Housing Subcommittee Holds Hearing on Increasing Housing Supply 

March 11, 2025

The House Financial Services Subcommittee on Housing and Insurance held a hearing on March 4 titled "Building Our Future: Increasing Housing Supply in America." 

Why it matters: The hearing focused on the ongoing housing affordability crisis, the supply-demand imbalance, and potential policy solutions that have some bipartisan appeal.

Key Takeaways for CREFC Members:
 
  • Regulatory Reform: Both parties recognize that zoning and permitting processes can slow the production of housing supply, but federal intervention in local zoning remains contentious.
  • Construction Costs & Financing: Rising labor and material costs continue to challenge developers, and access to capital for small and mid-sized builders is a major concern.
  • HUD’s Role: Proposed cuts to HUD funding could impact affordable housing initiatives, potentially affecting the Low-Income Housing Tax Credit (LIHTC) and Community Development Block Grant (CDBG) programs.
  • Insurance: The National Flood Insurance Program (NFIP) was not a major focus, but broader discussions on insurance markets and their impact on housing affordability arose.
  • Legislation Outlook: Bills aimed at streamlining regulations, incentivizing housing development, and increasing local accountability are gaining bipartisan interest, but their passage remains uncertain.

What they’re saying: Subcommittee Chairman Mike Flood (R-NE) emphasized that the root of the affordability crisis is the lack of housing supply, estimating a national shortage of 3.85 to 5 million units. Ranking Member Emanuel Cleaver (D-MO) highlighted concerns over rising rents and housing costs, particularly for low- and middle-income families.

  • Republicans largely focused on cutting regulations at the local and federal levels to speed up housing development.
  • Democrats emphasized maintaining fair housing protections and expressed concerns over reported U.S. Department of Housing and Urban Development (HUD) budget cuts under the Trump administration.
  • Both sides agreed that restrictive zoning laws, high construction costs, and regulatory barriers at the state, local, and federal levels exacerbate the housing crisis.

Witness Testimonies Highlights:

  • Paul Compton (Former HUD General Counsel):
    • Argued that overregulation at state and local levels is a primary driver of high housing costs.
    • Suggested exempting HUD programs from National Environmental Policy Act (NEPA) environmental reviews to speed up housing projects.
    • Recommended utilizing federal land, particularly military bases, for housing development.
  • Dr. Emily Hamilton (Mercatus Center, George Mason University):
    • Advocated for reforming zoning regulations, including eliminating minimum lot sizes and restrictions on manufactured housing.
    • Suggested that HUD should publish model zoning policies and that Congress should repeal Washington, D.C.'s Height of Buildings Act of 1920 to encourage denser development.
  • Buddy Hughes (National Association of Home Builders):
    • Identified the five L’s as key obstacles: Lending, Lots, Labor, Lumber, and Laws.
    • Called for easing AD&C (Acquisition, Development & Construction) lending restrictions, increasing workforce training programs, and stabilizing building material costs.
  • Tara Vasicek (City Administrator, Columbus, Nebraska):
    • Shared Columbus’ approach to streamlining permitting, revising zoning codes, and using local sales tax revenues to fund housing projects.
    • Expressed concerns over federal stormwater management regulations, which increase costs and discourage development.
  • Nikitra Bailey (National Fair Housing Alliance):
    • Warned against reducing HUD funding, arguing that fair housing enforcement and tenant protections are critical.
    • Advocated for greater investment in affordable housing programs, particularly for workers such as teachers and first responders.

    Potential Legislative Fixes:

    • Identifying Regulatory Barriers to Housing Supply Act: This bill would require local governments receiving federal housing funds to assess how their own land use policies impact affordability.
    • Housing Supply and Innovation Framework Act: This proposal would direct HUD to develop zoning best practices to encourage higher-density and more cost-effective housing solutions.
    The hearing underscored a growing bipartisan consensus on the need for more housing supply, but deep divisions remain on how much federal involvement is appropriate.
     

    Contact David McCarthy (dmccarthy@crefc.org) with any questions.

    Contact  

    David McCarthy
    Managing Director,
    Chief Lobbyist, Head of Legislative Affairs
    202.448.0855
    dmccarthy@crefc.org
    The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2025 CRE Finance Council. All rights reserved.

    Become a Member

    CREFC offers industry participants an unparalleled ability to connect, participate, advocate and learn!
    Join Now

    Sign Up for eNews