Housing crisis comes to Capitol Hill

Congress is feeling the pressure of the affordable housing crisis, as lawmakers hear from constituents about their struggle to buy or rent homes they can afford. While there’s little consensus on which policies will most effectively provide relief to cost-burdened Americans,  there’s no shortage of ideas. 

At a Senate Budget Committee hearing on Wednesday, housing experts described the need for additional funding to keep more Americans housed. It’s a common refrain in the affordable housing field: There just aren’t enough resources to provide stable, affordable housing for all those who need it. 

Half of Americans are spending more than one-third of their income on housing costs—and many spend at least 50%, according to a recent study. And the emergency rental assistance program that kept many families housed throughout the pandemic has ended, leaving many struggling to make rent. 

One federal program, the U.S. Department of Housing and Urban Development’s housing choice voucher program offers one  of the most powerful benefits for renters, but for every household that receives a Section 8 housing voucher, there are three eligible households that don’t. 

“...Getting assistance is like hitting the lottery,” said Peggy Bailey, ​​vice president of housing and income stability at the Center for Budget and Policy Priorities, during her testimony. 

Closing the massive gap between average incomes and average housing costs will take congressional intervention, she added, including increased funding for rental assistance programs, investments in affordable housing rehabilitation and stronger tenant protections.

State and local governments specifically need more funding to build affordable housing and provide assistance to residents, said Kevin Boyce, a county commissioner from Franklin County, Ohio, and co-chair of the National Association of Counties’ housing task force. He said that compliance requirements for federal funding often burden local governments and slow the distribution of assistance, suggesting that it’s time to modernize and streamline the processes behind the funding. 

Counties have limited governing authority compared to cities and states but play an important role in administering housing and homeless services, making intergovernmental alignment all the more important to “ensure that we have the required tools to reduce the cost burden facing our homeowners and residents,” he said. 

Congress will consider legislation this year to help ease the affordable crisis. Sen. Sheldon Whitehouse, a Democrat from Rhode Island and chairman of the budget committee, said he plans to introduce several bills over the next few months, including one that would provide first-time, low-income homebuyers a $15,000 refundable tax credit. 

Other proposals Democrats are pushing include the Decent, Affordable, Safe Housing for All, or DASH, Act that would, among other things, help build deeply affordable housing for extremely low-income families exiting homelessness and ensure all families in need can access housing choice vouchers. The Low-Income First Time Homebuyers, or LIFT, Act would create a HUD program that would provide low-interest 20-year mortgages. 

Other Democratic proposals aim to tackle issues state and local governments are increasingly looking to curb. The Fair Housing Improvement Act would make source-of-income discrimination illegal nationwide, an issue that has been gaining traction in city halls and state legislatures in recent years. Real estate investors that scoop up homes and charge high rents have also been creating challenges for state and local officials, pushing Oregon’s Sen. Jeff Merkley to introduce the End Hedge Fund Control of American Homes Act. 

But before Congress launches new initiatives, existing programs require greater scrutiny and review, some suggested during the hearing. There are more than 100 federal housing programs costing about $100 billion annually, said Wisconsin Sen. Ron Johnson.

“Despite this litany of programs, affordable housing concerns remain a perennial issue,” Johnson said. “...Before spending billions more on additional federal housing programs, we should take a good hard look at why existing programs have fallen short.”

Ensuring there are qualified, trustworthy leaders at the helm of public housing authorities is a key first step before more money is invested into affordable housing programs, said Bill Slover, former chair and commissioner of the D.C. Housing Authority Board. He described that throughout his experience with the board, he watched as the agency struggled with accountability and financial management. As an example, he pointed to a 2022 HUD report that found the District’s housing board had “inadequate management and knowledge of” property management and the housing choice voucher program as well as poor oversight of its operations and finances. 

If an agency is inefficient, it “spends more money on basic operations, fewer people get housed, causing a negative ripple effect across the entire housing space,” Slover said. Without increased oversight and accountability, “no amount of money pumped into PHAs will result in sustainable progress towards increased access to housing,” he added. 

At the heart of the housing crisis is a shortage of units and a surplus of households. Actions like expanding rental assistance or housing voucher programs may help families afford housing in the short term, but don’t do much to ease the root cause of high housing costs, said Todd Walker, a professor of financial economics at Indiana University.

“If you have a demand-side solution to a supply-side constraint, then you're going to have an increase in home prices, which will make matters worse or you're going to displace people who don't have access to the voucher,” he said. 

Interest rates are also a factor. Because they are tied to the national debt, Walker said, increased federal spending could negatively impact mortgage rates over the next decade. 

But the United States can’t afford to be idle, Bailey said. Last year saw the greatest number of people experiencing homelessness on record, underscoring the urgency of the housing crisis. Stable housing not only provides health and safety benefits to households, it also allows people to hold down jobs and children to attend school. Without greater action, she said, the housing crisis will continue to disrupt the lives of millions of Americans. 

“We have to remember that there's a cost to doing nothing,” she said.