Lawmakers are feeling pressure from voters to take action on housing as Americans are increasingly being priced out of the market.
The crisis of affordability is drawing more attention in Congress than at any time in years since the Federal Reserve’s aggressive interest rate hikes crippled supply by restricting builders’ access to capital and discouraging owners from selling.
As they face an election in which voters of both parties are pessimistic about the economy, Republicans and Democrats in the House and Senate are pushing dozens of bills to address the problem, covering everything from expanding a key rural housing program to providing tax credits to lower-income first-time homebuyers.
The calls for action are “growing exponentially,” Senate Finance Chair Ron Wyden (D-Ore.) said in an interview, adding that lawmakers are being “besieged” by employers in their districts seeking housing for their workforces. “This has changed very much in the Senate.”
“It comes up every time we’re at home,” Sen. Mike Rounds (R-S.D.) said in a separate interview. That’s “one of the reasons why we're trying to do some stuff in regards to housing.”
That “stuff” has proved elusive thanks to the high cost — and complicated politics — involved in tackling the issue. One of the main drivers of the lack of housing supply, restrictive local zoning laws, is largely beyond Congress’ control. And in areas where lawmakers can have an impact, they have such different ideas on how to address the problem that the obstacles may be insurmountable.
A failure to deal with the issue could hurt policymakers in November, with voters growing more upset that homeownership remains out of reach for many, one expert says.
“There'll be blowback over congressional inaction on this,” said Jim Parrott, a former senior adviser on housing at the Obama White House who now studies the issue at the Urban Institute. “It seems inevitable that if Congress can’t get its act together on this, the sentiment on both sides will be pretty, pretty brutal.”
Average monthly mortgage payments have more than doubled since the pandemic thanks to the one-two punch of sharply higher interest rates and skyrocketing home prices — up 47 percent since January 2020, according to the Case-Shiller National Home Price Index. And the income required for renters to comfortably afford monthly payments — by spending no more than 30 percent of their income on housing — has risen by 41 percent. Homelessness continues to surge, rising 12 percent in 2022, according to HUD.
“There’s such an intense need — in rural communities, suburban communities, and every place in the country,” Sen. Tina Smith (D-Minn.), who chairs the Senate Banking Committee’s housing panel, said.
In a sign of the building momentum, Congress has included housing provisions in the tax package it's considering this week. Those tweaks to the Low Income Housing Tax Credit are expected to lead to the production of thousands of new units — a small step toward reducing a shortage that Freddie Mac pegs at 3.8 million.
Bipartisan support for the language “shows that housing affordability is an issue that is resonating more and more with members of Congress of both political parties because they're hearing about it from their constituents,” said Dennis Shea, who studies housing at the Bipartisan Policy Center.
But any legislation that goes further will have to move separately — and that will be a much harder sell. The Tax Cut and Jobs Act, the overhaul that Republicans pushed through in 2017, is set to expire next year, opening the door for additional tax-related policies.
Senate Budget Chair Sheldon Whitehouse (D-R.I.) said at a Wednesday hearing that he plans to soon introduce "bills to make housing more affordable for lower-income Americans," including new legislation that would give lower-income first-time homebuyers a $15,000 tax credit.
Yet there is no clear path to enacting those tax-related measures before November — or, for that matter, any policy that would require federal spending.
“I'm hoping that at some point we pull together a pretty significant housing bill" since "every senator is seeing it in their home state," Whitehouse said in an interview. But "we’re a long way from finding the vehicle.”
A bill from Wyden and Sen. Dan Sullivan (R-Alaska) that would make middle-class Americans eligible for the same tax credit did not make it into the current version of the legislation. Sullivan — who recently joined with HUD Secretary Marcia Fudge to create a working group examining housing in his state’s rural communities — said in an interview he was frustrated it had been left out.
Senate Banking Chair Sherrod Brown (D-Ohio), meanwhile, says he is “hopeful” his committee can soon advance an array of bipartisan bills, including Smith and Rounds’ legislation that would expand the Agriculture Department’s Rural Housing Service programs. Rounds said the lawmakers want to include the measure in the farm bill.
But the committee’s ranking member, Sen. Tim Scott (R-S.C.), is pushing instead for a markup of his housing framework, which would focus in part on curbing regulations.
“In the same … hearing, we can have a discussion about affordability of housing — and what more regulations we should put on building a house,” Sen. Thom Tillis (R-N.C.) said. “Those two are inconsistent with each other.”
Brown, who is facing a tough reelection campaign this year, has shown little tolerance for Scott's proposal, which he slammed as "partisan."
As a result, Rounds and Smith are resisting efforts to fold their measure into Scott’s framework out of fear it will bog it down.
“Tim has got some really good ideas, but they may be ideas that may not gather as much bipartisan support — at least he's got more work to do here to bring it forward,” Rounds said. “And we just didn't want to hold this one up.”
Lawmakers may be even further apart in the House.
Rep. Maxine Waters of California, the top Democrat on the Financial Services Committee, wants to rally her members around housing — including at an upcoming retreat. Her top priority has long been a hefty package of proposals included in President Joe Biden’s 2021 Build Back Better proposal before they were left on the cutting room floor during the White House’s negotiations with Sen. Joe Manchin (D-W.Va.).
But House Financial Services Chair Patrick McHenry (R-N.C.) remains committed to a narrower — and less expensive — path forward. He posted an array of GOP-only legislation before a recent hearing, including a bill from Rep. Andy Barr (R-Ky.) that would forbid withholding funds from homeless shelter providers that are faith-based or require wraparound services.
“They work, so let's give them a chance,” Barr said in an interview.
So far, rank-and-file members remain highly skeptical about the odds of the two bridging the distance between their proposals.
"I'm pessimistic because I just see no evidence that Republicans are serious," Rep. Ritchie Torres (D-N.Y.) said. "It feels like the Committee on Housing and Insurance is more the Committee on Insurance — and housing has taken a back seat."
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By: Eleanor Mueller and Katy O'Donnell
Title: 'There'll be blowback': Congress feels pressure from voters on housing affordability
Sourced From: www.politico.com/news/2024/02/01/therell-be-blowback-congress-feels-pressure-from-voters-on-housing-affordability-00138779
Published Date: Thu, 01 Feb 2024 05:00:00 EST
