▶ 0:13:49Welcome, everyone for joining us today. Without objection, the chair may declare a recess at any time. And I recognize myself for the purpose of making an opening statement. Let's start with the basic reality check. A young american can work full time, do everything right, and still have no realistic path to owning a home. Not because they're lazy, not because they made reckless choices, but because public policy has made ownership more expensive and further out of reach than it has been in decades.
▶ 0:14:18Only 25% of americans say they are confident that they can afford to buy a home. More than half say that they have little or no confidence at all. Housing affordability is now at a 40 year low. At the same time, americans are seeing something that doesn't add up across the country, people who entered the united states illegally are living in housing that many working americans cannot afford. That is not a talking point. It's a policy outcome.
▶ 0:14:47Young adults who follow the law, enter the workforce and tried to build a future are told that they should accept permanent renting. Meanwhile, the government programs increase housing demand, subsidize select populations, and then drive prices higher for everyone else. That is not fairness. That's displacement. Nearly one quarter of homeowners and almost half of renters spend at least 30% of their income on housing.
▶ 0:15:14For for millions of families, housing is no longer a foundation for stability. It's a financial choke point. So how did we get here? First, the federal reserve held interest rates near zero and injected trillions of dollars into the economy leading up to and during the covid pandemic. Mortgage rates fell sharply, demand surged and home prices skyrocketed, while housing supply failed to keep pace.
▶ 0:15:42Then the federal reserve reserved reversed course and interest rates climbed to their highest level since 2008. Americans were left with the worst possible combination elevated home prices and sharply higher borrowing costs. At the same time, the biden administration fueled historic inflation through excessive federal spending. Paychecks lost purchasing power while housing costs continue to rise. Now consider the supply.
▶ 0:16:09The united states is short somewhere between 3.8 and 8.2 million homes today. By 2035, that shortage could approach 10 million units. Instead of prioritizing supply, federal policy increased demand. Mass illegal immigration placed immediate pressure on housing markets across the country, especially in working class communities.
▶ 0:16:34More people competing for too few homes has driven up rent and prices higher for americans already struggling to get ahead. Washington also has made housing more expensive to build. Federal regulations on building codes, energy standards and home appliances added tens of thousands of dollars to the cost of constructing or renovating a home.
▶ 0:16:57Proposals for a nationwide rent control further discouraged new construction and reduced the supply. The result is a system that squeezes working americans from every direction higher prices, higher interest rates, too little supply, and the demand competition driven by federal policy. That is not a failure of the free market. It's a failure of government. President trump and congressional republicans are taking a different approach.
▶ 0:17:25On day one, the president directed his cabinet to deliver emergency price relief by expanding housing supply and eliminating regulations that raise costs. The department of housing and urban development and the department of interior are working to make the federal land available for housing development. Congress passed h.r. One in the one big beautiful bill, which delivered historic tax relief for working families and remove barriers to make it harder to build homes.
▶ 0:17:55The direction is clear housing affordability will not be restored by trapping americans in permanent rent. It will not be restored by distorting markets or importing demand into an already broken system. It will be restored by unleashing american builders, dismantling the regulatory cartel, and putting hard working american families back at the center of national policy where they belong. And that's why we're here today. And with that, I yield to ranking member frost for his opening statement.
▶ 0:18:23>> thank you so much, chairman burlison, and thank you for calling this hearing today on such an important subject. Stable housing should be the essential foundation upon which families in america can build a good life. But housing is not affordable in this country, especially my generation is pretty much given up hope of ever being able to have stable housing, since the cost is high to purchase a home and the rising cost of rent, student debt, health care and everyday expenses prevent us from being able to stay housed, let alone
▶ 0:18:53Purchase a home. In fact, my office opened up one of the first satellite congressional offices on a university's campus. I thought the top issue people would come and ask us for help on would be student debt, but in fact, the top two were food insecurity hungry students and people who were homeless and didn't have a place to live. This is a personal thing for me. When I decided to run for congress, I experienced homelessness for many months when I was priced out of my apartment after the rent moratorium hike was taken away in the state of florida just after covid.
▶ 0:19:21I always joked to myself that at least if I won my race for congress, I wouldn't deal with housing issues again. I was elected to congress, and as a congressman elect, I was denied to every apartment complex I applied to in washington, D.C. I joked about having to couch surf on news, not knowing it would become national news that a member, a new member of congress, was essentially homeless in his new place that he'd have to work in. I say this to say this is an issue that's far reaching, that impacts all americans.
▶ 0:19:48And even when I took out a loan to be able to pay the high cost of rent moving to D.C. I was denied the opportunity to pay the high rent to first time homebuyers have been driven down to 21% of the market in the median age of first time home buyer is now 40 years old, the highest ever recorded. Families are getting priced out, while big money investors are cashing in.
▶ 0:20:08And the first quarter of 2025, investors bought nearly 27% of homes sold the highest share in at least five years and way above the number of first time buyers. That is not a cultural shift. That is what happens when government tilts the field towards corporate buyers, and then shrugs when regular people lose. The commodification of housing has gotten way out of control. There is a crisis that has been made even worse at every opportunity, by greed and turning the american dream into a commodified asset.
▶ 0:20:37Plus, tariffs and underdeveloped workforce and outdated zoning laws prevent the growth of housing supply that we need. I'll work with anyone to fix these issues. Congress, as well as the ftc, doj, hud, and treasury can and must rapidly mobilize to lower housing costs today. And all it takes is the political will and focus. For too long, the federal government has washed its hands clean of housing laws, relegating it to being a state and local issue.
▶ 0:21:05But there is a lot we can do at the federal government. Political will and focus, unfortunately, are absent right now with the republican majority. In fact, president donald trump is actively making it worse. He is driving up the cost to build homes through tariffs on construction materials and fixtures. His reckless immigration policies are going to shrink our workforce capacity. At a time when immigrants make up about a fourth of the construction workforce.
▶ 0:21:32Again, a fourth of the construction workforce now facing backlash over high prices. The president is suddenly saying he's on board with a democratic proposal to ban institutional investors from being able to buy single family homes. We welcome this. President trump received a lot of attention when he announced this month, quote, I'm immediately taking steps to ban large institutional investors from buying more single family homes, and I will be calling on congress to codify it, end quote.
▶ 0:21:58But earlier this week, the president revealed the details of his executive order and it falls short. This executive order does not include an outright ban on institutional home purchases, but just limits conventional mortgage guarantees for these transactions. What he failed to mention is that most of these transactions happen in cash or outside of fannie and freddie financing, and will not be impacted by his executive order.
▶ 0:22:23For president trump and congressional republicans to truly implement this proposal that the president himself called for, they must buck the same wall street investors and corporations that they've also been delivering massive tax handouts for. So I'll believe it when I see it, but we're here to work together on it. Trump helped to create the problem that we're in. Blackstone built the leasing company invitational homes, into a single family rental giant that got rich by buying up houses at distressed prices.
▶ 0:22:49And then it became the template for gentrification, displacement, and turning our neighborhoods into portfolios, gao report. In 2017, fannie mae backed a ten year, $1 billion loan to invitational loans. Market based solutions alone are not going to fix this crisis, but it gets worse. It's not just corporate ownership that's driving up housing costs for families. It's also corporate coordination and extraction.
▶ 0:23:14The biden era department of justice sued realpage for colluding to rig rents using algorithms that drive up prices and harm renters. Then, the same biden era doj sued six of the nation's largest landlords for colluding to rip off american renters. Names like greystar, blackstone, camden property trust, um cushman and wakefield, and pinnacle, willow bridge and cortland.
▶ 0:23:37So my question for all of us here is that if this hearing is truly about housing affordability, we should really start with a lot of the rent collusion schemes that we see that the doj itself has said harms millions of renters. We should start by tightening, uh, tightening standards on corporate landlords and their pricing software. We should start with investors that routinely outbid families for starter homes.
▶ 0:24:01And I invite my republican colleagues to join me in co-sponsoring legislation that will help achieve these things. One of my bills is the end junk fees for renters act. Another one is co-sponsoring a bill I will soon be introducing to push back on wall street, turning manufactured home communities into captive revenue streams.
▶ 0:24:19This bill incentivize states to adopt strong opportunity to purchase protections so manufactured homeowners, especially seniors and working families on a fixed income, can get a real chance to buy the land under their home before private equity and other large investors can swoop in, jack up the cost of the the lot rent and pile on new fees.
▶ 0:24:42Massive deregulation can be very is very dangerous and need I not remind us of things that happened in florida, such as the tragic surfside collapse and, um, and other issues like that we see across the entire nation. We don't need a hearing where it's just going to be folks pushing to take away standards that are important for americans while enriching, uh, big developers and removing the housing standards that keep bad actors in line. Getting rid of these protections is not a silver bullet or a strong housing plan. The process can be made faster.
▶ 0:25:10We know this, but we can do that without compromising important standards that keep working families safe. So I'm very excited about this hearing. I mentioned why this is a very personal to me. I routinely knock doors in my district in the housing crisis. Is the top one on top of everyone's minds. Democrats, republicans, tenants and homeowners alike. And in my state of florida, we're experiencing a housing insurance crisis, the rising cost of rent, it being too damn expensive, and we're in a situation.
▶ 0:25:39I was asked recently what I think is one of the number one issues impacting young people. And I said, it's the fact that I'm worried as young people grow older, will never own a damn thing in our lives, whether it's our home to the music we listen to, to the movies we watch, to the car that we drive, and we are going down that road. And so housing is something we have to take care of. Um, excited about this hearing. Thank you, Mr. chairman, I yield back. >> thank you. Ranking member frost, I would like to welcome our witnesses today. First, we have Mr.
▶ 0:26:09Edward pinto, a senior fellow and co-director of the housing center at the american enterprise institute. Before joining aei, Mr. pinto was an executive vice president and chief credit officer for fannie mae until the late 1980s. Next we have buddy hughes. Mr. hughes was is the chairman of the national association of home builders. He he he is also a in lexington, north carolina, has a home, a home builder business and has developed homes for more than 45 years.
▶ 0:26:41Um, next we have patrice onwuka, the director of the center for economic opportunity at independent women. And then lastly, we have caroline nagy, the associate director of housing policy at americans for financial reform. Thank you all for taking time and joining us today for this very important and timely topic.
▶ 0:27:02Pursuant to committee rule 90, witnesses, if you would, please stand and raise your right hand. Do you solemnly swear to affirm that the testimony that you're about to give is the truth, the whole truth, and nothing but the truth, so help you god? Let the record show that the witnesses have answered in the affirmative. Affirmative. Thank you. You can you can sit down. Alright. Um.
▶ 0:27:32You all should probably know the drill. Um, each of you will have five minutes for a statement. Um, during that, during that time, you'll see your light go to yellow, in which you have one minute left. When it goes to red, your time is expired. And with that, I now recognize Mr. pinto for his opening statement. >> thank you, chairman and ranking member forrest. Members of the subcommittee for this opportunity.
▶ 0:27:59The current state of the housing supply is best described as an irresistible force meeting an immovable object. The irresistible. The immovable object consists of overly restrictive land use regulations promulgated by most of the three 33,000 plus state and local jurisdictions. That's how many have zoning and land use power. This leads to unaffordability and a dearth of starter homes on smaller lots.
▶ 0:28:27The irresistible force the chairman referred to is the federal government's efforts to make homes affordable by means of credit, easing subsidies and acts by the fed, according to realtor.com. Returning the housing market to 2019 levels is a daunting task. Mortgage rates would have to fall to 2.5%. They're at about 6.2% today. Incomes would have to rise by 56%, or home prices fall by 35%. We don't want to have those types of things aren't likely to happen.
▶ 0:28:56And hopefully, um, we don't have house prices crash. As recently as yesterday, president trump cautioned about creating a lot of housing all of a sudden in driving home prices down. Yet inaction has its own risks. Implementation of multiple demand boosters, combined with a strong economy, would ignite strong house price appreciation. We've seen how that operates. Deregulation is needed to activate frozen capital in the form of existing stock of housing and land. Land is a form of capital.
▶ 0:29:24This would improve, uh, by expanding supply, improve affordability and increase homeownership. Um, I'll be talking about many solutions, five of which would increase homeownership rates. First, we should unlock existing housing stock frozen by the effects of capital gains treatment. Second, we should incent building of more starter homes currently made illegal by state and local land use regulations.
▶ 0:29:49And third, we should avoid solutions that only drive demand higher or have been proven to be ineffective. Let me return to unlocking existing housing stock frozen by capital gains lock in and related tax provisions. You could unlock an estimated 3.2 million rooms out of the 32 million spare rooms in owner occupied single family homes over ten years by providing an income tax exemption for rental income on newly rented rooms, these rooms already exist.
▶ 0:30:17These would start adding supply immediately. They're in every congressional district or near largely near amenities, and would rent at attractive levels. The current vacant capital stock yields no rental income today, therefore, it yields no revenue to the federal government, so there'd be no revenue loss. Second, you could eliminate or increase the capital gains exclusion caps currently at 250 and $500,000. And you could apply that to homeowners over age 65. Uh, those limits were set in 1997.
▶ 0:30:49Uh, consumer prices have doubled since that point, which would take you to to $500 million number and house price. House prices have gone up 200% with even higher numbers. The capital gains, uh, exclusion also applies, uh, that the the step up that occurs when a person dies, um, the heirs get the step up in basis. There are perhaps 100 or 200,000 homes that are sitting vacant.
▶ 0:31:14Um, that would be put back on the market if there wasn't the capital gains they're waiting for. The capital gains. Step up. Um, providing this incentive to sell and more rapidly return perhaps 2 million of these existing larger family sized homes to the market over ten years has the potential to unfreeze 200,000 homes each year. This would boost home ownership.
▶ 0:31:36Um, next, eliminate capital gains on starter single family rentals sold to occupying tenants in good standing with at least 24 months on time rental history. This would boost homeownership. We estimate there are 13 million households living in single family rentals, 77% of which are owned by small investors with 1 to 9 units. Two thirds of these are starter homes. Average current value $300,000. Average rent of $1,800 a month 85.
▶ 0:32:03Of these, 85% of these borrowers are likely unable to qualify for a mortgage. But there are ways to make this work. Uh, first of all, you could do away with the capital gains if it's sold to a tenant. Second of all, if you sell to the tenant, of course, you don't have a seller's commission. And third, you don't have to paint and do the other things. That's a lot of money that potentially could be used. Next, incentive building of more starter homes with a small lot bounty program. This would boost homeownership.
▶ 0:32:31States could provide a bounty that says if you create more small lots than you have been in the past, however you do it, we'll give you $25,000 for each one of those, you can have additional targeted, uh, bounties for, uh, lots near factories that are being built that lots on land sold by the federal government, and lots in, uh, areas where there tear downs. Uh, I'd also suggest that you could, uh, restrict hud money, um, that goes to places that have rent control.
▶ 0:32:58There's no point in providing federal money to places that are actively working to restrict new development. And lastly, you could tax profits or newly built for sale developments as a long term capital gain, not income. Right now, developers, if they develop a property and rent it as part of their business, they don't pay and then they sell it eventually, two, three, five years down the road, um, they get capital gains treat if they sell it after building it to a homeowner, they have to pay ordinary income because they don't get capital gains
▶ 0:33:29Treatment. That type of distortion in the income tax code should be eliminated. Thank you very much. >> thank you. I now recognize Mr. hughes for his opening statement. >> chairman burleson, ranking member frost and members of the subcommittee, thank you for the opportunity to testify today on behalf of the national association of home builders. The united states is facing a housing affordability crisis.
▶ 0:33:5877% of us households cannot afford just the median price of a new single family home. It's crucial to put regulatory costs in focus because home buyers and renters are sensitive to price. For every thousand dollar increase to the cost of a single family home, an additional 116,000 households are priced out of the market.
▶ 0:34:22Likewise, for every $1,000 increase to the cost of a new rental, an additional 20,000 renters are priced out of that apartment. Market regulations are a significant part of construction expenses, 24% of the cost of a new single family home can be attributed to regulations imposed at the local, state and federal levels.
▶ 0:34:45For multifamily projects, 41% of the cost are due to regulations, and while we understand and value regulations that promote health, safety and welfare, there are many that unnecessarily make housing more expensive. In 2024, hud and usda released a rule mandating federally assisted projects use the 2021 energy code, which offers marginal energy savings to homeowners.
▶ 0:35:16This energy code will add thousands in additional cost, and homeowners won't see a payback on these, sometimes for decades. Builders in kansas city, missouri, did a real world analysis that showed a two story house built to the 2021 energy code cost the consumer an additional $31,000 compared to the 2012 code.
▶ 0:35:42Furthermore, this energy code has minimal energy savings, resulting in up to a 90 year payback. Thankfully, hud secretary turner has delayed this rule. Davis-bacon requires payment of prevailing wages on federally assisted projects exceeding $2,000. These are based on union wages, union wage rates that do not reflect local market conditions in regions like south, midwest or rural areas.
▶ 0:36:12These wage determinations significantly exceed market wages on top of higher labor costs. Builders face extensive paperwork, weekly payroll certification, and compliance risk. Even a minor or technical mistake can result in a major financial penalty. Multifamily builders spend valuable resources to retain full time staff.
▶ 0:36:37Just to be able to comply with these burdensome administrative hurdles. Obtaining a nationwide permit under the clean water act is often challenging. What's supposed to be a streamlined, predictable process can take over a year.
▶ 0:36:55Permitting delays lead to additional interest on loans and fees being paid to consultants or attorneys to advance a permit application, resulting in a more expensive home. To address these permitting challenges, nahb is grateful that the house passed the permit act and that the administration is working on improving the permitting process for multifamily projects with federal assistance.
▶ 0:37:23A key challenge for our members is the requirement to source domestically for construction materials, while our members try to use products made within the us. It's not always practical because of price or availability. Single family housing has an exemption to this requirement, but multifamily housing also needs an exemption to help avoid construction delays and additional cost. Thank you again for this opportunity to testify.
▶ 0:37:53Regulatory pressures improve, impose real costs on housing affordability. We look forward to working with you to alleviate these headwinds and above all, to let builders build. Thank you again. >> thank you. I now recognize miss onwuka for her opening statement. >> there we go.
▶ 0:38:21Thank you, chairman and ranking member frost, for having me to appear today. Uh, at independent women, we have a special focus on women's career pathways, financial security and prosperity. So today's housing challenges place very great burdens on americans, particularly young people and women. It's a key issue for them. Women often control family finances and make household decisions throughout their lives, and they're not a monolith. Single women are the second largest share of home buyers behind married couples.
▶ 0:38:50Women take out larger mortgages than men and make smaller down payments than men. Because women live longer than men, many older women tend to stand to inherit all the assets and assume full control of the family. Household decisions whether to downgrade, for example, or to age in place. Meanwhile, younger generations like millennials, like myself, we feel the american dream is out of home. Ownership is out of reach. This is the largest generation, and yet they comprise only 29% of home buyers.
▶ 0:39:18So we need policies that meet the needs of young people and women who desire to be homebuyers, those who desire to age in their homes with dignity, and those who just want quality, affordable places to rent for themselves and their families. Now, housing unaffordability is simply driven by housing shortage, and the solution to this problem is to expand the us housing stock of existing and new homes for purchase through deregulation and tax policy. Government policies have led to scarce and costly housing options.
▶ 0:39:47Restrictive zoning laws, as we've heard, opaque permitting processes and the rise of environmental laws and other regulations are posing major impediments. The federal government can eliminate these costly federal regulations, including green energy mandates. Impact imposed over the past few years, and really incentivizing states and local governments to enact the needed reforms that are under their jurisdictions.
▶ 0:40:09So we're pleased that congress is considering rolling back biden era energy efficiency mandates on appliances that have added tens of thousands of dollars to the to the price of new homes. We're also encouraged by the permitting reform that is underway right now, bipartisan efforts. And in addition, we're encouraged by the packages of reforms aimed at increasing housing supply, affordability and access, such as the road to housing act or the the similar bill revitalizing america's housing act.
▶ 0:40:37They contain policy recommendations that will spur the creation of various housing, multigenerational housing types such as accessory dwelling units. And I'll spend a moment on that. Adus are a hidden gem. They are a secondary living spaces on the same property as primary residences. Think of your converted garages, english basements, in-law suites. They are a win win win for homeowners, renters, and communities.
▶ 0:41:03They generate secondary income for homeowners and can boost a home's value by up to 35%. They expand rental supply in desirable neighborhoods, driving down costs for people in cities like washington, D.C. I lived in one myself. They encourage intergenerational living, which is important for health, socialization and caregiving for seniors state and local governments have. Some of them have implemented regulatory reforms to great success.
▶ 0:41:30Congress has a role here and can pass permitting reform that clears the way for adus and incentivizes construction projects, maybe through federal grants for housing programs at local levels that incentivize permitting reforms at local level and and programs. Take, for example, in boston, massachusetts, which offers a no interest long term loan to older and low income owner occupants to build out smaller, independent units in their homes. I know this well.
▶ 0:41:57I have a very close family member who is a retiree who renovated her basement and created a three bedroom apartment generating $2,900 a month in the very same home she owns on taxes. I want to thank congress for passing the working families tax cuts, also known as the one big beautiful bill. Saving american families from a massive tax increases and increasing take home pay. But more can be done. And so we've heard already from Mr.
▶ 0:42:24Pinto talking about homes being the largest asset and a great source of wealth. Well, home values mean that you can face a very large tax bill. And so congress has an opportunity here to exclude more income from taxation and potentially doubling the exclusion amounts from $250,000 to $500,000. And of course, indexing that for inflation, we've seen home prices rise over 200% since the last time those exclusion levels were set.
▶ 0:42:52This is going to break the lock in effect for many seniors and home sellers. And this would expand the housing supply immediately and helping first time home buyers with their home buyers get into their homes. Congress should also consider helping home buyers with down payments, and there are some bills around that. I'm excited, though, that congress is taking this on right now.
▶ 0:43:12Deregulation will spur home construction, and adoption of smart tax policies will also make it easier for women, for millennials, and for all people who are looking to buy a home to save for that down payment. Thank you. >> thank you. And I recognize miss nagy for her opening statement. >> chairman burleson, ranking member frost and members of the committee, thank you for the opportunity to present testimony on behalf of americans for financial reform.
▶ 0:43:42We are a nonprofit, nonpartisan organization working to transform the financial system so it serves as an equitable and sustainable economy to help all families and communities flourish. Our nation is confronting an unprecedented housing affordability crisis. Nearly half of renters are paying higher rents than they can afford, and homeownership has become out of reach for most people. So let's look at the long term causes of this crisis. First, we need more housing.
▶ 0:44:09The single family home construction industry never fully recovered from the 2008 foreclosure crisis, and today we are building 20% fewer homes than we did in the 1990s. Despite population growth, we also have a severe national shortage of housing that people with the lowest incomes can afford. And we are losing what remains of our affordable housing stock faster than we can replace it.
▶ 0:44:33Due to rising rents and stagnant incomes, investors are outcompeting home buyers. Corporate investors have been buying ♪up homes, apartment buildings and manufactured housing communities. This surge of corporate ownership has reduced the availability of homes, increased housing prices and rents, impose new junk fees and raised eviction rates. Meanwhile, insurance and utility costs are growing.
▶ 0:45:01Homeowners rates have increased an average of 70% since 2021, while property insurers underwriting loss ratios remain low and profits are at record highs. High utility costs are another driver of housing unaffordability, and we also have unsustainable land use practices. We need new construction of multifamily and affordable housing, yet it is illegal to build anything other than single family housing on 75% of residential land in the united states.
▶ 0:45:30In addition to these trends, several policy decisions made over the last year have harmed renters and would be homebuyers. First, tariffs and the immigration crackdown are making home building and home repair more expensive. New permits and building starts are at or near five year lows, and workforce shortages became the leading cause of construction delays. In 2025.
▶ 0:45:54The federal government has also been letting predatory actors like realpage off the hook, despite being accused of facilitating price fixing among the country's largest corporate landlords. Last year, the department of justice proposed a weak settlement without fines or an admission of guilt.
▶ 0:46:09The current administration has also stopped home buyer protections that make mortgage lending fairer and safer, including by trying to shut down the consumer protection financial protection bureau and undermining fair housing enforcement at hud, this house, wall street and other financial firms that they can violate antitrust, consumer protection and fair lending laws with impunity, making home buying more risky, less fair and more expensive.
▶ 0:46:35The fha, a dramatically weakened fannie and freddie's affordable housing goals. The new, significantly lower goals will likely cut off over 175,000 families from affordable mortgages in early 2025. The fha also ended its support of special purpose credit programs and the fha.
▶ 0:46:57Different agencies took away the first look program for most post foreclosure sales, where previously owner occupiers, people who were buying the homes to live in, and nonprofits had an exclusive 30 day period to purchase a home before opening the sale to investors. That's mostly no longer the case. Now moving to recommendations first, the damaging policies described above at fhfa, cfpb, hud and other agencies need to be reversed to crack down on corporate landlords.
▶ 0:47:27Congress should pass the homes over private equity or hope for homeownership act, which would improve impose tax penalties on large investors who buy single family homes and require them to sell them off over a ten year period. Similarly, the end junk fees for renters act would protect renters by requiring landlords to disclose the total amount due each month before the lease is signed.
▶ 0:47:51Preferential treatment for hedge hedge funds and private equity firms in the tax code should also be eliminated by closing the carried interest loophole. Congress should also support first time home buyers, such as through the down payment towards equity act, which would expand down payment assistance for first time or first generation homebuyers for rental housing, congress can and should do more to support struggling tenants, including passing the ending homelessness act of 2025, which would ensure that every household who
▶ 0:48:22Qualifies for the housing choice voucher program receives it. Finally, regarding home insurance, the federal government should be using all tools available to monitor the deterioration of insurance markets, protect consumers, promote climate resilience, and develop a long term strategy for ensuring our housing stock in areas where private markets do not seem willing or capable to cover it. Thank you for the opportunity to provide testimony for these on these urgent issues.
▶ 0:48:52I look forward to answering any questions members may have about my testimony today. Thanks again. >> thank you, miss nagy. I now recognize myself for five minutes. Questions. I'll begin with Mr. hughes. Um, in the so-called inflation reduction act, it allocated 1 billion to incentivize state and local governments to to move to the 2021, um, international conservation code by tying the adoption of that to federal grant money.
▶ 0:49:20Um, you mentioned the impact specifically in, in kansas city, in my home state, when they adopted this code in 2020, three new home buildings ground to a halt. Um, and the number of builders active in the city declined by 78%.
▶ 0:49:37In one instance, a family, uh, that was already had an energy efficient home had to spend over $10,000 just to come in compliance with the new code, which only saved them $2 a year in their energy bill. Um, can can you elaborate on the on what is what is exactly the difference between what what is required in those 2020?
▶ 0:50:02In the 2021 building codes versus or and conservation codes versus the 2001. Is that right? 2012 2012. >> their comparison was 2012. >> okay. >> uh, they're different states all over the country that choose different models. Everybody in north carolina, we still use a combination of the 12 and eight. It's just whatever seems to fit at your, uh, state or locality.
▶ 0:50:28Uh, the main difference in those codes, uh, and, uh, you might have seen my chart in the, uh, in the comparison or in the written testimony. Most of it is insulation, wall insulation, slab insulation, extra r-value, extra ceiling around the bands. And in most cases, it was just adding unnecessary layers of insulation or protection.
▶ 0:51:00Because the truth of the matter is, for the last 25 years, the homes that we've built have performed very well. Uh, on energy, because most builders, uh, choose, uh, a program of one kind or another to, to make sure that their homes are built to a certain standard to.
▶ 0:51:20It's hard to guarantee what energy bills are going to be, but it's good to give home buyers an assurance that that the builder has done all he can to keep energy costs down. So to continue to put layers and layers of more insulation or more ceiling products just adds to the cost. As you can see, with very minimal return. >> right?
▶ 0:51:47In a way, you're you're increasing that initial, you know, jumping off point for someone because, for example, the first home that I, my wife and I bought, it was not the most energy efficient home. It was it was it was not our, you know, dream home, but it was a starter home, at least something that we could step into and afford at that time. We then I, I did as as I found dollars and available was able to use those dollars to make that home more energy efficient.
▶ 0:52:16But all of that was done in a calculation. Does this have a return on investment for for me, am I actually going to save dollars? Um, but to force it on people is I think what we're, what we're talking about today is that some of these regulations are raising the bar so high, so that the initial, um, entry point is, is, is really difficult for anyone to make, especially starting off. Sure. >> absolutely.
▶ 0:52:45It has to be choice. Uh, nobody appreciates innovative products any better than I do. Uh, I use it and encourage it, but I know it has to be choice. >> um, miss onwuka, um, last september, the us census bureau reported that nearly half of the us renters were cost burdened, meaning that they spend more than 30% of their income on housing costs.
▶ 0:53:11Um, as americans often rent for years before buying their first home, how might this be a very heavy burden on so many? How is this become such a heavy burden on on americans? And I say that, you know, we've we've seen the increase in housing costs, but we're not talking about the increase in health care costs, which is also crowding out dollars from from people's pocketbooks.
▶ 0:53:36Um, we're health care inflation in health care premiums are more than double what they were even adjusted for inflation today. So, uh, people have fewer dollars to spend. >> well, absolutely. I mean, when you look at a record, 22.4 million renter households paid more than 30% of their income on rent. That's a that's a lot. Half of those spent more than 50% of their income on rent.
▶ 0:53:58So when you have half of your income going to rent, then you have to pay for utilities and you have to pay for transportation and feed yourself. That leaves less for you to be able to put money away for savings and for that down payment. And as I talked about, when it comes to women, women struggle. Women take out bigger loans because they have less to put down, uh, from down payment standpoint. And so as you free up more income for an individual through rising wages and tax cuts, leave more of their hard earned dollars.
▶ 0:54:26And thank you for ending taxes on tips and taxes on overtime that allows people to put money aside for things like a down payment. >> thank you. My time. Now yield to ranking member frost for his five minutes. >> thank you so much, Mr. chairman. You know, there's so much to unpack here in five minutes on how to solve the housing crisis. But there's two things I want to focus on. Um, you know, number one, I think the conversation around our process and how we can make the process faster can work better.
▶ 0:54:58So we can build more homes is really important. But there's always an obsession, especially with a lot of my colleagues on the other side of the aisle, to focus in on important standards that we believe are important for working families to have in americans that have. And we're just talking about energy efficiency. As energy costs go up across this country, more and more working families want to make sure when they're putting such a big investment into a home where they're going to build equity, that things are done to make sure that it's more energy efficient.
▶ 0:55:24And we're we really you really think insulation is the reason why we're in a housing crisis right now? I mean, we know that this helps lower energy costs, and it's also about quality of living. I'm a drummer. I don't know if you want to live next to me and have, you know, not some great insulation in your home, but I bring this up because there's the process and then there's important, environmental and important, uh, standards that we have to keep. And I'm very sensitive to this in the state of florida.
▶ 0:55:52And this is pretty bipartisan thing all across florida as well. We want to protect our wildlife. We want to protect our biodiversity. We have things called hurricanes that happen every year. In fact, every year for the past several years, we've had 100 year hurricane, a hurricane that's only supposed to happen once every hundred years.
▶ 0:56:08It is standards that help ensure that homes are built in the right places, that there's flooding, flooding, mitigation, um, in place, that building standards, building rules, all this stuff is very important to us, uh, because when people put that investment into a home, we want to make sure they're safe in it, especially when the worst things happen in a state like the state of florida. But we look at the process. There's things we should look at. We've talked about it, um, restrictive zoning rules.
▶ 0:56:31Um, uh, getting rid of parking minimums, um, exclusionary zoning, height limits, uh, duplicative review process. All this is really important. Let's look at it. But the obsession with, like, honing in on some very important things that maybe might save a little bit at the bottom line. But when the hurricane comes, damn, you wish that standard was put into place, I think. Isn't, uh, the best foot to start start this conversation when we're talking about, um, bringing down housing costs.
▶ 0:56:58Too many house are simply houses are simply unaffordable for working people, and even people with enough money for a down payment are often outbid by investors with cash offers. Large corporations and institutional investors, including private equity firms, have purchased hundreds of thousands of homes and turned them into lucrative businesses, squeezing the dimes out of residences. This trend accelerated during the 2008 financial crisis. Millions of homeowners defaulted on their mortgages.
▶ 0:57:25Investor bulk purchased foreclosed homes and converted them into rental housing. Large investors also rose after the start of covid 19, when homeowners died or foreclosed on their home or sold during the dip in insurance rates. So whether it's 2008 or covid 19 or the next event, we can count on people in wall street to exploit americans housing affordability crisis without government solutions, this is going to continue. Um, this is especially relevant now as foreclosures are up by 20%. So, uh, miss, is it maggie?
▶ 0:57:54Miss maggie, um, what challenges do prospective homebuyers face when they have to compete with large corporations? >> well, first of all, they have a lot less money. Um, wages. >> are have not been keeping up with the rise in the cost of housing. And that is a serious problem, the solution to which is not corporate ownership of all of our housing stock.
▶ 0:58:15Um, additionally, if you require financing, especially if you're a first time home buyer, you're going to be dealing with an fha mortgage, um, inspection requirements, maybe your down payment assistance program. That is a lot more, um, to deal with from the seller's perspective than somebody who is here today offering you all cash because they're able to obtain financing much quickly using different channels than regular consumers are able to.
▶ 0:58:44Um, and I think the other thing to keep in mind with investor single family home purchases is that they're buying at the bottom of the market. Um, specifically, they target markets with lower housing values and higher shares of black and non-college residents, according to the philadelphia federal reserve. And these are also starter homes. So you actually have too much competition at the bottom of the market. Um, for folks who are just desperately, you know, people my age who are just trying to get into homeownership. >> yeah.
▶ 0:59:14Um, I also want to ask about manufactured housing. What are the unique and challenges that manufactured homeowners face? Um, when wall street's buying up all the land their homes sit on. >> right. So manufactured housing, residents own their homes, but not the land it's on. And in some ways, they have the worst of both worlds when it comes to protections. Um, one investor said it was buying up manufactured homes, was like, you know, investing in a denny's, except for manufactured homes. The people are chained to the table.
▶ 0:59:41Um, and that kind of illustrates the extreme difficulties manufactured homeowners have when they're faced with rising lot rents or lack of maintenance. They're kind of stuck there, and it puts them in a terrible situation. >> yeah. Thank you. I'm actually working on legislation to help level the playing field for the 7% of americans who are manufactured home communities in places like florida. There's actually laws that the if you have a much older, uh, unit that you live in, you can't move it legally.
▶ 1:00:09And so you're really, um, just at the mercy of whoever owns the land. This is important. So thank you, I yield back. Thank you for the extra time, Mr. chairman. >> thank you. And I recognize the gentleman from louisiana, Mr. higgins. >> thank you, Mr. chairman. For a matter of background. In 2007, my wife and I were were renting. They'd been renting for years. In 2010, we bought a used single wide trailer for 15,000.
▶ 1:00:43We we paid that off, like paying for a car in four years. And we bought a tract of land that we were so excited to be able to buy for. Not a lot of money. A 65 year old, 1000 square foot wood frame home on 1.2 acres of land. That's where we lived for many years. Where that's where we lived.
▶ 1:01:06When I ran for congress in 2019, we bought the modest home where we live right now, and our son lives in a little country home, little 1000 square foot home. We always looked at what we could afford to to us and to most american families, the question of affordable homes is quite personal. Has nothing to do with the federal government.
▶ 1:01:30What we want is the federal government the hell out of our way so we can live our lives and fill our homes, whatever it may be, whether it's a humble you single wide trailer or 1000 square foot wood frame, 65 year old home on an acre of land in the country, our home was filled with love and laughter, and that's what made it our home.
▶ 1:01:56The affordability of the home was not a question of what could the federal government do for us, it was. It was our journey and we embraced it. And this is the way most americans feel. Look at what, what not. What can the federal government do? But what should the federal government do?
▶ 1:02:18And including embracing the separation of powers between article one authority of legislative authority of congress and article two authority. Executive authority of the white house. So yeah, we support endeavors by this administration to decrease regulatory burden to get the federal government the hell out of the way of the home building market, the home selling market, home buying market.
▶ 1:02:44And we support legislative endeavor that would remove barriers to homeownership for american citizens. And american citizens are quite capable of determining what's affordable and what's not affordable. Thank you very much. As a past, a personal decision for every american family. And we do our best.
▶ 1:03:09So this this idea that's up to congress to decide where and how and for how much an american citizen can, can buy and live in a home. That's that's backwards and contrary to our deepest core principles, what we want is a freedom to live our lives. We want the government out of the way now. Home prices go up and down. They trend up and down.
▶ 1:03:41Interest rates trend up and down. But the insurance always trends up. Mr. hughes property insurance availability of legitimate property insurance providers, the lack thereof, especially in regions of our country that are prone to natural disaster, like florida.
▶ 1:04:02For the gentleman in louisiana, for me, the the when we shop for property insurance is like one insurer instead of I believe if it was market driven and this may be where the federal government can can have an effective intersection with the free market. How affordable would homes be if if property insurance was more readily available in your industry? Mr. hughes.
▶ 1:04:33>> property insurance and cost of has gotten way out of hand. And we have builders that are building our members, building in areas for a specific market or price point. >> there you go. So like in our case, our mortgage is less than our our insurance on our home. >> exactly. >> it's it's insane. So so we have a bill and I would ask Mr.
▶ 1:04:59Frost and I've never really worked on a bill, but florida, louisiana, we have a lot in common here. We have a bill 1071 070 that essentially uses the federal tax code. Good, sir, to create a market that would be attractive for insurance providers to sell policies and do business post-impact of natural disaster in regions of our country that suffer from those natural disasters.
▶ 1:05:27I ask you to just take a look at it, and perhaps we can work together to actually do something for the american people to reduce the cost of property insurance on homes, and therefore greatly enhance the affordability of homes across the country. Mr. chairman, I thank you for this hearing. I thank our witnesses today and I yield. >> thank you. I now recognize the honorable lady from arizona, representative ansari, for her five minutes. >> thank you, Mr. chairman.
▶ 1:05:58Thank you for hosting this hearing on one of the biggest economic challenges facing americans. Like the rest of the country, I represent a district where so many of the arizonans who keep our community running teachers, firefighters, service workers and nurses are being priced out of their communities. The same communities that they helped build. Rents have exploded in the last couple of years in phoenix. What used to be, you know, considered one of the most affordable cities in the country has become, uh, pretty unaffordable.
▶ 1:06:26And homeownership has become an impossible dream for most would be first time homebuyers. Um, I know many of you mentioned the housing supply crisis as, uh, the, you know, biggest reason why we're in this situation. I could not agree more. In phoenix, we're about 200,000 units short of where we need to be. When I was on the phoenix city council, we did everything possible to make, um, bureaucratic zoning laws easier. I saw that firsthand.
▶ 1:06:53I led the charge to legalize adus in phoenix to reduce arbitrary parking minimums. And just last week, we hosted a shadow hearing on housing affordability. And my role as the chair of the congressional progressive caucus is lowering costs task force and heard from policy experts on a whole menu of ways to tackle the affordable housing crisis.
▶ 1:07:13We know that we have many options to lower housing costs, but some of the actions by the trump administration have only raised construction costs, exacerbated labor shortages, and gutted hud and programs that keep working americans afloat.
▶ 1:07:28In a report from the nonpartisan economic policy institute, they concluded that if the trump administration meets its goal of deporting 4 million people by the end of 2028, 1.4 million immigrants who work in the construction industry would be lost. There would also be a net loss of 861,000 jobs among us born workers, because the sudden removal of the of part of the workforce could force contractors to rapidly scale back or shut down entirely. Mr.
▶ 1:08:00Hughes, um, I'll start with you. Yes or no? Would you agree that there is already a labor shortage in the construction industry? >> yes. >> and would losing somewhere between 1 to 2 million workers make the problem worse? >> sure. >> and how does the already existing labor shortage impact our ability to meet the housing demand? >> uh, well, it it affects it tremendously.
▶ 1:08:24I mean, if you if you simply don't have the trades to do the job, uh, it makes everything more expensive, almost nonexistent. I mean, we have, uh, we have some, uh, subdivisions sitting with slabs exposed, uh, with, you know, without enough labor. So we're we're hopeful and confident that that we can figure out how to deal with this, with this immigration issue, because we simply have to have them. We our estimate is that 30% of our workforce, uh, are foreign born.
▶ 1:08:55>> um, thank you. And I appreciate your answer. And I, I know your organization's research showed that there was a $10.8 billion economic impact caused by longer construction times due to the labor shortage and immigrants, the very people that this administration is attacking and, uh, causing to be fearful of going to the work site, make up about 25% of the construction workforce and one third of the craftsmen. Uh, I want to move to the topic of tariffs as well.
▶ 1:09:22The center for economic progress estimates that tariff induced building costs will lead to 450,000 fewer homes being built over the next five years. The national association of home builders have been outspoken against president trump's tariff policies. Mr. hughes, also for you, what measures are home builders having to take to respond to responding to rising material costs associated with tariffs? >> uh, I am not I haven't experienced it directly.
▶ 1:09:48Um, and for the most part there, there's just about always another option. Uh, I've had it affect me directly in one way with a, a scaffolding product that I have bought in canada over the years and has a tariff now, and so it's just forced me to find another source, um, in the states. Um, I, I how I build with a lot of concrete.
▶ 1:10:16So the concrete industry or portland cement is affected a lot of the portland cement, the gray powder that concrete is made of is imported. So that's somewhat of effect. And gypsum, but for the most part, uh, I haven't seen it. I haven't had to deal with it. Uh, so I that's about as far as I can speak to it. >> thank you so much. Um, and finally, president trump and doge have also gutted hud and gone after programs like housing choice vouchers.
▶ 1:10:40Trump has also proposed to cut off rental assistance after two years, even if participants still can't afford rent on their own. Miss nagy, the final questions for you how does insufficient funding for these programs impact the families who rely on rental assistance to keep a roof over their heads? And what effect would a time limit on voucher availability have on these low income families regarding?
▶ 1:11:04>> so, you know, regarding section eight vouchers and funding forum right now, um, if you live in new york city, you can't even get on the waitlist. The waitlist itself for section eight is closed time limits, um, are based under the assumption that, um, the folks who are working and most folks who can work are working. It's just they're working minimum wage jobs that don't pay them enough do not have regular hours.
▶ 1:11:28Many of these folks also have kids, um, other, you know, responsibilities that, um, they need a bit more regular scheduling. So unfortunately, um, it actually in, in places that have tried these time limits, they've actually found them to be counterproductive. And, um, I really do not recommend any place, uh, experiment with them or experiment with this unless they are prepared to take on the much more, um, resource intensive burden of housing.
▶ 1:11:58Now, homeless folks who used to have some stable, affordable housing. >> thank you for the extra time, Mr. chairman, I yield back. >> yes. Thank you. >> thank you, Mr. chairman. I see miss consent to enter into the record a document from the american council for an energy-efficient economy that makes it clear that energy efficiency efficiency codes are not driving up costs anywhere near what industry is claiming. >> without objection. >> and then I also have another one from the urban institute entitled mass deportations would worsen our housing crisis.
▶ 1:12:29>> without objection. >> thank you. >> um, I also ask unanimous consent to enter into the record the following materials. The prepared testimony of steven camarota, the director of research at the center for immigration studies, presented to the oversight and accountability committee, um titled the border crisis the cost of chaos.
▶ 1:12:51Also, an article authored by ej anthony, phd, um, entitled why we why an open border means more expensive housing, and a report from the federation of american immigration reform, published in 2025, entitled housing affordability is an immigration issue. Without objection. So ordered. Yes, representative. Sorry. >> thank you.
▶ 1:13:17Um, I also ask unanimous consent for an article from the new york times. Builders find hardship in trump's tariffs and deportations, and from nbc news. From lumber to lighting how trump's tariffs drive up home construction costs. Thank you. >> thank you. Without objection with that, I recognize, Mr. perry. Thank you for waiting for that, Mr. perry. >> yes, Mr. chairman, appreciate it. Thank you for panelists. Thanks for being here, miss onwuka. Did I say that correctly? >> yes you did. >> thank you ma'am.
▶ 1:13:46Um, my mom was a single lady. Two young boys. Bought a house outside of harrisburg, pennsylvania. No electricity, no running water. We had a thing called an outhouse, if you know what that is. Uh, had one of them pumps. You know, you go like this. Take your bath out in a galvanized steel tub.
▶ 1:14:13Bath happened fast because the water coming out of the ground is cold. Um, but she was able to do it right. My mom's a tough lady. She's like a hero to me. She's a tough lady. And she found a way to do it. And, you know, I think her kids have probably done okay for themselves. I know she's proud of them. Um, and over the course of my lifetime, watching. And she still lives in that house, by the way.
▶ 1:14:40Um, but I've watched things change dramatically, and I. I myself was a mechanical contractor for a while, and I was a state legislator for a while. So I'll tell you a couple stories, and then you tell me what you think. Over the course of my time, I spent some time on my local planning commission.
▶ 1:14:59I was the chairman of the board, and I watched the international construction code go from something about this big, I don't know, 801,000 pages now, 800,000 pages. Um, and do you know how things are added to the international construction code? >> I can imagine lots of lobbying. >> it's a lot of lobbying and special interests.
▶ 1:15:28And if you're the right group or organization, you can come in for the vote and vote for things to be put into the code, which then your local jurisdiction subscribes to and mandates. Now, I had the privilege of serving in the state legislature. I know a lot of friends of firefighters, and we had an opportunity to mandate sprinklers in all residential homes. All new residential homes get sprinklers.
▶ 1:15:58I just happen to be building my home at the time. And when I say building my home, the home that I currently live in, I don't mean hiring some contractor down the street to do the framing and then another contractor to pull the wire, and then another contractor to to to run the pex or the copper. I mean, I was building my home and so I was watching every penny, I was watching every penny. We had a little child and we were expecting another one. No money's tight, right.
▶ 1:16:28And and the experts told me that my new fire suppression system was going to cost me two, 250 bucks. That's what the people in harrisburg testified to. But that wasn't what I was going to be charged if I had to put it in. Now, I fought that and we fought that, and we won. Because, look, if you want a fire system in your home, god bless you. Then put one in if you can afford it, put one in.
▶ 1:16:58But my mom didn't start out with a fire suppression system or home. We had a potbelly stove that my brother and I cut wood in and stuck it in the fire in that potbelly stove to keep warm. Ladies and gentlemen, over the course of my lifetime, the cost of housing has exploded because government makes us do all this stuff. And it's all well meaning. My mom didn't want to live in that house with no electricity, no water, no bathroom. But.
▶ 1:17:25But that's the opportunity we had. And we did better in that house. Now has all that stuff in it. The cost of all this has gone up because the government thinks that the local, state and federal level that we know what people need.
▶ 1:17:41And unfortunately, the answer from my colleagues on the other side of the aisle is always some kind of give people money to afford all that stuff, take money from you and give it to them. They afford all that stuff or to ban stuff. And I just don't see it changing. Now I just want to ask a couple of you guys, have you ever heard of fractional ownership?
▶ 1:18:07It's where you rent the house if you're a renter, but you can't save enough money, right? Because you're renting. We all been there. Mr. higgins has been there. Right? But if you contribute a little bit to the ownership of that home, you build equity by renting. And it's great for the owner of the home, the landlord, because you're going to take care of that of which you're investing in. And I would just encourage instead of banning things and telling people, you can't do this because the federal government says so.
▶ 1:18:36Or the other idea is, take from this person and give to that person. Let's try and think of look, everything's political here, everything's political here. But we are trying to solve this because our people need places to live and they need to be able to afford them. And everybody wants to live in larry fink's house. But most people can't afford to live in larry fink's house.
▶ 1:18:56By the way, the largest private equity investor in residential housing, a supporter of the party on the other side of the aisle, he doesn't seem to have a problem with this. Instead of banning investors from being involved in the thing that's created the most wealth and dragged more people out of poverty in the world, which is real estate ownership, let's find a way to make look, if you want to be an investor, don't get the tax credits. Don't get we're not talking about banning anything.
▶ 1:19:26Don't get the tax credits that Mr. frost or Mr. higgins or myself or any of you would get on the first time you're trying to buy a house. My goodness, there are answers out here. We don't need the heavy hand of government forcing any more of this stuff down our throat. Mr. chairman, I appreciate your diligence, and I yield back. >> thank you. I now recognize Mr. min for five minutes. >> thank you. Chair. >> how about six minutes? >> whatever. I probably be on five. Thank you chair, and thank you, ranking member, for holding this very important hearing.
▶ 1:19:56Uh, I represent orange county, california, where we've seen home prices just skyrocket over the last decade. And of course, in the last year, they have soared even more. Uh, despite the fact that we have a stagnant economy due to a lot of the policies of this year. But, uh, I'll just say at the off the bat, um, this is a really, really important issue when we talk about affordability. For many americans, housing costs are at the front and center of that, uh, whether it's rent, whether it's mortgage payments, uh, and of course, the statistics have been cited quite a lot.
▶ 1:20:25Uh, the average age of a first time home buyer now has shot up to something like 38 or 41, depending on who you talk to. Uh, that means that families are not getting formed. People are still saving for their nest eggs. And as we know, uh, homeownership is the top avenue to building wealth in this country. Uh, now, you talk to economists, and I know alan greenspan had a famous moment where he said that, you know, we should have, uh, you know, uh, variable rate mortgages. We, we, you know, people shouldn't necessarily buy homes.
▶ 1:20:54They should invest in 401 s instead. Uh, but all of the empirical data is very clear. Uh, while people should do certain things, they don't necessarily do that. Uh, invest. Investing and owning a home is the top pathway to building wealth in this country, to paying for things like college and retirement. And so homeownership is really, really important and is happening later and later in life. There's a lot of factors that are complicated. Issue five minutes is not enough time to get into this.
▶ 1:21:21Uh, but certainly, uh, this is an income issue as well, as we have pushed more money to the very wealthiest. Uh, and we have hollowed out the middle class, that pathway to homeownership has become harder and harder. Uh, there's also obviously big permitting issues, whether it's nepa or sequa in my state, in california, we know permitting has become a real drag on building homes in this country. And we need to address that in a responsible way.
▶ 1:21:46I think we need to address environmental issues, but we need to do that in a way that also allows, uh, the cheap building of homes in this country, in places like orange county and elsewhere. Uh, but I also want to add that the policies of this past year and a half have been so counterproductive to the goals of lowering prices, particularly around home ownership and rentals. Uh, president trump and I both attended the wharton school of business.
▶ 1:22:11Uh, clearly only one of us went to class because the policies that he enacted over the last year are so counterproductive to lowering costs, uh, tariffs, for example, uh, tariffs. And I'll ask you, miss nagy, uh, imposing tariffs, particularly with uncertainty around them, whether they'll go up to 25%, 10%, 15%, what's the impact of that going to be on building costs in this country? >> it makes them go higher, higher. >> and in fact, it slows building down to a crawl.
▶ 1:22:37And when I talk to some general contractors, right after trump announced his tariffs last year, uh, they all told me the same thing. Maybe you disagree with this, Mr. hughes. Maybe you agree. But what I was told is that because you're building particularly for bigger developments, you're building out six months a year, a year and a half out, uh, you have a bunch of subcontractors who are relying on cost plus formulas where they get reimbursed for their costs plus a little bit extra, uh, that no one was buying at that point in time because they didn't know what the tariffs would be.
▶ 1:23:06They didn't know what the costs of their projects would be. Uh, you know, how much steel would cost, how much concrete and lumber and things like that. Uh, have you seen any kind of impact from these tariffs on on the pace of development, Mr. hughes? >> uh, very little personally. And what it's I was mentioning, uh, to the subcommittee earlier where it affected me was a product, uh, a scaffolding product, um, that's made in canada. And what the tariffs have done, it forced me to buy something made in the us.
▶ 1:23:36>> got it. Well, I will just note that, uh, it as far as canadian lumber, which is about 85% of all us softwood lumber imports, uh, your website has a 14.5% tariff listed on that. And of course, that's gone up and down. And that uncertainty has also created, uh, problems with building in this country. Um, I also want to talk about the just complete craziness of what trump is doing with federal reserve independence.
▶ 1:24:02And every responsible economist knows that federal reserve independence is a key pillar of U.S. monetary policy, of financial stability, of our ability to control interest rates, uh, but also to be the reserve currency, which has huge impacts for our economy, for our financial system.
▶ 1:24:19Uh, and so when you're threatening the federal reserve's independence, when you're weaponizing the department of justice to go after a federal reserve governor based on complete nonsensical claims that they did something wrong when they clearly didn't, uh, as the courts are now finding, uh, lisa cook here is obviously what I'm referring to. Uh, you end up rattling the markets and he's doing this all. He's threatened the federal reserve's independence so that he can have, like a 1% decline in interest rates, a 1% cut in interest rates.
▶ 1:24:48I will just note that his reckless and poorly thought out, uh, threats to invade greenland. Uh, miss, you're nodding here. Uh, what what impact did that have on our mortgage rates here in the united states? >> well, the. >> cost of, um, borrowing money, um, the us bonds went up or the returns specifically.
▶ 1:25:06So, actually, um, we erased all of the progress we had made on lowering interest rates as a result of the $200, 200 million, billion dollar mortgage backed securities purchase. So, um, these international trends actually do really impact the bond market and, um, slightly indirectly, interest rates.
▶ 1:25:28>> and I'll just note that a number of different economics groups out there, economists, uh, found that that the threats to greenland actually caused interest rates to go up 140 basis points, 1.4% on mortgages in america. And so, again, this chaos is not good for our markets. Uh, I'll just close also by saying one other factor we need to think seriously about in places like california and elsewhere, is the impact of climate change. Uh, the forest fires that we're seeing on a regular basis every year in california, southern california, are making insurance a huge cost. Uh, it's driving up.
▶ 1:25:58It's making housing very even more unaffordable. Uh, we start to see sea level rise, coastal erosion, a lot of other impacts to our local environments created by climate change. Uh, that is also driving up the cost of home ownership. Uh, but I'm over my time. I will yield back to the ranking member here. Thank you all for being here today. >> all right. Thank you. In closing, I want to thank all of our witnesses for taking time to get today and for your testimony.
▶ 1:26:26And I will now yield to ranking member frost for his closing statement. >> thank you, Mr. chairman. I want to thank all the witnesses for being here and sharing your perspectives. We're all in agreement about the reality and the magnitude of the housing crisis in this country. What we need to do this has been a crisis in the making, from the great recession that exacerbated by the covid pandemic, and it's going to take a lot of solutions to make sure that we handle this problem.
▶ 1:26:50Um, I did want to point a clarification, though, because I think it's very important we're trying to figure out what the bipartisan support looks like in congress to push forth the democratic proposal that's been endorsed by president trump on banning institutional investors from buying single family homes. Um, my colleague, representative perry, I know you'll do a really quick. It sounded like you said you're against that proposal. >> I don't love the federal government banning me from being free.
▶ 1:27:18If we want to change tax policy to encourage individual homeownership and then not encourage institutional investing, or at least make them pay extra for institutional investing, that's something I think we ought to have a conversation about. But outright banning to me seems. Yeah. >> okay. Yeah. No. Thank you so much, representative, I appreciate it. I just wanted to clarify that your opposition to president trump's call for congress to ban institutional investors from buying single family homes.
▶ 1:27:45If we're really serious about making rent and homeownership affordable for everyday americans, congress has to take concrete action, um, and legislate. We have to tackle the private equity interests that snatch up homes before individuals and working families have a chance to make an offer. We got to protect renters from landlords that want to exploit them and collude to keep rent prices high and charge exorbitant junk fees, which, by the way, most mom and pop landlords don't do.
▶ 1:28:12We must exercise our constitutional authority to check president trump's reckless tariffs and that harm american home builders. We must work to protect workers who are critical to the construction industry and increase our supply of affordable housing. We must get rid of things like exclusionary zoning, parking minimums, and duplicative reviews.
▶ 1:28:30And as we take these steps, we also have to ensure that federal agencies are supporting and protecting vulnerable americans, protecting critical, critical housing assistance programs at the department of housing and urban development, like section eight housing choice voucher program, we have to prevent the president from eliminating the consumer financial protection bureau and allow it to resume its work to enforce fair lending, and we have to push back on the administration's attempt to politicize the federal housing finance agency to go after president trump's political enemies and return
▶ 1:29:00Its work on sustainable, affordable home ownership. This is something, like I said at the beginning, I've been personally impacted by being able to afford housing at multiple points in my life. Um, and, um, that resulted in being homeless or my congressional campaign. Every time I talk to my constituents in florida, housing is the top issue that they bring up. This shouldn't be a partizan issue. I look forward to hopefully working with my republican colleagues on this.
▶ 1:29:26Look, a lot of us, everyone has great solutions in terms of making sure that we can fix this problem. When I sit down with people in my district, from home builders to the realtors to advocacy organizations to tenant organizations, we all agree we need more housing. There's going to be some places where we disagree on the solution, but I truly believe that a little bit from everybody's solution here, I think, is what's going to be necessary to fix this housing problem. We need to build more housing.
▶ 1:29:52We need to build as much housing as we can, quite frankly, affordable housing, period. And we have to ensure that we protect consumers. We protect the little guy. We protect working families. I think that's our job. I think the federal government does have a role in fixing the housing crisis. In fact, look in history, for too long, the federal government has washed its hands clean of incentivizing good behavior and punishing bad behavior. Most of the exclusionary zoning and things we're talking about are done at the local level, um, which I think is having a horrible impact on building more housing.
▶ 1:30:22So I think we do have a role here. I don't think we can say we have nothing to do here. We have a job. We got to do it. Um, and let's do it together. Thank you, Mr. chairman, I yield back. >> thank you. I now recognize myself for closing statement. Um. Today's testimony. Thank you again. Um, I think coming away from this, there's a few things that become clear.
▶ 1:30:41And that is the housing affordability crisis that americans are facing today is it's real and it's but it's not a not a product of normal market dynamics. It's the result of decades of poor policy decisions that have made it, you know, artificially, artificially, more expensive and burdensome to build a home than it should be. And we need to reverse that trend.
▶ 1:31:06Experts are predicting that we have 10 million housing unit shortage within the next ten years. So we need to remove the barriers to the construction of new homes. This is common sense. This requires reforming regulatory and permitting regimes, which at all levels of government have made home construction and ownership more difficult.
▶ 1:31:32The democrat led state and local governments in particular, have placed artificial barriers on new housing construction. Democrat cities, for example, rather than making it easier to expand supply or implementing radical rent control policies which actually destroy the supply of housing and raise the cost of rent, and it should be no surprise that in just the cities of houston and dallas alone, they approved more housing permits than the entire
▶ 1:32:03State of california in 2024. So runaway inflation is caused because because of president biden and the congressional spending that occurred, that binge spending that made everyday living more expensive and raised mortgage rates to record levels, it locked in millions of americans into homes and constricting our supply.
▶ 1:32:27On top of that, biden's open border policies allowed millions of illegal immigrants to compete against american citizens for the limited supply of homes in our nation, as we republicans have repeatedly highlighted this sudden and preventable mass migration drew heavily on government benefits as well, including housing assistance that was meant for american citizens. What is the result?
▶ 1:32:55Americans today wait, on average, until the age of 40 to buy a home for the first time, and americans are waiting longer to form families and less financially secure and less confident in the american dream. This is why we, along with president trump, are taking decisive action to make the american dream affordable again, with bold proposals that place homeownership for hard working americans at the heart of federal policy.
▶ 1:33:24For example, president trump and this congress of republicans passed h.r. One to cut taxes at record levels, put money back in the pockets of everyday americans, and make it easier for americans to save for a home. And republicans will continue to undo the disastrous policies of the biden era that are hampered our housing supply and drove up the cost of things. We must do this.
▶ 1:33:53We can't leave this on the table. Um, and we have a short time to to to correct this course. The american people deserve a home run on this topic and others and not a base hit. And with that. I have without objection, all members have five legislative days within which to submit materials and additional written questions for the witnesses, which will be forwarded to the witnesses if there is no further business.
▶ 1:34:24Without objection, the committee stands adjourned.