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.