HOME 2.0: Modern Solutions to the Housing Shortage

House Subcommittee on Housing and Insurance

2025-07-16

Loading video...

Source: Congress.gov

Summary

The Subcommittee on Housing and Insurance convened a hearing titled "Home 2.0, Modern Solutions to the Housing Shortage" to discuss the modernization of the Department of Housing and Urban Development's (HUD) Home Investment Partnership Program (HOME)[ 00:08:20 ]

Citation requires full transcript

Sign in to continue

Sign in
. This hearing brought together members of Congress and expert witnesses to explore ways to improve the program's efficiency and impact on the national housing crisis[ 00:08:52-00:08:56 ]

Citation requires full transcript

Sign in to continue

Sign in
.

Themes

Modernization of the HOME Program

The HOME program, established in 1990, is identified as needing modernization due to its long history without statutory changes or reauthorization, making it "ripe for a remodeling itself"[ 00:09:51 ]

Citation requires full transcript

Sign in to continue

Sign in
. Chairman Flood emphasized the need to increase housing supply to curb rising housing costs, viewing the HOME program as a key tool for this purpose[ 00:10:09-00:10:34 ]

Citation requires full transcript

Sign in to continue

Sign in
. Ranking Member Cleaver also highlighted that the program operates on an expired authorization and requires modernization to address the urgent need for more housing supply across the nation[ 00:12:56 ]

Citation requires full transcript

Sign in to continue

Sign in
. Both emphasized extensive bipartisan work, including soliciting feedback from over 140 organizations and conducting six hours of meetings to develop proposed legislation[ 00:10:58-00:11:20 ]

Citation requires full transcript

Sign in to continue

Sign in
.

Impact of Regulatory Requirements (The "Four Horsemen")

Several regulatory requirements, termed the "four horsemen of the housing apocalypse" by Chairman Flood, were identified as pain points that drive up housing costs and delay projects[ 00:11:33-00:11:37 ]

Citation requires full transcript

Sign in to continue

Sign in
.

  • Witnesses universally agreed that environmental review requirements increase project costs and time, often due to duplicative processes and delays. Ms. George and Mr. Oberdorfer recommended ensuring only one environmental review per project to streamline the process. Mrs. Potts shared an example where environmental reviews for post-tornado rebuilding took nearly three years, causing significant hardship.
  • BABA requirements were cited for increasing costs, causing delays, and making it difficult for contractors, particularly small businesses, to source materials and comply with confusing rules[ 00:11:48 ]

    Citation requires full transcript

    Sign in to continue

    Sign in
    . Habitat for Humanity and NARO advocated for exempting HOME projects from BABA, noting the current challenges in the manufacturing and construction industry to meet these demands.
  • These regulations add significant administrative burden and cost, especially for smaller contractors and in rural areas, making it harder to find willing bidders[ 00:11:50 ]

    Citation requires full transcript

    Sign in to continue

    Sign in
    . All witnesses agreed on increasing the unit threshold for Davis-Bacon applicability, with a common recommendation being 50 units, to facilitate projects in underserved areas.
  • These requirements also contribute to difficulties in finding contractors, particularly in rural areas with existing workforce challenges.

Funding and Program Flexibility

The HOME program is recognized as a vital investment, leveraging substantial private capital and generating significant economic activity, with $1 of HOME funding leveraging nearly $5 in additional private investment. Witnesses expressed strong concerns about proposed appropriations cuts that would eliminate or significantly reduce HOME funding, arguing it would be "devastating" for affordable housing creation. The flexibility of the HOME program to adapt to local needs was highly praised, allowing states like Colorado to pilot innovative programs such as tenant-based rental assistance for homeless children identified through schools. Recommendations for improving flexibility include increasing the administrative cap and eliminating the 24-month commitment deadline, which currently poses challenges for developers, particularly smaller ones. There were also discussions about the impact of expanding eligibility to higher Area Median Income (AMI) levels, with concerns that it could dilute funds for the most vulnerable unless accompanied by increased program funding[ 01:13:27-01:13:57 ]

Citation requires full transcript

Sign in to continue

Sign in
.

Tone of the Meeting

The meeting maintained a largely bipartisan and collaborative tone, with Chairman Flood and Ranking Member Cleaver frequently highlighting their joint efforts in developing the HOME program reforms[ 00:12:08 ]

Citation requires full transcript

Sign in to continue

Sign in
. There was a general consensus among witnesses and many members on the urgent need to address the housing shortage and modernize the HOME program by streamlining regulations. However, the discussion also saw moments of passionate debate, particularly from Ms. Garcia, who expressed strong disappointment and concern that proposed reforms to ease regulatory burdens might compromise housing quality, worker protections, and "Buy American" principles. Despite these debates, the overall sentiment leaned towards finding practical, efficient solutions to the housing crisis while emphasizing the critical importance of sustained funding for the HOME program[ 00:38:23 ]

Citation requires full transcript

Sign in to continue

Sign in
.

Participants

Transcript

The Subcommittee on Housing and Insurance will come to order.  Without objection, the chair is authorized to declare a recess of the committee at any time.  This hearing is titled Home 2.0, Modern Solutions to the Housing Shortage.  Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record.  I would remind all members and witnesses we do have an open vote on the floor at this time, so the committee   reserves the right to recess for purposes of that, but we are convening this hearing today in a spirit of bipartisanship.  I recognize myself for four minutes for an opening statement.  First, I'd like to thank all of our witnesses for being with us today.  I very much look forward to hearing your testimony on the Department of Housing and Urban Development's Home Investment Partnership Program.  For those who are not familiar with it, the Home Program was created in 1990 with the passage of the   Cranston-Gonzalez National Affordable Housing Act.  The HOME program provides block grant funding to states and municipalities for the purpose of building and rehabilitating affordable housing.  In practice, HOME is often used as a gap financing tool for housing projects often in conjunction   with LIHTC, the Low Income Housing Tax Credit.  Since the early 1990s, the program has continued to be funded without many statutory changes and without a reauthorization.  In other words, the home program is ripe for a remodeling itself, a fresh look from this committee.  Our work in this subcommittee this year has been focused on one thing, and that's addressing rising housing costs in this country.   The one way to curb rising housing costs is to increase housing supply.  No amount of rental assistance, down payment assistance or other demand side subsidies will get us out of our housing cost problem.  We need to build more housing in this country and that's the only solution that will move the needle.  The underlying supply problem is what made me so interested in the home program to begin with.
Home is a program within our jurisdiction   that is specifically geared towards building housing supply.  I figured it would make sense to take a closer look at home and figure out what works with the program, what doesn't work with the program, and what we could change.   To that end, I'm proud to say that I've been working very closely with my colleague, Ranking Member Cleaver, to get to the bottom of those questions.  In April, you might have seen it, the two of us released a video requesting comments from states, cities, nonprofits, and developers on the HOME program.  We received over 140 letters from organizations across the country in response.   In May, the two of us sat together in a room for six hours, meeting with different requesters and asking them questions on how they would change the home program.  Now, finally, we have a public hearing on this topic.  In the comments we received from a diverse set of stakeholders, there were four themes that came up repeatedly as pain points   that drive up housing costs in the home program.  They are what I call the four horsemen of the housing apocalypse.  The environmental review requirements, that's the first one.  These delay a project's start and often drive up its costs.  Number two, the Build America, Buy America requirements that drive up the cost of critical construction materials.  Number three, the Davis-Bacon requirements that from what I've heard are much more costly due to the associated reporting requirements than they are for the actual cost of paying the prevailing wages.   and Section 3 requirements that make it more difficult to find contractors to do the job, particularly in rural areas with some of the workforce challenges I mentioned.  We all agree that individually, each one of these requirements have a noble purpose, but when you put them all together, it makes it harder to address the supply problem   in a less costly way.  The legislation attached to this hearing intends to address each of these four factors that drive up costs in the home program.  Additionally, it seeks to provide a little more flexibility for jurisdictions to use funds to build more supply rather than for the permissible demand side uses of the program.
I expect our conversation today, members and witnesses may raise things they'd like challenged within this draft.   That's okay.  In fact, it's more than okay.  That's why we're here.  As I close, I want to thank ranking member Cleaver for working in such good faith with me over the last several months.  It's been a pleasure to develop a closer relationship with him through this process.  With that, I'm excited to hear testimony from our witnesses on the home program and housing supply.  And with that, I yield back.  I now recognize the ranking member of the subcommittee, Mr. Cleaver, for five minutes for an opening statement.

Sign up for free to see the full transcript

Accounts help us prevent bots from abusing our site. Accounts are free and will allow you to access the full transcript.

Sign up