▶ 0:18:04Chair Scott: Good morning. This committee will come to order. I want to think the comments on this committee and the witness and everyone joining us today for this important discussion about the state of affordable housing in america. Housing is a deeply personal issue to all of us, frankly to me as well. My brother and I grew up in poverty. My mother did everything possible to keep a roof over our head and frankly to steer us toward a better life.
▶ 0:18:33Chair Scott: I learned early on that housing is not just about having that roof over your head, it's about having the opportunity to build a better future. Owning a home has long been the pillar of the american dreaming but for too many americans today, working families today that dream has slipped further and further out of reach. We must confront the reality that during the biden administration, housing affordability reached record lows. Mortgage rates have grown by over 150% under president biden.
▶ 0:19:04Chair Scott: Just under 2.67% on average in january 2021 to 7% by 2024. Meanwhile, rents have surged by nearly 25% in that same time, putting more pressure on those unable to buy homes, forcing many into unstable living situations. Perhaps the most devastating statistic of all is that homelessness has hit a record high.
▶ 0:19:33Chair Scott: 18% increase in just 12 months, 30% increase since covid ended. This raises the important question. Why do we continue to confront roadblocks despite massive government investment and support? The hard truth is government interference is perhaps more of the problem and government resources are the solution. Spending trillions of dollars on the housing market is not the answer.
▶ 0:20:04Chair Scott: Today, we will hear from leaders and experts about what needs to be done. We are honored to have with us today eric johnson, the mayor of dallas, texas. Go cowboys. A local official who understands the challenges of housing at the community level. We have lee jelenic, chief information of a of united wholesale mortgage to speak to the impact of federal housing policies.
▶ 0:20:33Chair Scott: Also edward glaeser, respected academic from harvard university who brings a much needed perspective on the economics of housing. And renee willis, interim president and ceo of the national low income housing coalition. The good news is, we have a diverse group of experts who can speak to the issue that impacts all americans in a way that I believe will improve our ability as a committee to get things done, frankly not even in a bipartisan fashion, in a nonpartisan fashion.
▶ 0:21:03Chair Scott: This is about the american people finding their path through the american dream and not about republicans or democrats scoring or making points. Let's make a difference together. I look forward to your insights and discussing real, workable solutions to what most americans consider a crisis. We need to take a different approach and embrace efficiency, deregulation, and getting the federal government out of the way.
▶ 0:21:31Chair Scott: There are too many regulations at the federal, state, and local levels, in my opinion, having worked in all levels of government, to actually building homes in local communities. Whether it is restrictive zoning laws, bureaucratic policies, policymakers at all levels of government must take a hard look at what is really preventing the housing supply from keeping up with housing demand.
▶ 0:21:57Chair Scott: That is my my legislation, the road to housing act, seeks to make targeted reforms to actually work. This legislation would reduce regular tory barriers, streamline the development process and ensure that taxpayer dollars are used most effectively. I have seen firsthand from local communities that they are best positioned to address their housing challenges. The federal government should not dictate a one-size-fits-all housing program.
▶ 0:22:27Chair Scott: Instead we must empower state and local governments to adopt policies and encourage responsible development and increasing housing supply. Let's be clear. Housing should not be a parsonage. It is just about people realizing their version of the american dream, plain and simple.
▶ 0:22:49Chair Scott: That is why I earned my democratic colleagues to work with me and all of the members on the right in our approach to the road to housing act by working together we can reverse decades of failed housing policies and bring about real change for tens of millions of americans who needed them most.
▶ 0:23:09Chair Scott: I look forward to this case discussion and working with colleagues on both sides of the aisle to advance policies that will restore the american dream of homeownership and put more americans on the path to success while closing the gap on wealth in this country. Thank you. I look forward to hearing from our witnesses and our ranking member.
▶ 0:23:30Sen. Warren: Thank you, Mr. chairman. I appreciate you holding this hearing. I know you care deeply about addressing the housing crisis. I hope we will be able to work together to lower housing costs for families. The crisis we face today is massive. We have a nationwide shortage of about 5 million homes. And these shortages drive up rents, they push homeownership out of the reach of millions of families.
▶ 0:23:59Sen. Warren: 40 years ago, the cost of a house for a boston public school teacher was about 4.5 times their salary. Today, that same boston public school teacher would need about 11 times their salary to buy a home. Housing feels unaffordable because housing is unaffordable. We do not have enough housing, and nothing gets better if we do not build more housing.
▶ 0:24:30Sen. Warren: So, how do we increase the housing supply? Housing is local, but for decades, states and towns have fallen further and further behind. The federal government can be a good partner to help boost housing supply and to make the housing market work better for families. Fortunately, there is no shortage of good and, in many cases, bipartisan work, done by members of this committee that would help get us started. And I want to mention a few.
▶ 0:25:03Sen. Warren: Senator smith has a bill with senator rounds. The rural housing service reform act. It would help protect and expand affordable housing supply in rural areas. In a chair warner is a bill with senator crapo. The scala community lenders act, which would help fuel more lending and investment in low income and underserved communities. Senator cortez masto has a bill. The price act, which would help to upgrade and preserve manufactured homes.
▶ 0:25:35Sen. Warren: She also has the home investment partnerships reauthorization and improvement act which would help local communities finance new construction, home repairs, and other housing needs. Senator van hollen has a bill with senator young, the family stability and opportunity vouchers act, which would give more families with young children access to safe and stable housing.
▶ 0:26:01Sen. Warren: Senator reed has a bill with senator hagerty, the homebuyers pharmacy protection act that would protect prospective homebuyers, personal information from predatory lenders. Senator lummis has a bill with senator fetterman. The whole home repair act that would help homeowners and small landlords make essential repairs that keep homes safe and livable.
▶ 0:26:26Sen. Warren: Senator gallego is a bill, the housing voucher fairness act, that would help more families in high-growth states afford housing. Senator blunt rochester has a bill, the reducing regulatory barriers to housing act, that would support state and local governments that want to update their zoning laws to build more affordable housing.
▶ 0:26:50Sen. Warren: Senator warnock as a bill, the down payment toward equity act, which would support first time, first generation homebuyers. I am glad to partner with sanders warnock, van hollen, and kim on my american housing and economic mobility act, which would help build nearly 3 million affordable homes and lower rents across the country by an estimated 10%.
▶ 0:27:17Sen. Warren: There are different approaches we could take to help address the housing crisis, but ideas like these should get us started, and I hope we can consider these and other bills as our committee looks forward to passing meaningful housing legislation this year. I just want to close by mentioning the assault on hud. In the past few weeks, hud's secretary turner and elon musk's doge have frozen affordable housing development projects across the country.
▶ 0:27:49Sen. Warren: They have also made it easier for landlords to deny people housing because of a disability or how they look, and they have rolled out plans to lay off half of hud's workforce. These actions will make it harder, not easier, for families to access housing, and they will raise housing costs. If the federal government is going to be a good partner to local communities to address the housing crisis, we need a well resourced and well staffed hud.
▶ 0:28:19Sen. Warren: Thank you, Mr. chairman.
▶ 0:28:20Chair Scott: Thank you, senator warren. We will hear from today's witnesses, we will start with mayor johnson. You are recognized for five minutes.
▶ 0:28:30Mr. Johnson: Thank you, Mr. chairman, and distinguished members of this committee, for the opportunity to speak to you on the critical issues of homelessness and housing affordability in our country. My name is eric johnson, and I have the honor of serving as the 60th mayor of dallas, texas. I was born and raised in dallas. Growing up in a low-income household, my family bounced around between cramped apartments and small rental homes. I know firsthand what housing insecurity feels like and how important stable housing is for families.
▶ 0:28:57Mr. Johnson: It is true that in dallas, we have made some noteworthy gains in addressing both homelessness and housing affordability. Last year, we effectively ended veteran homelessness by ensuring that any veteran who falls into homelessness is housed within 90 days. This achievement means that in dallas, the men and women who served our country are treated with dignity. But honestly, I do not want to spend the time graciously allotted to me by this esteemed committee bragging about what dallas has done right.
▶ 0:29:27Mr. Johnson: Instead, I want to help this committee understand what I have learned about both homelessness and housing affordability from serving on the frontlines as the mayor of america's ninth-largest city. Over the past six years, I have come to understand that two major misconceptions stand in the way of real progress. If we do not correct these misconceptions, we will never move the needle on chronic homelessness or housing affordability in our nation's cities. The first misconception is that housing affordability is the primary driver of chronic homelessness.
▶ 0:29:57Mr. Johnson: Homelessness is a complex issue, and affordable housing is a critical component of the solution. However, the overwhelming majority of the chronically homeless are not living on our streets because of housing affordability. They are doing so because they struggle with serious mental illnesses, drug addiction, and psychological and behavioral disorders. Chronic homelessness is primarily a public health issue, but we are not addressing it as such. It is not primarily a housing affordability issue, and it is not even a public safety issue at its core.
▶ 0:30:27Mr. Johnson: Although we can and should enforce local laws prohibiting camping in public spaces and public buildings, we cannot arrest our way out of chronic homelessness. We must shift our focus toward thinking about chronic homelessness more as a public health issue, and less as a housing or public safety issue. The second misconception is connected to the fact that many discuss and even shape policy related to housing as though it is not a market, when it in fact is.
▶ 0:30:55Mr. Johnson: Like in any other market, housing prices are determined by supply and demand. Therefore, the most effective way to bring down housing prices is to encourage the private sector to increase home building throughout the united states, but particularly in cities like dallas, where we see unprecedented demand for our existing housing stock because of our economic growth and success. Now keep in mind, government itself is not an effective housing developer.
▶ 0:31:22Mr. Johnson: But what government can do is step aside, cut the red tape, and encourage the private sector to build more homes faster. In dallas, we have shown that reducing barriers to home building works. We have cut permitting times, streamlined zoning, and worked with private developers to increase housing starts. Over the past few years, we have prioritized efficiency, and as a result, we slashed the median time to issue a residential building permit from 68 days in 2022 to just eight days in 2024.
▶ 0:31:52Mr. Johnson: This expedited permitting process has enabled developers to bring new housing to the market more quickly, helping us to meet the skyrocketing demand for housing in dallas. I strongly believe that the most effective thing congress can do to make housing more affordable for everyday americans is not to create yet another federal program that pours millions of taxpayer dollars into subsidizing the already robust demand side of the housing equation.
▶ 0:32:19Mr. Johnson: What I need right now as the mayor of dallas -- the heart of the fastest-growing metropolitan area in the united states -- is for congress to reframe the narrative around homelessness and housing affordability by correcting the misconceptions that I have just discussed. Thank you for the opportunity to speak to you, and I look forward to doing the best I can to answer any of your questions. Thank you, Mr. chairman.
▶ 0:32:40Chair Scott: Mr. jelinek, thank you for being here. Sharing your knowledge as well. You are next.
▶ 0:32:50Mr. Jelenic: Chairman scott, ranking member warren, and distinguished members of the committee, thank you for inviting me to appear at today's hearing. I'm the chief innovation officer at united wholesale mortgage. We have grown to 9000 team members that come to work everyday at ever state-of-the-art headquarters in pontiac, michigan. We support over 10,000 independent mortgage brokers across all 50 states. Since 2022, we have been the number one overall mortgage lender in the U.S.
▶ 0:33:20Mr. Jelenic: We offer inclusively in the wholesale channel which means we don't lead directly to consumers, we have mortgage brokers as our clients. We funded a proximally one in 10 mortgages in the united states last year. Home ownership remains to be the most significant source of financial stability for american families and united wholesale mortgage as the largest mortgage lender in america takes seriously our response ability for maximizing the accessibility and availability of financing so more people can achieve the dream of homeownership.
▶ 0:33:48Mr. Jelenic: While the system to facilitate homeownership is functioning today there are clear and actionable ways to improve the status quo. Before turning to the solutions, I would like to first highlight three significant headwinds to making homeownership more attainable, interest rates, supply, and cost embedded in the mortgage process. First, I will address interest rates. For the past three years, consumers have been facing interest rate sticker shock. There were over two and half trillion dollars worth of mortgages at or above 6% in our country today.
▶ 0:34:19Mr. Jelenic: That is most of the loans originated in the past two years. This compares to raise between two and 5% from 2020 to 2022. Second, there is a be not enough houses available at any price to keep up with demand. The short supply in combination with higher rates creates an environment where homeowners stay put in their homes longer than a typical seven to nine years. With people locked in their homes and not moving up if you normally would, new homebuyers are frozen out of the market.
▶ 0:34:47Mr. Jelenic: Third and finally, there are opportunities to reduce the cost embedded in maintaining a mortgage that did not involve lower credit standards or risky underwriting. All it requires is an embrace of technology and data available to market participants today. To address these challenges, congress, fhfa can act to improve mortgage affordability. First we believe some competition between the two gses is necessary to increase the responsible flow of credit and achieve greater efficiency in the mortgage process.
▶ 0:35:17Mr. Jelenic: Policymakers should reevaluate any fhfa rules that prevent the gses from prevent -- competing with each other on volume and innovation. One example of a policy that cycled innovation is fhfa's new activity rule. It terrifically curtails the opportunity to pursue innovation.
▶ 0:35:40Mr. Jelenic: When the gses compete under the watchful eye of the regulators, they can offer better products and policies often through pilot programs to attract lenders who alternately pass these benefits on to borrowers. For lenders like you, competition among gses via pilot programs and innovation means our advances in technology can ultimately be accessed by more americans. Secondly, we need to streamline the market process without increasing homeowner lender or systemic risk by allowing innovations in technology to replace traditional paper-based processes.
▶ 0:36:09Mr. Jelenic: One such area is title insurance. Such solutions have been introduced to the market. Mortgage lenders and gses must be further incentivized to innovate. Another area right for improvement are appraisers. By approving virtual appraisers, modern data and analytics can be used to save consumers money. More competition between the gses could also have the effect of incentivizing credit bureaus to compete not only on price but accuracy and consumer reliability.
▶ 0:36:39Mr. Jelenic: Congress should support fhfa competition by and between freddie mac and fannie mae and congress can also support hud's efforts to reduce consumer costs by harnessing innovation to make homeownership more affordable to all americans. Thank you for the opportunity to testify today. I look forward to answering your questions. I would like to invite any of the members to our campus in michigan to talk about how we can continue to help the dream of homeownership.
▶ 0:37:07Chair Scott: Dr. glaeser.
▶ 0:37:09Dr. Glaeser: Thank you chairman scott, ranking member warren members. I'm an economist who spent the last quarter-century studying what has gone wrong with america's housing markets. Initially I word about the high cost and low supply in coastal america because I've watched as the real cost of housing tripled in boston. The cost of housing in cities like atlanta, dallas, and houston remains affordable largely because these cities built a lot of homes. But that has changed.
▶ 0:37:40Dr. Glaeser: Between the end of 2009 and the end of 2024, the real price of housing doubled in phoenix and rose by 55 percent in atlanta. The median new home prices now $635,000 in miami. $476,000 in phoenix. 450,000 dollars in charleston, south carolina. The critical fact about america's current housing crisis is that it is driven by a lack of supply of new homes. We live in a land of plenty and yet we have manufactured a shortage of basic living space.
▶ 0:38:11Dr. Glaeser: The economists sort out supply and demand by looking at prices and quantities. If prices are up and building is out, we know demand is to blame. If prices are up and building is down, supply is the problem. As the next exhibit shows, homebuilding across the U.S. collapse after the global financial crisis and has yet to recover. We are producing fewer single family homes at the start of 25 and we did at the start of 2021, and 30% less than 20 years ago.
▶ 0:38:39Dr. Glaeser: The next exhibit shows places in america that are expensive don't build a lot and places that built a lot are not expensive. There is demand for homes in california and there is demand for homes in texas, but texas builds more and remains much more affordable. The combination of high prices and limited building means america has a supply problem despite the fact that we lacked neither land nor construction capacity. Next exhibit uses the wharton index global land use index and shows prices are higher where there is more regulation.
▶ 0:39:10Dr. Glaeser: This is a problem because ordinary americans have to spend too much on housing. The nationwide ratio of home prices to median income has reached 5.6 in 2022, the highest ratio in history. 39 percent of spending by renter households goes to housing. 56% of californians total recent pulled they consider leaving the state because of how I housing costs. Our country is also less productive because we built too little in our most productive places. A nobel laureate found that U.S.
▶ 0:39:40Dr. Glaeser: Labor productivity would be 12.4% higher and consumption would be 12% higher if all U.S. states who tap away from the current land use regulation levels to the current texas level. Throughout our history, americans have made our country stronger by moving to more productive places. 19th-century new englanders left our rocky soil to find better farms in the ohio river valley. 20th century refugees from the dustbowl found a brighter future in california.
▶ 0:40:07Dr. Glaeser: Yet today we see no migration to more productive places because we don't allow building there and because it is too expensive. The next exhibit shows the relation between the index and the level of upward mobility by poor children. The federal government has long fought for affordability with demand-side policies such of the home interest reduction in housing vouchers but demand-side policies can be counterproductive when the fundamental problem is restricted supply.
▶ 0:40:36Dr. Glaeser: If homes were abundantly supplied at two and a $50,000 each, demand subsidies would benefit the households that get those subsidies. But if a number of homes is fixed, demand-side subsidies just push up prices. If there are 1000 homes in a neighborhood and 1001 buyers, providing each of them with a $50,000 tax credit just pushes the price to $550,000. We could reconfigure existing supply-side policies such as a low income housing tax credit, but there is a lot of work to do.
▶ 0:41:06Dr. Glaeser: One study found the average cost to build a low income unit in california was 708,000 dollars. A better alternative may be to permit localities to a lot more construction. But america's tradition of federalism is strong and we should never want washington to micromanage local zoning codes. An alternative that respects state and local sovereignty is to use existing spending to encourage more construction. We could tie a state eligibility for infrastructure grants to building new housing in his most productive counties.
▶ 0:41:36Dr. Glaeser: Transportation-related grades are natural because the benefits of transportation spending are tied to the number of people who can live nearby. Our high housing cost problem is linked to our high infrastructure cost problem. It is natural for them to work together. We can take the most productive counties in the U.S., 119 counties produce more than one half of the nation's income. We could allocate homes to those counties, and if states have those counties and build enough, they get priority on grants.
▶ 0:42:06Dr. Glaeser: If they don't build a lot, they don't get priority. If they don't have the counties, it doesn't impact them at all. My hope is these incentives will encourage building. We want to make space for our nation for outsiders. I want to end by thanking the committee for taking up this topic and giving me the chance to speak.
▶ 0:42:27Chair Scott: Next we will hear from Ms. willis.
▶ 0:42:30Ms. Willis: Chair scott, ranking member warren, members of the committee on an urban affairs, it's an honor to testify before you today. The nation is experiencing a pervasive and growing housing affordable housing crisis impacting rural, urban, suburban, and tribal communities alike. Most renters, particularly those with the lowest incomes, are struggling to keep a roof over their heads and a record number of people are experiencing homelessness.
▶ 0:43:00Ms. Willis: The national low income housing coalition's latest research it be published tomorrow has found a national shortage of 7.1 million rental homes affordable and available to extremely low income households. This shortage is a structural feature of our countries housing system, impacting every state and congressional district in the country.
▶ 0:43:23Ms. Willis: Despite the clear and urgent need for additional resources, congress only provides enough housing assistance to serve one in four eligible households. Without affordable homes, three out of every four extremely low income households spend over half of their income on rent, leaving them without the resources they need to put food on the table or otherwise make ends meet.
▶ 0:43:50Ms. Willis: These households are often a single missed paycheck or unexpected expense away from facing eviction, and in worst cases, homelessness. To fully address america's affordable housing and homelessness crisis, congress must bridge the gap between incomes and housing costs through universal rental assistance, build and preserve rental homes affordable to people with the lowest incomes, prevent evictions and homelessness by stabilizing families during a crisis, and
▶ 0:44:21Ms. Willis: Strengthen and enforce rental protections to address the power imbalance that tilts heavily in favor of landlords. In 2025, congress can and should advance bipartisan housing package to help make meaningful strides toward this goal. We urge you to act quickly to enact meaningful solutions despite the challenging political times.
▶ 0:44:44Ms. Willis: As we discuss the importance of housing solutions, I must also address an immediate threat facing hud and by extension the communities people -- the communities and people hud serves. Elon musk and the department of government efficiency, doge, propose to fire half of hud's current workforce.
▶ 0:45:08Ms. Willis: Without adequate staff to oversee administer these funds, states and communities will face new barriers to accessing the critical federal resources they need to pay the rent, build affordable housing, address homelessness, recover from disasters, road allies distressed communities, promote homeownership, enforce fair housing laws, and more.
▶ 0:45:31Ms. Willis: Rather than improving efficiencies, such drastic staffing cuts at hud will cause significant, harmful, and costly delays and worsen america's affordable housing and homelessness crisis, as well as a significant disaster recovery needs. Delays in accessing federal resources will slow down affordable housing construction and drive up development costs.
▶ 0:45:53Ms. Willis: Slow recovery after disasters and cause organizations that rely on federal funding like homeless services agencies to limit services or close their doors altogether. We are also deeply concerned aboutdoge's effort to unilaterally withhold funding approved by congress and terminate contracts. Funding for homelessness, fair housing, technical assistance and capacity building have been wrongly withheld or canceled.
▶ 0:46:22Ms. Willis: Unless this funding is released soon, it could cause irreparable harm. Victims of discrimination will have no way to enforce their rights under the law, and shelters may have no choice but to close their doors and turn on people onto the streets.
▶ 0:46:39Ms. Willis: I look forward to opportunities to work together to protect and expand federal housing investments and protect the federal agency staff necessary to administer and oversee these funds to help address the affordable housing needs of communities all across this nation. Thank you.
▶ 0:46:56Chair Scott: Thank you very much, ma'am. We will start our questions with senator kennedy. Then we will go to ranking member warren. The floor is yours, sir.
▶ 0:47:13Sen. Kennedy: Thank you for being here. Professor glazer, you are ahead of the department of economics at harvard. No longer. But you taught there since 1992.
▶ 0:47:28Chair Scott: I think you need to turn your microphone on.
▶ 0:47:32Sen. Kennedy: You did your pitch, you did your work at chicago. You published about five articles a year.
▶ 0:47:40Dr. Glaeser: I don't know, I published a few.
▶ 0:47:45Sen. Kennedy: I appreciated your testimony because you not only talked about the problem, but you talked about possible solutions. No disrespect to anybody, but revamping our appraisal process or title insurance or talking about power imbalances is not going to get homes built. Not in a free enterprise country.
▶ 0:48:18Sen. Kennedy: Our problem is supply.
▶ 0:48:20Dr. Glaeser: Yes, sir.
▶ 0:48:22Sen. Kennedy: The main reason we have a problem with supply is because of land use regulations come isn't it?
▶ 0:48:31Dr. Glaeser: I've been saying that for 25 years, yes. I agree strongly.
▶ 0:48:37Sen. Kennedy: Land use, zoning, some would call it, is within the job description, some state but local government.
▶ 0:48:48Dr. Glaeser: That's correct, sir.
▶ 0:48:51Sen. Kennedy: Congress has a history -- you can disagree certainly if you do -- of just throwing money at the problem and try to tell local government how to get more houses built.
▶ 0:49:09Sen. Kennedy: And local government takes the money and pushes back, because politicians at the local level, they like to eat and live indoors, too, and they like to get reelected, and they don't want to make anybody upset by changing land use regulations in a way to encourage more housing. Would that be a fair assessment? My words, not yours.
▶ 0:49:35Dr. Glaeser: I will not disagree with any of those words, senator.
▶ 0:49:39Sen. Kennedy: There is a plan that has been talked about in canada. What the canadians -- they are talking about it, has not been implemented -- but the proponent of the plan, talking to senator warren about this, has said, look, we need to incient local government to increase housing starts but we need to use a carrot and stick.
▶ 0:50:14Sen. Kennedy: What if america had a law, congress passed a statute that said, look, we don't care how you do it, states, but you need to increase your housing starts by 3, 4, 5% a year. Do it however you want to do it. If you do that, we will give you extra federal money. If you don't do that, we will take federal money away from you until you start doing it. Would that work?
▶ 0:50:43Dr. Glaeser: If you are willing to champion such legislation, senator, I'm willing to be behind you. I think there are challenges with that in the U.S. difficulties of taking away spending that was already expected may be hard, could be easy with discretionary grants than with spending. I also think you need to be targeted not to the states level of production but to production in the most productive parts of the state.
▶ 0:51:10Dr. Glaeser: We don't want california to meet its requirements by building in areas that are very far away from los angeles or san francisco and so forth. Basically something that creates carrots and ideally sticks, as well, that tries to encourage state to do the right thing. From my perspective, the battleground of affordable housing are in places like california state legislature. I would love for those that want to do the right thing to say, the federal government is pushing us in this direction.
▶ 0:51:40Dr. Glaeser: Can we not lose our spending for x? That would be powerful.
▶ 0:51:43Sen. Kennedy: Who would be best to decide the most productive areas to incent housing?
▶ 0:51:53Dr. Glaeser: I would use bureau of you and a housing numbers. I would not handed over to an agency. I would put it directly in the legislation.
▶ 0:52:03Sen. Kennedy: You think our problem in america and housing is caused by a power imbalance?
▶ 0:52:09Dr. Glaeser: I'm not sure I know what that means.
▶ 0:52:11Sen. Kennedy: Neither. E thank you.
▶ 0:52:17Chair Scott: Ranking member.
▶ 0:52:19Sen. Warren: Thank you, Mr. chairman. We all agree here we need to build more housing. Housing for seniors, housing for seniors, veterans, for renters, for first-time homebuyers, for families in rural areas, families in cities. Housing for pretty much everyone who isn't already rich and doesn't already own a home. There are a lot of drivers behind the housing shortage. It's a reason why we need to use a lot of different tools to expand how we approach housing.
▶ 0:52:51Sen. Warren: Factors driving the housing shortage, seems to me, include outdated building codes, local land-use restrictions that prevent new housing from being built. For example, according to one estimates, it's illegal to build apartments, townhomes, and anything but single-family detached homes on three quarters of the residential land in cities and suburbs across america. Dr.
▶ 0:53:17Sen. Warren: Glaeser, help us understand a little bit more at a granular level, walk us through the problem about local restrictions and, like the exclusionary use or zoning and building codes, how they drive up the cost of housing.
▶ 0:53:33Dr. Glaeser: There are thousands of different ways to say no. In greater boston, which you know as well as I do, I've spent a lot of time studying in at different forms. It start by making it hard to manufacture at scale. It starts by requiring that you get these tiny projects instead of the large-scale building that builders were doing after world war ii, when you had mass production of ordinary homes that made things affordable.
▶ 0:54:04Dr. Glaeser: You get smaller projects. Then you get smaller projects that take two years to get approved. I am amazed. Most of our people are talking years. The rules become so specific for particular towns. Forgive me for being massachusetts oriented. I know one builder who will not build outside of lexington. This is a small town. Just in general, the difficulty of moving anything. In massachusetts, we have a tradition of a state override.
▶ 0:54:34Dr. Glaeser: We have chapter 40b which allows for an override of certain types of housing. I would say that it is the right model for other states, has been helpful in massachusetts. This fighting back and forth between state and local is a really important thing.
▶ 0:54:50Sen. Warren: That is a really important thing to focus on, where the problem lies. Our job is not to tell local governments what to do, but we do have a responsibility to be a good partner to communities that actually want to build more housing, more housing that we need. I have a bill right now with senators warnock, van hollen, kim called the american housing economic mobility act, and it creates a competitive grant program.
▶ 0:55:19Sen. Warren: It is the caret it is the carerot end of the spectrum and says, if a community lowers the cost of housing and produces more housing, we will put more money on the table for other costs that come along with that. We can use it to build new elementary schools, new road that you may need, sewage plant, all of it supporting this housing. With senator kennedy, but we are working on right now is carrots and sticks, if that is what is needed here.
▶ 0:55:50Sen. Warren: But let me ask, I think senator kennedy was asking, but I want to make sure I have this right. Dr. glaeser, do you think that is a way to expand supply?
▶ 0:56:00Dr. Glaeser: I think policies that nudge states and localities to work permitting more housing, to allow the genius of american industry to get to work and build homes for ordinary americans, I think those are good policies.
▶ 0:56:14Sen. Warren: Let me let you get in this as well, Ms. willis. Do you think this is a way to expand supply?
▶ 0:56:21Ms. Willis: Absolutely. Looking at your american housing and economic mobility act, absolutely. You talk about the carrots. There is definitely that in the bill because you are incentivizing, there's an opportunity to incentivize and encourage better zoning practices. From what I recall, there is also that competitive program that could really create a race to the top.
▶ 0:56:50Ms. Willis: Zoning reform is best handled at the state and local levels, but I think in your bill, there is that incentive, that carrot that you speak up to incentivize innovation at the local and state levels.
▶ 0:57:05Sen. Warren: Mr. jelenic, I'm running out of time but you are an expert in this area. Is this something that could likely produce more supply?
▶ 0:57:13Mr. Jelenic: Ranking member warren, thank you. We are mostly focused on the mortgage process but there is clearly a supply issue in the country right now.
▶ 0:57:21Sen. Warren: This is not about the federal government imposing a one-size-fits-all, housing in louisiana has to look like housing in massachusetts, or be built in the same ways. But it really is an incentive to get local governments to solve the problem they face, because let's face it. They have had 40 years and the problem has just gotten worse and worse and worse. Thank you, Mr.. Look forward to working with you on this.
▶ 0:57:48Chair Scott: Exciting time for us to have a nonpartisan conversation about solving the needs of our country. I wish we could do this more often, in every committee in the senate and congress. Those of you not aware, I spent 13 years, six months on local county councils. [laughter]
▶ 0:58:08Sen. Warren: Who's counting?
▶ 0:58:11Chair Scott: I was not excited to leave at all. [laughter] I enjoyed my time. I will say the issue of housing is very much a local issue. Frankly, the state legislature can do some good, but it is those communities who really have building caps that distorts the market in extraordinary ways.
▶ 0:58:35Chair Scott: The way they use their zoning laws and density requirements is in fact what has exacerbated the problem from california to new york and beyond. How does that happen? Your local community decides they don't want anybody else. Not everybody wants a wall built, but we are building these virtual walls by saying we are not going to allow for any high density construction in these areas.
▶ 0:59:01Chair Scott: At that on top of the construction cost, and 7% interest rates, you have destroyed the local housing market. Mayor, you have done a fabulous job in texas from crime to improving the safety, to focusing on homelessness, reducing the amount of time it takes to get things done on every topic it seems like. I really appreciate your service to your community in many ways, to texas and beyond.
▶ 0:59:33Chair Scott: Can you talk about how you would address the issue from a zoning perspective, number one. Number two, compound question here, the housing, homelessness crisis is something we should all be passionate about. 18% increase with record dollars being spent through hud to address homelessness, and yet the problem gets worse. It is almost as if the more money we put out there, the worse it has gotten.
▶ 1:00:02Chair Scott: I am sure somebody will rebuke me for that statement, but it seems that we are dealing with something more complicated than here's a couple of dollars to solve the problem.
▶ 1:00:10Mr. Johnson: I appreciate the question and I will do my best to tell you come in all cases, my perspective as the leader of a city on the policy side, political side, as opposed to the bureaucratic side. We are talking about something that is a largely bureaucratic issue. There is just a lot of the issues related, specifically asking about zoning, I would also throw in with that permitting.
▶ 1:00:40Mr. Johnson: This is process. This is about process, and in many cases, local governments not being sufficiently focused or perhaps incentivized to focus on their process and making it easier to do business with the city.
▶ 1:01:00Mr. Johnson: Frankly, there are entities that exist in the world and the united states that know how to build houses, no warehouses need to be built, and can do so profitably, but are being hamstrung by local governments, how difficult it can be to navigate their process, and how long it can take to bring a project to fruition. We have had success but it is not for no reason.
▶ 1:01:29Mr. Johnson: I've had to really lean in over the past six years with the bureaucracy. Our bureaucracy is headed by the city manager in dallas. I have had to prioritize how important it is to get down these permit wait times. This doesn't happen on its own. Departments had to be consolidated, staff had to be moved around, you had to reconfigure how we went about surfing the developer community.
▶ 1:02:00Mr. Johnson: Having pre-meetings with folks about their projects. We had to be very creative about how we got projects done or quickly. That takes a concerted effort. That is a process thing. I am talking to the united states senate right now, so the question I want to not address here is what you can do to help that. I think we need some form of change in conversation around this topic of housing.
▶ 1:02:35Mr. Johnson: I think we get confused, frankly, and think that housing is somehow something that we at the local level can just determine the price of. Housing is like everything else, supply and demand, but we don't act that way. We could use some help in changing the narrative around that. As far as holmes is concerned, similarly we have a narrative problem.
▶ 1:03:01Mr. Johnson: In a lot of ways, I've had to push back on the idea that you see the folks sleeping on the streets because of the high median housing price in dallas. It is really not about that. The unhoused that you see on the streets are there for reasons I outlined before. In addition to carrots and sticks, things that congress can do financially, we could use some help in charging native -- changing the narrative around these topics to understand the root narrative.
▶ 1:03:32Chair Scott: Question for Dr. glaeser. To me, the housing issue, affordability is in fact the more you suppress housing construction because of your zoning laws, the higher your prices will go in the communities. We are talking about manufactured prices. Please continue.
▶ 1:03:52Dr. Glaeser: I agree with that pretty strongly, senator, so thank you for taking this up. America is full of land. We are an abundantly rich country. This is not necessary. We did this to ourselves by stopping the natural genius of american builders, by restraining them over and over again, by making it impossible to figure out new ways to build. Look at what is happening with productivity in the construction industry.
▶ 1:04:20Dr. Glaeser: Construction has stagnated in part because our projects are tiny, which means our firms are tiny. Firms that have 4, 6 people don't have research and development departments. There was a time when construction was just as dynamic as every other industry but because of local land use regulations, it is no longer so.
▶ 1:04:38Chair Scott: Senator kim.
▶ 1:04:42Sen. Kim: Thank you, I'd Mr. chairman, to the four of you for coming out. Mayor johnson, I want to start with you, between fiscal year 2023 and 2024 your city received more than $31 million in federal funding for grant programs. One of them was the home investment partnership.
▶ 1:05:01Sen. Kim: I'm not too sure how much you are aware of how that was used, but I wanted to see if you could speak to whether or not that was helpful and important for your city in terms of understanding how to address the issue of household, building of homes.
▶ 1:05:17Mr. Johnson: I cannot speak specifically to exactly what those funds went to in terms of directly contributing to a number of housing starts are over that period of time. But I will say is this in a more general sense.
▶ 1:05:37Mr. Johnson: I think there is a whole, long list of federal housing programs that we have used over the years, mostly focused on the construction of multifamily and rental housing units, that I think we have sort of learned over the years, they are just not as efficient delivering at the end of the day the number of housing units we need to move
▶ 1:06:09Mr. Johnson: The needle on affordability. So I don't want to say that these programs don't work, I want to say it depends on how you define working. When we look at creating housing year-over-year in dallas, using some of these programs, 3000, 4000-unit range, when you have a need for 50, 60,000 units, it is just not enough.
▶ 1:06:37Mr. Johnson: I think what I want to emphasize to the committee -- and I definitely appreciate the opportunity to be here to speak to this. It is not about the fact that these existing programs are unable to create a housing start, it's about the fact that they will never be as effective at reading the housing at scale that we need to actually move affordability in the right direction, impacting the supply-side.
▶ 1:07:03Sen. Kim: I agree with you and I think there is unanimity here in the room that we send those signals and try to address the supply-side. What I'm trying to think through is how do we make sure that, as we spur building and development , we are spur and diversity of types of homes that are being built?
▶ 1:07:26Sen. Kim: We struggle with that in new jersey, my home, a state where a lot of the incentives were building is to build very large houses, very expensive condos, not as much on the affordability side. Trying to get a sense from you, what are the tools that can help make sure that affordable homes are being built, not just the most expensive stock?
▶ 1:07:47Mr. Johnson: Again, this is where I have a fiddle -- philosophical difference with some folks about whether or not you can just set out to build and affordable home without getting involved in the market in ways that are counterproductive. I do think the affordability of homes is related to the supply and demand issue.
▶ 1:08:09Mr. Johnson: What I would say come in a city like dallas, which is almost 400 square miles, has more vacant land in it to build on that most american cities have available to it, we are not utilizing to the full extent we can. Let's start with single-family.
▶ 1:08:28Mr. Johnson: We could be building a lot more single-family that would drive down the cost of housing for everyone without setting out from the outset and try to artificially cap the cost of it, saying that we will only let someone charge x amount of dollars to pay for a house like this. I don't think those types of programs work long term. At some point, the house turns over, stops being affordable, even if you set up from the outset to be one.
▶ 1:08:57Mr. Johnson: The only thing that works long term, having lived this now, is to have a build baby build attitude toward housing in your town. We are being inundated by californians and chicagoans in dallas, people coming because we are economically successful. It looks like a bargain to them, our housing stock, but it is driving up the cost for people that are not used to paying that.
▶ 1:09:23Mr. Johnson: The approach we need to take is one that is more market-based and that unleashes the potential of the private sector to build more on our unused land, which there is a lot of.
▶ 1:09:34Sen. Kim: Thank you, mayor. I yield back.
▶ 1:09:38Chair Scott: Next will be senator rounds.
▶ 1:09:43Sen. Rounds: Thank, Mr. chairman. Thank you to all of you for coming and visiting with us today. I think the one thing that we hear time and again regardless of if you are a large or small community is the need for appropriate housing. In many cases, it can take a different form or priority, depending on whether you are in a small community or large community. At the federal level, we need to be able to look at multiple types of programs that would be available to assist in incentivizing the development of new housing.
▶ 1:10:13Sen. Rounds: Housing eventually wears out and you have to be looking toward the future. I would like to begin with Ms. willis. First of all, thank you for the work to help people with the lowest incomes having the opportunity for quality affordable homes in our communities. The last several years, I focus on bipartisan housing merck addressing a range of topics including streamlining of the environmental review process, modifying homeless prevention programs, increasing access to affordable housing in rural areas.
▶ 1:10:45Sen. Rounds: Senator smith and I have introduced the rural housing service reform act to preserve affordable housing units in rural communities across the country and make much-needed updates the usda's rural housing service. My question for you, with your work with the national low income housing coalition, how could legislation like the rural housing service reform act make a difference in rural communities and their ability to finance affordable housing?
▶ 1:11:10Ms. Willis: Thank you for the question, senator. It is extremely important to ensure that we have affordable housing in rural communities. We talked a bit today about suburban and urban communities, tribal communities, as well. It is important to make sure that we focus on urban communities.
▶ 1:11:34Ms. Willis: We know some of the challenges that are faced in rural communities are severe, in terms of the building of affordable housing. Sometimes it is much harder to build in rural communities. Sometimes the wages or the people in rural communities are lower.
▶ 1:11:53Ms. Willis: What we have, when we talk about affordable housing crisis, nationwide, one out of four people who are eligible for affordable housing get affordable housing or rental assistance of some kind. Another way of saying that is three out of four don't.
▶ 1:12:13Ms. Willis: In terms of looking at the demand-side, really it is making sure that the federal government -- making sure the federal government invests, has resources for communities including rural communities, to make sure they also have the housing that is deeply targeted. We are talking about building affordable housing.
▶ 1:12:41Ms. Willis: We are talking about ensuring that if a builder is building in a rural community, that they are using usda funds or low income housing tax credits. Maybe even pairing that with home dollars or the housing trust fund dollars.
▶ 1:12:59Sen. Rounds: It is different in some cases than some of the urban housing challenges, but once again, you have fewer contractors. And the contractor that are there may build fewer homes in those ribald areas. Just curious, who are going to be the individuals hit hardest by the expiring usda mortgages, and what could that mean for affordable workforce housing?
▶ 1:13:26Sen. Rounds: It sounds like a weird offset but literally as these mortgages expire, things happen to the programs. Can you talk about that?
▶ 1:13:33Ms. Willis: As the usda mortgages are expiring, also a lot of times they are paired with subsidies. So we want to make sure that the families and individuals who are living in the homes where the mortgages are expiring, that they can continue to use those subsidies. It is decoupling. Absolutely. To ensure that people can stay housed.
▶ 1:14:02Ms. Willis: These are mortgages that, 20, 30 years, we want to keep them in the housing stock. If not, landlords can raise the rent, take them out of the stock. All sorts of things.
▶ 1:14:15Sen. Rounds: Thank you. Dr. glaeser, quick thought. Cbg's are really important. We use that in a lot of cases to determine infrastructure opportunities in small and rural communities. One challenge though is in order to do a lot of those things, you have to be able to identify the environmental review process but all the davis-bacon prevailing wage requirements.
▶ 1:14:43Sen. Rounds: Utilizing a $2000 cbg in a project requiring the davis-bacon requirements, that include prevailing wage compliance, weekly certified payroll reporting, on-site labor interviews, contractor -- contract recite my question quickly -- should it cost $2000 just to complete the paperwork?
▶ 1:15:16Sen. Rounds: >> that certainly sounds like a lot of work. While most regulations we are talking about our local, I'm on board for reducing the federal regulatory burden.
▶ 1:15:24Sen. Rounds: Thank you.
▶ 1:15:25Chair Scott: Senator smith?
▶ 1:15:28Sen. Smith: Thank you, chair and ranking member, and to our panelists today. Let me start by saying I appreciate the line of questioning my colleague senator rounds from south dakota was just offering on our bill. Mr. chair, I heard you say earlier that housing should be a nonpartisan issue. I appreciate that.
▶ 1:15:52Sen. Smith: I think the bill senator rounds and I have been working on actually completely fits that mold. It is not a bill that is pushing any partisan interests. It is a bill that is really focused on protecting and preserving affordable housing, without which, in rural communities, people are literally not going to have a place to live. I'm going to follow up a bit on my colleague's questions.
▶ 1:16:23Sen. Smith: Forgive me if I am eating because I was -- if I am repeating because I was in transit as he was asking his question. Who are the folks who are living in these homes? Who are we making sure has a safe home with this program?
▶ 1:16:43Ms. Willis: Thank you, senator. We are talking about families who earn a 30% ami or less. These are people who need sustainable, affordable homes.
▶ 1:17:00Sen. Smith: They are families or maybe working in low-wage jobs or maybe elders?
▶ 1:17:05Ms. Willis: That is what we are seeing. The workforce, we mentioned low-paying jobs. And this is maybe a third. We are talking about 30% or less ami, and we are talking about a third who are in the workforce, and another third are seniors.
▶ 1:17:31Ms. Willis: There are students or people with disabilities, and single caregivers.
▶ 1:17:39Sen. Smith: That is important. A lot of times, we don't think about who we are making sure has a safe place to call home with this effort. Can you comment on how important it is as we talk about adding affordable places for people to live, or a housing supply problem -- I don't think we talk enough about how we need to preserve the housing we have, so it does not go away, exacerbating the challenges we have.
▶ 1:18:08Ms. Willis: That's right, and that would certainly exasperate the challenge. We are talking about rural communities with usda mortgages. We want housing stock to be affordable.
▶ 1:18:26Ms. Willis: I know that your bill, the rural housing service is reform act, really allows houses to continue to receive rental assistance, even when those property mortgages mature. That is important. That is about the preservation of housing. That is why a bill like the rural housing service reform act is critical to these communities.
▶ 1:18:56Sen. Smith: Dr. glaeser, I wanted to talk about the challenges in helping to increase the supply of housing. Democrats and republicans agree -- I think ranking member warren made this point, that if you have an imbalance, prices are going to go up, and that is going to create the problems we have here.
▶ 1:19:21Sen. Smith: I'm glad that my hometown of minneapolis has tackled some of the zoning reforms that are necessary to make it -- that make it necessary to build housing. Could you talk a little bit about how you see this issue, and what we should be paying attention to? Maybe a bit on how we could innovate the way we build housing.
▶ 1:19:51Dr. Glaeser: I want to use this opportunity to say a word for modular housing. We have -- modular housing has lots of capacity. It can be differentiated. And we can do it cheaply. Since adam smith, we have known mass production is a critical path toward housing. But there are local zoning rules.
▶ 1:20:20Dr. Glaeser: The chairman of the authority is working to make sure that public housing in chicago is built with modular housing. It is exciting. I would love to see a state that champions modular zoning. I would love to see something that enables us to scale economies in housing.
▶ 1:20:45Dr. Glaeser: The housing for poor people -- it is an amazing way of providing starter homes and easy to buy things for people who are not of extravagant means.
▶ 1:21:04Sen. Smith: We have used modular housing things to zoning laws that are high-quality. And the construction can be completed in roughly 75% of the time. >> on behalf of the chairman, senator ricketts.
▶ 1:21:21Sen. Ricketts: I want to thank chairman scott and ranking member born for the support in the hearing today, as I think we all recognize, the housing shortage in our country is something that is creating problems for all of our communities across the state. My state of nebraska -- we talk about rural housing as one of the things that we worked on when I was governor of nebraska, and we had success coming out of programs to be able to do it.
▶ 1:21:51Sen. Ricketts: Maybe some of you have heard it in states like south dakota. Somebody in a small town could be offered a job to move to the small town. And they cannot find a house that is suitable. They turn the job offer down. That is a big hamper to our rural communities growing. To come up with solutions is important to take a look at.
▶ 1:22:20Sen. Ricketts: We crated a housing bill that creates $7 million to start with, that was available for communities to apply to this grant. The way most communities ended up using it was a revolving fund, so that developers would be able to get a low interest loan to come to a rural community and build housing, and then repay that loan so it could
▶ 1:22:50Sen. Ricketts: Be loaned out down the line. It was tremendously successful. One of the things it allowed was developers can make more money may be in bigger cities. But when it comes to a community, because it was transient -- they would be able to build 12 homes at once to be able to get more toward the mass scale to bring down the cost of homes.
▶ 1:23:23Sen. Ricketts: There is a house on the market right now. Very affordable to be able to get people to keep jobs in rural communities. The mayor of ralston, nebraska,, they are able to build 100 8 -- 120 unit complex. Revolving funds, essentially.
▶ 1:23:51Sen. Ricketts: We also used arpa dollars, but those had to be one time use. We could not use them the same way. So it was not creating a long-lasting job. Anyway, I want to talk to you about some of your research in some of the things. First of all, university of chicago -- great school. I am an alum.
▶ 1:24:18Sen. Ricketts: We talked about the zoning and how that is impacting, because we are restricting -- restricting what land-use can be for. What about some of the other things the ranking member mentioned? Building permits. What about the availability of finding people who can do the job in the first place, the people in the trades?
▶ 1:24:43Sen. Ricketts: Are you seeing any research that talks about those sorts of problems and what we might be able to do to address them?
▶ 1:24:55Dr. Glaeser: Great question. To differentiate, permits are a local government issue. The time to permit is really important. I think the sort of nudging against local legislation would be helpful as well. If you put that states have to build in their most occupied counties, they have to figure out how to do that.
▶ 1:25:25Dr. Glaeser: The workforce is different. I think there is a role at the state and local level. It might be open for a federal program to do more vocational training and lots of places in the U.S. in many places, smart vocational training that wraps around existing education and provides an exciting option. I would like to see that legislation in place before I endorse it. I would like to see an evaluation of the programs.
▶ 1:25:53Dr. Glaeser: Part of the beauty of occasional program is that you can pay for performance. They could learn to become a plumber or a programmer. There is a question as to whether something like the global financial crisis permanently broke the construction industry. We are up 100,000 people. Excessive regulation changed us from being a nation of builders to being a nation of modelers, because the permitting process is easier.
▶ 1:26:25Dr. Glaeser: In dallas, texas, they are back to where they were before the global financial crisis. As a strategy to think about -- a holistic human capital strategy, thinking about vocational training -- that is worth doing.
▶ 1:26:41Chair Scott: Thank you. Senator reed?
▶ 1:26:45Sen. Reed: Thank you, Mr. chairman, and thank you for your testimony. Ms. willis, back in 2008, I helped create the housing trust fund. Which was designed, as you know, to expand housing for people who are looking for housing. Why do you think today the housing trust fund is necessary? How can we help?
▶ 1:27:18Ms. Willis: Thank you for your question and for your leadership in crating the national housing trust fund. The national housing trust fund is incredibly important because it is one of the only federal investments that goes deep in terms of its target, to target extremely low income households. That is households that pay 30% below the poverty line. So it is extremely important. Without that, it can be.
▶ 1:27:51Ms. Willis: Difficult to create affordable housing for that population. But the housing trust fund targets deeply. Developers are able to build global housing, using those funds.
▶ 1:28:09Ms. Willis: So it is critically important to have that level of deepness, if you will, to really target in a new way, a formal housing.
▶ 1:28:27Sen. Reed: We put in legislation that would expand the resources of the trust fund to reach 3 million affordable homes. I think everyone on the table would say demand response to constraints. This would accelerate demand.
▶ 1:28:49Sen. Reed: Another program I think is very useful -- I'm very proud to have joined my colleague from alabama, senator britt, to introduce the helping more families save act. That is the family self sufficiency program. There are families who because of this program, they can put money away, save it up, and eventually move out and move up.
▶ 1:29:21Sen. Reed: We hope we can get this past this year. Have you seen that program and how well it works?
▶ 1:29:29Ms. Willis: Absolutely. We certainly have supported the helping rural families program, and thank you for your leadership on that as well. And helps renters living in hud assisted housing to save more of their hard-earned income to boost their financial stability. We have seen countless families across the country.
▶ 1:29:58Ms. Willis: It helps families to save more, rather than paying those higher rents. They can put the extra payments into the escrow account they can use for mobility or to invest in their future.
▶ 1:30:13Sen. Reed: Dr. glaeser, senator lummis and I have an issue which is the property improvement of manufactured homes. It would help families access financing. Could you give us an idea about how this would support housing supply?
▶ 1:30:43Dr. Glaeser: Yes, 80 use -- adu's are ways to still densify. I tend to wish we would do more than just add a use, but they are potential aids, and manufacturing housing is a really inexpensive way to add toward your property.
▶ 1:31:05Dr. Glaeser: I think policies that lean in toward modular's with manufactured housing are helpful, because adu's can get through in some of our most hostile environments.
▶ 1:31:20Sen. Reed: Thank you very much.
▶ 1:31:21Chair Scott: A good example of that nonpartisan legislation, senator britt and so many -- I'm so sad you are not writing with me.
▶ 1:31:35Sen. Reed: We have very talented people. They are right here.
▶ 1:31:38Chair Scott: We have lots of them.
▶ 1:31:43Sen. Britt: I am really thankful for senator reed and his willingness to tackle these tough issues and do it in a bipartisan way that we can actually achieve results for the american people. Thank you all for being here. This is certainly an important topic. I'm particularly looking forward to hearing more about this as the chair of the housing subcommittee. When I tackled this issue first getting here, it is clearly an issue of supply and demand.
▶ 1:32:12Sen. Britt: It also covers a lot more than that. When I started looking at regulations, 24%, 25% of a new home cost is directly attributable regulation. It is what is necessary and what is over burdensome. When you find out that americans are no longer buying their first home, that piece of the american dream, in their late 20's, but rather in their late 20's, early 40's -- how do we make this more obtainable for every american?
▶ 1:32:42Sen. Britt: There are a number of approaches. Senator reed mentioned one that we had with government assistance programs that would help people actually achieve upward mobility and help him stand on their own two feet, and be able to live their version of the american dream, which is so critically important. That there are other things we have been doing that we felt like we had to club back on some of this stuff. Environmental regulations have directly stifled housing supply.
▶ 1:33:11Sen. Britt: When we look at alabama, we have a great example of what senator ricketts was saying, with things they were doing in nebraska. In alabama, there is a fortified roof program. It incentivizes strong homebuilding, and it does that encouraging people to build to withstand storms without imposing excessive environmental standards. It has been wildly successful.
▶ 1:33:40Sen. Britt: There is certainly a way to do both, and there is a balance that needs to be achieved. Can you talk about erroneous environmental and land-use regulations and the ability to build homes to meet those demands?
▶ 1:33:58Dr. Glaeser: Thank you for your leadership on this topic. It is an odd irony that often environmental relations are counterproductive. 15 years ago, I wrote a paper with a california environmental economist currently at the university of southern california, which tried to measure carbon emissions associated with the link in different parts of the country. We normalized for family size and for income.
▶ 1:34:22Dr. Glaeser: What we found was that by far the lowest carbon emission parts of the country naturally were coastal california. It has nothing to do with regulation. It is the weather. It is january's that don't require you to heat like crazy and july's that do not require you to air condition. If you cared about reducing america's carbon emissions, you should be saying let's build in san francisco bay. It's at as much housing as we possibly can.
▶ 1:34:51Dr. Glaeser: Yet california housing, partially because of a case that requires significant environmental review locally for any california project -- they face the most onerous environmental regulations possible and the effect is moving building from places where it is good for the environment to places where it is less good. You see that happen over and over again. Partially it is a mistake that regulators think that they are stopping the building. It does not stop. It just moves to a place that is worse for the environment.
▶ 1:35:22Sen. Britt: I appreciate that and have follow-up questions I would love to submit for the record for you if that is ok. I want to dig down on that. Short on time. Mayor johnson, I heard you say to chair scott -- you talked a little bit about local challenges. I've heard the best thing the federal government can do in most situations is just get out of the way. As the daughter of small business owners, I saw that firsthand.
▶ 1:35:49Sen. Britt: I think local leaders are boots on the ground and local solutions work best for the people they serve. Can you talk briefly about how you are ensuring that we have equipped our state and local leaders to meet the unique challenges that their communities face, and what we can do better in that regard?
▶ 1:36:09Mayor Johnson: I appreciate that question, senator and I will tell you it is interesting. Look to washington for a couple of things. One is money. We are all looking for money. The other is leadership, and thought leadership. Sometimes, being so close to the people, it is good. You know exactly what is going on. But it can be noisy. Sometimes folks who are a little further away can look at problem and see it nationally.
▶ 1:36:39Mayor Johnson: If you do not look at this housing issue nationally, you do not understand what is going on. At the city level, we are competing with other cities for people, institutional investment , corporate relocations, jobs, higher education institutions. We are competing for those things. My job is to try to make dallas as awesome as it can be, make life as high as it can be.
▶ 1:37:10Mayor Johnson: The result when I am successful is pressure on my housing market because we are not building enough houses, new ones, fast enough. The new folks are adding pressure to the market in the form of more demand in terms of people and what they are willing to pay. They are more well compensated. They come from the coast. Our housing margins are a bargain.
▶ 1:37:40Mayor Johnson: I'm saying this over and over again because I was very honored to be asked to be here today. We need the understanding of congress that this is a problem that has to be attacked nationally, because we are just pushing the issue around. We really do need to have a build, baby, build approach to housing. In addition to the leadership we are looking for with our friends from washington, it is not always about coming and asking for money for a new program.
▶ 1:38:11Mayor Johnson: There are ways that -- I will let all of these wonderful pieces of legislation I'm hearing about. Figure out how to incentive us to do what is within our purview. I would be run out of any room back home if I did not say that we do believe that the zoning issues, the process and permitting issues, are going to always be best handled at the local level.
▶ 1:38:37Mayor Johnson: That does not mean that you cannot attach, as I believe senator kennedy was implying -- you cannot attach benefits to us doing things better in the right way. If you want to reward a city that reduces their permitting time and builds x housing units at a rate that you set, I'm all for that. Dallas will jump in the competition.
▶ 1:39:02Mayor Johnson: We would gladly increase our housing starts to attract some sort of public benefit. But it is not a new program we are looking for. It is a change in the narrative.
▶ 1:39:18Sen. Britt: I have a question for Mr. young winek -- for Mr. jellinek that I will submit for the record.
▶ 1:39:26Sen. Warner: To the panel, to the mayor, I'm going to incorporate in my reference what everybody has said about the housing shortage. I'm went to quickly go through some of the questions and some of the tools.
▶ 1:39:46Sen. Warner: New architects, new extensions, the neighborhood investment act, the fillon opportunity -- we have got to make sure that aging properties can be restored. Restoring tax credits in terms of rural applications.
▶ 1:40:09Sen. Warner: I know the cfi tax credit -- I also want to advertise to my republican colleagues something we put together last year called the lift act, which would be focused on first-generation first-time homebuyers, which is two thirds people of color -- two thirds of people of color.
▶ 1:40:31Sen. Warner: The subsidy says in addition to some of the other tools, if you qualify, you would pay a 30 year rate but you would get 20 years. So double the amount of equity in the first 10 years. The ranking member mentioned this. I'm trying to make sure we do not get a secondary market. Actually -- I was going to go to Mr.
▶ 1:41:00Sen. Warner: Jele can youni speak to that ideac. -- Mr. jelenic to that idea that you can close the wealth gap.
▶ 1:41:15Mr. Jelenic: I am a little familiar with the lift act and I understand as you explain at that as a consumer we get the benefit of a 30 year rate but have the ability to build equity as if it was a 20 year mortgage. We would really like to dig into this with you. It is products like this that get us excited.
▶ 1:41:34Mr. Jelenic: Whether it is a product like this or something else, without increasing the risk that they will not repay -- this does not do that, and gets people on that path of achieving the american dream and getting that equity in their homes.
▶ 1:41:52Sen. Warner: I will go to Ms. glaser. -- Dr. glaeser. People have talked about the need for localities to improve their zoning rules. I have got notional ideas and I think there are grants having a caret to maybe increase those if you limit your zoning requirements. One is commercial or residential. There is not a community in america that does not have an aging stripmall.
▶ 1:42:23Sen. Warner: I don't think they will ever come back for infrastructure. How we can use that tool to really incentive those conversions, number one. And then number 2 -- I think some other folks have raised this. How we can work with religious institutions, and go out to churches or mosques with lots of available land.
▶ 1:42:47Sen. Warner: A northern virginia church has been trying for five years, and it would not disrupt the neighborhood, but five years was way too long. Could you talk about what other tools we might use to try to give incentives to change zoning?
▶ 1:43:07Dr. Glaeser: These are great questions, senator. Let me join with you in a profound desire to see those single use zoning rules that were imposed throughout america starting in the 1920's -- to see them peeled back. They have to be repealed at the local level, not the federal level. This is tremendous. Cities are trained to reinvent themselves post-covid. It is a curse for suburban areas that have strip malls that were once the cutting edge of retail, but are not there anymore.
▶ 1:43:40Dr. Glaeser: I think thinking about this is great. I would push on something that is using some form of carrots and sticks with federal funding to use more production. But we could discuss how great it would be to allow different uses of land. I think that would be very good.
▶ 1:43:56Sen. Warner: Doing some of this in virginia -- so many religious institutions. With that contribution, you use the underlying land, so there is a win-win here. Cfi -- cdfi's, when I visited with you about this in the past -- this is an important niche.
▶ 1:44:26Sen. Warner: Under the last administration, we had $12 million in tier one equity and grants. Can you talk for a few seconds about cdfi?
▶ 1:44:37Ms. Willis: They are important. They offer flexible loans to build housing for rental homes or health care clinics, grocery stores, schools, and so forth. They also play an important role in expanding economic opportunity and development in distressed communities, and they offer interest rates that are flexible that have a better reach for underserved
▶ 1:45:07Ms. Willis: Communities as well. Through the capital magnet fund, cdfi's, they financed over a thousand affordable homes. It is extremely important.
▶ 1:45:20Sen. Warner: Thank you.
▶ 1:45:22Sen. Moreno: Thank you for having this important hearing. Generally speaking, I think it is important to say that if government action and good intentions lowered housing costs and you looked over the last period of time, housing should be free, given how many initiatives government has put in place to lower housing costs, ironically. Dr. glaeser, you live in massachusetts. I lived in massachusetts 12 years.
▶ 1:45:51Sen. Moreno: It is more rare to find a republican at harvard than it is to find a republican writ large in massachusetts. The ranking member talked about how housing costs for the school teacher -- I'm very familiar with that. I ran a large group of car dealerships that sold cars to schoolteachers, and they kept living further and further away, to the point where a lot of people lived in new hampshire.
▶ 1:46:16Sen. Moreno: It is interesting because I think if you are looking at how you solve housing problems, I would headline it as do the opposite of massachusetts, which is massive government intervention in public markets, private markets that should be allowed to work. My question for you, Dr. glaeser, is this. In 2019, if you made $59,000 a year, you could afford a home as defined by if your income was less than 30% of your mortgage payment.
▶ 1:46:47Sen. Moreno: Today that number is all most approaching $110,000. Just five years. What happened?
▶ 1:46:53Dr. Glaeser: Thank you for your question. Thank you for your care on this topic. I want to first respond to your comment on massachusetts land-use regulations. I have long thought it is deeply ironic that red state texas does a better job of providing affordable housing for everyday people then blue state massachusetts. It is an issue of land-use regulation, all of which is well-intentioned and has consequences for ordinary people trying to buy homes.
▶ 1:47:24Dr. Glaeser: The change inaffordability reflects two things. It reflects both the price of housing and the mortgage rates. I'm not a banking or micro economist. I study housing markets. I study cities and other places. I'm not going to run down the litany of mistakes that my macro economist colleagues got us into the place where mortgage rates are what they are. That is a big part of it.
▶ 1:47:48Dr. Glaeser: The other big part of it that I'm happy to talk about is the fact that housing is more expensive than it should be, saying this is an issue that used to be about coastal areas, and now it is increasingly in cities where the inner ring areas have made it harder and harder to build. You used to see patterns in places like atlanta, where we built more in the pricier parts of atlanta in the 1970's. Now, we don't. We build in lower density areas that are far away.
▶ 1:48:19Dr. Glaeser: I think this is no longer just a massachusetts issue. That is in some sense is what scares me. Places that were escape valves for affordable housing in the U.S. -- houston, atlanta, miami -- they are not an escape valve anymore. That scares me. I think coming some national discussion, even if it is largely symbolic, it is important to recognize we are going in the wrong direction as a country if we want to be a place where outsiders can come and forge a brighter future.
▶ 1:48:53Dr. Glaeser: >> when you see that increase over a five-year period, you have to say, what happened? Could it be that we had 10 million illegals coming into this country? Could it be that incredible surge in demand with no correlating supply increase? Could that have something to do with it? Those 10 million people having to be housed raise the price of housing generally?
▶ 1:49:18Dr. Glaeser: Again, I am not an expert on immigration policy.
▶ 1:49:24Sen. Moreno: But you know supply and demand 101 as a harvard professor.
▶ 1:49:29Dr. Glaeser: I'm going to repeat what I said in my original testimony, which is we know there is a demand problem when you see quantities and prices go up. We know things are a supply problem when you see prices go up a quantity is down. We have seen is prices are way up and building is down. That is why it is crucial -- the one fact to take away is this is a supply problem. It is not about housing demand.
▶ 1:49:55Sen. Moreno: People that need to be housed is a problem. On mortgages, this is also the banking and housing committee. What are some things that you think could be done from an innovation perspective to help alleviate the problem?
▶ 1:50:10Mr. Jelenic: Thank you for the question. It is the mirror image of the discussion on housing. As long as we are careful with the innovations and the ways we test them, there are a lot of ways we could use new technology and big data to reduce some costs in the process. Some of this was in my testimony. There are some examples. I will give about 10 seconds.
▶ 1:50:42Mr. Jelenic: We work with independent mortgage brokers that are small-town businesses across small business states. Working with mortgage brokers, they are generally the lowest cost to get a loan, and they are in the communities. Whether it is rural, whether it is urban, they know the market better than anyone else.
▶ 1:51:07Mr. Jelenic: The margins compared to some of our competitors with a different is this model -- everything we do is about technology and process inefficiency. Some of the things we have available -- we have incredible data and analytics tools. There is more data now and there are more tools we have. We have ways to reduce accuracy of appraisals and costs of appraisals. It is a small issue, but these numbers start to add up.
▶ 1:51:37Mr. Jelenic: I could say the same thing for mortgage insurance in the title space. These are very necessary, but when you look at premiums collected and when the premiums need to be paid out, there were opportunities to provide alternatives, where you don't increase the systemic risk, don't increase labor risk, don't increase consumer risk. You are leveraging modern-day technology to reduce costs out of what is a complicated and often legacy process.
▶ 1:52:10Sen. Moreno: Thank you.
▶ 1:52:13Sen. Van Hollen: Thank you for your testimony. Let me start on the supply issue . I've been listening on c-span. Clearly, constrained supply drives up costs. You are an economist, Dr. glaeser. But the reason we are worried about constrained supply is because with demand not being met, it drives up costs. That is the fundamental question.
▶ 1:52:41Sen. Van Hollen: There is another side to the cost factor, and that is the cost of materials. I just want to read to everybody a letter that we all received from the national association of homebuilders very recently. I am quoting. While homebuilding is inherently domestic, builders rely on components produced abroad, with canada and mexico represent 25% of building materials inputs.
▶ 1:53:08Sen. Van Hollen: Imposing additional tariffs on these inputs will lead to higher material costs, which will ultimately be passed on to homebuyers in the form of increased housing prices. It is a pretty simple statement of supply and demand, is it not? So when we hear the president talking about beautiful tariffs, I think the american people need to understand what he is talking about.
▶ 1:53:38Sen. Van Hollen: In a broad-based way, it means higher housing costs. Isn't that right?
▶ 1:53:40Dr. Glaeser: It is hard to see how imposing higher and higher costs on materials will lower cost for housing, yes.
▶ 1:53:47Sen. Van Hollen: Let me give you the estimate from the chief economist over at the national association of homebuilders, robert dietz. He estimates the tariffs, fully phased in, will add anywhere from $7,500 to $10,000 to the cost of building the average american family home. Do you have any reason to dispute that?
▶ 1:54:08Dr. Glaeser: It is true that he represents an industry group, and industry groups are known to talk about policies in a way that gets the policy they want, but I have no evidence on the homebuilding technology.
▶ 1:54:24Sen. Van Hollen: Ms. willis, I want to turn to the other part of the equation, and that is trying to help families that can't afford a home. Some additional means to be able to do that. In your testimony, we talk about the immediate threat facing hud, as a result of the actions being taken by elon musk and the dose group. -- doge group.
▶ 1:54:55Sen. Van Hollen: I find it kind of sickening that the richest man in the world, who just a few years ago sold like seven mansions, is trying to deny working people access to programs that at least to some extent increase affordability. Can you talk about the damage that would be done if the threatened cuts go forward?
▶ 1:55:11Ms. Willis: Absolutely, senator. And just thinking about -- you are talking about the richest man in the world. I want to talk about hud programs and who they are for. When we are talking about eli, extremely low income housing is -- households, we did a study that is called "out of reach." $32 is what a person needs to make in order to afford a modest two-bedroom unit.
▶ 1:55:44Ms. Willis: $26.74 is what a person needs to make to afford a modest one bedroom unit. As we know, the federal wage is $7.50. Many people need to work more than two jobs to provide affordable housing. Hud provide stability to people who needed across our country.
▶ 1:56:13Ms. Willis: At least one out of four people needed across this country. That means three out of four don't receive it. When we are talking about the cuts to hud, we are talking about and one program, the program with the field offices -- we are talking about a 50% cut in staff for the program that oversees public housing in indian affairs.
▶ 1:56:39Ms. Willis: We are talking about an 84% cut to the office that oversees cdbg block grants, the housing trust fund. We are talking about an 84% cut there. And a 76% cut to the program that does the research, that figures out the market rates that are to be paid to landlords.
▶ 1:57:08Ms. Willis: How can these programs function if you are cutting these programs? And again, it is a significant cut throughout hud. The field offices, they see the people in the front line that are coming to them to access hud programs, and I don't see how you can function as an organization with those kinds of significant cuts.
▶ 1:57:34Sen. Van Hollen: I want to thank you for supporting in your testimony the bipartisan legislation I introduced with senator young, the opportunity vouchers act. They help lift families out of the cycle of poverty. Thank you.
▶ 1:57:51Sen. Tillis: Thank you all for being here. Several years ago when I was in the state legislature, I had one of the towns in my district ask for a one-hour meeting. I tell this story in the finance committee. We spent 45 minutes in that meeting talking about what I could do to help with a fertile housing, and we had a great meeting.
▶ 1:58:11Sen. Tillis: The last 15 minutes of the meeting, they were trying to pitch me on passing -- we had what they called local bills, where it provides an authority for a county and city government to do things that are unique to them. They wanted me to file a local bill to empower them to mandate sprinkle systems and single-family dwellings.
▶ 1:58:34Sen. Tillis: I said, guys, we just spent 45 minutes talking about what we can do for affordable housing, and you just proposed something as a mandate that would add to the cost of a home by 10% or 15% . Out of those two work together? And they don't. North carolina, I think, is tied close to idaho or tied with idaho for having the most number of residential construction permits authorized per 1000 people, at 9.12 a year.
▶ 1:59:06Sen. Tillis: And yet over the next five years, we are going to have about 800,000 unit shortfall, almost evenly divided between rental and for-sale units. One of the things I did not accomplish when I was speaker of the house, that I hoped to accomplish here, is that the scarce dollars for affordable housing resources ought to go to the state and local governments that are regulating efficiently and responsibly. Dr.
▶ 1:59:33Sen. Tillis: Glaeser, I have a question for you. What is wrong with this idea that says that we indexed states and local governments based on regulatory execution, cost of permit and time to permit? And at some point, when they reach an unacceptable level, they are no longer eligible for affordable housing resources coming from the federal government.
▶ 1:59:59Sen. Tillis: In a world of scarce resources, we should display it -- deploy it to jurisdictions that fall below that acceptable level. What is wrong with that?
▶ 2:00:07Dr. Glaeser: As I argued in my testimony, I believe strongly that the best path forward is to use some form of discretionary federal spending to nudge states and localities to permit more housing, and some form of conditionality seems helpful. I think you have to make a decision what forms of spending you want. In my own thinking -- I'm open on housing.
▶ 2:00:31Dr. Glaeser: But if you actually wanted to move a state -- let's say california -- for changing the rules, think you find transportation spending would be more effective than housing spending. Doesn't spending is just going to appeal much less to the typical legislator in california. Hence the need for different committees to talk to one another. But some degree of we lean against the highly restrictive areas --
▶ 2:00:55Sen. Tillis: Honestly, about salt, I have people wanting me to provide relief to states that overtax their population. They want the federal government to subsidize that, to discount the over taxation. Think about the same jurisdictions, the salt states. The reason I have a personal problem with that is that in north carolina -- if we had not lowered the tax burden when I was speaker, we would be a salt state.
▶ 2:01:22Sen. Tillis: Why should we not hold state and local governments accountable for the increasing cost of affordable housing units in their districts? Leave it up to them. If you want to regulate until the cows come home, if you want to keep raising taxes, awesome. Just make sure you do it to a level where you can get reelected and don't expect federal dollars to throw good money after bad. What is wrong with that concept?
▶ 2:01:46Dr. Glaeser: Senator, for 25 years, I've been obsessed with local regulation making it too difficult for ordinary americans to buy and rent a home. I'm thrilled that the members of this committee are taking this seriously and thinking about having federal policies that could meaningfully lean against this. It will give one caveat. It has to be based on the units, not the rules. They can monkey with the rules anyway you want.
▶ 2:02:11Sen. Tillis: That -- got it. A question for Ms. willis, because I like the idea of tillis asking willis. Ms. willis, why shouldn't reducing -- let me position it differently.
▶ 2:02:26Sen. Tillis: Does your coalition come of focused on unnecessary regulatory requirements, to the extent you can measure them in the areas you are focused on, as a key priority for your organization to make sure we can reach more affordable housing? Can we do it today? I am done after that, Mr. chair.
▶ 2:02:49Ms. Willis: Thank you, senator, and tillis willis sounds like a great television show. We see the affordable housing crisis as being two-pronged. On the supply side, we don't have enough affordable housing. We also talk on the demand side because there is a gap between incomes and rent.
▶ 2:03:12Ms. Willis: I do see that the federal government can assist in making sure that -- making investments in rental assistance to people who need it. Only one out of four receive it. We should have universal rental assistance.
▶ 2:03:28Sen. Tillis: I'm telling you it would be helpful for people who are advocating for housing to understand this is a driver behind some of the assistance that people need, because we are needlessly increasing the costs, crating a greater gap. People that grew up in the same trailer park as I did need help. But let's figure out how to make that trailer park and those apartments more affordable.
▶ 2:03:55Sen. Cortez Masto: Thank you, chairman scott, and ranking member warren. This is such an issue, as you can only imagine here right now, including in nevada. And I think the panelists for your candor and not taking the bait sometimes when some of my colleagues try to bait you into some conversations. The truth matters, and most importantly -- how do we address housing, and honest about it? Let me talk about nevada.
▶ 2:04:26Sen. Cortez Masto: One of the things I do know -- it is a supply issue. There is no doubt about it. We have to address the supply. But we also have to address the affordability. I have working families that cannot afford -- I have wealthy families that cannot afford homes. It is not just the supply. How do we make sure that you can afford the home? The homes that are being built in my state are more costly because 80% of the land is owned by the federal government.
▶ 2:04:57Sen. Cortez Masto: The first step in building housing is getting the land from the federal government. That is the first cost that now is associated with building those homes. So now we have to figure out how we level the playing field so we can lower those costs. It is about building, but it is also the financing that goes into the building to make sure we can keep some of those costs low enough for those families, the working families, to be able to afford those homes.
▶ 2:05:24Sen. Cortez Masto: One of the programs we have at the federal level that I still believe in -- I think we need to continue to utilize it and modernize it. It is the home program. Ms. willis, let me ask you. I have a bill which is s-948. The home program -- I want to say it was created in 1994. It was reformed since 1994.
▶ 2:05:53Sen. Cortez Masto: What I have done is updated it to make sure it works better for our families and their communities, and introduced it yesterday. Ms. willis, can I ask you -- how does the home program contribute to building more affordable homes for those working families, like in my state, where we have to address one key piece of the cost, getting the federal land first?
▶ 2:06:17Ms. Willis: Thank you for the question and for your leadership in introducing the legislation to improve the home program. Home, as you know -- it is another financing structure to allow deals to pencil out. It is a critical source of financing.
▶ 2:06:44Ms. Willis: It is important working with you to improve homes so that it supports community housing development organizations, so that they can better serve extremely low income households.
▶ 2:07:00Sen. Cortez Masto: I had a question but you answered it. Let me ask you this. We talked a little bit about federal land. Can you expand on your view that using federal land for housing is not by itself going to meet the affordable housing for this country? I'm curious if you would expand on the thought a little bit more.
▶ 2:07:19Dr. Glaeser: Thank you for your question. And thank you for your interest in manufactured homes as well. Federal land for manufactured housing -- I think all federal land should be taken on a case-by-case basis. I don't think I could solve america's affordable housing problem. It is a place where we have unaffordability problem. There are substantial amounts of federal land.
▶ 2:07:51Dr. Glaeser: In greater boston, with federal land, we would not solve the problem. But there are parts of america where there is federal land. We should use serious analysis. It would be allocated toward housing. Let's figure out a way to get as much housing as possible. Large-scale manufactured housing is one way of doing that.
▶ 2:08:18Sen. Cortez Masto: A piece of legislation I have introduced in another committee is the lands management act. It focuses on how we get more of the federal land, and also for housing. That is unique, by the way, to the western states. Most of my colleagues don't have to come to the legislature to pass legislation to get land for housing. We do. I appreciate your comments there as well. And then Ms. willis, thank you.
▶ 2:08:46Sen. Cortez Masto: Let me stress the federal home loan bank -- it is not a new role. It is in the original charter that they are required to participate in. It is an idea that they are obligated to think about how they invest in housing and economic development in our communities. Ms. willis, do you think federal homeowners can do more to support housing?
▶ 2:09:11Ms. Willis: Sure. I would say that we need every use of every resource available. I really do applaud you that there are commonsense ways to do that and to increase those resources. I would certainly love to keep working with you and your team and your staff to ensure that those resources serve extremely low income households.
▶ 2:09:43Chair Scott: Senator banks question mark Sen. banks I want to thank you for having this hearing. This is such an important topic and I have learned so much. I appreciate everyone who has been here today. The price of a typical home in indiana has gone up 60% in five years. Mr. chairman, how much homeownership is linked to the american dream? This is fundamental to why we are here and what we are here to work toward.
▶ 2:10:14Chair Scott: That is why this hearing is so important. You have studied and written papers on the differences between building a home and buying an existing home. I wonder if you could impact some of your findings. What does it mean for the future of the american dream as the gap between the two changes. What did it used to be? What is it now? Maybe I'm not making enough sense, but there is a divide there that is changing rapidly, and I wonder what that means.
▶ 2:10:44Dr. Glaeser: Thank you, senator. That is a wonderful question that gives me a chance to talk about basic evidence about how we know how powerful something is. The basic logic of economics is if you have a relatively competitive market, the cost of what it is to buy something should be close to what the cost is to make something. In other words, more competitors are going to come in. Construction is a really competitive industry.
▶ 2:11:09Dr. Glaeser: The body of evidence that I was involved documented growing gap between how much it costs to buy and how much it costs to build. And really dense environments, you can talk about how much it costs to buy an apartment in new york city versus how much it costs to build. Add an extra story. It was twice as much 20 years ago, and it is more today. I heard about zoning adding 25%. This is more like doubling the effective price.
▶ 2:11:39Dr. Glaeser: Lower destiny environments is harder, because you have to price the land and you don't often know that. One of the tricks we have is that you compare how much an acre is worth that extends an existing law -- lot, versus if it sits under an existing lot. In many of our environments it is 10 times more voluble if it sits -- valuable if it's it's under a house.
▶ 2:12:03Dr. Glaeser: With those tools, we can say that the gap between the land cost plus the housing cost and how much it costs to buy has gone way, way up. That is the way we know. It is one of my favorite ways to know that the land-use regulations are really playing an outsized role in this. Think of indiana as being typically a place where it is relatively easy to build, but it is clear that places where I once thought it was easy to build are becoming harder.
▶ 2:12:30Dr. Glaeser: As it becomes harder, the wedge between buying costs and building costs has just expanded. What we want the gap to look like?
▶ 2:12:43Dr. Glaeser: 25% for land cost?
▶ 2:12:46Mr. Banks -- Sen. Banks: Is there a time it was healthy?
▶ 2:12:51Dr. Glaeser: Most of the time it was typically less expensive to buy than it was to build in most of america. The reason was that houses depreciate. The new houses that were being bought are at premium, so building a house was more expensive than it was to buy a typical used house. Typically, it was negative. It would be fantastic to get back to that, where it costs more to build than the cost to buy a typical home.
▶ 2:13:15Sen. Banks: We understand it is zoning and regulations and things. One question I had for you -- a lot of the affordable housing programs the federal government are focused on -- building apartments, apartments are good. A lot of hoosiers live in apartments. But there are a lot of first-time homebuyers that want to buy a single-family house, rather than live in an apartment.
▶ 2:13:40Sen. Banks: Can you talk about how we would reform some programs to give first-time homebuyers an opportunity, using federal support to achieve that american dream?
▶ 2:13:51Dr. Glaeser: One thing I would think about is to think about how particularly hud treats manufactured housing. There are some very exciting things going on in manufactured housing. There are exciting things going on in the state of indiana in manufactured housing. The city of chicago is looking to source and effector homes for public housing in indiana, in fact, where indiana would be the producer.
▶ 2:14:19Dr. Glaeser: It would make affordable homes affordable for first-time homebuyers. It is important to remember that even if the homes are being built and are too expensive for first-time homebuyers, because they alleviate the pressure on used housing, there is still good affordability for first-time buyers.
▶ 2:14:37Sen. Banks: Thank you. I yield back.
▶ 2:14:42Chair Scott: Senator warnock?
▶ 2:14:45Sen. Warnock: Thank you very much, Mr. chairman. We have a housing availability and affordability crisis in this country, and I am especially concerned about young americans. And their ability to buy their first home. I grew up in public housing and I have been reflecting these days on the fact that I was able to buy my first home pretty early. Young folks coming along now, it is tough.
▶ 2:15:16Sen. Warnock: Dr. glaeser, you are a harvard economics professor. Are you concerned about what you are seeing in the economic data about young americans and homeownership?
▶ 2:15:31Dr. Glaeser: I certainly am. I had a paper in the journal of economic perspectives about housing regulation, one of which is the expense of housing, from the young to the old. We compared it to 1983. There were plenty of 25 to 35-year-olds who had tension housing wealth. That is gone.
▶ 2:15:56Dr. Glaeser: The contrast if you look at 65 to 75 plus at the top end of that distribution, they are enormous the wealthy. If you bought a home in los angeles in 1973, you have done spectacularly well. If you are trying to buy a home in los angeles in 2025, not so well.
▶ 2:16:13Sen. Warnock: 1973, ancient history for young folks today. I'm talking about the color students I know, right? -- the college students I know, right? So massive transfers of wealth, and a lack of ability to pass wealth from one generation to the next. It is moving in the wrong direction, which has implications to all of us, regardless of our generation.
▶ 2:16:43Sen. Warnock: This is a big problem that will require big solutions. Last year, we actually saw the largest increase in rental costs in decades, while the share of first-time homebuyers reached an all-time low. Tough pickings, whether you are a renter looking to rent or buy. Georgia has the lowest homeownership rate in the entire southeast. Ms. willis, what are the consequences of high rental costs and lack of affordable housing on upward mobility and the broader economy?
▶ 2:17:12Ms. Willis: Thank you, senator. I think on an individual level, when people with low incomes can't afford housing, they are forced to make impossible trade-offs. We are talking about trade-offs between paying rent and buying groceries or medications, or investing in children's education.
▶ 2:17:33Ms. Willis: But more broadly, I would say the researchers have found that housing constraints have lower gdp growth by 36% over the study period. In any given year, -- gdp was 3.7% lower. >> I will let you continue.
▶ 2:18:00Ms. Willis: It is not as bad for the folks buying homes, it is bad for all of us. >> absolutely. >> zoning reforms are important. It is also, it needs to address market failures that impact households with the lowest incomes. Because the market cannot serve itself without federal investments.
▶ 2:18:23Sen. Warnock: What about first-time homebuyers? What do they cite most often as a barrier?
▶ 2:18:32Ms. Willis: Two words -- down payment costs.
▶ 2:18:37Sen. Warnock: I know that to be the case and that is why I introduced the rent relief act and the down payment toward equity act with some of my colleagues. These are important bills that address the affordability issue -- the accessibility issue around housing. The government must help smart investments.
▶ 2:19:05Sen. Warnock: So we get a healthy balance between the private and public sector. Let me be clear. Government can also get in the way, especially local government. You were beginning to talk about that. >> I believe that very strongly senator. I'd been trying to make this point for 25 years. The problem has only gotten worse.
▶ 2:19:36Sen. Warnock: Saying no to adding density to adding homes and single to the american dream.
▶ 2:19:43Sen. Warnock: Thank you so much. This zoning often in the legacy of jim crow era racism, let's be clear, is a consistent problem and it is a problem even in blue cities, under democratic leadership. That is why I agree with many of my republican friends across the aisle.
▶ 2:20:07Sen. Warnock: This will -- we will never make a dent in our housing shortage without federal investments like my two bills and my bill with the ranking member. This is a serious issue and we need partisan solutions. Thank you. >> I look forward to your working together to solve the issues.
▶ 2:20:37Sen. Mccormick: Thank you. Thank you to a great panel. In addition to being a part of homeownership it carries great financial benefit as the home for many families is the most important asset. When I'm in pennsylvania I consistently hear about this problem. Housing prices are up 11%.
▶ 2:21:04Sen. Mccormick: Major metro areas, philadelphia and pittsburgh rank near the bottom nationally for new home construction. The american dream we want for everyone is slipping away because of the mismatch between supply and demand. Mayor johnson, good to see you.
▶ 2:21:26Sen. Mccormick: Could you give us a perspective as a big city mayor on the challenges you have faced with housing construction and stories you might have heard from other mayors?
▶ 2:21:39Mr. Johnson: I appreciate the question. The city of dallas proper, which I am the mayor of, is surrounded by several vibrant -- what used to be bedroom communities. Relatively large, successful suburbs in their own right.
▶ 2:22:01Mr. Johnson: The metro area we formed together, we call it the metroplex or the dfw region, is soon to be the third largest metro region in the U.S. 8 million people. A very dynamic region with a lot of job growth, a lot of economic opportunity. I describe us as the buckle of the sunbelt.
▶ 2:22:27Mr. Johnson: The sunbelt is the fastest growing part of the united states, population-wise and economically. There is no short of people who want to do business in our neck of the woods. They have choices where they want to do that building. It is my job to make dallas a more competitive place for them to do that.
▶ 2:22:59Mr. Johnson: One of the most common things I hear from folks in that line of work about why not dallas, why someplace else, is the permitting process, and assess. That is why I have been so -- your question highlight something.
▶ 2:23:31Mr. Johnson: -- you keep pushing it around.
▶ 2:24:03Mr. Johnson: We have to deal with it in a national manner. The solution and the answer is to increase the amount of homes being built and a big barrier to it is how long it takes.
▶ 2:24:18Sen. Warnock: That is what we are hearing. I want to move to Ms. willis. Could you comment on the collaboration you have seen with hud on this and the national trends?
▶ 2:24:38Ms. Willis: Thank you for the question. There are documented studies with housing, making sure that homeless veterans are housed. The success rate is over 50%.
▶ 2:25:00Sen. Mccormick: Is it getting better?
▶ 2:25:01Ms. Willis: It is certainly getting better. On any given night there are over 770,000 people living on the streets every night. In terms of veterans homelessness, the trend is it is being solved and getting better. Sen.
▶ 2:25:23Se-- Sen. Mccormick: If you look current course for this committee to think about without a change in the overall posture of policymakers, what would you think housing prices would do in the next five years?
▶ 2:25:41Mr. Jelenic: I will dodge that one, senator, just to be honest. Corrections are always possible and I do not want to be on the record for the next five. Give me 10 or 15 years.
▶ 2:26:10Mr. Jelenic: More and more of this country is closed off to opportunities. Closed off to people finding a future. I read a book about societies getting captured by insiders and making it impossible for outsiders to find a fortune. It feels more like america now and that is why it is so important for your committee to make sure opportunity continues everywhere.
▶ 2:26:40Sen. Mccormick: Thank you.
▶ 2:26:44Sen. Rochester: Chairman scott and ranking member warren, for this thoughtful hearing on housing, thank you to the panel for your testimony. It is clear when you listen to every senator, we recognize we have a housing crisis in this country. I hope this provides some hope to you that we recognize we are in this together.
▶ 2:27:14Sen. Rochester: Buying a home has never been more expensive. There are delaware residents who have worked to get a down payment. For a new home it could cost them $500,000 to be able to afford a house. We know this is a challenge. Generational wealth. I think about workforce housing.
▶ 2:27:41Sen. Rochester: We have doctors, nurses and firefighters that cannot afford housing. I think of the root cause for those who are unhoused and how we tackle this. . It is affecting everyone in the country.
▶ 2:27:59Sen. Rochester: I wanted to ask a question, as the nation's most preeminent scholar on housing, land use and the economy, could you talk to us a little bit about any research -- you mentioned land use policies creating an imbalance of supply and demand. I focused a lot on zoning reform and barriers and cutting red tape.
▶ 2:28:26Sen. Rochester: Could you talk about the overall economic impact of a lack of housing supply and why everybody -- whether you are a small business or a family -- should care?
▶ 2:28:37Mr. Glaeser: Thank you for your leadership in this area. This is a national problem. As I mentioned in my testimony, we move to places where it is possible to build rather than places where people would want to live. Our overall gdp is lower than it was.
▶ 2:29:09Mr. Glaeser: Was. -- it weakens us as a country. Those are the areas most restrictive. I am relying on my colleague's data on upward mobility. It is tragic. There are some parts of america that are great at turning poor kids into middle income adults.
▶ 2:29:44Mr. Glaeser: We don't because of local regulations. It is precisely because these local rules have national consequences. It is appropriate for your committee to take up this issue. It is no longer just an issue for one area. It impacts generations. It makes us less dynamic.
▶ 2:30:08Mr. Glaeser: >> I want to put a finer point on what we have heard from what we consider land-use to be critical to unlocking new housing supply. Last year I introduced a bipartisan bill in the house and have worked to -- these bills would reimagine outdated zoning laws and cut red tape.
▶ 2:30:37Mr. Glaeser: We also know we need a local level support. I want to jump to the issue of breaking down barriers. We need innovation, not just in addition to what we do with land-use, we need innovation, as well. When I think about shared act the affordable homes.
▶ 2:31:09Mr. Glaeser: Still building wealth. Do you think shared equity housing models play a role in addressing the housing crisis? Do they achieve home ownership for moderate income americans?
▶ 2:31:27Ms. Willis: Thank you for the question. Absolutely. I think shared ownership -- I think about community land trust as being a good resource. An example of shared equity model. I would encourage you and your colleagues to expand opportunities. As well as shared equity programs for homeownership.
▶ 2:31:58Ms. Willis: It allows opportunities for people to move into homeownership and to continue. >> I am preparing legislation in this area so I will share that with the committee. I want to thank you all for your testimony and your work for ensuring americans can live a prosperous life. My parents also lived in public housing for a while.
▶ 2:32:30Ms. Willis: To be able to be the first to go into that first home that my parents bought, there is nothing like it.
▶ 2:32:37Chair Scott: Thank you. Senator rochester has been here the entire hearing and I thank her for her patience and her willingness to stick around.
▶ 2:32:54Sen. Alsobrooks: Thank you so much. To this committee and the panelists for being here today. We all recognize that homeownership is a key feature to building wealth in. Our country I think about my parents. My mother has worked as a receptionist, my father was a car salesman. They married at 21 and 22.
▶ 2:33:27Sen. Alsobrooks: At that time in five years of their marriage they could afford to buy a home. That is no longer the case or expectation for my own daughter who is 19. I spent time focused on expanding homeownership, working to building leverage, private sector dollars and public sector dollars. We had 5000 units in a three-year period.
▶ 2:33:51Sen. Alsobrooks: I wonder if you can speak to the need to better allocate private capital into projects that promote home construction and ownership?
▶ 2:34:03Mr. Glaeser: Thank you, senator. I also have a 19-year-old daughter. How utterly implausible a home in seven years would be. Fundamentally, when housing works, private capital went to provide housing where demand was highest. You see this in the data.
▶ 2:34:32Mr. Glaeser: 1950's, 1960's, 1970's across metropolitan areas and in metropolitan areas. The building process helped prices come down. That really ceased. You see that in exhibit 3. Places that are expensive build a lot. The places that build a lot are not expensive.
▶ 2:34:53Mr. Glaeser: The regulatory differences are determining where private capital is going, not the demand. Not the economic core of what makes one place more valuable than another. Nothing -- not the fundamental need. They are shaping more private capital goes. They are shaping where we get new businesses.
▶ 2:35:14Mr. Glaeser: They are being decided at a level -- I love federalism in a lot of different ways and individual choice but none of these town councils are making decisions saying what would be best for america? That is why it is so valuable that your committee is taking up this topic. We need a national voice on this.
▶ 2:35:36Sen. Alsobrooks: Thank you. You made a statement and you said america's housing crisis was a deep, self-inflicted wound. We have heard a lot about tariffs recently. I introduced legislation to produce data to give us an idea about how it will impact cost of homebuilding, which I think and further exacerbate the supply shortage we see.
▶ 2:36:04Sen. Alsobrooks: I wonder what impacts you believe president trump's proposed tariffs will have on imported materials and how it will affect the cost of homebuilding in the united states?
▶ 2:36:18Mr. Glaeser: For 250 years economist thought tariffs impose costs on consumers. That is true. I will not weigh in on whatever the complicated foreign policy dance that is going on that I do not understand. I will not second guess that. If tariffs stay high will impose costs and we will see that over time.
▶ 2:36:41Sen. Alsobrooks: Thank you. Final question for our mayor. In fiscal year 2024, the city of baltimore and your city in dallas received over $30 million in federal support from hud. That includes funding allocated through a home program you have heard a lot about today. I am a cosponsor of the legislation.
▶ 2:37:06Sen. Alsobrooks: Can you talk about the impact on dallas communities if the funding for hud programs is reduced?
▶ 2:37:13Mr. Johnson: Thank you for the question. A similar question was asked earlier and I will give you a similar answer. The specific impact, I do not have the data in front of me to tell you what that has been but I will tell you, as far as the whole array of federal programs aimed at the lower income end of the spectrum, even before I became the mayor, I do see there
▶ 2:37:46Mr. Johnson: Is a value to these programs. They do create some increase year-over-year in the available housing stock aimed at that end of the income spectrum.
▶ 2:38:02Mr. Johnson: My reason for wanting to participate in today's discussion and what I will tell you is I believe that amount, even in a good year is in the 3000-5000-unit range. What we need to be looking at is things that will substantially increase the amount of housing that is available throughout the city of dallas, across income levels.
▶ 2:38:32Mr. Johnson: I am talking about creating enough housing where it relieves pressure for everyone from the young professional, your daughter, if she wants to stop renting an apartment and become a homeowner, and to folks who are currently living in a far suburb but work in dallas, maybe the e.r.a. Ba -- maybe they are a barrista.
▶ 2:39:06Mr. Johnson: We have to force ourselves to get out of this box and only thinking about these federal programs and how much more money we put in. We need to start thinking about wholesale movements along the supply curve. I do not think there is a source other than the private sector to do it. If I really believe government could do it, I would send it, but I do not believe they can.
▶ 2:39:37Mr. Johnson: Simple gallego -- 7400 vouchers. Allocating additional housing to assist families.
▶ 2:40:02Mr. Johnson: Can you talk about the unique challenges and solutions you have seen actually work?
▶ 2:40:09Ms. Willis: Thank you for the question and a housing choice -- the housing voucher act. We are happy to look into this issue but it raises some significant issues because right now, only 1 out of 4 eligible households get help. The others have to fend for themselves.
▶ 2:40:37Ms. Willis: Congress should be working to ensure rental assistance is available universally. To all eligible households.
▶ 2:40:45Sen. Gallego: Thank you. The reason there is a disparity is the housing voucher allocation is based off the 2000 . Census if you are a fast-growing city. You will be disproportionately penalized for having good policies and growing versus some older cities that are essentially atrophying but we are being punished.
▶ 2:41:18Sen. Gallego: The most recent census would be more accurate. We will be working on that legislation, too.
▶ 2:41:26Ms. Willis: I can just add to that. It is important you mentioned data. In terms of the data hud collects. Going back to wanting to protect those programs and the staff at hud, 76% in the office in hud is being threatened to cut the staff.
▶ 2:41:54Ms. Willis: It is important to have that data, to understand the housing issue and how we can correct it.
▶ 2:41:59Sen. Gallego: Talking about cuts , one of the unique states or we have recognized tribes, the largest tribal enrollment in the country. We have a housing challenge. The firing and closing down of some of our offices makes things difficult, especially when we try to apply for housing grants for some travel nations.
▶ 2:42:27Sen. Gallego: I am going to introduce to the record written about our opposition of these offices closing which will exacerbate a housing crisis. I have another question. This is something I have noticed. Many californians are moving to arizona.
▶ 2:42:51Sen. Gallego: Instead of downsizing their homes, they are selling a valuable property for one point $5 million in canada and then moving -- in california. Why are they doing that?
▶ 2:43:08Mr. Glaeser: Thank you for that question. I think the appeal of arizona should be obvious to anyone.
▶ 2:43:19Sen. Gallego: I could go on and on. [laughter] but the reason they are selling their house at $1.2 million. It is a paid off house. A retired couple, man and woman, partner, whatever, instead of getting a nice house or condo and then pocketing the rest of the money, they are not doing that. I am not trying to trap you.
▶ 2:43:47Mr. Glaeser: If you go to a place where housing is cheaper, you buy more house. I would not be surprised if they spent $1.8 million.
▶ 2:44:01Sen. Gallego: The reason is because if that family sells that house and they do not buy a house close to the value they will end up paying capital gains. Instead of paying the government the money -- I agree they should not. That -- we should figure out a way to give them a capital gains tax cut.
▶ 2:44:31Sen. Gallego: They would come to arizona, buy a smaller place and then keep that money for their own retirement. Instead they are buying an equivalent house. How are we incentivizing these well-to-do retirees into buying houses that they do not need to buy? With that, I apologize for going over time.
▶ 2:45:00Chair Scott: Sounds like an opportunity for us to work together. Increasing the amount of money you do not have to pay capital gains on. Let me just say, what a wonderful hearing we have had today across the country. We all leave better educated. We want to thank you all for traveling to be with us.
▶ 2:45:31Chair Scott: It has been an illuminating hearing. I pray there will be legislation on the president's desk this year to have housing reform that leads to more housing. Housing affordability issues are important to this committee and to me, personally. For senators who wish to submit questions, those questions are due.
▶ 2:45:59Chair Scott: You have 45 days from that day to submit your responses to questions for the record. Thank you so much. This committee is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]