Senate Banking Committee Holds Hearing on State of Housing

The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing, “The State of Housing 2023,” on February 9. Witnesses included Christopher Herbert, managing director of Harvard University’s Joint Center for Housing Studies; Robert Dietz, chief economist and senior vice president for economics and housing policy at the National Association of Home Builders; and Lance George, director of research and information at the Housing Assistance Council. The witnesses discussed the ways the COVID-19 pandemic has exacerbated the affordable housing crisis, summarized issues confronting renters and builders, and shared ideas about strategies that could help address these problems.

Committee Chairman Sherrod Brown (D-OH) began the hearing by drawing attention to the bipartisan collaboration involved in the selection of witnesses and the importance of adopting such an approach in gauging the nation’s current state of housing. Chair Brown reflected on the committee’s past actions and recommitted the committee to addressing housing, transit, and community development, explaining that “we’re starting this Congress with a hearing on housing because it is one of the most important issues facing families.” Chair Brown also emphasized the ubiquity of housing affordability challenges, which include rent increases, growing cost burdens for renters, and the worsening shortage of affordable housing, and argued that combatting the problem requires close collaboration across party lines.

Ranking Member Tim Scott (R-SC) agreed with the Chairman’s outline of the affordable housing crisis but recommended a different path in addressing it: curbing federal spending to reduce inflation. Ranking Member Scott criticized the Biden administration for ending federal apprenticeship programs and failing to address domestic supply chain bottlenecks. Citing the disparities in Black homeownership rates, Senator Scott called for the federal government to “begin responsibly helping families rather than doubling down on programs that fail to generate results.”

Christopher Herbert called housing market trends over the last few years “a roller coaster ride.” Dr. Herbert highlighted how the pandemic enhanced housing demand and restricted supply, which led to home prices and rents increasing at a “dizzying pace.” Mr. Herbert also pointed out the need for investments in housing to address the needs of an aging population and a rapidly deteriorating housing stock.

Senator Elizabeth Warren (D-MA) asked Herbert about the federal government’s role in protecting tenants. Herbert referenced the importance of tenant protections to the health and well-being of renters, citing the nationwide eviction moratorium as one such successful protection, and pointed to a number of federal statutes that guarantee fair treatment for all homebuyers in the private market. Senator Warren emphasized the need for a multifaceted approach to addressing the affordable housing crisis that addresses not only supply but renter protections, stating that “the problems that renters face go beyond the supply problem. In too many places across the country, renters have few protections, from needless evictions to excessive fees and exorbitant rent hikes.”

Robert Dietz identified “the primary and persistent problem” in the housing market as the lack of attainable, accessible housing. Dr. Dietz noted that the causes of underbuilding are complex and listed the “5 L’s” that limit housing production: labor, lots, lending, lumber, and laws. Dr. Dietz attributed the nationwide rise in housing costs to a lack of skilled labor, the high cost of building materials, the challenges of accessing construction financing, the existence of burdensome federal regulations, and counterproductive local land use policies. He argued that without alleviating these supply-side bottlenecks, housing costs – which account for approximately 40% of the Consumer Price Index – would continue to be a persistent driver of inflation.

Lance George summarized the needs of rural Americans, who make up 18% of the country’s population and reside in approximately a quarter of the nation’s homes. Rural markets, like urban markets, have been impacted by rising rents: 44% of rural renters are cost-burdened, and nearly half of these renters are paying more than 50% of their income towards housing costs. Mr. George stated that “race matters… especially in rural housing.” In areas like the Lower Mississippi Delta, border colonias, Native American lands, and regions visited by migrant seasonal farmer workers, residents live in homes that are twice as likely as homes in the rest of the country to be substandard and inadequate. Citing the needs of residents in rural Ohio, Chairman Brown asked Mr. George about the impact of allowing affordable Section 515 units to expire. Mr. George said that the impacts would be “profound and multiplying”: if Congress were to allow every Section 515 unit to expire, between 350,000 and 400,000 affordable rental units would be lost, and “tenants in these properties are among the most vulnerable,” having incomes just above $13,000 on average.

Watch the hearing and read the testimony at: