Building Our Future: Increasing Housing Supply in America

House Subcommittee on Housing and Insurance

2025-03-04

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Summary

This meeting of the Subcommittee on Housing and Insurance addressed the critical issue of increasing housing supply and affordability in America, highlighting a nationwide crisis affecting various demographics from towering cities to rural communities. Discussions centered on identifying the root causes of the housing shortage and rising costs, exploring solutions ranging from regulatory reform to federal investment, and examining the impact of current governmental policies. [ 00:20:55-00:21:09 ] [ 00:21:58-00:22:20 ]

Themes

Housing Affordability Crisis

The United States is grappling with a severe housing affordability crisis, marked by substantial increases in median home prices and rents, even when adjusted for inflation. [ 00:22:13-00:22:45 ]

Many young individuals and middle-class families are struggling to afford housing, leading to extended renting periods and financial insecurity. [ 00:22:28-00:22:45 ] A significant housing supply deficit, estimated between 3.85 million and over 5 million units, is identified as a primary driver of high costs. [ 00:23:45-00:23:54 ] Furthermore, it is noted that 77% of U.S. households cannot afford a median-priced new single-family home, with every $1,000 increase in home cost pricing out approximately 106,000 additional households. It was also highlighted that homelessness is ultimately more expensive for the federal government than housing programs.

Regulatory Barriers to Housing Supply

A major theme was the impact of regulatory barriers, particularly at state and local levels, on housing supply and affordability. [ 00:24:17 ]

Zoning ordinances, land use policies, and building codes are cited as key impediments that increase costs and complicate development. Federal regulations, such as HUD's National Environmental Policy Act (NEPA) requirements, are criticized for causing significant delays and expenses without proportional environmental benefits. [ 02:11:22-02:11:30 ] Similarly, energy efficiency mandates from HUD and USDA were flagged for adding costs that homes cannot recoup through savings, especially for entry-level housing. [ 02:09:21 ] Specific local examples like EPA's stormwater management policies were mentioned for adding hundreds of thousands of dollars to subdivision costs. The federal requirement for manufactured homes to sit on a permanent steel chassis was also identified as an unnecessary cost and barrier to flexibility.

Workforce and Material Costs

The discussion identified a range of factors constraining housing supply, encapsulated by the "five L's": Lending, Lots, Labor, Lumber, and Laws. A critical shortage of skilled labor in the construction industry, with over 300,000 open positions, significantly hampers building efforts. Instability and high costs in material supply chains, especially lumber, further inflate housing prices, exacerbated by tariffs on imported materials. Increased immigration was suggested as a potential short-term solution to address the labor gap. [ 01:43:06 ]

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Federal Funding and HUD's Role

There was a strong call for bipartisan federal legislation to address housing challenges. Specific support was voiced for legislation like the "Identifying Regulatory Barriers to Housing Supply Act" and the "Housing Supply and Innovation Framework Act." However, significant concerns were raised regarding reported actions to reduce HUD's funding and staff, which members feared would severely undermine the department's capacity to address the housing crisis and enforce fair housing laws. Despite housing being a central concern, HUD's budget represents only a small fraction (1%) of overall federal spending, suggesting an underinvestment in critical housing programs. [ 01:52:00 ]

The "Housing Crisis Response Act," proposing $150 billion for fair and affordable housing, was highlighted as a comprehensive solution, including support for first-generation down payment assistance.

Local Initiatives and Innovations

Several successful local strategies were presented to combat housing shortages. Columbus, Nebraska, was lauded for proactive measures such as removing local regulatory barriers to density, direct investment in housing development, and utilizing tax increment financing (TIF). The city also leverages local sales tax revenue and grants for workforce housing and efficient permitting. The increasing use of Accessory Dwelling Units (ADUs) was noted as a popular and effective way to expand housing options. [ 01:27:20-01:27:23 ]

Additionally, a shift from mandating affordable housing percentages to incentivizing it through general fund tax dollars was suggested as a more equitable approach.

Tone of the Meeting

The meeting's tone was largely serious and concerned, reflecting the widespread agreement on the severity of the national housing crisis. [ 00:22:06 ]

There was an expressed bipartisan desire to collaborate and find solutions to improve the quality of life for American families. [ 00:21:33 ] However, the discussion became contentious at points, particularly regarding the role of government regulation and the current administration's impact on HUD and housing costs. [ 01:14:19-01:14:21 ] [ 01:21:29-01:21:53 ] Ranking Member Waters vehemently criticized current policies, including tariffs and reported HUD staff reductions, arguing they exacerbate the crisis and undermine efforts to ensure fair housing. While some members advocated for deregulation as the primary solution to boost supply, others emphasized the critical need for sustained federal investment and robust fair housing protections. [ 01:52:14 ] A shared concern for the younger generation's ability to achieve homeownership was evident across the aisle. [ 02:05:19-02:05:26 ]