>> c-span brings you an unfiltered view of government . our newsletter word for word recaps the day for you from the halls of congress to daily press briefings to remarks from the president. scan the qr code at the right bottom to sign up for this email and stay up-to-date on everythinghappening in washington each day . subscribe today using the qr code or visit c-span.org/connect to subscribe anytime. >> the impact of tax incentives on affordable housing was the subject of a hearing before the senate finance committee. members talked about the housing supply shortage as well as the rise in rents and home prices. they also addressed concerns over private equity firms and real estate companies buying properties in low income communities whichcould push out long-term residents . >>.

>> the finance committee meets this morning to discuss rn how this hearing comes at a time when americans are

getting clobbered by climbing rents and home prices. key drivers of inflation. data released last week showed rents increased in june at the fastest rate since 1986. buying a home was getting more expensive. many young people who have modest incomes or big student loan debt mefeel like the dream of homeownership's has slipped of their reach. the root causes: the united states isn't building and off housing. it's been that way for decades. the shortage is affecting citizens and cities all over america. for example my hometown of portland the skyrocketing rents and slow supply due to low housing is also an issue though in centraloregon . southern oregon and eastern rnoregon where they can't build

enough housing fast enough to keep up with demand. i'd be willing to bet that every imember on this panel is hearing the same story. now, whereb& a number of issues this morning. and i just like to raise a relatively new issue that deserves real scrutiny. and that is private equity firms and sophisticated companies armed with terabytes of housing data are bring up properties nationwide. there jacking uprents . they're using algorithms to outbid americans who just want to own a home. why do these big guys want to ?et into our housing market because they are upward of 330 million in the country and there aren't enough homes

for all of them. huge demands, limited supply. typically people on a budget are going to come outon the losing end of that sort of tthing every time . the cost of housing is also pushed up by the snarls of state and local red tape. zoning rules too often band the kind of construction that's most needed and perpetuates segregation. in some places it can take years of tireless work to get a ruling on permits and approval for new construction and then you have the big upfront costs. fortunately my home state of oregon is one of the states that stepping up onthis issue . others need todo the same . it's also a fact that when housing costs go up, home homelessness go up. you can save a lot of individual suffering and taxpayer dollars tomorrow by building more affordable housing today. the bottom line when it comes to housing, us needs to build

and then build some more. the finance committee plays an important role in helping get shovels in the ground. that's because much of housing policy deals with tax policy. i propose the dash. the decent affordable safe housing for all bill. it's about getting up to the most vulnerable childrenand families experiencing homelessness . it would also create a credit for more affordable units, boost like tax low income housing, and encourage the construction of more middle income housing without taking a single penny away.y. unlike local officials in oregon tell me they badly need more incentives going out to middle-class families. the finance committee has found a bipartisan coalition working on important housing issues were a long time. senator cantwell as we know is doing important work on a semi conductorlegislation . she has long been a housing champion leading legislative

expansions were crating more than 150,000 new affordable homes. i think she'd agree that that's a good down payment nt for four housing at the same time recognizing there's lots of more to do. there's another proposal, the affordable housing credit improvement act which i'm proud to sponsor by senator young and one of our colleagues senator portman. that bill has even more punch and. >> ability to build even more housing an estimated 2 million new units nationwide. senator cornyn senator portman has also proposed an important billcalled the neighborhood owns investment act . it would bea big magnet for the affordable housing for struggling communities . that's very much needed and finally, thanks to my seatmate here senator crapo we continue our bipartisan work with senator leahy, collins and i offering a like mind that our bill creates marketability for local governments and tries to use existing funds to get more affordable housing built. the cost where they are

today, the alternatives and a whole lot of unfinished construction plans fall at before they get out of the gate. finally while there's bipartisan interest in getting this approach done legislatively, the treasury also has substantial authority to publish a lot more than what we're seeking to do on our own with rule changes so today we're going to make sure that the direction is getting congress cand the treasury department to move more quickly together r and getting it done will provide an important progress.vi again ensuring access to more opportunities for affordable housing. lots of ideas to talk about. every member has aninterest in this . i suspect that hopefully you won't be hearing me at our serial tomorrow in the finance room but i can tell oyou a lot of my colleagues look forward to our discussion and i want to thank you again editor triple for the work on another important issue. >> thank you senator and i appreciate your willingness

in this. as you are highlighting another of the bipartisan issues which we are building a strong record in this committee of working on . and this is important. last week we learned that consumer price inflation spiked to 9.1 percent, the highest rate in more than 40 years. the shelter component of the consumer price index was up 5.6 percent in june relative to a year earlier and rents were up by nearly 6 percent. to continue battling inflation which was cool last year's partisan american rescue plan, the federal reserve must aggressively raise interest rates and may raise rates later this month by this as much as a whole percent. inflation must be contained or we run the restof the fed having to repeat what you did in late 1980 to combat runaway inflation . painfully, then overnight interest rates were driven to nearly 20 percent which

crushed economic activity including housing markets and help lead to a deep and long procession. with higher interest rates by the fed higher mortgage rates follow. making it all the more challenging or americans to buy homes. housing affordability is the critical issue in idaho across the country. nationwide there's a shortage of about 7 million affordable rental homes available to lower income americans at the gap between demand and supply increases each year. to provide more affordable housing or existing tools in ea the tax toolbox that provide incentives for builders to create more affordable homes. the low income house tax credit for example is responsible for generating a majority of all affordable rental housing created in the united states today and generally enjoys bipartisan support in congress . in idaho there are currently

284 light projects located across the state providing 12,000+ units. these projects vary in size between urban and rule role with 25 percent targeted to local families and 28 percent for seniors in the elderly. once the project is the power point apartments inboise which started chronically homeless veterans . several members of this committee have been active in n working to improve existing affordable housing credits and create incentives. as i indicated on a bipartisan basis. senators young and cantwell as well as several others introduced the affordable housing credit improvement act to expand and strengthen lihtc. senators portman and hardin introduced the neighborhood owns investment act which would create a federal tax credit that covers the cost difference between building or renovating a home in urban and rural areas . numerous other finance committee members on also are interested in finding affordable housing solutions

and i think all of them for their work. with while lihtc and other credits are part of the solution, we must address other drivers that are increasinghousing costs generally . foremost in the current economy is the need to reduce inflation. unfortunately it's been allowed to run rampant and the necessary federal reserve actions will probably raise the cost of housing. builders are also feeling inflation's affect the more expensive building materials and painfully high fuel prices continue to put even more pressure on builders budgets making it even more expensive to get materials to the construction site. additionally several economic factors have led to ashortage of affordable evhousing . one way to alleviate the shortage would be to look into more manufactured housing. during this time at odd former secretary carson created the office of innovation to evaluate new ways to provide housing.

and in doing so highlighted the improvedefficiency and suitability of manufactured . zoning laws and regulatory barriers which were often uncoordinated and unnecessary or overly cumbersome also present challenges to affordable housing by creating a cost that restrained avdevelopment of affordable housing. many of the marketswith the most severe shortages and affordable housing have the most restrictive state and local barriers to development . we must work to reduce regulatory barriers which requires outside the box approaches as well as the more from local, state and federal governments and the private sector. this includes initiatives like opportunity zones that were part of the tax credits and jobs act in an area where senator scott has a great deal of good work. data released as recently as may 2022 or excuse me, march 2022 five opportunities on fund directly shows that

49.18 billion has been committed to anticipated investments and 60 percent of those funds target investments inaffordable housing and community development . homes are more than just physical structures. homes are a foundation or wealth building, family stability and community cohesiveness. it's critical that we make american dream of homeownership obtainable for as many people as possible. which will continue to foster the economic success of our nation. i look forward to discussing ways to ensure affordability and accessibility in homeownership with today's witnesses and i thank you all for being here . >> iq senator and your spot on in saying this is another area that we have an opportunity to some bipartisan solutions. let me go through our witnesses . andrea bell is here from oregon. it is so good to have you.

she's executive director of oregon housing and community services and serving different capacities from 2019 previously with the housing administrator for the medicaid health program. very glad you're here. we welcome him, jerry konter, chairman of the association of homebuilders. he's had 45 years building nn homes and we're very pleased that he and the homebuilders are participating. our third witness is leah haney, distinguished professor of economics at the university of los angeles and i would say to mister ohanian my late mother worked at the institution for many years and it was the ultimate compliment in some of the executive sessions , mrs. biden is so good that she still is a democrat. i'm very pleased you are here. my fourth witness is miss benson roberts, affordable housing lenders.

previously mister roberts was treasury official working in this area with considerable expertise so she is. witness will be missed dana wade, chief production officer at parker and dunlap. she served as commissioner of the federal housing administration in 2020 and has extensive experience with the second branch management and budget which she also runs the senate committee on banking so welcome to her. because were going to have so many senators participate are going to have to stick closely to the five minute rule. misspell you travelthe furthest . start us off . >> iq mister chairman and ranking member and members of the committee.first off i just want to acknowledge and appreciate wthe opportunity to testify on the vital role that tax incentives play in ournation's affordable housing delivery system . again, for the record i'm andrea bell director of housing and community services.

we serve as state of oregon housing finance agency and first off mister chairman thank you for your steadfast leadership. for many years and continuously elevating the needs of the people of oregon and their housing needs collectively. senator crapoi also want to acknowledge and just uplift your supportfor affordable housing . your leadership certainly does not go unnoticed . for years our nation has not built enough rental housing. but the conditions and circumstances spurred by the pandemic have made our housing crisis particularly acute. to which individuals with low income individuals and families with moderate incomes are bearing the brunt of that impact. with rising interest rates escalating home prices, skyrocketing rents due to the mismatch to supply and demand .

many would-be homeowners are often left stop renting. and more than 70 percent of extremely low income renters across the united states spends more than half of their income on housing in 2021. 70 percent. that 70 percent of individuals that have to make tough decisions every y single month throughout the year, about what bills they willbe able to pay and how they are ggoing to get by . the housing credit and housing bonds are by far gthe most essential production tools that we have at our disposal. affordable housing simply relies on these programs. the housing credit specifically is a highly successful both public and private partnership and what we know is when stabilized individuals and families we also ostabilize communities hwhichhas an economic benefit .

and the state of oregon nearly 70 percent of all rental finance in the last five years. relied on bonds. costs are increasing due to inflation, supply chain disruptions, many things i noticed membersof this committee are fully aware of . housing finance agencies and our partners across the nation are doing everything that we can to prevent and these deals from falling through. but the unfortunate reality is that sometimes financing gaps are simply too large and in some cases there are no resources to pull from to help cure those finance. the most impactful thing congress can do is to pass senator cantwell and young's affordable housing improvement act . both expand and strengthen the housing credits . it would significantly increase the housing credit already allowing us to build more properties like riverbend place in rural

ontario oregon . . the affordable improvement re act would also provide states greater flexibility to spread existing bond resources to pm more developments by reducing the bond financing test from 50 percent to 25 percent. i also urge congress to pass a bipartisan lifelineact introduced by senators leahy and collins . this bill would enable states and localities to most effectively use federal fiscal recovery funds to fill financing gaps in housing credit development. i also quickly want to mention to pieces of legislation that the finance committee should take up on the means of homeownership. senator cortez master's affordable housing bond enhancement act would end simple and impactful improvements to the mortgage revenue bond and mortgage er credit certificate program which are essential to serving low and moderate first-time homebuyers. this is again creating pathways to homeownership a

dream that many of us have. senators cardin and n portman's neighborhood homes investment act would establish new titles afterthe highly successful housing od credits . simply put the housing credits crisis simply will not get better if congress does not act and in my last few seconds i would urge both appreciation for this committee and we needcongress to ask . the action is going to come post this to me what decisions will be able to make tand service to the american people appreciate the time. >> well said misspell. this to mister kaiser. >> thank you for the opportunity to testify today. every american is her access to safe decent and affordable housing. even after over 40 years in business, i still enjoy nothing more than an over keys to the first-time buyer.

but delivering an entry-level product is difficult. 69 percent of american households could not afford ff median price. but delivering, a year ago nearly 1/4 of new homes were priced under $300,000. today, it's 10 percent. we also face colleges with minority ownership opportunities. households under the age of 35, which is your typical first-time buyer, 46 percent of white households owned a home. only 17 percent of households so . as a multi family over also understand, affordable real housing creates daily for tenants. the housing affordability crisis is the result of falling failing to produce enough housing to match

demand. we're goingto solve our housing affordability crisis , we must drive down the cost as well as the cost of (. well structured housing tax incentives can help achieve this. many of these incentives serve the public interest and remain effective including the low income housing tax credit. however others infailed to keep up with changes to the tax code such as mortgage interest deduction. for over 100 years the mid made homeownership more acceptable but the mid remains rooted in increasingly outdated space of the tax code. itemized deductions. the changes wrought by the tax cuts jobs act aimed at doubling the standard deduction significantly reduce the number of taxpayers who itemize. prior to those reforms complete 70 percent of homeowners with a mortgage claimed mid. today that number has dropped

umbelow 27 percent. in 2017, 80 percent of the mid deducted by taxpayers earning less than $200,000. today in 2018 that fell to 58 percent. the mid is simply missing the mark.pl the most effective way to promote and enable homeownership is to eliminate the mortgage interest deduction and replace it with a tax credit . of 15 percent tax credit claim against mortgage interest in real estate taxes a offer a more effective and productive tax incentive. the credit should be phased out for single buyers with incomes above 2000 and$50,000 . and joint filers with incomes above $500,000. credit structure along these lines can be enacted on the

relevant revenue neutral basis in 2026. in the next few years, many of the provisions enacted in 2017 will expire . this presents an opportunity to refocus the homeownership tax incentives so that the benefits flow to those who need it. middle-class lower income americans from all backgrounds. we also recommend enacting the affordable housing credit improvement to boost production of affordable rental housing. and we support chairman wyden's proposal for a middle income housing tax credit which addresses 84 affordable workforce rental housing. congress should also address the many housing incentives for inflation d such as the gains exclusion

and we urge you to reconsider the current limits on assault reduction. an hp rightly appreciates a bipartisan incentives for to solve our affordable housing crisis. after all shelter is a basic human need and the headwinds we are facing are strong. the index of builder sentiment had its second largest drop ever for july and single families stocks fell to a two-year low. we have an opportunity to do something that not only makes good economic sense but will uplift the lives of millions of americans. thank you. >> thank you very much for important points and i note that you are the president of your own home on a firm so glad you are here. the next witness will be mister lee ohanian. >> ranking member crepo thank

you for inviting me to testify. increasing housing affordability requires progress on two fronts. one is expanding housing supply, the other is building that new housing at much lower cost than the current levels. their policy performs that may be influences using government incentives that would affect these goals. today i'll focus on to perform. frivolous increase in the use of manufactured housing which is much less expensive to build than traditional housing. the other is in the process of building subsidized housing which has become expensive in some states including mine of california. our residential construction costs are high in part because the process of homebuilding has not changed all that much over time compared to other sectors in the economy. it hasn't been benefited as much from modern production methods. this point has been made with in the federal government for f the last 85 years. now i like construction costs are so high i note that the

bureau of labor statistics reports labor productivity growth and residential construction through just 11 percent between 1987 and 2016 . this stands in sharp contrast to 150 percent productivity growth in the durable manufacturing over the same period which flex schedule and continued technological innovations inour factories . manufactured homes are much lower cost alternatives for traditionally homes these are factory the homes produced with saving technologies. census data show the production cost of manufactured homes are 50 percent lower than traditionally built homes. because of substantial lower-cost manufacturing housing production moved after world war ii accounting for 60 percent of construction in 1972. but since then regulatory burdens have reduced this deduction. believe relieving these burdens could increase the importance. one important requirement is that that these homes sit on the permanent chassis this

imposes a negative incentive on home as their labeled as mobile homes or trailers. the undesirable aesthetic of the homes placed on the chassis induces a cascade of negative effects including local zoning ordinances excluding manufactured housing for many neighborhoods. this means these homes are often placed in mobile home parks which in turn means there are demands with cattle loans both of which tend to be more expensive and shortened directions and neither of which can provide the water with more tax insensibility. recommendations for reduce the regulatory burdens placed on manufacturing housing dates back to president reagan's housing commission report. more recently a limiting regulations to depress the manufactured housing were made in the 2011report . limiting the chassis requirement will create a program to incentivize state and local agencies to more broadly zone manufactured housing outside of mobile home parks could be a game

changer increasing affordability andwould be squarely consistent with president biden's recently announced proposals . now to discuss the importance of reducing the cost of building subsidized housing. construction costs of subsidized housing particularly in the western united states. none san francisco subsidized project is cost $1.3 million for small apartment unit just for renovation and refurbishment. 2018 g08 study found extremely large cost disparities in subsidized construction across the state ranging from up low of 100,000 per unit and one texas allocation location to a maximum of 750,000 per unit in california based on 2011 to 2015 data. the gao found only a few allocating agencies had requirements to guard against misrepresentation of cost. the gao also found a weakness and the quality and consistency and measurement of reporting costs related to variables and the practice including the fullextent of

direct cost . the gao also found financing inefficiencies related to many lenders. uc berkeley's center for housing innovation estimates each additional lender has an additional $6400 in costs per unit. lawsuits also delay affordable development to increase costs. in california a lawsuit against affordable housing are found in the auspices of california environmental quality act which is recognized within my states block and delay development rather than being used for the express purpose of protecting the environment. i recommend congress revisit the gao recommendations improving standardization of costs for agencies that are collected and analyzed by a single federal entity. >> affordability can be introduced by the adoption of low-cost production and

techniques improving efficiency and helping state and local agencies create acceptable building development opportunities to increase their high demand. thank you so much >> thank you very much mister o haney, mister roberts . >> good morning chairman and ranking members. other members of the committee. thank you for your leadership on affordable housing. national association of affordable housing lenders is an alliance of major banks, nonprofits and other ro commissions driven by lenders and investors in the affordable housing and inclusive neighborhood revitalization. our member banks and 20/20 provided $180 billion to finance affordable and low income housing and other community development activity. and our members are the primary investors and low income housing tax credits . so today we have some good news. the bad news of course is the tremendous cost and

increasing affordability doproblem. according to the national association of realtors, prices and rents rose nearly 20 percent last year. but housing is not just a casualty of inflation, it isa cause of inflation . even in 20 2020 home prices went up 11 percent when cpi was rising only 1.4 percent. so building housing is essential if were going to get our lllong-term inflation challenges under control. last october about half of all americans said that affordable housing in their communities was a major problem and that exceeded what they cited for other really important problems like drugs and crime and covid-19 consequences.

the good news is you know what to do. the low income housing credit is widely considered the most effective and successful united states policy to produce affordable housing ever. 3.6 million units so far. about 130,000 annually. that's virtually all the affordable production over the last 35 years and it is equivalent to about one third of all comparable he rents price housing in the united states.it's had a major impact and it could do much more. it's also performed exceedingly well to giblets and foreclosure rates on housing properties and 0.57 percent. that's not an annual foreclosure rates, that cumulative foreclosure rate. as far as we know that's the best-performing assetclass in

all real estate . pretty amazing for low income housing. then proposed neighbored homes investment act would take many of the lessons learned from the housing credit and apply them to a differentproblem . which is to revitalize communities and provide homeownership opportunities ho there. by building starter homes and rehabilitating homes. so we urged congress to pass a bipartisan senate bill 98 sponsored by senator hardin, portman and 20 other senators. that thwould produce half 1 million homes for homeownership in struggling communities over the next 10 years. the broad increases in housing prices really masked tremendous diversity across this country. the median price of a home in san jose is 1.6 million. in toledo ohio it's one 10th of that less than $150,000.

every state has communities that are struggling. and in most communities is an economic to rehab or construct those homes. the numbers just don't cancel out. we need to have a neighborhood homes pack. the housing credit to has been so effective. our priorities for the housing credit course will be to pass the cantwell and young affordable housing creditimprovement act . the key elements to address or to first restore the temporary 12.5 percent increase in housing credit allocation authority expired at the end of last year and so we are actually losing ground rather than gaining ground.

second, to increase the state allocation caps by 50 percent over two years. that would help every state in the country to produce more. third, as miss bell suggested , reduce the bond of financing requirements to unlock tax credits from 50 percent to 25 percent and finally to reform the qualified contract and writer right of first refusal to preserve affordability rsand expand nonprofits control of properties. so we do know what to do. we just need to do more and we see people doing it. >> thank you very much mister roberts. questions in a moment but we have miss wade, welcome. >> good morning and chairman whiting, ranking member, thank you for your bipartisan leadership on this issue. my name is tino wade. i am a chief production officer at walker and dunlop.

i'm a former sha commissioner, former assistant secretary at the department of housing and urban development and chairman as you mentioned i'm also a former senate staffer so it's an honor for me to be on the other side . walker and dunlop where i work is one of the largest providers of capital to the multi family industry and the fourth largest lender for all commercial real estate. we employ water and dunlop 1400 people in 40 offices across the country. as our top affordable housing lender at the sixth-largest low income housing tax credits indicator we see every day both the knees to build more affordable housing and the barriers that stand in the way. this panel has already talked a lot about the data which is prettyclear on the need to build more affordable housing . one recent report showed a

shortage of 3.8 million homes in the unitedstates . 10 million low income households spend more than half of their income on rent. the list goes on. add to that the everyday struggle. millions of americans spend more time getting to work, friendships in their cars, on buses, on trains than they do with their family. so there are definite and very real hardships that are presented by the lack of affordable housing. that is why the conversation on increasing the housing supply for this committee is having today is so important. the affordable housing credit improvement act is a very important step forward. and i'll go over it just very briefly. i know mister roberts you mentioned the benefits are back but specifically we think it would be helpful to increase the already oversubscribed nine percent tax credit. lower the threshold for r

private activity bonds 50 to 25 as well as making important reforms to allow the four percent credit to more easily be used for rehab projects. increasing the housing supply using these tax credits as we seen has translated into better economic opportunities . a better quality of life. as one real-world example if you'll allow me of the difference these tax credits made in people's lives. walker dunlop recently financed complex in portland oregon called canton wood. 100 percent of the units in canton wood were income restricted to those making 60 percent orless of the area median income . something made possible with lihtc. access to energy efficient compliances and canton wood

is a walkable project close to a light rail station. that's just oneexample. we have many many examples . from where we sit there are other benefits of lihtc including as mister roberts mentioned a very low foreclosure rate. both vacancies as well as strong compliance for affordability. while important, while iglihtc is important i think it will be a big topic today as the ranking member alluded to that's just one side of the equation. we must cut through regulatory barriers at the federal, state and local levels that are holding back housing supply a. an estimated 40 percent of development costs can be s attributed to regulation at all levels. record high costs for labor and materials are only adding fuel to the fire. federal obstacles include longtime transfer io environmental and labor decisions as well as some antiquated rules.

one example is heightened noise restrictions. local policies like zoning, density limits, lengthy permitting and approval processes and other ioland-use restrictions are all examples. while zoning and other issues are in the hands of local citizens and their governments, federal policymakers can provide a forum for best practices. congress can and does leverage the supply of federal resources like lihtc to increase housing supply. governments can also work together at all levels to standardize policies, practices and timelines across different programs. i think everyone on this panel will agree that we need a combination of a lot of smaller local ideas as well as the ideas to solve the housing crisis. thank you again for the opportunity to be here and i look forward to answering your questions.

>> it's been an excellent panel. mister konter, let me start with you. i have town hall meetings in each of my 36 counties and overwhelmingly what employers tell me is their top issue is is they can't find enough workers. and invariably that involves those folks can't get housing and my concern is particularly for the missing middle this morning. the middle class folks. nurses, firefighters would be a pretty good example. and i want to askyou and my colleagues , we always try to operate under the theory that you've got to build a bipartisan coalition and focus on what works. we've all been talking about the low income housing tax credit program so what i said is a quaint idea. why don't we build on what works and that's what my middle income housing tax credit is all about.

to try to get sheltered for folks like nurses and firefighters and middle income people across the country. and when we talk about middle income people, we're talking about families incomes between 60 percent and 100 percent of the median income. obviously it depends on the area in which people live but i like your thoughts on how the homebuilders feel about middle income housing tax credit. i heard you talk to john for a little bit but understand you all support it and as you know in pacific northwest it's also relates to the well-being of the wood products industry because it creates more opportunities for rural communities for timber and forestry so your thoughts. >> first i would start with we strongly support. we believe there is a missing middle is the hardest area to

serve. a because typically they buy entry-level homes if they're on the homeownership side. and if they're on the multi family side, they don't qualify for lihtc or other subsidies given direct subsidies such as section a. voucher program. so they have a disproportionate amount of their revenue or their income spent towards shelter. and they don't have the ndability to accumulate downpayments for even a, the lowest price housing that is available and the within the private sector. so this tax credit would solve part of that problem. and that's why we hedo strongly

supported. but many people on the panel have already talked about the regulatory burdens of introducing housing. and you know, mindy is in is a large part of that also. i know that in my community i experienced people that they want school teachers and police officers and fire people to serve their community but they put in restrictions that affect housing prices that force them not to livewithin that community . and so i will tell you that my colleagues in the building industry wants to build for every sector of america. we don't concentrate on one sectorover another . so we will be working with you and very much appreciate

your support with respect to middle income housing tax credit and obviously we need to have a fresh approaches in terms of trying to on snarl some of that red tape at the local level to get one more question and i'm going to ask this of you mister roberts. you heard me say i'm very concerned about this trend of some in the private equity industry. what some are doing in the industry is exploiting loopholes and the tax code to maximize their own returns while jeopardizing low income the purpose of affordable housing and i want to walk you through this because as far as i can tell we're losing something like 10,000 affordable housing units per year just with one of these polls involving something called the qualified contract . low income housing tax credit properties are supposed to remain affordable for 30 years however this loophole allows lihtc operators to

sell their properties after 15 years to private developers who are going to go out and rent the units at higher prices. and as i state thousands of units apparently are already being lost per year and projections are going to go up. i have proposed legislation to closethat loophole . i like your thoughts on why that'simportant . >> it's critically important chair. because it's so hard to build and rehabilitate homes and to be losing them through what has really become aloophole . it's just taking us back in the wrong direction. the problem is that formula of a disqualified health provision was written in 1989 when low income housing credits was very initially and the real estate market was very different.

and it no longer serves its purpose and now it's become an unattended exit ramp. this is not something that the original investors have been involved in but sometimes we see new investors come in i think thoroughly after the close of the six-year compliance period for the purpose of. >> my time is up and i think what mister roberts is highlighting is a lot of these programs and essentially the infrastructure, of the rules were written decades ago and you heard me mention algorithms being used to outbid americans who just want to own a home. when you were talking about 1989 he wasthinking about algorithms . so i'm very much appreciate those but senator. >> thank you mister chairman. senator portman, you wanted me?

>> i appreciated. >> i've yielded 30 seconds of my time and can the parliaments of the senate you can use. >> i apologize. i got to go to this meeting with mister zelinski. i just want to say i really appreciate all the comments made today about the need for us to rehabilitate existing housing and single-family homes are left out of the process right now. it's a piece of the puzzle we need to fix . that's what i think the neighborhood homes is so important. cleveland 3000 of the soul are vacant, not being used so they can be fixed up it would help towards this effort that everybody is acknowledged today which is increasingly the dream of owning a home is coming out of reach or something americans want to acknowledge the work mister roberts you have done and others. we appreciate your on this with senator cardin and i packed my colleagues. >> thank you senator portman. let me go to you first mister

konter. the net income tax serves as a tax on small businesses and under recent proposals would get active business income to the tax. i think you agree that would result in higher rental housing costs. can you explain how expanding the active investment income would result in higher rates west and mark. en>> sure. there's the consensus is the consequences are especially acute for renters because it's just another cost associated with operation of an apartment complex. so that previously, that active income was not taxed. now it will be an that will lead pass along as part of the cost and we will put upward pressure on rates to

cover it. there's no magic wand and how much rents are charged. they are absolutely directly related to revenue versus expenses. >> thank you. and miss weight, you alluded to this already .but what do you think the possibility of persistently high inflation means for affordable housing and how would higher long-term inflation affect housingdevelopment and utilizing federal tax benefits ? >> center, that is a great question and thank you. persistently high inflation will mean persistently high rent increases. it's no surprise that if you think of inflation as the tax on everyone and everything, it impacts rent prices as well and as mister roberts stated in his testimony, higher rent prices also

factored in to cbi calculations. it is in fact inflation is also very important in considering the efficacy of low income housing tax credits. persistently high inflation will mean that these tax credits are less effective and will decrease their value as well. >> you very much. doctor, you discussed today with us as well the impact of regulatory and zoning policies. however well-intentioned. on the ability for us to deal with the affordable housing needs in the country. could you discussed any studies were aware of that ar have analyzed the effects of these and local deregulatory efforts to determine which land-use is the supply promoting strategies were most effective? >> yes senator. great question. regulatory burdens are

expanding housing costs substantially. when we look at zoning regulations, what we find is that hethe states with the most severe zoning restrictions such as my state of california have the highest home prices.they have the highestconstruction costs . construction costs rise and development is delayed. due to lots of litigations and d lawsuits. are often based on not in my backyard types of arguments. we look at states and locations with much laxer zoning regulations such as texas, kansas, states in the midwest. they tend to have lower construction costs, much lower housing costs so there's been a number of peer-reviewed studies and they all come to the same conclusion which is that land-use regulations substantially drive up home prices, construction costs and depress american welfare and there's a lot of progress

that could be made. senate bill 1416 is an important step in that direction . by requiring agencies to compile data and report on how they're managing demand. and being held somewhat accountable for how they're dealing with the needs to build more housing at very high demand areas. >> thank you very much. >> thank you mister chairman. >> next is senator carver. >> i wanted to back up a little bit. every now and then in this room we talk about the least of these in our society and what we're doing to help the least of these. when i was naked, you close to me. when i was thirsty you gave me a drink. did you welcome me. matthew 25 says nothing about when i didn't have a place to live for i was living under a

bridge did you do anything about it. wehave an obligation i think a moral obligation to do something about it and it's not called on the federal government . it's a shared responsibility to state and federal, locals, wnonprofits and businesses as well. it's a shared responsibility. we itwelcome you here today with that spirit in mind. wethank you for joining us to talk about housing affordability . the top of mind with my constituents and i'm sure it is in the other 49 states two. in recent decades i come from a hearing as arecovering governor . and it's an issue we first worked on whole lot when i was governor. the highest homeownership rate of any state in the country something i feel great about that in recent decades the rapid growth and

retail prices and lack of housing supply made it difficult for a lot of people to find safe affordable housing options as we all know. this problem is especially dire today is our constituents continue to feel the effects of the pandemic and as the base price increases in other parts of the economy. i would note the price of gasoline thank god is beginning to come down and we have a lot of wolof convenience stores up and down the east coast . and the price of gas we saw yesterday is down to about 436 which is off to a half dollar in the last couple of weeks. it's going to go a lot lower. but i was proud to work withchris coons, my wing man from delaware . congresswoman was securing $78 million in american rescue plan to help attack the housing crisis. and finally it will taleverage $500 to support development and rehabilitation of affordable housing units throughout our state and in court nation with a nonprofits we include the amenity called sin air, another one called in many

organizations dedicated to addressing this same problem. one issue that deserves our focus is lack of affordable housing for our senior citizens. it has a population ages must meet these needs for our seniors. who are often require additional support services. i question this would be a question for the spell question for mister roberts. the others get away scott free. how can we ensure that tax incentives and other resources meet the unique and enduring housing needs of our seniors. i'll say that again. how can we ensure that tax incentives and other resources meet the unique and growing housing needs of our seniors mrs. bell . >> thank you for that question center. i think you're raising a couple of really important points really only the unique situation. related to supply and demand and specifically how the issue of supply and demand is

causing other issues around lack of access, lack of affordability. mi think the reality right now utin this moment as we think about tax incentives and we think about all the ploptions in front of usthere's a couple of things that are worth elevating which is one , being able to lower the threshold when we think about private activity bonds. knowing there is a real restraint that a lot of communities are feeling around that. when we think about low income housing tax credits, we know what works. we have seen successes with. we also know when we think about the lack of affordable housing issue that so many americans are particularly our aging population, we also know that we have to build affordable housing and also in all shapes and sizes that we have been able to have transit oriented housing as we think about the needs of our seniors. we have some very real policy options in front of us today

that we think will both reduce red aptape both increase access to reaffordable housing and in a really formative way and begin to build on what has worked and where we've seen the most progress across the country. for diverse populations including our aging populations. >> same question, thank you. >> thank you senator and you just mentioned also the two of our members. habitat of course is a big supporter of network homes but directly to your question one of the beauties of the housing credit is to escape the authority to direct those resources to the greatest needs including housing. we've seen tremendous low income housing tax credit properties dthat offer services to the elderly in conjunction with housing. including assisted-living which is extremely hard for low income elderly people .

>> my time is expired. could i take 15 seconds and ask a question. i just want to take a minute. just a moment to say was for misspelled is. you answers would now n. here it is. what resources are most helpful in setting low income families up for success when buying a home for the first time and how can we expand access to these tools.i'll ask you that. >> thank you senator carver we are very proud of this will as well. i think you're going to get a good answer. >> answer senator carver's question in part by announcing the neighborhood home investment act. he'd be disappointed if i didn't. thank you for those kind comments you made. i was not in the committee will because the room is holding a hearing on food insecurity. we have food insecurity or

around the world but also here in the united states. thank you for holding this hearing. and i want to talk a little bit about the neighborhood home investment act. it is bipartisan. i think senator portman for his comments and his sponsorship on this and certainly intertwined in credo. supported by the white house so we have not only bipartisan support, we have support on from both branches of government. but i want to acknowledge the work that mister roberts and his organization has done in regards to developing this legislation. we developed it as a need to deal with affordable housing. covid-19 has underscored this need even further. inflationhas made it even more urgent that we do something in this regard . we are talking about the appraisal for communities

that need investments, that need affordable housing but the cost of e building or renovating exceed the value and thereforecannot be done under regular commercial circumstances . this leads to the decline of neighborhoods as well as making worse the wealth in america so mister roberts can you elaborate as to how the current market which is anything but predictable and investors willingness to go into communities now the neighborhood homes investment act would help us deal with that challenge. >> thank you for your leadership on this. neighborhood homes would provide states with an allocated amount of tax credit. or they would set their own strategies and priorities and run a competition to deploy those credits one applicant

wins an award they would go and raise private capital and build or rehabilitate in distressed communities. once those homes are sold and owner occupied the credits would flow and the developers of course or rather the picture, there's also a provision to enable existing homeowners whose homes need substantial rehabilitation to participate as well under a simplified basis. >> missed bell if you could respond to how this particular credit would help as relates to neighborhoods s that are have been traditionally neglected and to try to deal with the wealth gap we have in america ? >> absolutely. while i appreciate that question and asked i know this committee is fully aware and i appreciate your leadership in this particular area, as we think about

pathways to homeownership. as we think about pathways to housing and the impact ofthat , across the country we have continued to see the racial wealth gap that has continued to persist. a lot of communities. so as we think about mortgage revenue bonds, as we think about other resources both on the tax credit side that we have to increase the pipeline of affordable housing this both helps us reduce administrative redtape that exists . there is also o the two further leverage the tax incentives that we have two make sure that the spur of affordable housing that is happening is available and accessible to particularly our black indigenous and people of color communities and then also from a policy perspective senator, being able to align those policies in a way that is being practical alignment in addition to the burning of

resources in this particular area. >> mister chairman i would just conclude by saying the news today is the decline in housing markets we're seeing concerns because of rising interest rates, rising costs so the urgency of dealing with these issues is even greater today than it was when these bills were first introduced hyperlink is. >> i you for your years of work on these kinds of issues i look forward to partnering with you in the days ahead. senator cortez masso has been for affordable housing. tell my colleagues i talked to her about these housing issues and she shared the idea that we increase supply. we understandably don't supply. and what happens in this kind of market, is constructed and prices go up. so be part of this is increasing supply and i will do my colleagues. >> thank you for holding this hearing and to the panelists, every single one of you you because this is exactly what

i've been hearing and not around our challenges when it comes to affordable housing and we all know in my seat it runs from homelessness to low income toworkforce housing is a beloved . so i have been working with so many in my state to figure out what is it that we need to do to address affordable housing. so there's some great legislation that i support here. that i am cosponsor that we need to get done and i'm hopeful that in this committee we are able to do something one piece of legislation i introduced and misspell i'm going to start with you because i can't thank you enough for mentioning it in your opening which is the affordable housing bond enhancement act. s4445 and what it does is it improves the mortgage revenue bonds and certificate programs. he thought a little bit about this. can you explain how mortgage revenue bonds help low and moderate income e families, help them buy homes.

>> thank you for your leadership on this. so essentially, the affordable housing bond enhancement act would allow a housing finance agency to better utilize our bond resources to serve more homebuyers. so using the mortgage revenue bonds they housing finance agencies, we have been able to help over 3 million borrowers and the mortgage credit certificate programs have been able to help more than 360,000 families. become homeowners. that is significant. and also within these this particular bill it would also be able to help us optimize programs so that even work better for low income families as well. this particular time and we talked a little about it already this committee when we have rising interest rates and a lack of affordable

ownerships of homes, the reality is that homeownership is going further and further away and in my own family at the reality . one of the other facets of this bill senator that i think is important to elevate and i was happy to see this is an increase to the mortgage revenue bonds rt improvement loneliness so this increases to 50,000. as it currently stands it's at 15,000 but i believe that's not been updated since the early 1980s so we're talking about home improvements, necessary improvements. as we think about our asian community and thinking about iimprovements and modifications that need to make the home not only level this is also about quality of life. >> thank you and thank you for the support. let me say and i appreciate the support of the national council of state housing agencies and association of realtors, national association of homebuilders and other organizations for their support of this piece

of legislation.i do think it is an all hands on approach. how do we help the d homebuyers, how do we give them choices manufacturing homes, believe me this is an area of focus on as well. more choices for homeowners as we address all these issues one other area we can briefly center, i know i'm going to run out of time but i do believe that the state and local fiscal relief funds provided in the american rescue plan really provide the ability to make a historic investment and desperately needed housing and communities across our country so let me just say this. i would love to hear maybe this way your thoughts on the lifeline of this is an opportunity to take funds that are alreadythere , leverage them to support low income housing. >> absolutely and i think it would be a very important use of this funding. it would significantly increase the ability of

states and local jurisdictions to produce more affordable housing . i believe congress has already stated that a lot of these relief funds at the state and local level should be used for affordable housing so caring that better with a program like the low income housing tax credit would certainly be a huge forward in that direction. >> i listened to that as and are housing leaders for the legislative fix to use really $500 million that we could identify from our homes in that initiative to do just this. we could use it to build more of us apply for low income housing in nevada and everybody's ready to do it. this is an opportunity for us to get it right this is why i support the lifeline been for the reasons you've all been talking about, the low income housing tax credit. this is the number one thing i hear as a potential for increasing our housing supply

addressing our needs and we across the country. thank you for the work that you do . >> i thank my colleagues. i don't want anyone to think going to wage a filibuster as we wait for a few more colleagues but i appreciate my colleagues from the making the point with respect to the lifelinelegislation which i touched on in my opening statements .this is the chance to squeeze more housing value out of existing dollars and the fact is that senator leahy collins and myself, my colleague from panevada we got plenty of bipartisan support for it. i'm very pleased about it and just given us home prices hit new records of $416,000 in june, the sales continue to slide. so i don't think we really need as much of a call that

certainly drives it home. once applied and i'd like to give other panelists the chance to talk about it is my question to mister roberts involving some of these examples of loopholes and laws that are particularly hurting our ability to offer affordable abhousing. mister roberts said hey, this stems from a law that was written in 1989. so we're talking about laws in this area that is not for the dark ages are certainly pretty ancient.i'd be interested in your thoughts about whether there are other examples of laws inwhere you think that the bureaucratic barnacles are just getting so that also is hampering the ability to offer affordable housing. i think some of it as it relates to mister contra! involves outdated rules at the local level and i really appreciate miss bell's leadership working with local communities as well. she's given us almost a

little dissertation into the principles of supply and demand and we thank you for it but i also want to make sure that folks understand that in our part of the country we work very hard to try as you suggested and miss we touched on as well is to figure out how in the future we want to have people working over here and ngliving over here and going back and forth and outdated transportation systems but are there other laws that we want to be aware of and in fact here's what were going to do. since we had the fortune of having senator young, i can give him a chance to catch his breath. he's doing good work on semi conductor legislation which were glad to partner with them and he has been on about little bipartisan coalition on the finance committee for housing. so while you contemplate whether there are other outdated laws along the lines

of that loophole that asked mister roberts about let's hear from a strong advocate for help in senator young. >> thank you jeremy for holding this important hearing and affordablehousing and i think every one of our witnesses because i have to tell you , as i travel across the state of indiana i hear from every community about the importance of affordable housing and about the challenges they're experiencing right now. bthis shortage is of course being exacerbated by the current inflation challenges more probably impacted impacting the country and throughout my time in congress-my best to remain focused on efforts to address the housing shortage. i've been proud to work in particular with my committee colleagues senator cantwell on the affordable housing creditimprovement act . this bill is as i think our

witnesses know will help strengthen the low income housing tax credit program also known as lihtc which remains the most successful affordable housingprogram in the united states . a public-private partnership ported in a bipartisan fashion. if we want to address our nation's housing affordability crisis i think it's crucial that we pass the legislation bi tto improve the affordable housing program. the lihtc program by passing the affordable housing credit improvement act as soon as possible . so i asked our witnesses today just it should be an easy one. my show of hands who supports this affordable housing credit improvement act. >> thank you, i'll let the records show all five of five witnesses support the affordable housing credit improvement act . >> the record will show it

and i'm also going to there anybody to say that they didn't but it is a very important piece of legislation that senator young and cantwell have led. >> let the record also showed none of the witnesses are under duress . thank you. so let's dive into why this bill just for a moment and the lihtc program has such far-reaching support mister roberts, can you kindly explain what it is that makes the low income housing tax credit so effective in addressing the affordable housing crisis . >> as well as the neighborhood homes investment that. they share a common dna and what makes the credit work so well is the combination of factors. first is private market distance. this credit only flow after

the development is completed and public benefits are flowing. so we're not giving money away and hoping for a good result, we are painfully for success.and. >> pain for success. >> paying for success which isanother thing i've been focused on in my time in congress . my constituents insist on . >> yes by the way, thank you for your leadership on this paper success principle throughout the federal system. it's as tremendous promise so it's a very competitive market. credits are limited. the state out only to the highest priority activities and in fact they have to compete to invest in us. and if for any reason compliance is not followed through those credits are recaptured so tremendous discipline. the state administration, misspell and her colleagues

have done an amazing job in sorting these resources. we have from his confidence in them as stewards and that's why neighborhood wrote homes would rely on them. they areboth targeted and flexible . so there targeted but flexible in how they refine and the tremendous economic benefits. >> thanks so much for that. one of the things i find unified about the housing portability crisis and i like to focus on these unifying issues. the chairman was kind to mention the china innovation hill at the u.s. senate. one reason i was working on that is during this time of finalize politics , we can wi rally around solving difficult challenges together across political files, across political philosophies. and this housing affordability crisis, it's striking how it impacts various demographic groups, geographic areas.

it doesn't really seem to discriminate a lot. the front of this crisis falls on a diverse population and it's so important we support ideas that meet the needs of these communities mislead, briefly and you talk about how the lihtc program helps arrange of people in the. >> thank you for the question and you for allyou've done to support affordable housing . you are absolutely right that the problem of a lack of supply of affordable housing it everyone unfortunately . one of the things we see is the lihtc program has been effective at bringing people directly off the streets and the housing. it is one of the only programs that has done so with the support of the federal government. we see a range of types of individuals and families r

living in lihtc supported housing and that includes veterans. 10 percent of our homeless population is made up of veterans. that includes people recovering from opioid addiction. it includes seniors, people with disabilities. it really does run the gamut of some of our nation's most vulnerable. >> thank you so much. i see another time. i see a couple of other leaders as it relates to these issues have entered the committee rroom so i'll look forward to continuing discussions about this bill and about other housing legislative priorities in my questions for the record. >> senator young, before you have to take off and go back and prostitute are cause for the semi conductor industry in the united states i like to note that what you and senator cantwell have done with respect to the lihtc model has led people to say this is a solid approach for the housing policy of the future ngand homebuilding facilities responding with the legislation that i

proposed, the middle income housing tax credit, the lihtc kind of approach so that firefighters and nurses will have a chance to start climbing the ladder of upward mobility so thank you to senator cantwell and yourself on this and you'll continue to have my support in the days ahead . >> thank you mister chair for the hearing and thank you to our witnesses for being here today and for the work you do . >> .. >> developing with legislation that a plan to reduce them to help bring down these costs, and incentivize the investments in the statell affordable housing trust funds in this bill, can you just please speak about with these trust funds are and why they are so important to. >> yes and thank you for that

and i just to acknowledge and uplift, your leadership and so organ is one of 39 states it is a state housing trust fund and these funds typically though not always have a designated revenue source and can be particularly helpful in providing additional housing resources for the needs of the state of oregon, our trust fund is funded by state general fund, and lottery funds and certainly as you continue to pursue to work on this, we will work with you on the serious medical i appreciate that very much of my bill would also support thepo construction of nw reports housing creating new competitive grant program at hud and can you expand about how billing for housing will help lower the cost for the homebuyers in a federal support can help build more houses. >> absolutely, the problem is

very simple, is just a building of houses and more houses we build, the less pressure we have from the rising cost because we are supplying the market. >> i appreciate that very much and he also would note that the more housing that we have, the more people who are housing the more other issues that we all work on together and that we can address. mr. roberts i previously introduced bipartisan legislation with senator blanche of the middle class mortgagex insurance premium act to provide tax because the middle class homebuyers and use mortgage insurance and it is a mortgage insurance think that homeownership more accessible and i can we continue to cut costs for the families. >> so private mortgage insurance is very important so that the homebuyers who do not have 20 percent down payment funds, can get and we often see them come in at 5 percent and even

3 percent down payment and that is much more attainable the ffirst time buyers and so cuttg the cost of the mortgage insurance, is very important too making sure that they can afford the monthly aim at haswell. >> thank you, one more question, in response to the covid-19 crisis, congress provided states for financial support to the recovery of the prices and all-new cash or essays committed to using a portion of these funds to support theun housing, it's difficult to pair these funds with another critical federal housing growth of the low-income housing tax credit is way pipeline acted to ensure the states have the ability to utilize both covid-19 response funds in thee low-income housing tax credit and how can the increase flexibility for the state to use these funds support the housing efforts all across the country's yes and thank you

for the question creditor and s soaked up 31 states are voting over $9 billion in coronavirus physical recovery funds toward affordable housing activity. this total does not include local jurisdictions may also invest in affordable housing activities of the state of oregon is using these funds for other affordable housing activities, about 24 statesut he indicated that the intended use at least a portion of these resources is a gap filler for filling the financing gap which is absolutely the right thing to do but it is not coming without difficulties certainly as a i within the american rescue plan act captured, there is unintentionally, there is language and they're coming for people the funds for long-term loans which is exactly what you need for affordable housing this is where the lifeline act comes in and it would essentially fix the problem by allowing state

and local governments to utilize these resources for the long-term loans which of course, supports what we are talking about today the financial more affordable housing to ♪ ♪ thank you for that and i look forward to working with all of you as we continue to try to come back hundred combat this child. >> thank you and that's senator kuhn and then cantwell who has been doing extraordinary work on these issues for a long long time. >> thank you mr. chairman and welcome to all of her witnesses this morning and as you know, we are here to talk about the role of the tax incentives and affordable housing, and i would like to start out by asking you about tax relateded incentives o the affordable housing specifically tariffs which are defective taxes on softwood lumber imports from canada, softwood lumber is a critical input to home construction and the current 17.9 percent tariff rates on the import increases the home building cost an arm

full housing and fails to increase apply in earlier thissu week, senator menendez and i sent a letter to the numbers in the ustr emerging administrator to prioritize lumber trade to reduce housing costs so mr. can't or do you agree that reducing tariffs on softwood lumber would help make home construction and homeownership more affordable. >> thank you for the question, and thank you and senator menendez we leadership on this issue yes, i do believe reducing tariffs on enforced canadian softwood lumber make home construction and homeownership more affordable and lumber represents one of the most significant material to the construction of a home. try to measures that act as a tax, on these imports are necessarily going to increase the cost of the final product

conversely anything that you can do to remove these trade barriers is going to reduce the cost of the final product and if i could also senator wyden earlier said, what kind of regulations are outdated and are trade policies go back to the policy act, so if you think that maybe if they are not working and if we cannot get agreement and we are structurally built in the structure is built into the review process of that trade program, does not have the effectiveness of being able to act quickly on modifications to try the policies, the maybe we need to look at the overall picture that we create are trade policies thank you when i was going to follow up with a question about what we could do a more general sense now renewed

u.s. soft lumber agreement to the benefit of affordable housing i think you kind of addressed that in your last answer and i would just say hopefully, the administration takes final action on these issues and these were practical bipartisan ways to help with affordable housing the u.s. housing community at large. we just speak my mind for minutes, this optic on a housing availability and affordability are huge issue for south dakota and i hear about these issues all of the time the constituents and communities like rapid city, which is quickly expanding. and with construction prices significantly inflated, this is more difficult to complete these housing association the course and according to the national realtors, midwestern states average cost increased by more than $80000.0. so if i might, ms. wade, you touch on this in your written testimony but could you share your insights into the u.s. housing but in terms of data,

and how impacting family livelihoods across the country. >> yes, senator, that is a great squestion it by one estimate ad by the a way, i've seen a testament doubled and we had a shortage of 3.8 million homes in the u.s. which is staggering and i think it's only hard to grasp. there are a lot of things that have to come together to address this urgent need it whether the federal level so the legislation this committee is discussing things that you have worked on senator at the state and local level as well as the private sector and i think the low-income housing tax credit brings together all of those various components and is one way to effectively increase the supply of affordable housing and is also taking you know, reform the local level when it comes to things like zoning when it comes tolo things like permitting dels and other policies at the local

level. and all of this kind of has to be viewed holistically as part of the housing ecosystem in order to truly solve this problem to make it i would just develop, my time is experiencing transferring your but i just was like with respect to that one of the things that we heard the south dakota housing developing authority, he has just that people come those who participate in these multiple federal housing programs continuously low income housing tax credit program come the programs that had become of the roles governing these programs are not uniform and they can create challenges for state housing authorities and dissident set of eyes property management human is made in some geof these programs and so i hoe that is one the things mr. chairman, that we can try to work with these programs to ensure that they are functional and workable and do not impose these happy burdens and compliance requirements makes it very difficult for those out

there that are tasked with trying to create more affordable housing options not buried in a mountain federal paperwork and so thank you. >> it we are definitely going to pebe going up with the rules and regulations and next senator bennett. >> thank you and i i appreciated and thank you for having us hearing and in colorado, putting years ago i guess i was a superintendent - schools and it wasub very uncommon to me to teacher who do not live in denver, that they worked and today, his impossible for a teacher to afford to live not only different but suburban denver and i had a colorado teacher of the year come visitth me a month or so ago and she was living in the rural community in the western spoke of carney passing she was not complaining that she just made the observation that 70 - 80 percenf her colleagues in the middle and high score she teaches, have

to have two or three jobs just to live in that area and so this is a real failure on the part of our society andnd think, be able to create a workforce housing or is getting to a point where we losing businesses and losing medicalsi practices because peoe simply cannot afford to live in the state of colorado anymore and housing costs are far outpacing it comes in every single colorado community metro denver, the average rent raised 40 percent median home price int denver colorado, recently talked $600,000 which is up 20 percentt from the previous year but in durango, which is on the western spoke of colorado, in the southwestern part, of our state, the median price for an in town, hit $650,000 last year, 30 percent increase from the previous year and employers

across colorado especially in rural areas civic and higher because of the shortage of housing in 2021, last year i conveyed adverse bipartisan group of 30 leaders from across the state, to develop solutions to the housing prices and these are experts in housing looking at it from all different vantage points in their top recommendation surprise anybody in this panel, to do everything in our power to increase housing supply including expanding existing programs that work at, we need to do more to modernize our government's response at every level i give communities greater flexibility and embrace innovation and promote stability as the eviction crisis act would do and that the low income housing tax credit is our most effective program to build new affordable housing and actually coming to a question for you but that is why i strongly support senator cantwell and young affordable housing credit and permit act and also pushing for

a swift implication one improvement congress already has passed, is been developed housing more families back in 2018, congress created the average income enabling them to serve household and houses up to 80 percent of median family income and make center young and i lived bipartisan bicameral group of colleagues calling on treasury to expedite release of the final workable rule on the average income and ms. bell, how would finalizing average income tax rule, spent affordable housing to more families in this country. >> think you for the question is senator, and i know that we are while there is collective solidarity and the experiences of folks in the state they serve around affordable housing. so thee average income tax which congress enacted for the housing credit in 2019, actually an important new tool that will

make housing credits and properties more economically diverse and this is done by allowing us to serve the household earning up to 80 percent of the area medianme income while at the same time, still making sure that units are underwritten to the affordable for some of our individuals and their families with the lowest income as of the average income that they do by using rental income that is charged by the higher income still lower income households to essentially offset the lower rents charge to the household may be very low in some cases extremely low income and the proposed role in limiting the average income tax, was something historically simplyax unworkable and i think some of the interest has on that but there's some very meaningful positivear steps forward than te average income tax and were

certainly grateful to you the other senators that have signed on to urge treasury and the irs to really focus on this particular. >> and of this committee will keep pushing it mr. chairman, i had another question but i'm conscious of my colleagues and so i i will submit a question on homelessness for the record and it will yield. >> i think my colleagues and we been working these issues for a long time and senator brown is next scaled i believe we can get in senator warren at work and senator cantwell and senator bit brown, thinking committee is more closely. >> thank you influences today for joining us and as the chair of the committee, and chair whited, we heard housing affordability because not only priority and i think were certainly everybody on the side of the aisle perhaps, beyond that many moral imperative to many people are paying too much

to keep a roof over their head and a quarter of the renters think most of you know, the statistics one quarter the renters pay more than half their income and rent homeownership is increasingly average and far too many families and i'm glad that was senator whited and crapo are doing is scheduling this hearing work on this and so i partnered with senator whited to introduce the renters try to tax credit act and a complement them to make sure that extremely low income renters do not have to pay more than 30 percent of their income t towards housing what happens in families like that everything is upside down when they're evicted and my first question is forte mr. robertson, in cleveland, with a lot of homes with paffordable first generational opportunities these old names need repairs andny some of you r me this committee is a safe, and another committee, my wife and i live had more foreclosures in

2007, thinning zip code in america, that was in cleveland's of went homeowners cannot make these repairs themselves without safety or the stepped-up by out-of-state investors and to turn a profit and that's the problem, evidence so mr. robertson how can the neighborhoods investment act bill that i worked on and was referred to, have address the shortfall of affordable single-family homes homes in the lower incomes hands and aspiring homeowners. >> will thank you so much, senator, for your leadership on neighborhood homes and low income housing credit and everything that you do the making committee, it is been really remarkable to see the comprehensiveness of your strategy pretty these homes can fill the gap between the cost to build a rehab home in a neighborhood with the local mart there can support and without that is not feasible for the private developers reason existing homeowners to improve

their homes and by extension, the neighborhood and the entire neighborhood suffers when a homes are deteriorated because most of thewh land use most of these neighborhoods, our single-family home so we cannot really fix up those neighborhoods without addressing this problem in the neighborhood homes will allow the state to deploy printed in just the right amount to cover that gap. >> thank you and i want to talk to you about your industry the homebuilders, we hear from people around the country, for the regulation, zoning relations have done to help build the homes around the and comment on that and on what if we were to support and provide funding support to the communities that update the zoning regulation, without help increase the supply of housing. >> thank you centaur.

senator, there's a great deal of well some of my colleagues have supported me in the act which is - in my neighborhood. and because of that, there tends to be zoning regulations that are put in place whether intentional or - the result is that the raise the cost of housing and therefore, we cannot build affordable housing through those zoning requirements so he is is a great problem and members face it constantly and things such as design standards being added to the zoning which is really nothing to do with zoning but increases the cost of thein housing and so the zonings a tremendous problem. >> so my question though was and i agree with you and i thank you

so pretty much believed across the board, with the funding support theha communities with e zoning relations would have an impact is her way of doing that are you proposing ways of making that happen. >> yes, funding to the local associations at the local municipalities that we formed their zoning regulations so that it will allow more affordable housing it to h be built and to restrict as long as the property is owned for single-family or mobile families restrict any further regulations that would help ed ofld the stock. >> and you agree without. >> to agree with yes i do, there's a massive body that did the research and study zoning regulations and how those increase the cost of housing and depresss construction had my own research is look at that as well

my co-authors and i find it at affordability substantially increase in inflation is just a gdp with ranking in the u.s. as a consequent the building zoning relations and land-use relations back to what they were in the 1990s and the i early 2000. >> recently in thank you, another question but ms. bell, your senior senator has done a great thing on the committee and by the chairss this committee ad thank you for that sina an inflationary comment, i think my colleagues and i love working together okay, we have a vote there will be ableng to get into both of our senators and senator warner and appropriate that senator cantwell wrapping up even in leadership all of these years. >> thank you and i do think of my friend that you run which i'm on this committee, gratuitous plug for you in terms of the senior center, think both of you because the scenario where we have all had approaches and this

hearing is so important and want to skip the part about the same kind of gaps that we are all of us indicated indicate that capitol raise credit and new market tax credit very quickly when i get items of one, something underground worked with me on we thought more to get some of that i was very work closely with the civil rights committee which is a live deck which would've created for first-generation first-time homebuyers so by default percent are people of color, and they qualify for 30 year mortgage, we would provide a 20 year mortgage of the wealth accumulation at twice the rate and racial wealth gap is an extraordinarily challenging issue and

fortunately home ownership is ap huge huge component part of that i do hope that program will lift outing combined with our support as well for down payment assistance and that's a good one as well and what i wanted take my time to get to robertson unwanted get to start you in another area that i've been working on the chairman is very supportive as well as the ranking member, his visual support for nbi's and financial situation we don't have nearly enough anymore, so the suppository's effusions, we were able to get $12,000,000,000.3 billion in grants and 9 billion in equity to those institutions, really i think interesting initiative but still going to be enough in a bipartisan way, we put together tax credit that would give tax credit to those private sector entities and i think in terms of many comedies is in the

aftermath of the murder of george floyd wantedo to do something and racial equity done a pretty crummy job they put their promises were but this would say that if you put it long term or than tenure page of money we would give you tax incentive is slightly larger one at 20 years and i think this is again, no single silver bullet bit a very effective tool to take this what is historically been a relatively narrow niche financial sector and try to expand the capacity and mr. robert since you were kind enough to work in my office, i'm putting this tax credit together, i would love to get your comments and suggestions what you think it's a good idea. >> we are tremendously excited by this proposal center more that i think you and the others were you leadership on this and for your. >> you gotta give chrisman holland. >> yes and my senate and neighbor, and yes this could make a huge difference and they

do the hardest work in community developments had they are designed f to fill the gap that other private sector financial providers cannot do on their own they are great in partnership together and what your tax credits proposal would do is to be to buildto those partnerships between capitol providers in the acdf eyes on the ground to do n the cdf eyes you long-term capitol in the community development requires it is the hardest kind of capitol to get, but has to be available a costly make sense in your tax credit would lower the cost of the capitol to enable theo cdf i to greatly expand it. >> i appreciate the work and hopefully we can on this and i'll lose my last 55 seconds to yield to senator cantwell also the committee membersht and oths

on another small initiative, section 113, that's a reform that would take a legal active 94, and basically a very small amount of money literally in the millions, start experimenting on whether we could actually secure ties with the city depth which again would be another tool to make sure that we spread this capacity more in the spirit, since he yielded back when he was already in the rec. i wheeled back when i'm still in the yellow think you. >> and i think my colleague i've support of those communities ant i am going to continue to do so sooner cantwell, wrap this up ourr her years leading committee and being out of the floor leaving america to make sure we have semi connectors in the united states. >> make sure you give credit from her for yesterday. >> huge went. >> thank you for holding this c hearing on census for affordable

housing and i think you for your leadership and legislation that you introduced on the middle of the housing clearly, the 2000 and hunt 2009 downturn was a lot of people into different categories and the consequence of that are still being felt and so i definitely appreciate your path and help in supporting. low-income housing tax credit and your legislation is really on one remind people of senator hatch when he was with us, the right leader on this and always love that you had housing first initiative but when first initiatives as part of the veterans community there and show great success of driving down the cost to house people first and you're driving out thn of the publishing would otherwised have to be sink in when i want to thank my colleagues for the leadership with us on increasing this by 5e don't realize a few years ago,

it expired at the luster so were going to go down in the amount of money corsica under tax credit, 90 percent of the portable housing bill is built within tax credit but it really is, a governor and we don't increases, on solving the problem and if you like why we cannot get this out here and i don't understand it well if you like painting a big supply you know, the message across one of the audis out here, it is just supply or is supply stupid or you know i don't know what you get about it, it is really just about supply. and so festering because so many people have written reports i can probably get a step is high of reports paying it is a supply problem so i would just like to hear from the witnesses, why is it that we are not breaking through on the supply passage when you talk about it come is

pretty easy and the demographics we have elderly people livingg oplonger and returning investors from workplace issues that we do in seattle and that increases the demanded a bunch of people fall out of the middle income into the lower income and that increase the demand, i don't get why we cannot just admit we have a supply problem and is something about it pretty ... >> ... the supply your

leadership will be a huge step forward. >> anybody else want to talk about this? >> what strikes me is somewhat tragic as we have had a housing crisis almost for 100 years for the average price of a mid-town manhattan home in today's dollars is 1.2 million. our housing, there are some efficiency enhancements that we can implement to make and implement zoning reform so would make it easier and less costly to build in areas of high demand and one thing we have seen it

evolve over the years is a growing number of americans are really focusing on relatively small numbers of locations to o to including seattle and the west coast including some parts of the southwest. and sadly some of those areas in my home state of california we make buildings very expensive to do my custom in one and existing small apartment unit and when you look at those types of costs you've got to scratch her head and say there's got to be a better way. and i think put you through is manufacturedac can change regulatory requirements i think we have reason to be up to that we can make the right choices

hearing is very much focused on that and i'm optimistic that we can do that. >> i think we have inflation good housing and if you think again back to the details think the details are most irrelevant because they are not totally relevant that we don't get bogged down in the supply issue for pebbled understand that it is the supply u issue. can we make it more efficient affordable, yes let's do that. somehow all that discussion stops people from really understanding that it is a supply crisis and again is 9% of the affordable homes homes will at the type that homes will the attack at it unless we increase the tax credit we are going to get t no matter how many peoplen seattle pledged to spend millions of dollars on projects we are going to get out of it. i do think, i don't know i have

a suspicion is more to do with it think it had a chilling effect forhi several years whene should have realized with the crisis was going to do ande my colleague senator bennet and senator brown talked about it. the crisis made everybody out and we should securitize some way to make more housing supply. people were blaming all sortstsf people in them we did nothing but at that very moment we also push more people into that in the end market because they literally fell out. they fell out of economy they literally fell out of the economy we didn't do anything for demands demands that used to be missed for 70s or 80s or even the your let's go had where did that

[cheers and applause] >> it very much as a supply issue popped the more we can reduce costs to academically the moreos we can expand supply. one study in california showed that california instruction costs -- construction costs were not at the averagera of other evaluated locations a good gao study but we are close to the average california could have built 12,000 more units to under funding. until we recognize our construction costs are remarkably high it's going to be hard to expand supply unless we are really going to push on the subsidies and push a lot more dollars into less expensive commodity. >> i met with people in seattle who are very charged with this

decision and i asked them and they said i think it's going to cost us $15 billion to get out of this problem. the teen billion dollars her. 10 years and they said no, probablyo, over five. quantifying how problematic this really is i'm all for ideas on how to drive down costs that there's anything you'd like to add. >> thank you senator. i think you're a possibly correct because we under built and by about 400,000 houses a year over a 10 year period. there was delayed entry level market interest because millenials had household formations that were much later in h life. and they all hit at the same time. if you look at the demographics between boomers and millenials

it's significant. so that's all hit at the same time when we were building up a deficit just to meet what formation would be in the future. i think you are dead on with what you said and there was, it was a change in the public sector's view of housing and i agree we haven't had a chair housing policy in this country since the 1980s but the aspiration for single-family homeownership never went away. and that's where all of those things collided and that's why we have a problem with one grid not understanding exactly the significant of the crisis. >> i know we have to run mr. chairman but we shouldn't forget how important homeownership is and economic

stability for families. i hope it can rectify this. i appreciate this hearing and i appreciate your tax policy and the chairman and ian come from e part of the country and the northwest and not the the texans and californians haven't been to but we have got to step up to get some solutions. >> senator cantwell just one comment. you are spot on with your perspective it's all about supply. it's always going to be about supply and i'd like everybody to note senator cantwell's comments with respect to how some of the highfliers use the derivative. back in 2009 that contributed to the market crash problem. before you came i talked about using algorithms to outbid americans who just want to own a home. we have got equity issues to pursue and we are going to do that in a way that is consistent

as mr. konter and i have been talking about strengthening private-public partnerships to build more houses. a special thanks to two mundel for coming such a long ways for this and without the finance committee is adjourned. [inaudible conversations] [inaudible conversations]