market impacted the ability of low and middle income families to buy a home. >> in many other ways that you raised i would add that it also creates challenges for the people who rent the

single-family homes owned by institutional investors and in general institutional investors are among the worst actors in the housing field when it comes to landlord-tenant relations. in the research the data shows that those 㦠>> unfortunately i'm out of time i have more questions i will submit for answers for the record. thank you, i yelled back. >> gentlewoman from texas ms. delacruz is recognized for five minutes. >> thank you for holding this hearing today. i think our witnesses appearing before us, this is an issue that is close to me as i believe that south texans people in south texas americans understand the very real impact of rising housing costs. more and more americans continue to see their housing expenses rise as their single most expensive monthly cost.

inflationary pressures have pushed interest rates up and added premium unaffordable to some would-be homebuyers and since the pandemic washington has only made this issue works. by pumping trillions of dollars of democrat sponsored spending into the economy. mr. appleton, as you know, there are several factors in the mortgage market simultaneously an increase in the housing supplies. our current high interest rate environment both increases cost to borrowers and also the incentivizes existing home sales from homeowners locked into lower rates. we now also see the potential for the basel three proposal to dramatically increase capital requirements and in turn potentially increase the risk

of single-family mortgages. my question is this, can you elaborate on the negative impact this would have on mortgage affordability and mortgage availability. >> thank you for your question. if finalized, the proposed present banks to provide access to credit for low down payment borrowers including many first-time low income ããit should recognize in determining the value ratio but it doesn't. restoring the recognition will encourage innovation portfolio and level the playing field to ensure consumers have access to a broad array of low down payment financing options across the gse and government agency executions. >> i'm to have you repeat this you said that the basel three could have a significant impact on minorities?

>> communities of color and minorities are less likely to have intergenerational wealth to bring a large down payment to the closing table. it's going to make it uneconomical and very difficult for banks to engage in that type of. >> so we we have my colleagues on the other side of the aisle saying basel three helps minorities what i'm hearing from you is that it's actually going to hinder minorities in their dream of having their home. is that correct? >> yes there is largely an alignment among consumer groups mortgage market participants and members of the committee on both sides of the aisle that it's going to be negative for low down payment borrowers including low and moderate income minority borrowers texts

now that we are in agreement that housing affordability is at historic lows, it's now the right time for for regulators to further restrict access to capital. >> absolutely not. >> along the same lines of government intervention impacting the housing market we also saw president biden and congressional my colleagues on the other side pumped trillions of dollars into the economy the past two years of course that led to inflationary pressure and continues to impact and is a reason we are here right now given this high interest rate environment would you say that or i'm going to ask what market-based recommendations do you have to bring down the cost of housing? >> i think it's a crowding out

problem. i have several recommendations alluding to the testimony that was during the past but you've got roughly 90% or more the market dominated by the federal government. that's one way, you have to start paring it back. the excessive use provision is one thing that could be defined and enforced. reducing fha insurance to match ããthat would be another. >> the gentleman from california mr. burgess has recognized according to the october 2023 consumer price index housing cost remain key

driver in the country. all of our constituents are feeling this. i have to say that we all have our personal stories situation with myself was that my mom and dad worked themselves to the bone to make sure they had a house and that little house financed 900 graduate degrees, numerous advanced degrees, scores of logbooks engineering books finance books social services books and ultimately, it really was the ability to take money out of the house and the generosity of my parents that all of my brothers and sisters and i got a decent education. it was the house that gave the

opportunity. it really was. and they worked hard for that. i was a little intrigued with the provocative statements you are making saying that federal policy should not encourage homeownership, i don't want to take words out of your mouth but i believe that's what he said. what others agree to that? it seems to me that that is somewhat wrongheaded. see somebody is anxious to ãã would you like to comment? >> i think the federal reserve survey consumer finance found that the average network of the homeowner is 40 times the average network from the renter i think we need to make sure we have consistent and clear housing finance policy to make sure the private capital is not crowded out of the market unnecessarily by government programs but i think homeownership when done sustainably and responsibly is an excellent mechanism for wealth building you said but i agree with a lot of what you said i do a government should be involved for those that can afford it. the down payment is really what

kills like people. they can't afford it and i'm not against private insurance. i used it when i bought my first home. manufacturing housing i'm not against it. the federal government has to be involved because there are some people who made very low money and for a lot of people won't be able to own a home because they don't makes much more money. having all these people in the streets whether it's .001% or whatever it is, it's a huge amount of people on the street living in a way that's disgraceful. travel significantly around the world you don't even see this in developing countries. it really is awful and we have to do something about it. but i do think the restrictive laws we have on zoning are problematic but i also understand a lot of people don't want to change the character of the neighborhood. that's why we have to encourage homeownership but also in a way that the neighborhood will accept that means you have to tell people stacking homes is

okay making a lot smaller it's okay all these things are important and subsidizing for those that need subsidies we should do that. who can disagree with that? >> if it followed inflation would be $373,000 home down the street from mine, the same sold for $1.85 million.

>> i would say it was a very good investment. >>. >> it is a house that certainly benefited myself and my family. it did increase significantly. that's why think to argue against the american dream is provocative to say the least. >> that's the way we've been doing it.>> my time is up. i thank you for the courtesy. >> the gentleman from tennessee mr. rose is recognized for five minutes. >> thank you for holding this hearing and thank you to our witnesses for being here i would also like to thank the subcommittee for the opportunity to waive on today's hearing. the growing scarcity of affordable housing in this

country for both homeowners and interest in the serious crisis. helping to alleviate this crisis well require as our hearing title suggests knocking down government barriers that are standing in the way of helping to supply more affordable housing. one such government barrier ms. hamilton has made reference to this to more affordable housing is hugs outdated requirement that manufactured housing be built on a permanent ãa permanent chastity allows manufacturer housing to be more easily transport. this is helpful if the manufactured home will be moved multiple times during its lifetime. however, as i think most people are aware, many manufactured homes are now built with the intention of being permanently placed in one location and that's not does not need to be built with the permanent chastity. eliminating the permanent chastity from federal construction code administered

by hud will help to save thousands of dollars on new manufactured homes made without permanent chastity. i'm proud of introduced bipartisan bill hr 5198 the expansion of attainable homeownership through manufactured housing act of 2023 along with my colleague congressman carina of california that will eliminate the outdated requirement. i think the subcommittee for attaching the delta today's hearing and look forward to working with colleagues to advance this important piece of legislation. ms. hamilton, i know you've already spoken about this but the latest figures show america a short 3.9 million homes stop for shortages especially on starter homes for first-time homebuyers meanwhile, the hardcode on manufactured homes

to be built for 20 to 50% less than what site built home. expands on how the current statutorily requirement chastity for every hardcode prevents broader adoption of this cost and building trades. >> manufactured housing is the most cost-effective way to deliver a new unit of housing in the u.s. today. in large part due to the hardcode focus on affordability over other types of policy priorities. the permanent chastity requirement is intended for manufactured housing that will be moved from site to site when that's often not the case particularly in rural communities where manufactured housing is a very important source relatively low cost

housing. eliminating also opportunities for manufactured housing to serve as accessory dwelling units. eliminating the requirement means different types and different sizes of units can be produced under the hardcode creating a policy that can work hand-in-hand state local accessibility reform. >> i see the time winding down i think anyone has ever had the opportunity to tour or be present at one of the manufacturing facilities were manufactured housing is produced will understand what i'm trying to get out here and that is we all know there's a shortage today of skilled tradesmen in our country

necessary for building a home. my wife and i are renovating a home on our farm that we hope to move into supposed to be ready in august apparently forgot to tell the builder which year we wanted to be in august. but there is a shortage of trades. i'm wondering if you might expand in a few seconds we have left on how the adoption of manufacturing modular homes helps to fix the problem in rural america. >> manufactured housing allows a unit of housing to be built in a different location than where it will be cited. opening opportunities for housing in california for example built at a lower cost place is a very positive outcome. >> i'd like to thank our witnesses for their testimony that today greatly appreciated and helpful. without objection all members

have a higher legislative days in which to submit additional questions witnesses to the chair. which will be forwarded to the witnesses for response i asked witnesses to please respond as promptly as you are able to hearing his knowledge or ......