The U.S. House of Representatives’ Committee on Financial Services held a hearing, “Boom and Bust: The Need for Bold Investments in Fair and Affordable Housing to Combat Inflation,” on December 1. Witnesses included Nikitra Bailey, executive vice president of the National Fair Housing Alliance; Margaret Eaddy, activist and housing seeker; Michael Mitchell, director of policy and research at Groundwork Collaborative; Mark Zandi, chief economist at Moody’s Analytics; and Douglas Holtz-Eakin, president of the American Action Forum. Witnesses discussed the current housing crisis, the economic pressures families are facing due to inflation, and strategies to build more fair and affordable housing.
Committee Chairwoman Maxine Waters (D-CA) opened the hearing by noting that high housing costs are the primary driver of core inflation. She stressed the importance of congressional action to target investments for building deeply affordable homes, lower housing costs, and create more jobs to boost local economies.
Nikitra Bailey highlighted the challenges families across the country face due to the housing crisis, especially families of color who were hit hardest by the COVID-19 pandemic. Rental housing prices rose 17.6% in 2021, far outpacing wage increases. Housing costs account for 40% of the core inflation rate, and housing costs continue to be the single largest expense for the average consumer. With a shortage of 7 million affordable homes for extremely low-income renters, Ms. Bailey called on Congress to prioritize housing investments to increase housing availability and accessibility. Most importantly, Ms. Bailey discussed the need to adopt inclusive housing practices: “It is critical to embed fair housing into every action. The nation needs a comprehensive housing strategy rooted in equity.”
Margaret Eaddy shared her family’s struggle to obtain housing after being evicted due to financial hardship brought about by the pandemic. She shared that landlords often have unreasonable requirements, such as high deposit fees and proof of income three times higher than monthly rent. Ms. Eaddy and her family were able to find one rental unit, but their landlord failed to renew their lease and increased the rent beyond what they could afford. Ms. Eaddy and her husband currently live out of their vehicle.
“When you’re homeless, everything is stripped from you,” said Ms. Eaddy. “When people have stable housing, it allows them to do so much more with their life.” In response to a question from Chair Waters, Ms. Eaddy said, “[Housing investments] would give us back our identity and dignity, allow us to feel safe again, and allow us to feel like we are human again.”
Responding to a question from Congresswoman Madeleine Dean (D-PA) about the importance of prioritizing access to safe, stable housing, Ms. Eaddy noted that “getting housing first would bring stability. We could wake up everyday and we are safe. Now we can get back to the life of things because we have stability.”
NLIHC supports Housing First, the most effective strategy to combat homelessness. Under the Housing First model, stable, affordable, and accessible housing is provided to people experiencing homelessness quickly and without prerequisites, and voluntary supportive services are offered to help improve housing stability and well-being. It is a flexible model that can be adapted to address the unique needs in local communities and tailored to the challenges facing individuals.
Michael Mitchell discussed strategies to combat inflation and boost housing supply. Mr. Mitchell argued that the aggressive approach by the Federal Reserve to combat inflation by increasing interest rates is disproportionately harming marginalized workers, as larger corporate landlords are using the rate increases as an opportunity to increase rent and boost profits. “Congress will need to act to ensure that families have access to affordable housing,” stated Mr. Mitchell.
In response to a question from Congressman Jim Himes (D-CT), Mr. Mitchell said that besides critical housing tax subsidies, continued public investment in the national Housing Trust Fund (HTF) is needed to renovate existing housing stock. The HTF is the first new housing resource since 1974 targeted to the building, rehabilitating, preserving, and operating of rental housing for extremely low-income people. NLIHC strongly supports increased investments in the HTF to ensure the preservation and operation of existing rental housing for extremely low-income households.
Mark Zandi focused on the need for congressional policies to fight both inflation and rising housing costs. With a shortage of an estimated 1.6 million homes – and a shortage of 7 million deeply affordable rental homes – Dr. Zandi emphasized that Congress needs to adopt policies to alleviate the shortage and increase housing supply, such as the Low-Income Housing Tax Credit (LIHTC). In response to Congressman Roger Williams (R-TX), Dr. Zandi highlighted how LIHTC can address the acute shortage of affordable rental housing for extremely low-income households.
NLIHC supports Low-Income Housing Tax Credit (LIHTC) expansion and reform in a tax extenders package Congress may consider before the end of the year. In addition to expanding LIHTC, NLIHC strongly urges Congress to include reforms (see Memo 11/14) to incentivize developers to invest in rural and tribal communities and better target resources to meet the needs of extremely low-income households (see Memo 9/26).
NLIHC President and CEO Diane Yentel submitted a Statement for the Record emphasizing the absolute shortage of affordable housing for extremely low-income households and the need for long-term solutions to the housing crisis for households with the greatest needs.
Learn more about Housing First at: bit.ly/3H0JSun
Read NLIHC’s Statement for the Record at: bit.ly/3HagfqF
Read witnesses’ testimony and watch a recording of the hearing at: bit.ly/3Fjv4FI