The House Financial Services Committee [1]held a hearing on Thursday and discussed several pieces of legislation related to housing and the current affordability crisis.
Among the bills heard during the markup-hearing were:
- H.R. 149 [2]: Housing Fairness Act of 2020
- H.R. 4351 [3]: Yes In My Backyard Act (YIMBY)
- H.R. 5187 [4]: Housing Is Infrastructure Act
- H.R. 5931 [5]: Improving FHA Support for Small-Dollar Mortgages Act of 2020
Committee Chairwoman Maxine Waters said she was pleased that the committee marked up 69 bills—55 bills were passed by the House and 50 had bi-partisan support.
“In 2020, this committee will continue to address the challenges that face Americans, and ensure the economy is fair for everyone,” Waters said.
Waters’ Bill, H.R. 5187, would authorize more than $100 billion in federal spending for the nation’s affordable housing infrastructure, which includes public housing, supportive housing for seniors and the disabled, and rural and native housing.
“Affordable housing remains an important issue for this committee as well as the country. Committee Republicans agree there is no place for discrimination in society,” Committee member Patrick McHenry said. “We need to ensure HUD, state, and local enforcement entities have the tools they need to enforce the Fair Housing Act.”
McHenry added the country needs to bring housing programs into the 21st century, and while he commends Waters’ bill, he said: “I don’t believe giving $100 billion to America’s east and west-coast cities is the solution.”
“This approach will not increase housing availability or reduce the number of Americans who go homeless every night,” he said.
McHenry, however, delivered praise to H.R. 4351, which he called a “good step forward” in understanding local barriers to housing.
“We need to look at local zoning laws. We need to look at the regulatory barriers and we need to look at the local processes and procedures that are harming our cities,” McHenry said.
The legislation would require cities that receive Community Development Block Grant funding to submit a plan to track and report the implementation of land-use policies that promote housing production.
Kim Hart, Managing Editor for AXIOS, appeared on CNBC [6]in October 2019 to discuss the YIMBY moment. She said San Francisco was “ground zero” for rising home prices since the Great Recession, with home prices near $1 million and $1.7 million.
“You’re starting to see more and more people say, ‘well, you know what, the answer to this is to increase the supply. To help meet that demand. We have to build more houses and we have to build more units beyond single-family houses,’” Hart said.
Also under consideration Thursday was H.R. 5931, which would require the Federal Housing Agency (FHA) to conduct a review of all policies and identify barriers to supporting mortgages under $70,000. The FHA would be required to report to Congress within a year with a plan to remove such barriers.
The bill’s author, committee member Lacy Clay, said the legislation’s goal is to close the affordable housing gap.
Clay referenced an Urban Institute report that found despite having similar indicators, financing options to purchase, refinancing, and renovate homes under $70,000 is limited when compared to mortgages between $70,000 and $150,000.
He added that small-dollar mortgage applications in 2017 were denied at doubled the rate by lenders when compared to large-mortgage loans. Clay said the report states the FHA is “disproportionately failing to serve this market.”
Clay said the FHA served 24% of the entire housing market but just 19% of small-dollar mortgages. He added a quarter of the 640,000 homes priced under $70,000 solid in 2015 were financed through a mortgage, as most were cash purchases by investors.
“While cash-rich investors can dominate small-dollar housing inventory in low-cost markets, through cash purchases individual borrowers to lend on traditional mortgage products and the lack of access to such products can be a substantial barrier to homeownership,” Clay said.
Clay continued, saying research has found that homes making at least $75,000 annually, who previously would have been homeowners, accounted for 75% of the rental market growth between 2010 and 2018.
“Increasing access to small-dollar mortgages could be one way to help shift these households back into homeownership,” Clay said.
The committee approved the legislation to the House for consideration.