The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing, “Priced Out: The State of Housing in America,” on July 21. Witnesses included Dr. Lawrence Yun (National Association of Realtors), Dr. Douglas Holtz-Eakin (American Action Forum), and Peggy Bailey (Center on Budget and Policy Priorities). The hearing focused on rising housing costs, policies to address the housing shortage, and programs to help the lowest-income families afford rent, such as the Housing Choice Voucher (HCV) program.
“We talk about housing so much because it is the foundation of everything else in our lives,” said Committee Chair Sherrod Brown (D-OH). “Home health aides, nursing assistants, and restaurant workers working full-time have long been paid too little to afford even a one-bedroom apartment, let alone be able to fulfill the dream of even owning their own home…The answer is clear: we need more housing. We need more housing available to buy for the millions of homeowners just starting out. We need more housing for renters, especially those with the lowest incomes.”
Dr. Lawrence Yun reported that lack of housing supply is not a new phenomenon. Since the 2008 recession, the housing supply shortage has continued to intensify due to a slowdown in homebuilding that has yet to reverse. In 2022, the Federal Reserve (“Fed”) began to raise interest rates to combat inflation, causing monthly mortgage rates to rise. In response to an inquiry from Senator Brown about the effect of rising mortgage rates on the rental market, Dr. Yun explained that “[h]omebuying demand has softened. People who thought they could buy homes are staying in rental units and rents are rising. We have very low vacancy rates for housing.” In response to another question from Senator Brown, Peggy Bailey said that “the lowest income families feel the pressures [of rising rental prices] the most.”
To address rising rental costs, Ms. Bailey encouraged the Senate to expand housing vouchers for the lowest-income families, increase capital funding for deeply affordable rental housing, prevent the loss of existing affordable housing, remove barriers to homeownership, and address the unique affordable housing needs on tribal lands. Ms. Bailey also addressed the different housing needs in rural areas in response to an inquiry from Senator Jon Tester (D-MT), stating that “[rural housing issues] need to be addressed in a different way. We need manufactured housing. We need tools to be able to finance smaller projects, so they blend into the community.” While programs such as the Low-Income Housing Tax Credit (LIHTC) help increase affordable housing supply, LIHTC is not specifically designed to finance smaller projects in rural areas. NLIHC supports key reforms to these housing credits, especially reforms that would boost housing credit investments in rural communities to better serve the lowest-income households.
In response to an inquiry from Senator Reverend Raphael Warnock (D-GA), Ms. Bailey said that “the most immediate thing that we can do to help renters is to provide rental assistance, mainly through the housing choice voucher program, that can immediately give renters the relief that they need to be able to afford…food, transportation, clothes, and school supplies.” HCVs help low-income households find affordable housing in the private housing market by reimbursing the landlord for the difference between 30% of a household’s income and the cost of rent. NLIHC advocates protecting and expanding the HCV program, also known as Tenant-Based Section 8, with the goal of expanding the program so that every eligible household is able to receive the assistance they need.
View a recording of the hearing and the witnesses’ testimony here.