House Financial Services Subcommittee Issues Testimony From National Low Income Housing Coalition President Yentel (Part 1 of 2)

WASHINGTON, Dec. 15 -- The House Financial Services Subcommittee on Housing and Insurance issued the following testimony by Diane Yentel, president and CEO of the National Low Income Housing Coalition, involving a hearing on Dec. 6, 2023, entitled "Housing Affordability: Governmental Barriers and Market-Based Solutions":

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Chairman Davidson, Ranking Member Cleaver, and members of the Committee, thank you for the opportunity to testify before this committee on housing affordability challenges and solutions.

The National Low Income Housing Coalition (NLIHC) is dedicated to achieving racially and socially equitable public policy that ensures people with the lowest incomes have quality homes that are accessible and affordable in communities of their choice. NLIHC's members include residents of public and assisted housing, people experiencing homelessness and other lowincome people in need of affordable homes, housing providers, homeless services providers, fair housing organizations, state and local housing coalitions, public housing agencies, faithbased organizations, concerned citizens, and others. While our members include a spectrum of housing interests, we do not represent any one segment of the housing field. Rather, NLIHC works on behalf of and with low-income people who receive or need federal housing assistance, especially people with extremely low incomes and people who are homeless.

Across the nation, America's lowest-income renters face a severe shortage of affordable and available homes and a significant gap between incomes and housing costs. There is a national shortage of 7.3 million homes that are affordable and available to America's lowest-income renters - those earning less than either the federal poverty rate or 30% of their area median income (AMI). The severe shortage of affordable and available homes for extremely low-income renters is a structural feature of the country's housing system, consistently impacting every state and nearly every community.1

Housing costs are out of reach for too many of the lowest-income renters.2 Rents are far higher than what the lowest-income and most marginalized renters, including seniors, people with disabilities, and working families, can spend on housing. Despite the clear and urgent need, Congress only provides housing assistance to one in four eligible households.3

Without affordable housing options, more than 10 million extremely low-income and very lowincome renter households, disproportionately people of color, pay at least half their income on rent, leaving them without the resources they need to put food on the table, purchase needed medications, or otherwise make ends meet.4 Paying so much of their limited income on rent leaves the lowest-income families always one financial shock - an emergency or unexpected expense - from facing eviction and, in the worst cases, homelessness. On any given night, more than half a million people experience homelessness, and millions more are at risk.5

During the COVID-19 pandemic, federal, state, and local lawmakers responded to the growing threat of housing insecurity by providing unprecedented resources and protections to keep renters housed, including $46.6 billion in emergency rental assistance (ERA) and a national moratorium on evictions for nonpayment of rent. These protections and resources cut evictions in half,6 lowered eviction filing rates to the lowest on record,7 and kept millions of people who otherwise would have lost their homes during the pandemic stably housed.8

Just as these emergency resources were depleted and pandemic-era renter protections expired, however, renters reentered a brutal housing market, with skyrocketing rents and high inflation. Eviction filing rates have now reached or surpassed pre-pandemic averages in many communities, resulting in increased homelessness.9

Even with a recent stabilization of rental prices, the rapid inflation we saw during 2021 and the first half of 2022 has done significant damage to affordability, especially for the lowest-income renters. The median rent of new leases in November 2023 was 22% higher than at the beginning of 2021.10 Historically, rent inflation tends to be even higher for lower-priced units.11

The housing crisis existed before the pandemic, was exacerbated by its disruptions, and will continue to persist after COVID-19 resources are depleted. For this reason, Congress must increase investments in long-term solutions to the persistent underlying shortage of affordable, accessible homes in the United States and improve renter protections for the lowest-income people. Congress should make rental assistance universally available to all eligible households in need; preserve and expand the supply of homes affordable to people with the lowest incomes; provide resources to prevent evictions and homelessness; and strengthen and enforce renter protections. These solutions must be paired with reforms to break down barriers that prevent access to critical resources and that deepen racial disparities.

The 118th Congress can advance these long-term solutions through bipartisan legislation, the fiscal year (FY) 2024 appropriations process, an end-of-year tax package, and other critical pieces of legislation. NLIHC is committed to working with Democrats and Republicans to advance solutions to America's affordable housing crisis. Immediate bipartisan opportunities to advance housing access include increasing housing stability and economic mobility among lowincome families; investing in cost-effective eviction prevention tools; improving and streamlining existing housing programs; cutting red tape to build housing for people with the lowest incomes; improving oversight of federal disaster resources; expanding and reforming affordable housing development programs; and providing better access to fair and affordable housing, among others.

As Congress considers spending priorities, it should ensure full funding for vital federal affordable housing and homeless assistance programs. Without these resources, millions of the lowest-income and most marginalized households will continue to experience homelessness or remain at risk, paying more than half their limited income on rent. Congress should work quickly to enact final spending bills that provide the highest level of investment possible for federal housing and homelessness programs through the annual appropriations process.

As Congress works towards these long-term solutions, the Biden administration must continue to take action to strengthen and enforce tenant protections and incentivize or require communities to reduce restrictive local zoning practices that inhibit the supply of rental housing.

Underlying Causes of the Housing Crisis

Shortage of Affordable Housing for the Lowest-Income Renters

An underlying cause of America's housing crisis is the severe shortage of rental homes affordable and available to people with the lowest incomes. Nationwide, there is a shortage of 7.3 million homes affordable and available to extremely low-income renters, whose household incomes are at or below either the poverty guideline or 30% of their area median income (whichever is greater). For every 10 of the lowest-income renter households, there are fewer than four homes affordable and available to them.12

The shortage of affordable and available homes for the lowest-income renters ranges from most severe to least severe, but there is no state or congressional district with enough affordable homes for its lowest-income renters. For example, in both Chair Davidson and Ranking Member Cleaver's districts, there are fewer than four affordable homes for every 10 of the lowest-income renter households.13

Systemic racism, past and present, has led to significant racial disparities in both renter demographics and outcomes experienced by renters, such as cost burdens, evictions, and homelessness. While the housing market is often characterized as neutral, ongoing injustices and discriminatory practices persist to this day. The unaffordability of the rental market disproportionately harms Black and Latino households because they are more likely at all income levels to be renters: 27% of white households are renters, compared to 57% of Black households and 52% of Latino households.14

Moreover, renters of color are much more likely than white households to be extremely lowincome renters. Nineteen percent of Black households, 17% of American Indian or Alaska Native (AIAN) households, 14% of Latino households, and 9% of Asian households are extremely low-income renters, compared to 6% of white non-Latino households. Renters of color are also more likely to experience housing cost burdens than white, non-Latino renters.

Forty-four percent of white renters are cost-burdened, while 52% of Latino renters and 55% of Black, non-Latino renters are cost-burdened. Nearly one-third of Black, non-Latino renters and 28% of Latino renters are severely cost-burdened, compared to 23% of white, non-Latino renters.15

Nationwide, more than 10 million extremely low-income and very low-income renters pay at least half their income on rent, leaving them without the resources they need to make ends meet. Housing cost burdens are concentrated among the lowest-income renters. Of the 11.3 million severely cost burdened renter households, 8.1 million (72%) have extremely low incomes and 2.3 million (20%) have very low incomes.16 Research indicates that the lowestincome households spend significantly less on other necessities - such as food, clothing, transportation, and healthcare - when they are forced to spend more than half their income on rent and utilities.17

Making matters worse, the existing affordable housing stock is often in poor condition, due to decades of underfunding by the federal government, or with affordability requirements set to expire soon.18 Based on past trends, more than 176,000 federally assisted rental homes with affordability restrictions that expire over the next five years could be lost from the affordable housing stock if preservation efforts are not expanded. The failure to preserve federally subsidized housing can lead to unaffordable rents, a loss of habitability, and evictions for current tenants. Given the current shortage of affordable homes and chronic underfunding for federal programs, preventing the loss of the already limited supply is essential.

The Gap between Incomes and Housing Costs

A major cause of housing instability is housing costs outpacing income gains. NLIHC's Out of Reach: The High Cost of Housing annual report estimates each locality's "Housing Wage" - the hourly wage a full-time worker must earn to afford a modest apartment without spending more than 30% of their income on housing.19 In 2023, the national Housing Wage is $28.58 per hour for a modest two-bedroom rental home and $23.67 per hour for a modest one-bedroom rental home.

Thirteen of the nation's 20 most common occupations pay a lower median hourly wage than the wage a full-time worker needs to earn to afford a modest two-bedroom apartment at the national average fair market rent. Ten of these occupations, which account for more than 49 million workers, pay median wages less than the wage a full-time worker needs to earn to afford a modest one-bedroom apartment. Over 25 million people work in the five lowest-paying occupations - retail sales, food and beverage services, food preparation, home health and personal care services, and building cleaning. Workers in these occupations earn median wages that fall more than $7.80 short of what a full-time worker needs to afford a one-bedroom apartment.20

Lack of Federal Resources

The shortage of rental homes affordable to the lowest-income people is caused by market failures and the chronic underfunding of solutions. Government intervention, in the form of subsidies, is necessary to fill the gap between what the lowest-income people can afford to pay and the costs of developing and operating rental homes. Congress has consistently underfunded housing subsidies such that only one in four households eligible for housing assistance receives any.21 Millions of families are placed on waitlists for housing assistance, many of them facing homelessness or overcrowding while they wait.22

Without public subsidies, the private market rarely produces new rental housing affordable to households with the lowest incomes. New private market development can result in a chain of moves that benefit moderate and lower-income households through filtering. However, filtering on its own fails to provide an adequate supply of housing for extremely low-income renters. Even when a property's share of occupants with low incomes increases with building age, the tenants are typically housing cost-burdened.23 Often, the operating cost of maintaining older housing is more than what the lowest-income renters can afford to pay in rent. The average monthly operating cost for rental units was $520 in 2019, but the average extremely low-income household could afford only $283 per month.24 Owners in weak markets are therefore often incentivized either to stop operating the housing as rental property or redevelop the property to rent at higher rates. Thus, federal solutions are necessary to address the shortage of affordable housing for renters with the lowest incomes.

Congress has also divested from public housing for decades, resulting in over $70 billion in unmet capital backlog needs.25 As a result, our nation loses 10,000 to 15,000 units of public housing every year to obsolescence or decay, while other units fall into deep disrepair. This leaves public housing residents routinely exposed to hazardous and unhealthy living conditions, including lead, carbon monoxide, mold, asbestos, radon, and pests.26

Current State of the Housing Market

COVID-19 Pandemic Housing Resources

In response to the urgent housing needs of renters impacted by the pandemic, the Trump administration implemented (and Congress and the Biden administration extended) a national eviction moratorium, and Congress allocated $46.6 billion in Emergency Rental Assistance (ERA) to states and localities to keep renters stably housed. Research conducted on the efficacy of local, state, and federal eviction moratoriums provides evidence that such moratoriums were effective at reducing COVID-19 transmission and fatalities as well as eviction filings.27,28 Similarly, ERA helped keep millions of renter households stably housed over the course of the pandemic. State and local grantees have so far disbursed more than $39 billion for rental assistance and other housing services to renters facing housing instability.29 The ERA program has made nearly 12 million payments, mostly to very low- and extremely low-income renters.30

While ERA has helped stabilize millions of households, the program was designed to provide only short-term financial assistance during the pandemic and cannot address the long-standing gaps in our housing safety net, including the lack of federal renter protections. State and local ERA programs have now run out of funding, and the last eviction protections have expired, just as rents and other costs have increased across the country, reducing housing affordability for people with the lowest incomes. Evictions have increased, with eviction filing rates in some cities reaching or surpassing their pre-pandemic levels.31 As a result, homelessness has worsened in many communities across the country.

High Rents and Increased Housing Instability and Homelessness

Rising rental prices are associated with an increase in homelessness. A study by the Government Accountability Office (GAO) found that changes in median rental prices and homelessness rate estimates were statistically significantly related. A $100 increase in median monthly rental price was associated with an approximately 9% increase in the estimated homelessness rate in that community, even after accounting for other relevant factors.32 In 2021 and 2022, renters experienced a nearly $200 median monthly increase.

Recent rent increases were driven by several factors, including a growing demand for rental housing and limited supply. Between 2020 and 2022, 1.9 million renters entered the rental market. Many households entering the market were higher-income renters who may have been priced out of the increasingly competitive home-buying market. Rising mortgage interest rates have squeezed many would-be homebuyers out of the housing market, pushing up rental prices and forcing the lowest-income renters into more unstable housing. The rent increases can also be attributed to a largely unregulated rental market that permits landlords to raise rents as high as the market will allow, without regard to the impact on tenants with low incomes.

In some markets, the supply of rental housing is beginning to catch up to demand, and inflation has cooled. However, even with the recent stabilization of rental prices, the rapid inflation during 2021 and the first half of 2022 has done significant damage to affordability, especially for the lowest-income renters.

Homelessness is a lagging indicator of housing market affordability. As America's rental housing affordability crisis grows even more severe, more and more people are pushed into homelessness each year. Despite successful efforts to house individuals experiencing homelessness using the Housing First approach, particularly veterans, homeless systems cannot keep up with the increased inflow due to the intensifying affordable housing crisis. For example, in Los Angeles County, more than 207 homeless individuals are rehoused each day, but 227 different individuals are pushed out of housing and into homelessness daily.33

To end homelessness, Congress must provide the significant, long-term investments needed to address its underlying causes. Without these investments, more people will continue to experience homelessness or remain at risk. This is particularly true for the lowest-income households with children, older adults, and people with disabilities, who are increasingly represented among those falling into homelessness.

Investor Purchases

Rising rental prices are also impacted by purchases of single-family and multi-family properties by real estate investors. Despite a significant drop in investor purchases since the middle of 2022, they continue to represent a sizable share of sales. In the first half of 2023, investors purchased more than 90,000 homes.34 Increased institutional investor ownership in the rental market can have negative impacts on renters and has been associated with decreased affordability, increased fees, lack of upkeep, higher rates of eviction, and worsening displacement, particularly in Black neighborhoods.35 Limited affordable options for renters with low incomes, coupled with a lack of federal tenant protections, allows some corporate landlords to engage in abusive practices in pursuit of profit.36

Ownership of multifamily buildings is becoming more consolidated in the hands of corporate landlords, with the number of apartment units owned by the largest 50 companies increasing from under 2 million in 2017 to 2.5 million in 2022.37 These 2.5 million units represent approximately one-tenth of the country's multi-family apartment stock.38 Moreover, this is likely an underestimate because two of the largest firms - Blackstone and Lone Star Funds - do not participate in the survey that collects these data.

Investor purchases have historically been made in low-cost Black and brown neighborhoods, and this trend continued during the pandemic.39 Investors' accumulation of subsidized properties could further threaten housing affordability in the future. Two large investors - Blackstone and Starwood Capital - now own more than 138,000 federally subsidized units, including many units backed by the Low-Income Housing Tax Credit (LIHTC).40 Given the time-limited affordability period of LIHTC properties and the stated strategy of investors to purchase below market rental properties and later increase their prices, it is unlikely that these apartments will remain affordable.

The accumulation of rental properties in the hands of larger investors could threaten affordability in other ways as well. Many larger investors rely on rent-setting software to determine rents, for example, yet the nation's top provider of rent-setting software, RealPage, is under investigation by the Department of Justice for alleged collusion with landlords to inflate rents.41 Legal experts have raised concerns that RealPage uses private rental data to encourage landlords to increase profits by raising rent prices even if it results in a lower occupancy rate, thereby reducing the supply of affordable housing.42 If the allegations are true, the impact on rent prices and housing instability could be significant, given that many of our nation's largest housing providers use RealPage to set prices.

In addition to raising rents, corporate landlords have been shown to use additional fees to generate profit. Data collected by the House Financial Services Committee (HFSC) found that surveyed institutional investors increased lease fees 40% over the survey period, from an average of $147 per lease per year in 2018 to an average of $205 in 2021.43 Some investors may use this strategy more than others. While lease fees for several of the companies surveyed remained steady over the four-year period, average annual lease fees for Invitation Homes' properties increased from $201 in 2018 to $449 in 2021.44 Investors have acknowledged that fee collection is part of their revenue generation strategy. Tricon, whose profits increased from $113 million to $517 million between 2020 and 2021, noted that this significant increase in profits was due in part to fees and other costs and upkeep responsibilities that were transferred to tenants.45

Research suggests that corporate landlords are more likely to file for eviction than small landlords. A study of single-family rentals in Atlanta found that corporate owners were 8% more likely than small landlords to file for eviction, even after controlling for neighborhood characteristics.46 The study also found that some institutional investors are far more likely to pursue evictions than others. One institutional investor filed evictions against one-third of its tenants, while two other institutional investors filed evictions against one-quarter of their tenants.

Large landlords are also more likely to be serial eviction filers, filing for evictions repeatedly when households fall behind on their rents.47 Serial eviction filings can significantly increase housing costs for renters beyond their monthly rent payments since filings often result in late fees and court fines.48 One estimate found that each eviction filing results in a 20% monthly increase in housing costs.49 Moreover, eviction filings can make it more difficult for renters to find other landlords willing to rent to them, pushing households deeper into poverty.

Institutional investors' practices have a disproportionate impact on Black communities. Data collected by the HFSC indicate single-family rental investors purchase properties in ZIP codes whose populations are on average 40% Black, which is more than three times the Black population in the U.S.50 Research on investor purchases in southeastern cities during the COVID-19 pandemic also found that purchases were concentrated in Black and Latino neighborhoods.51 The higher rates of investor purchases in Black neighborhoods have resulted in the displacement of residents. Statistical models estimate that on average, neighborhoods in Atlanta with an investor-purchased property had 166 fewer Black residents and 109 additional white residents as a result, compared to nearby neighborhoods without an investor-purchased property.52

Institutional investors wield significant political power and have used this power to advocate against renter protections. Five prominent rental home investment companies - American Homes 4 Rent, FirstKey Homes, Invitation Homes, Progress Residential, and Tricon Residential - have formed the National Rental Home Council, a trade association that advocates against state rent regulation policies. In 2018, Invitation Homes and Blackstone spent $1 million and $6 million, respectively, opposing a ballot initiative that would have allowed rent regulation in California cities.53,54 Institutional investors also lobbied to reverse the federal eviction moratorium during the COVID-19 pandemic, with some of these owners continuing to evict tenants unscrupulously and unlawfully during the protected period.55,56

Lack of Federal Tenant Protections

The lack of renter protections in the housing market contributes to a power imbalance between renters and landlords that puts renters at greater risk of housing instability, harassment, and homelessness, while also fueling racial inequity. Despite the common characterization of the housing market as being neutral, evidence shows that racial discrimination in the housing market persists. While overt discrimination was outlawed by the "Fair Housing Act of 1968," covert forms of housing discrimination continue to disproportionately harm people of color. Broad and robust tenant protections - including laws ensuring legal representation in eviction court and prohibiting source-of-income discrimination, as well as "just cause" eviction laws - are needed to rebalance a power dynamic that currently tilts heavily in favor of landlords at the expense of low-income and marginalized tenants.

In many states, there are no federal protections against arbitrary, retaliatory, or discriminatory evictions, or other abusive practices by landlords. Many low-income tenants who use housing subsidies such as housing vouchers, emergency rental assistance, and other forms of public assistance struggle to find or maintain safe, quality, affordable housing due to source-of-income discrimination - the practice of denying an individual full and equal access to housing based on their lawful source of income. Discrimination by landlords against renters can prevent households from effectively using federal, state, or local rental assistance and often provides a pretext for illegal discrimination against renters of color, women, and people with disabilities.57

In most states and localities across the country, landlords are not required to provide a reason for evicting a tenant at the end of the lease term or for evicting a tenant without a lease. Landlords who are unable to evict a tenant during their lease term may choose not to renew the tenant's lease and use the lease holdover as grounds for eviction. A tenant at the end of their lease is also at risk of unreasonable rental increases.58 When a tenant receives an eviction notice, faces rent hikes, or fears displacement, they may choose to leave their unit - or "selfevict" - rather than go to court. Those who pursue legal action often find that no laws exist to protect them from eviction at the end of a lease term and that having an eviction judgment on their record creates further barriers to obtaining and maintaining future housing.59

Despite the broad and lasting consequences of evictions, only 10% of renters in eviction court receive legal representation, compared to 90% of landlords.60 When tenants have legal representation during the eviction process, they are more likely to avoid eviction and remain in their homes.61

Long-Term Solutions to the Housing Crisis

A stronger housing safety net is needed to prevent evictions and homelessness and to reduce housing instability among the lowest-income renters. Addressing the root causes of the housing affordability crisis requires a sustained commitment to bridging the gap between incomes and rent through universal rental assistance, investing in new affordable housing and preserving affordable rental homes that already exist for America's lowest-income and most marginalized renters, providing emergency assistance to stabilize renters when they experience financial shocks, and establishing and enforcing strong renter protections.

Bridge the Gap between Incomes and Housing Costs with Rental Assistance

To bridge the gap between incomes and housing costs, Congress should expand rental assistance, making it universally available to all eligible households in need. Making rental assistance available to all eligible households is central to any successful strategy for solving the housing crisis. Rental assistance is a critical tool for helping the lowest-income people afford decent, stable, accessible housing and has a proven record of reducing homelessness and housing poverty.62 A growing body of research finds that rental assistance can improve health and educational outcomes, increase children's chances of long-term success, and advance racial equity.63

In many communities across the country, there is a sufficient supply of housing, but the available homes are not affordable to the lowest-income renters. Expanding rental assistance is critical to helping extremely low-income renters afford safe, stable, accessible housing in the communities of their choice.

Expand and Preserve the Supply of Affordable Rental Homes

Addressing the shortage of affordable and available housing for the lowest-income households requires both preserving the existing affordable housing stock and increasing the supply of affordable housing.

Congress must provide robust resources to preserve the roughly 900,000 public housing units that are currently home to more than 2 million residents, the majority of whom are people of color. Public housing is critical to ensuring people with the greatest needs have an affordable and accessible place to call home, and the preservation of this community asset is key to any strategy to address America's housing crisis.

To increase the supply of deeply affordable and accessible housing, Congress should expand funding for the national Housing Trust Fund (HTF) to at least $40 billion annually. The HTF is the only federal housing program exclusively focused on serving households with the lowest incomes and most acute housing needs.

In addition, the federal government should incentivize or require state and local governments that receive federal transportation and infrastructure funding to eliminate restrictive zoning rules that increase the cost of development, limit housing supply for all renters, and reinforce segregation and structural racism in housing and other systems.

Provide Emergency Rental Assistance to Stabilize Families and Prevent Evictions

Permanent solutions are needed to combat the evictions and homelessness that can occur when low-income renters experience income loss or unexpected financial shocks. Congress should build on the lessons learned and successes of the Department of the Treasury's ERA program by enacting a permanent program to help stabilize families before they face eviction, displacement, and, in the worst cases, homelessness. Providing temporary assistance for households would help prevent the many negative consequences associated with evictions and homelessness, including physical and mental health challenges, loss of possessions, instability for children, and increased difficulty finding a new home.64

Strengthen and Enforce Renter Protections

During the pandemic, state and local jurisdictions across the country recognized the crucial role tenant protections play in preventing evictions and ensuring housing stability for the most marginalized households. Since 2021 alone, states and localities have passed or implemented more than 200 new laws or policies to protect tenants from eviction and keep them stably housed.65 Jurisdictions passed numerous short-term protections to support renters during the pandemic, including eviction moratoriums, pauses on evictions while ERA applications were under review, and measures to coordinate the eviction process with ERA. State and local governments also enacted long-term protections, such as right-to-counsel legislation, source-ofincome discrimination laws, appropriations for legal defense, and eviction record sealing legislation.66

To ensure the safety and just treatment of renter households across all jurisdictions, Congress should enact similar legislation to establish vital national protections for renters. Such protections should include source-of-income laws to prevent landlords from discriminating against voucher holders, "just cause" eviction standards, guaranteed access to legal counsel to put renters on more equal footing with landlords, eviction record sealing and expungement requirements, and limits on excessive rent increases.

Immediate Congressional Actions Needed

FY24 Housing Investments

Congress must work quickly to enact a final fiscal year (FY) 2024 spending bill that fully funds affordable housing and homelessness programs. The current Continuing Resolution (CR) extends funding to January 19 for HUD programs. Congress has until then either to pass a final spending bill, extend the CR, or risk a government shutdown.

Thanks to the hard work of advocates around the country and champions in Congress, both the House and Senate spending bills provide funding increases above FY23-enacted levels. Yet despite these increased investments, neither bill provides sufficient funding to renew all existing Housing Choice Vouchers due to the dramatic increase in the cost of rent in communities nationwide.67 If enacted, the House bill would result in approximately 40,000 fewer vouchers being renewed, while the Senate bill would result in an estimated 6,000 vouchers being lost. Without additional resources, fewer households would receive the assistance they need to afford a home.

Failure to reach an agreement increases the risk of a full-year CR. Under an agreement made between President Biden and congressional leaders, a full-year CR would automatically cut domestic funding by 1% below FY23-enacted levels, harming federal housing and homelessness programs and the millions of households who rely on these resources. Because the cost of housing rises every year, enacting a full-year CR effectively leaves HUD's affordable housing and homelessness programs without the resources they need to maintain the current level of service. In FY24, because of rising housing costs and decreased offsets from the Federal Housing Administration (FHA), HUD needs more than $13 billion in additional funding to serve the same number of households.

End-of-Year Tax Legislation

Congressional leaders are discussing the opportunity for an end-of-year tax package. If Congress includes resources in a tax package to expand the Low-Income Housing Tax Credit (LIHTC), it must pair this expansion with needed reforms to ensure that LIHTC can better serve extremely low-income households who are most at risk of homelessness and households in rural and tribal communities. These reforms are included in the bipartisan "Affordable Housing Credit Improvement Act" (AHCIA) (S.1557, H.R.3238), introduced by Senators Maria Cantwell, Todd Young (R-IN), Ron Wyden (D-OR), and Marsha Blackburn (R-TN), along with Representatives Darin LaHood (R-IL), Suzan DelBene (D-WA), Brad Wenstrup (R-OH), Don Beyer (D-VA), Claudia Tenney (R-NY), and Jimmy Panetta (D-CA).

LIHTC is the primary source of financing for the construction and preservation of affordable housing. While an important resource, LIHTC is rarely sufficient on its own to build or preserve homes affordable to households with the lowest incomes. The majority (58%) of extremely lowincome renters living in LIHTC developments who do not also receive rental assistance are severely cost-burdened, paying more than half their incomes on rent.

It is vitally important that Congress enact bipartisan reforms to expand the basis boost for housing developments financed with LIHTC in which at least 20% of units are set aside for households with extremely low incomes. This reform would allow LIHTC to be used to better target the lowest-income renters by making it possible to offer rents that are affordable to them and to facilitate the development of more affordable housing for populations with special needs, such as formerly homeless individuals and people with disabilities.

Congress should also advance bipartisan reforms to LIHTC to better serve rural and tribal communities, which experience higher poverty rates and lower incomes and often lack access to affordable capital. Tribal nations have the most severe housing needs in the United States, with high rates of overcrowding, unreliable plumbing and heat infrastructure, and unique development issues. By designating rural and tribal communities as "Difficult to Develop," as proposed by the bipartisan AHCIA, Congress would make housing developments in these areas automatically eligible for a 30% basis boost to ensure greater financial feasibility.

Critical Long-Term Housing Investments

To fully address the housing and homelessness crisis in America, Congress must enact the large-scale, sustained investments and reforms necessary to ensure that renters with the lowest incomes have an affordable place to call home. More than ever, bold policies are needed to ensure that people with the lowest incomes and the most marginalized people have a stable, affordable home. Congress should advance legislation to invest in proven solutions at the scale needed.

Ensuring Access to Affordable Housing for Those with the Greatest Needs with the "Ending Homelessness Act"

Congress should enact the "Ending Homelessness Act" (H.R.4232), as introduced by Representative Maxine Waters (D-WA) and others to ensure universal rental assistance for America's lowest-income and most marginalized households. Currently, only one in four eligible households receive federal rental assistance because of chronic underfunding by Congress. This bold legislation would scale up the successful Housing Choice Voucher program to ensure housing stability for all eligible households by transforming the program into a federal entitlement, phased in over 8 years. In doing so, the bill will fully bridge the gap between incomes and housing costs, ensuring more of the lowest-income households can afford a place to call home and dramatically reducing the risk of homelessness.

The bill also prohibits landlords from discriminating against renters based on source of income and veteran status, and it invests $10 billion in funding over 5 years for the national Housing Trust Fund and other key programs to fund the creation of permanent affordable housing for people experiencing homelessness.

Expanding Investments in Affordable Housing Supply with the "Housing Crisis Response Act"

Congress should enact the "Housing Crisis Response Act of 202"3 (H.R.4233) introduced by Representative Maxine Waters (D-CA) and others to provide more than $150 billion in critical investments to help low-income renters afford rent, support public housing, create and preserve affordable and accessible housing, improve equitable planning and development processes that affirmatively further fair housing, and expand homeownership opportunities. The bill includes the housing investments enacted by the House of Representatives in the Build Back Better Act.

In addition to providing $25 billion to expand rental assistance to nearly 300,000 households struggling to pay rent, the bill would invest $65 billion to repair the nation's public housing and $15 billion in the national Housing Trust Fund to build and operate rental homes affordable to households with the lowest incomes and the greatest, clearest needs. Altogether, the bill's investments result in the creation of nearly 1.4 million affordable and accessible homes, help 294,000 households afford their rent.

Other Bipartisan Legislative Opportunities in the 118th Congress

Numerous opportunities are available in the remainder of the 118th Congress to advance bipartisan legislation to help address homelessness and housing poverty. NLIHC urges Congress to advance and pass these and other important bills as soon as possible.

Increasing Economic Mobility with the "Family Stability and Opportunity Vouchers Act"

Congress should enact the "Family Stability and Opportunity Vouchers Act" (S.1257, H.R.3776) to connect low-income families with economic and educational opportunities. The bipartisan bill, re-introduced by Senators Chris Van Hollen (D-MD) and Todd Young (R-IN) and Representatives Joe Neguse (D-CO) and Brian Fitzpatrick (R-PA), would provide 250,000 new housing vouchers as well as counseling services to help low-income families with young children move to communities of their choice, including communities with high-performing schools, strong job prospects, and other essential resources.

Access to safe, stable, affordable housing is linked to nearly every quality-of-life measure, including better educational and health outcomes, racial equity, and economic mobility. A landmark study by Harvard University economist Raj Chetty demonstrates the enormous positive impact of affordable housing on upward economic mobility for children of low-income families.68 The Family Stability and Opportunity Vouchers Act is a bipartisan, evidence-based initiative that would improve outcomes for low-income children by helping their families afford homes in neighborhoods of their choice.

Investing in Cost-Effective Eviction Prevention Tools through the "Eviction Crisis Act"

Congress should also enact the "Eviction Crisis Act" (S.2182), introduced in the 117th Congress by Senators Rob Portman (R-OH), Michael Bennet (D-CO), and Sherrod Brown (D-OH). The legislation would provide emergency, short-term assistance to help stabilize households in crisis, building on lessons learned from and the infrastructure developed during the pandemic to keep families stably housed.

Evictions push families deeper into poverty, harming health outcomes, hampering educational attainment, and resulting in numerous other negative effects. When a household faces an emergency, it needs focused, short-term help, not a one-way ticket to further housing instability. By passing the bipartisan Eviction Crisis Act, Congress would draw on experiences and insights gathered during the pandemic and create a permanent, cost-effective tool to help stabilize households before they face evictions and homelessness and to reduce the harms and costs associated with evictions for individuals and communities.

Reforming and Streamlining Rental Assistance Programs with the "Choice in Affordable Housing Act"

Congress should advance bipartisan efforts to streamline and improve the Section 8 Housing Choice Voucher program. For example, Congress should enact the bipartisan "Choice in Affordable Housing Act" (S.32, H.R.4606), introduced by Senators Chris Coons (D-DE) and Kevin Cramer (R-ND) and Representatives Emanuel Cleaver (D-MO) and Lori ChavezDeRemer (R-OR), to reduce inspection delays, create landlord incentives, facilitate recruitment efforts with local property owners, and expand the use of Small Area Fair Market Rents. Such changes could increase voucher holders' housing choices and reduce programmatic barriers to help attract and retain landlords in the program. To help renters on tribal land, the bill would also increase funding to the Tribal HUD-Veterans Affairs Supportive Housing (HUD-VASH) program.

Cutting Red Tape to Build More Housing through the "Yes In My Backyard Act"

Congress must also incentivize or require state and local governments to reduce or eliminate restrictive zoning and land use requirements that drive up housing costs and constrict the supply of housing, especially in markets with significant growth in demand for housing. Congress should incentivize these reforms by tying federal transportation and infrastructure funds to better zoning outcomes.

To further reduce or eliminate zoning and land use restrictions, Congress should enact the bipartisan "Yes In My Backyard (YIMBY) Act" (S.1688, H.R.3507), introduced by Senators Todd Young (R-IN) and Brian Schatz (D-HI) and Representative Derek Kilmer (D-WA). The bill would require HUD Community Development Block Grant (CDBG) grantees to report on actions taken to address zoning and land use barriers. Developers are often burdened with restrictive zoning rules that delay or prevent new housing and further restrict communities' economic development. The YIMBY Act would cut red tape that prevents the development of affordable housing.

Providing Greater Oversight and Ensuring Deeper Targeting of Federal Disaster Resources through the "Reforming Disaster Recovery Act"

Congress should enact bipartisan legislation to permanently authorize HUD's long-term disaster recovery program to provide greater oversight and deeper targeting of resources. The "Reforming Disaster Recovery Act" (S.1686, H.R.5940), introduced by Representative Al Green (D-TX) and Senators Brian Schatz (D-HI), Susan Collins (R-ME), and others, would permanently authorize the Community Development Block Grant-Disaster Recovery (CDBGDR) program and provide important safeguards and tools to help ensure that federal disaster recovery efforts reach the lowest-income and most marginalized disaster survivors. Because the program is not currently authorized, HUD must issue new rules through a Federal Register Notice whenever Congress provides long-term disaster funding, slowing the distribution of funds and preventing states and municipalities from anticipating and preparing for the receipt of funding before disasters occur.

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(Continues with Part 1 of 2)

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Original text here: https://docs.house.gov/meetings/BA/BA04/20231206/116635/HHRG-118-BA04-Wstate-YentelD-20231206.pdf