The House Financial Services Committee’s Subcommittee on Housing and Insurance recently held a hearing on topic of the nation’s housing inventory titled, “Building Our Future: Increasing Housing Supply in America.”
The hearing focused on the factors and policies that have led to the lack of housing supply in America. And while estimates may vary, experts find that the overall housing market is currently underbuilt by millions of units—a gap especially pronounced in the moderate-income price range for single family purchase homes where, in many places, it no longer makes economic sense to build such houses despite available purchaser interest.
Some of the factors contributing to this supply issue include inflation, regulatory costs, workforce challenges, and state and local land-use policies, among others. To encourage greater development to close the supply gap in single-family housing, the House Financial Services Committee’s Subcommittee on Housing and Insurance heard testimony from a panel of experts sharing their insight and expertise on solutions to close the supply gap.
Witnessed who presented testimony included:]
- Paul Compton, Managing Partner, Compton Jones Dresher LLP
- Emily Hamilton, Senior Research Fellow and Director of the Urbanity Project, Mercatus Center at George Mason University
- Buddy Hughes, Chairman of the Board, National Association of Home Builders (NAHB)
- Tara Vasicek, City Administrator, City of Columbus
- Nikitra Bailey, EVP, National Fair Housing Alliance
Supply Solutions
“The United States is facing a fever-pitched housing affordability crisis,” said Hughes in his testimony. “Nearly 77% of U.S. households cannot afford a median-priced new home.”
Hughes, a Lexington, North Carolina-based home builder and developer with more than 45 years of experience in the home building industry, is NAHB’s 2025 Chairman of the Board. A third-generation builder, in 1984, he opened Hughes Construction, a general contracting business specializing in home building and light commercial construction. Since the 1990s, Hughes has trained hundreds of builders to install poured insulated concrete walls for all types of construction. He currently serves as a product specialist and consultant to the residential and commercial construction industry for both large and small projects.
Taking Steps to Improving Affordability
Fueling affordability issues is a shortage of more than 1.5 million housing units and construction costs that are rising at an unsustainable rate, which is making it increasingly difficult for builders to produce housing that is attainable for buyers and renters. Last year, NAHB released a 10-point housing plan that seeks to improve affordability by addressing these impediments to increasing the nation’s housing supply.
Fueling the unaffordability crisis is a shortage of more than 1.5 million housing units and construction costs that are rising at an unsustainable rate, thus making it increasingly difficult for builders to produce housing that is attainable for buyers and renters. Hughes said the headwinds placing pressure on builders can be boiled down to the “5 Ls: Lending, Labor, Lumber, Lots, and Laws.”
Hughes cited the following facts:
- Credit is tightening for development and construction loans, and builders also rely on several federal programs administered by federal agencies to help them supply new homes and apartments.
- The construction sector faces a persistent labor shortage, with more than 200,000 unfilled industry jobs.
- Due primarily to supply chain disruptions, construction material costs are up 34% since December of 2020, ultimately resulting in higher rents and home prices.
- Low lot supplies are due in large part to tighter rules regarding land use and zoning for housing and land development.
- Regulatory costs account for about a quarter of the purchase price of a new single-family home and even more for apartment buildings due to construction delay costs and zoning issues, and these regulatory burdens have made it very difficult to build entry-level housing for first-time home buyers.
Hughes called on Congress to:
- Preserve and strengthen key federal programs including the Low-Income Housing Tax Credit, the Department of Housing and Urban Development (HUD) Section 8 housing voucher programs, and HUD’s HOME Investment Partnership and Community Development Block Grant programs.
- Support workforce development programs such as Job Corps and pass the CONSTRUCTS Act, legislation pending in both chambers of Congress that will help prepare young adults for rewarding careers in construction and other essential trades.
- Responsibly boost the domestic supply of lumber and call on the Trump administration to negotiate a long-term softwood lumber agreement with Canada that will end lumber tariffs, help stabilize this volatile market and give builders greater price stability.
- Pass the Identifying Regulatory Barriers to Housing Supply Act, which will reduce minimum lot size requirements and allow more density on single-family zoned areas.
- Rein in excessive regulatory costs and reassert congressional authority over federal agencies’ rulemaking agendas. Lawmakers should also amend the Energy Independence and Security Act to clarify that HUD and the U.S. Department of Agriculture are not required to continue updating energy standards for related housing programs.
Bailey, currently EVP at the National Fair Housing Alliance (NFHA), is a member of NFHA’s senior leadership team, leading the organization’s Public Policy and Communications Divisions, and assisting with managing Resource Development. Bailey develops and spearheads visionary, comprehensive policy, and communications strategies to implement NFHA’s mission of eliminating all forms of housing discrimination and ensuring everyone has decent, stable, affordable housing in well-resourced, opportunity-rich communities free from bias.
“Congress must act quickly to make equitable housing investments that promote financial inclusion and stimulate economic growth for everyone as housing continues to drive inflation,” said Bailey in her testimony. “The Federal Reserve Board lacks the power to lower housing inflation. A housing market in which all people cannot participate fairly, without regard to race, color, national origin, religion, gender, familial status, or disability, is a broken market both economically and morally.”
Closing the Home Ownership Gap
Bailey cited a number of concerns about the current state of the housing market, specifically the gap in U.S. home ownership.
“The homeownership gap remains wide and persistent. Currently, the homeownership rate is about 72% for White households, 51% for Latino households, and 44% for Black households,” said Bailey in her testimony. “That means that the White homeownership rate is 64% higher than the Black homeownership rate, 41% higher than the Latino homeownership rate, and 14% higher than the Asian homeownership rate. In 1960 (before passage of the Fair Housing Act in 1968), there was a 27-percentage point gap between Black homeownership (38%) and White homeownership (65%). So, the current Black-White homeownership gap of 28-percentage points is higher than it was when housing discrimination was legal.”
Overcoming Regulatory Hurdles
Compton, a Founding Partner of Compton Jones Dresher, serves clients in the real estate, financial services, and banking industries—providing legal advice and support for the transactions and operations that are key to them. Compton concentrates his practice on multi-family housing, as well as affordable housing and community development matters—especially those involving low income housing tax credits, new markets tax credits, historic tax credits and opportunity zone investments. He also focuses on regulatory and growth and expansion activities of financial institutions—including merger and acquisition activity, enforcement matters, and development of new products.
During his testimony, Compton suggested that housing development being caught in red tape is proving to be a hinderance in the advancement of U.S. housing inventory.
“In many cases, it is not the requirements or expense of the red tape itself directly that is the chief impediment, but rather, the enormous cost in time which these cumulatively impose,” stated Compton in his testimony. “For projects costing in the hundreds of thousands to many millions of dollars, these extended timetables imposed by otherwise not individually unreasonable government objectives collectively impose enormous costs. First, they impose costs for professionals and for reviewing and coordinating them. Second, there is the time value of money. Third, and perhaps most importantly, they impose the cost of much more risk. Simply put, bad things can happen during delay, such as increased costs, higher interest rates, land sellers who lose patience, investors who find other opportunities, and downturn in the economic cycle. This all especially affects smaller projects, where regulatory costs are fixed and high relative to the project size and a small increase in risk turns profit into loss. And the threat of that means nothing gets done.”
Taking Action Locally
Vasicek, who has served as the City Administrator for the City of Columbus, Nebraska since 2017, has been essential in guiding the government organization through key projects and challenges. In her role, she has demonstrated exceptional leadership by overseeing the City’s fiscal budget process, streamlining city services and driving important economic development initiatives.
Vasicek presented a number of examples of how her actions locally have resulted in the production of increased housing opportunities.
“Columbus has made significant steps to increase housing production, recognizing a lack of available housing directly impacts economic growth, workforce attraction and retention, as well as quality of life. Through strategic use of various resources, we have made significant strides in boosting housing development,” said Vasicek before the panel. “However, despite our proactive approach and continued commitment to removing barriers, the core issue remains—housing production is still not keeping pace with demand.”
She noted how Columbus has proactively addressed its housing shortage by changing what we can be controlled through deregulation, direct investment, and local incentives. She noted that more action needed to be taken in order to enact change.
“Federal support in the form of funding flexibility, infrastructure investments, and incentives for pro-housing policies is essential to closing the gap,” added Vasicek. “I strongly believe that housing is one of the greatest limiting factors of continued economic prosperity for this nation’s communities.”
Zoning Reforms as a Catalyst to Housing Starts
Dr. Hamilton, Senior Research Fellow of the Urbanity Project, Mercatus Center at George Mason University, focuses her research on urban economics and land-use policy. She publishes both academic research and policy work. Her writing has appeared in the Washington Post and the Los Angeles Times, and she writes an occasional column at Governing. Hamilton has testified before several state legislatures, as well as the U.S. House of Representatives. She also serves on the Advisory Boards of Up for Growth and Cityscape, a journal published by the U.S. Department of Housing & Urban Development (HUD).
Dr. Hamilton addressed how zoning reforms can expand opportunities for the construction of starter homes nationwide.
“Land use and building regulations are predominantly implemented at the state and local levels,” said Dr. Hamilton. “At the federal level, policymakers can support housing reform by providing leadership on reforming the rules that are standing in the way of badly needed housing. Federal policymakers can use their platforms to aid knowledge sharing on best practices in land use and building regulations, and, in a few cases, federal policymakers can reform specific federal rules that are driving up the cost of housing construction.”
Dr. Hamilton suggested a three-pronged approach as a solution:
- Reforming zoning
- Expanding opportunities for siting manufactured housing
- Introducing improved analysis into the building-code development process
“While the heavy lifting in zoning and building-code reform must come from state and local governments, Congress can aid these efforts,” added Dr. Hamilton. “Members can point to successful reforms in their districts or elsewhere, encouraging state and local policymakers in their states to learn from these successes. Congress could go further by directing HUD to publish best practices in zoning and building codes to support starter homes and workforce housing. In specific areas, such as the Height of Buildings Act and the steel chassis requirement for manufactured housing, Congress could act directly to repeal regulations that are standing in the way of more housing at better prices.”
Click here to view the House Financial Services Committee’s Subcommittee on Housing and Insurance hearing “Building Our Future: Increasing Housing Supply in America.”
