The House Subcommittee on Housing and Insurance on Tuesday afternoon held a hearing to examine the effect of government regulations on the cost of housing—and whether those regulations are hindering or promoting affordability.
Subcommittee Chairman Blaine Luetkemeyer (R-Missouri) has been an outspoken critic of government regulation when it comes to housing and the financial industry. Last week, he told a group of bankers that they need to “find a way to neuter” Dodd-Frank advocate Sen. Elizabeth Warren (D-Massachusetts) and called her “the Darth Vader of the financial world.” Warren responded by saying if Republicans want to try to roll back Dodd-Frank, “Let’s have that fight. I’m ready.”
In Tuesday’s hearing, titled “The Future of Housing in America: Government Regulations and the High Cost of Housing,” Luetkemeyer was critical of the government’s intervention into housing.
“Government has inserted itself into the business of housing by mandating affordable housing and community reinvestment while simultaneously stifling creation of affordable housing and community reinvestment. It’s time to promote the development and availability of housing for low- to mid-income Americans, not restrict it,” Luetkemeyer said. “So today we ask ourselves: where do people go when they reach self-sufficiency? Is the stock of affordable market-rate housing plentiful enough to support the people seeking it? The unfortunate answer is no.”
According to a release from the Subcommittee on Tuesday afternoon, housing demands in the American housing market have changed since the financial crisis in 2008, and that federal housing regulations are “too antiquated” to address future consumers’ housing needs. The Subcommittee further stated it believes that regulatory barriers are inhibiting the development and preservation of rental housing—and affecting the cost of building and maintaining affordable housing.
“While overall homeownership rates have dropped, rental rates have been rising,” said Mechele Dickerson, Professor, the University of Texas at Austin School of Law, a witness at the hearing. “Since the recession, the number of renters in the U.S. increased by double digits. In fact, recent survey results show that renters are now the majority in nine of the 11 largest U.S. metropolitan areas. While there is a robust market for high-end, luxury apartments, affordable rental units are not being built at a rate that is keeping pace with the heightened demand for those units. It is especially difficult for middle-income families to find affordable rental units in large U.S. cities.”