HOME 2.0: Modern Solutions to the Housing Shortage

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                   HOME 2.0: MODERN SOLUTIONS TO THE5                            HOUSING SHORTAGE67=======================================================================89                                HEARING1011                               before the1213                 SUBCOMMITTEE ON HOUSING AND INSURANCE1415                                 of the1617                    COMMITTEE ON FINANCIAL SERVICES18                     U.S. HOUSE OF REPRESENTATIVES1920                    ONE HUNDRED NINETEENTH CONGRESS2122                             FIRST SESSION23                               __________2425                             JULY 16, 202526                               __________2728                           Serial No. 119-352930       Printed for the use of the Committee on Financial Services3132               [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]3334                            www.govinfo.gov3536                                ------3738                   U.S. GOVERNMENT PUBLISHING OFFICE3961-136 PDF                 WASHINGTON : 20254041                 HOUSE COMMITTEE ON FINANCIAL SERVICES4243                    FRENCH HILL, Arkansas, Chairman4445BILL HUIZENGA, Michigan, Vice        MAXINE WATERS, California, Ranking46  Chairman                             Member47FRANK D. LUCAS, Oklahoma             SYLVIA R. GARCIA, Texas, Vice48PETE SESSIONS, Texas                   Ranking Member49ANN WAGNER, Missouri                 NYDIA M. VELAZQUEZ, New York50ANDY BARR, Kentucky                  BRAD SHERMAN, California51ROGER WILLIAMS, Texas                GREGORY W. MEEKS, New York52TOM EMMER, Minnesota                 DAVID SCOTT, Georgia53BARRY LOUDERMILK, Georgia            STEPHEN F. LYNCH, Massachusetts54WARREN DAVIDSON, Ohio                AL GREEN, Texas55JOHN W. ROSE, Tennessee              EMANUEL CLEAVER, Missouri56BRYAN STEIL, Wisconsin               JAMES A. HIMES, Connecticut57WILLIAM R. TIMMONS, IV, South        BILL FOSTER, Illinois58  Carolina                           JOYCE BEATTY, Ohio59MARLIN STUTZMAN, Indiana             JUAN VARGAS, California60RALPH NORMAN, South Carolina         JOSH GOTTHEIMER, New Jersey61DANIEL MEUSER, Pennsylvania          VICENTE GONZALEZ, Texas62YOUNG KIM, California                SEAN CASTEN, Illinois63BYRON DONALDS, Florida               AYANNA PRESSLEY, Massachusetts64ANDREW R. GARBARINO, New York        RASHIDA TLAIB, Michigan65SCOTT FITZGERALD, Wisconsin          RITCHIE TORRES, New York66MIKE FLOOD, Nebraska                 NIKEMA WILLIAMS, Georgia67MICHAEL LAWLER, New York             BRITTANY PETTERSEN, Colorado68MONICA DE LA CRUZ, Texas             CLEO FIELDS, Louisiana69ANDREW OGLES, Tennessee              JANELLE BYNUM, Oregon70ZACHARY NUNN, Iowa                   SAM LICCARDO, California71LISA McCLAIN, Michigan72MARIA SALAZAR, Florida73TROY DOWNING, Montana74MIKE HARIDOPOLOS, Florida75TIM MOORE, North Carolina7677                      Ben Johnson, Staff Director7879                                 ------8081                 SUBCOMMITTEE ON HOUSING AND INSURANCE8283                     MIKE FLOOD, Nebraska, Chairman8485MONICA DE LA CRUZ, Texas, Vice       EMANUEL CLEAVER, Missouri, Ranking86  Chairwoman                           Member87JOHN W. ROSE, Tennessee              NYDIA M. VELAZQUEZ, New York88WILLIAM R. TIMMONS, IV, South        RASHIDA TLAIB, Michigan89  Carolina                           AYANNA PRESSLEY, Massachusetts90RALPH NORMAN, South Carolina         RITCHIE TORRES, New York91ANDREW R. GARBARINO, New York        SYLVIA R. GARCIA, Texas92SCOTT FITZGERALD, Wisconsin          NIKEMA WILLIAMS, Georgia93MICHAEL LAWLER, New York             BRITTANY PETTERSEN, Colorado94MARIA SALAZAR, Florida               JANELLE BYNUM, Oregon95TROY DOWNING, Montana9697                         C  O  N  T  E  N  T  S9899                              ----------100101                        Wednesday, July 16, 2025102103                           OPENING STATEMENTS104105                                                                   Page106Hon. Mike Flood, Chairman of the Subcommittee on Housing and107  Insurance, a U.S. Representative from Nebraska.................     1108Hon. Emanuel Cleaver, Ranking Member of the Subcommittee on109  Housing and Insurance, a U.S. Representative from Missouri.....     3110111                               WITNESSES112113Ms. Alison George, Director, Colorado Division of Housing,114  Department of Local Affairs, on behalf of the Council of State115  Community Development Agencies (COSCDA) as Board President.....     4116    Prepared statement...........................................     6117Mr. Eric Oberdorfer, Director of Policy and Legislative Affairs,118  National Association of Housing and Redevelopment Officials119  (NAHRO)........................................................    11120    Prepared statement...........................................    13121Mrs. Ellen Woodward Potts, Executive Director, Habitat for122  Humanity of Tuscaloosa, on behalf of Habitat for Humanity123  International..................................................    19124    Prepared statement...........................................    21125Ms. Tiffany Bohee, President, Mercy Housing California...........    30126    Prepared statement...........................................    32127128                                APPENDIX129130                   MATERIALS SUBMITTED FOR THE RECORD131132Hon. Mike Flood:133    Associated Builders and Contractors (ABC)....................    60134135                 RESPONSES TO QUESTIONS FOR THE RECORD136137Written responses to questions for the record from Ms. Alison138  George139    Representative Scott Fitzgerald..............................    62140    Representative Maxine Waters.................................    62141    Representative Janelle Bynum.................................    63142Written responses to questions for the record from Mr. Eric143  Oberdorfer144    Representative Scott Fitzgerald..............................    64145    Representative Maxine Waters.................................    67146    Representative Janelle Bynum.................................    69147Written responses to questions for the record from Mrs. Ellen148  Woodward Potts149    Representative Maxine Waters.................................    71150    Representative Janelle Bynum.................................    72151152                              LEGISLATION153154H.R. ----, the HOME Reform Act of 2025...........................    73155156                  HOME 2.0: MODERN SOLUTIONS TO THE157                           HOUSING SHORTAGE158159                              ----------160161                        Wednesday, July 16, 2025162163             U.S. House of Representatives,164             Subcommittee on Housing and Insurance,165                            Committee on Financial Services166                                                    Washington, DC.167168    The subcommittee met, pursuant to notice, at 2 p.m., in169room 2128, Rayburn House Office Building, Hon. Mike Flood170[chairman of the subcommittee] presiding.171    Present: Representatives Flood, De La Cruz, Rose, Timmons,172Fitzgerald, Lawler, Downing, Cleaver, Tlaib, Pressley, Garcia,173Williams of Georgia, Pettersen, and Bynum.174    Also present: Representative Liccardo.175    Chairman Flood. The Subcommittee on Housing and Insurance176will come to order.177    Without objection, the chair is authorized to declare a178recess of the committee at any time.179    This hearing is titled, ``Home 2.0: Modern Solutions to the180Housing Shortage.''181    Without objection, all members will have 6 legislative days182within which to submit extraneous materials to the chair for183inclusion in the record.184    I would remind all members and witnesses we do have an open185vote on the floor at this time, so the committee reserves the186right to recess for purposes of that, but we are convening this187hearing today in a spirit of bipartisanship.188    I recognize myself for 4 minutes for an opening statement.189190     OPENING STATEMENT OF HON. MIKE FLOOD, CHAIRMAN OF THE191 SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE192                         FROM NEBRASKA193194    First, I would like to thank all of our witnesses for being195with us today. I very much look forward to hearing your196testimony on the Department of Housing and Urban Development's197HOME Investment Partnership Program. For those who are not198familiar with it, the HOME program was created in 1990 with a199passage of the Cranston-Gonzalez National Affordable Housing200Act. The HOME program provides block grant funding to States201and municipalities for the purpose of building and202rehabilitating affordable housing. In practice, HOME is often203used as a gap financing tool for housing projects often in204conjunction with LIHTC, the Low-Income Housing Tax Credit.205Since the early 1990s, the program has continued to be funded206without many statutory changes and without a reauthorization.207In other words, the HOME program is ripe for a remodeling208itself, a fresh look from this committee.209    Our work in this subcommittee this year has been focused on210one thing, and that is addressing rising housing costs in this211country. The one way to curb rising housing costs is to212increase housing supply. No amount of rental assistance, down213payment assistance, or other demand-side subsidies will get us214out of our housing cost problem. We need to build more housing215in this country, and that is the only solution that will move216the needle. The underlying supply problem is what made me so217interested in the HOME program to begin with. HOME is a program218within our jurisdiction that is specifically geared toward219building housing supply. I figured it would make sense to take220a closer look at HOME and figure out what works with the221program, what does not work with the program, and what we could222change.223    To that end, I am proud to say that I have been working224very closely with my colleague, Ranking Member Cleaver, to get225to the bottom of those questions. In April--you might have seen226it--the two of us released a video requesting comments from227States, cities, nonprofits, and developers on the HOME program.228We received over 140 letters from organizations across the229country in response. In May, the two of us sat together in a230room for 6 hours, meeting with different requesters and asking231them questions about how they would change the HOME program.232Now, finally, we have a public hearing on this topic.233    In the comments we received from a diverse set of234stakeholders, there were four themes that up repeatedly as pain235points that drive up housing costs in the HOME program. They236are what I call the four horsemen of the housing apocalypse.237The environmental review requirements, that is the first one.238These delay a project start and often drive up its costs;239number two, the Build America, Buy America requirements that240drive up the cost of critical construction materials; number241three, the Davis-Bacon requirements that, from what I have242heard, are much more costly due to the associated reporting243requirements than they are for the actual cost of paying the244prevailing wages; and Section 3 requirements that make it more245difficult to find contractors to do the job, particularly in246rural areas with some of the workforce challenges I mentioned.247We all agree that individually, each one of these requirements248has a noble purpose, but when you put them all together, it249makes it harder to address the supply problem in a less costly250way.251    The legislation attached to this hearing intends to address252each of these four factors that drive up costs in the HOME253program. Additionally, it seeks to provide a little more254flexibility for jurisdictions to use funds to build more supply255rather than for the permissible demand-side uses of the256program. I expect in our conversation today; members and257witnesses may raise things they would like challenged within258this draft. That is okay. In fact, it is more than okay. That259is why we are here.260    As I close, I want to thank Ranking Member Cleaver for261working in such good faith with me over the last several262months. It has been a pleasure to develop a closer relationship263with him through this process. With that, I am excited to hear264testimony from our witnesses on the HOME program and housing265supply, and with that I yield back.266    I now recognize the ranking member of the subcommittee, Mr.267Cleaver, for 5 minutes for an opening statement.268269 OPENING STATEMENT OF HON. EMANUEL CLEAVER, RANKING MEMBER OF270       THE SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S.271                  REPRESENTATIVE FROM MISSOURI272273    Mr. Cleaver. Thank you, Mr. Chairman. Let me thank you also274for creating a very wholesome atmosphere to work on some very275serious pieces of legislation, and I thank the witnesses and276some of the advocates who are concerned about the HOME program277who joined us here today.278    I would like to begin by describing for the American public279the process for the legislation being considered. My colleague280has already outlined some of it, but at the beginning of this281Congress, Chairman Flood and I sat down and discussed our282priorities around housing and insurance. Increasing the supply283of safe, decent, and affordable housing is a challenge across284this Nation. Tomorrow, I will join the National Low-income285Housing Coalition to release the 2025 Out of Reach report. The286report will highlight the urgent need for more housing supply.287The high cost of housing is a function of limited supply. In288Missouri, my home State, a minimum wage worker needs multiple289jobs to afford a 1-bedroom rental home at fair market rate. In290April, the chairman and I put out a national request on how to291improve the Department of Housing and Urban Development (HUD's)292HOME program. HOME is HUD's largest program dedicated293exclusively to supporting affordable housing. The program is294often used with the low-income tax credits. Every $1 of HOME295leverages nearly $5 in additional private investment, and HOME296has built more than 1.4 million affordable houses. It is also297operating on an expired authorization and in need of298modernization.299    After soliciting feedback, Chairman Flood and I invited300organizations to discuss their needs, their ideas. We came to301an agreement on key areas to be addressed and continue to work302on that legislation. There are a massive number of rules placed303on nonprofits on thin margins, and on low-income housing304providers who are building safe, decent, and affordable305housing. Many rules add little to the goals of the program or306are outright counterproductive. This includes rules that307prevent low-income populations from participating in Federal308projects. Low-income housing programs have also been tasked309with complying with uncoordinated rules across different310programs and agencies that make the goals of providing safe,311decent, and affordable housing more difficult. This is312something that Ezra Klein and Derek Thompson wrote at length in313their book, ``Abundance.'' I advise everybody to read that314book. It will make you happy or, as it did with me, convicted315me.316    We saw a HOME rulemaking last year that addresses some of317the issues of the program, but Congress is needed as well. All318the witnesses today report that the HOME program can be319improved and that the program is critical to housing supply,320and I agree. Anyone who knows housing agrees. The witnesses321today are more than 100 organizations, and what they have322provided us in terms of invaluable feedback. The Fiscal Year3232026 Appropriation Subcommittee bill this week would not324provide new homes for the HOME program and would eliminate many325of the HOME programs. This is wrong. I disagree with it. The326White House presented it. It is something we disagree with327strongly.328    No matter what we do on HOME, this hearing today is not329occurring in a vacuum. I am committed to working with you on330HOME and on the many issues facing American families. I look331forward to my continuing work with the chairman, and I look332forward to being with him when we cross the line on this333extremely important piece of legislation.334    Chairman Flood. Thank you, Representative Cleaver. I now335welcome the testimony of Ms. Alison George, the Director of the336Colorado Division of Housing Department of Local Affairs, here337on behalf of the Council of State Community Development338Agencies as board president. We also welcome Mr. Eric339Oberdorfer, Director of the Policy and Legislative Affairs at340the National Association of Housing and Redevelopment341Officials; Mrs. Ellen Woodward Potts, the Executive Director of342Habitat for Humanity of Tuscaloosa, here on behalf of Habitat343for Humanity International; and Ms. Tiffany Bohee, President of344Mercy Housing in California. We thank each of you for taking345the time to be here. Each of you will be recognized for 5346minutes to give an oral presentation of your testimony.347    Without objection, your written statements will be made348part of our official record.349    Ms. George, you are now recognized for 5 minutes for your350oral remarks.351352  STATEMENT OF ALISON GEORGE, DIRECTOR, COLORADO DIVISION OF353HOUSING, DEPARTMENT OF LOCAL AFFAIRS, ON BEHALF OF THE COUNCIL354   OF STATE COMMUNITY DEVELOPMENT AGENCIES (COSCDA) AS BOARD355                           PRESIDENT356357    Ms. George. Thank you. Good afternoon, Chair Flood, Ranking358Member Cleaver, and members of the subcommittee. Thank you for359this opportunity to testify today. I am Alison George. I am the360Board President of the Council of State Community Development361Agencies, COSCDA. We represent States that administer vital362programs doing housing, community development, homelessness363programming, and disaster recovery work. I am from the great364State of Colorado and the director of the Division of Housing365at the Colorado Department of Local Affairs. I am here today on366behalf of State housing leaders across the country who367administer the HOME Investment Partnership Program and to share368how these funds are making a difference in Colorado, an example369from Representative Pettersen's district, Harvest Hill in370Broomfield.371    Broomfield is a suburban area between Denver and Boulder372housing over 74,000 residents. Through a $2.6 million HOME373award, we are helping build 152 affordable homes for families374earning between 30 and 70 percent of the area median income.375This income range is $42,000 to $94,000 for a 4-person376household in Broomfield. I particularly want to highlight the377eight 30-percent area median income (AMI) units at Harvest Hill378because these units, at a deeply affordable rate, are not379possible without essential gap funding. In partnership with380Broomfield FISH, a local nonprofit, residents will have access381to food security programs and long-term stability services, and382that is just one piece of the broader ecosystem. HOME is often383the first funding source in and the last piece that keeps a384project together.385    Now I will share with the committee what HOME makes386possible in Colorado. In Fiscal Year 2025, we received over $16387million through HOME, $5 million to my department and $11388million directly to our local governments. Public data from HUD389shows that since 1993, Colorado has assisted over 29,000390households, invested over $280 million of HOME funds in over 60391cities and towns, and contributed to over 500 projects. That392funding goes a long way in a tight housing market. Nationwide,393the success of the HOME program is clear: the program is a394great investment. HUD estimated that with $1 billion in FY 2024395funding, the HOME program would leverage about $6 billion in396additional investments. Since 1992, HOME has generated 2397million jobs and over $140 billion in local economic activity.398    To strengthen the HOME program, though, COSCDA has outlined399several key priorities. From COSCDA's national network of State400agencies, we fully support modernization and respectfully offer401the following suggestions to improve HOME's efficiency and402impact. First, ease administrative burdens where possible. We403recognize the importance of accountability, but overlapping404requirements, like Section 3, Davis-Bacon, Build America, Buy405America (BABA), and environmental reviews, have become406especially difficult for our small and rural communities to407manage. We encourage consideration of ways to streamline or408better align these requirements to keep projects moving.409Second, support stronger administrative capacity. Many States,410including Colorado, are doing a lot with very limited411resources. We would welcome consideration of increasing the412administrative cap, eliminating the commitment deadline, and413revisiting the Community Housing Development Organization414(CHDO) set-aside to today's operating realities. Third,415preserve flexibility in how States use HOME. The ability to416adapt the program to local conditions is one of HOME's greatest417strengths. We hope any updates to the program maintain the418flexibility while allowing improvements that simplify419implementation.420    In closing, HOME is working in Colorado and across the421country. We appreciate the subcommittee's thoughtful efforts to422modernize the program. At the same time, we are concerned about423the House Appropriations proposal that plans to eliminate HOME424funding. The one-time HOME Investment Partnerships American425Rescue Plan (HOME-ARP) program is entirely separate and426distinct from the annual HOME program. We urge this427subcommittee to continue emphasizing the importance of the HOME428program as funding negotiations continue.429    On behalf of COSCDA and the Colorado Department of Local430Affairs, thank you for your leadership and for keeping housing431front and center. I will be glad to answer any questions you432have.433434    [The prepared statement of Ms. George follows:]435436    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]437438    Chairman Flood. Mr. Oberdorfer, you are now recognized for4395 minutes for your oral remarks.440441     STATEMENT OF ERIC OBERDORFER, DIRECTOR OF POLICY AND442   LEGISLATIVE AFFAIRS, NATIONAL ASSOCIATION OF HOUSING AND443                REDEVELOPMENT OFFICIALS (NAHRO)444445    Mr. Oberdorfer. Thank you. Good afternoon, Chairman Flood,446Ranking Member Cleaver, members of the subcommittee, and thank447you for this opportunity to comment on the HOME Investment448Partnerships Program. My name is Eric Oberdorfer, and I am the449Director of Policy and Legislative Affairs for the National450Association of Housing and Redevelopment Officials, or NAHRO.451NAHRO's 26,500 members play a vital role in providing homes for452more than 8 million people nationwide. NAHRO members include453public housing agencies and community development organizations454serving rural, suburban, and urban areas across the United455States.456    NAHRO members use the HOME Program to help expand the457supply of housing and provide essential funding to support458local housing needs. Housing professionals rely on HOME funds459to make affordable housing projects financially viable, often460using HOME dollars to fill critical financing gaps, including461low-income housing tax credit deals. HOME funding has become462increasingly important to affordable housing creation, having463produced and preserved 1.4 million homes since the program464began. Further, since 1992, HOME investments have supported465over 2 million jobs and generated approximately $135 to $140466billion in local income. By modernizing and streamlining the467HOME Program, we can help reduce project costs and stretch HOME468dollars further to create more affordable housing.469    Although well intentioned, certain requirements, including470Davis-Bacon, Build America, Buy America, or BABA, and the471environmental review process impact the effectiveness of the472HOME Program. Davis-Bacon requires federally assisted473construction projects to pay prevailing wages and benefits to474laborers, and while NAHRO supports fair and adequate wages, the475current threshold of 12 units that triggers Davis-Bacon makes476lower-volume construction projects more difficult by driving up477costs and adding significant administrative burden. This can478put these smaller but important projects out of reach. As such,479NAHRO recommends increasing the number of units that trigger480the Davis-Bacon threshold to 50 units. NAHRO also recommends481increasing the construction contract threshold for Davis-Bacon482to $250,000, adjusted annually for inflation, so that HOME483remains economically viable with other funding streams.484    Build America, Buy America, or BABA, requires the use of485domestically produced materials for projects that use HOME486funds, and while NAHRO supports American manufacturing, BABA487makes it more difficult to build and preserve affordable homes.488Currently, demand for housing materials far outweighs the489supply. The extra costs, increased timelines, and confusing490requirements connected to BABA make it harder for contractors491and private developers to take on federally funded projects.492Exempting HOME and other housing and community development493programs from BABA would ensure funding could be used quickly494and efficiently to address our current housing supply crisis.495Cumbersome environmental reviews can also make HOME dollars496less effective. These reviews often cause delays, leading to497unnecessary costs. NAHRO recommends improving the environmental498review process by shortening the time it takes to complete and499ensuring that only one review is required per project, no500matter how many funding sources are involved.501    Beyond streamlining, we also see opportunities to make the502HOME Program itself more effective. Specifically, NAHRO503recommends broadening the list of eligible activities to504include rehabilitating public housing units and supporting505projects that have previously received HOME funds. These506changes would help communities better meet local housing needs.507By allowing HOME to be used for the rehabilitation of public508housing units, the program would provide much-needed support to509units in distress. Using funding for projects previously510assisted with HOME funds, grantees can restore projects that511need modernization.512    Lastly, authorizing adequate funding amounts for the HOME513Program would ensure that funds match increasing costs and514need. Providing HOME funding at levels that keep pace with515inflation and rising operating and construction costs would516ensure the program remains effective in our current economic517climate. Proposals to eliminate funding for the program would518be devastating and would significantly decrease our country's519ability to construct affordable housing. The gap financing520provided by HOME is critical to making affordable housing deals521work.522    NAHRO thanks the chair and ranking member of the523subcommittee for their efforts to improve the HOME Investment524Partnerships Program. Your commitment to expanding affordable525housing for all Americans is greatly appreciated. Thank you,526and I look forward to your questions.527528    [The prepared statement of Mr. Oberdorfer follows:]529530    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]531532    Chairman Flood. Mrs. Potts, you are now recognized for 5533minutes for your oral remarks.534535STATEMENT OF ELLEN WOODWARD POTTS, EXECUTIVE DIRECTOR, HABITAT536 FOR HUMANITY OF TUSCALOOSA, ON BEHALF OF HABITAT FOR HUMANITY537                         INTERNATIONAL538539    Mrs. Woodward Potts. Chairman Flood, Ranking Member540Cleaver, and members of the subcommittee, thank you for this541opportunity to testify and share Habitat for Humanity's542recommendations for deepening the impact of HUD's HOME543Investment Partnerships Program. My name is Ellen Woodward544Potts, and I have served as Executive Director of Habitat for545Humanity of Tuscaloosa, Alabama since 2013. I am here on behalf546of Habitat Tuscaloosa and on behalf of Habitat for Humanity's547U.S. network of over 900 affiliates in all 50 States, D.C., and548Puerto Rico.549    Our country is facing a record shortage of entry-level550homes, which has driven up prices and pushed the dream of551homeownership out of the reach of millions of families552nationwide. Throughout the United States, Habitat affiliates553are working directly with essential members of the workforce--554teachers, home health aides, military personnel, and many555others--who earn at or below the 80th percentile of AMI and556struggle to find homes that they can afford to purchase. As one557of the few builders in the starter HOME market, Habitat is558working diligently to create and preserve homeownership559opportunities, but both financial and regulatory barriers make560it difficult to construct affordable starter homes. Habitat561makes it work by leveraging corporate partnerships, private562donations, volunteer labor, low-cost public land and other563means, but public resources are essential pieces of the564solution.565    The HOME Program's crucial resources have helped create566homeownership opportunities for thousands of households in567rural, urban, and suburban communities nationwide. We received568HOME funds as a community housing development organization, or569CHDO, from the city of Tuscaloosa, which supported the570construction of more than 30 homes for homeownership during my571tenure. These local families would not have been able to572purchase a safe and affordable home otherwise. However, the573scale of our Nation's housing crisis requires us to modernize574the program and make HOME as effective as possible. We are575grateful to see the interest by members of this subcommittee to576modernize the HOME Program and are honored to share the highest577priority recommendations from our written testimony.578    First of all, we believe homes should be consistently579available for homeownership purposes. We are fortunate to have580a great relationship with our participating jurisdiction.581However, that is not the case throughout the country, as shown582by the steep declines over the last 10 years, documented by the583Congressional Research Service. We recommend creating a floor584for participating jurisdictions (PJs) to make assistance585available for homeownership activities. We also recommend the586statute make it explicit that the preemptive purchase option587may be used by community development corporations, such as588Habitat affiliates, which have the ability and capacity to589preserve the affordability of for-sale homes for low-to590moderate-income families. This should not be limited to591community land trusts or entities using a shared equity model.592    Third, we understand the need for environmental reviews.593However, the expensive process frequently creates significant594delays and complications. Habitat recommends offering595categorical exclusions for new constructions of homes up to 20596units, exempting home repair projects altogether, and allowing597the reuse of ERs. We are pleased to see language in the draft598legislation that would provide categorical exemptions for599several types of projects. Also, as included in the draft600legislation, we recommend easing Davis-Bacon compliance601burdens. Habitat believes in fair pay for workers, but the602challenge lies in the profuse documentation, especially for our603small contractors. We recommend increasing the exemption from60412 to 50 units. Lastly, as in the draft legislation, we605recommend exempting the development of private homes from Build606America, Buy America requirements.607    In closing, I would be remiss if I did not mention the608importance of providing robust annual funding for the HOME609Program alongside these wonderful modernization efforts. The610program plays a critical role in expanding housing supply and611pathways to homeownership. With improvements, it will only612become more impactful. I appreciate the opportunity to share my613experience and Habitat's recommendations. I am happy to answer614any questions. Thank you so much.615616    [The prepared statement of Mrs. Woodward Potts follows:]617618    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]619620    Chairman Flood. Ms. Bohee, you are now recognized for 5621minutes for your oral remarks.622623STATEMENT OF TIFFANY BOHEE, PRESIDENT, MERCY HOUSING CALIFORNIA624625    Ms. Bohee. Chairman Flood, Ranking Member Cleaver, and626other distinguished members of the House Financial Services627Subcommittee on Housing and Insurance, thank you for the628opportunity to testify before the subcommittee's hearing today.629My name is Tiffany Bohee, and I am honored to address you on630this important modernization effort. I will speak from my631experience as President of Mercy Housing California, the632largest regional affiliate of Mercy Housing and a frequent user633of the HOME Program.634    Mercy Housing is a national nonprofit, multifamily housing635developer, owner and manager with a portfolio of 346 rental636communities, including more than 25,000 affordable homes across63721 States serving 40,000 people with low incomes. We are638committed to creating affordable homes and thriving639communities. Our development efforts have leveraged the HOME640Program in high-cost urban areas as well as suburban and rural641areas to develop homes for families, veterans, seniors, and642people exiting homelessness.643    Nationally, Mercy Housing has leveraged HOME dollars to644produce 111 multifamily rental communities inclusive of almost6458,000 affordable homes in 10 States. Just last year, we646leveraged a HOME award of $700,000 to recapitalize Timber Creek647Apartments in Omaha, Nebraska, renovating the homes of 180648working families and ensuring that the apartment homes remain649affordable for the long term. In Savannah, Georgia, HOME650dollars helped us redevelop a public housing site into 484651modern homes where hundreds of families and seniors can thrive.652In California, over the next few years, we will leverage653committed HOME dollars to create new, dignified homes for654seniors in the small town of Davis as well as the service655enriched housing for seniors in Oakland.656    The HOME Program is one of the only Federal sources657dedicated to providing gap funding for shovel-ready affordable658housing. While Mercy Housing's projects catalyze a great deal659of private investment, including financing made possible by the660housing credit, these Federal HOME dollars still make up a661critical piece of our funding stack. HOME is often the gap662funding that makes affordable housing deals feasible, helps us663break ground, and lease up our homes in less time. We are664encouraged by the expansion of the housing credit in the recent665tax and spending bill and wish to emphasize that this expansion666will be even more impactful for working families and other low-667income people if programs such as HOME are strengthened, fully668funded, and streamlined.669    Because HOME funding is rarely the only source of funding670for an affordable housing development, we recommend the671subcommittee consider sensible streamlining reforms that make672HOME dollars work more seamlessly with other kinds of funding.673Firstly, save time by aligning the environmental review674process. The use of HOME dollars often triggers an675environmental review process per National Environmental Policy676Act (NEPA) that is duplicative with existing environmental677review and adds time without achieving environmental goals.678Secondly, reduce complexity by using one set of regulations679focused on tenants. Finally, address building requirements that680make HOME dollars hard to use. Accepting HOME awards often681triggers Build America, Buy America rules as well as Davis-682Bacon regulations, which adds cost and complexity to the683construction process and drives up the cost of producing more684affordable housing.685    In conclusion, it is our hope that advancing commonsense686reforms to the HOME Program does not come at the expense of687maintaining adequate funding for this transformational program.688We respectfully urge the committee to work with your colleagues689and stakeholders to support and adequately fund this critical690program. We stand ready to work with your committee to find691meaningful bipartisan solutions. The Federal Government must692partner with our States and municipalities to address housing693shortages and recognize the importance of high-quality694multifamily rental housing for people who are not high earners.695HOME, again, is the only Federal block grant focused696exclusively on providing housing for people with low and697moderate incomes. It is absolutely essential that this resource698be maintained. Thank you, and I look forward to continuing the699discussion.700701    [The prepared statement of Ms. Bohee follows:]702703    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]704705    Chairman Flood. I now recognize myself for 5 minutes for706questions.707    Every witness with us today is either someone who interacts708directly with HOME funding or someone who represents an709organization whose membership interacts directly with HOME710funds, so I am going to direct the next three questions to each711of our four witnesses. I am short on time, so I would712appreciate it if you would be concise with your answers. The713first question is, due to the environmental review requirements714in the HOME Program, do these requirements increase the cost of715housing construction? Give me a ``yes'' or ``no,'' and then716briefly explain why. Ms. George?717    Ms. George. Thank you, Chair Flood. The quick answer is718yes. It is yes because of the uncertainty of the number of719times at this moment that an environmental review might be720required, so there are many different triggers, and so limiting721the environmental review to one per project is critical.722    Chairman Flood. Mr. Oberdorfer.723    Mr. Oberdorfer. Yes. Thank you for that question, Mr.724Chairman. I would agree it does increase both time and cost. I725think, to Ms. George's point, what is really important is726making sure that there is just one environmental review process727throughout. Otherwise, it can lead to delays, which then will728lead to increased costs and challenges with finishing the729development.730    Chairman Flood. Mrs. Woodward Potts.731    Mrs. Woodward Potts. Yes. It increases the cost for new732homeownership by several thousand dollars, but then also with733our HOME repair programs. For instance, we have an elderly734couple now who are without heating and air conditioning. We are735trying to replace their HVAC unit, but we cannot do that until736we get an environmental review done just to replace an HVAC737unit.738    Chairman Flood. How hot is it right now in Alabama?739    Mrs. Woodward Potts. I do not want to say anything ugly.740    Chairman Flood. All right.741    [Laughter.]742    Mrs. Woodward Potts. Very warm. Warmer than here.743    Chairman Flood. We will be fair for them, yes.744    Mrs. Woodward Potts. Yes.745    Chairman Flood. Ms. Bohee.746    Ms. Bohee. Yes, Chairman, it does increase the cost and747time to construct. As other folks have articulated, there is a748duplicative nature to a number of these regulations currently749in the statute. It adds cost and administrative burden.750    Chairman Flood. Okay. Next round of questions, back to Ms.751George, do Davis-Bacon requirements increase the cost of752housing construction using HOME dollars? Again, ``yes'' or753``no,'' and a very brief why.754    Ms. George. A quick answer is yes, and the reasoning is, I755would like to focus on the rural areas of our State where we do756not see the consistency, and oftentimes with States, States757have their own requirements for wages, and so there are758conflicting requirements, and then that also drives up the759administrative burden in reviewing both State and Federal760requirements.761    Chairman Flood. Mr. Oberdorfer.762    Mr. Oberdorfer. Yes, Davis-Bacon comes with a significant763number of administrative requirements that are attached to it.764What can be especially difficult is, in smaller rural765communities, local contractors or developers may not be willing766to meet Davis-Bacon requirements for a variety of reasons,767meaning that grantees using HOME funds need to go further768afield to get contractors or developers, which then adds769additional cost as well.770    Chairman Flood. Mrs. Woodward Potts.771    Mrs. Woodward Potts. Yes, and part of the problem is that772even in a community our size, we have 220,000 people living in773our county. We have trouble getting people to bid at all, for774electricians, plumbers, things like this, and it is even more775difficult to find them if they have to comply with Davis-Bacon.776Most of these people are small businesses. It is maybe an777electrician with one helper and a bookkeeper, and so trying to778do all of the Davis-Bacon requirements when you are a really779small business is very difficult, and we like to support our780small businesses.781    Chairman Flood. Sure. Ms. Bohee.782    Ms. Bohee. Mr. Chairman, yes. We certainly are stalwart783supports of our friends in labor and are committed to paying784prevailing wage in the trades in both high-cost and rural785areas. However, as a national organization, we have found that786the application of that particular statute has really different787impacts in different States, and for us, we have seen788particularly challenges in these high-cost areas where789communities are already rent burdened.790    Chairman Flood. Thank you to each of you. I have more of791those kinds of questions, but my time is limited, but let us792just observe what we just saw. We have Democrat and Republican793witnesses get asked the same questions with mostly the same794answers. This is one of those unique issues in America where we795are on the right side because everybody up here wants to see796more affordable housing. I bet we could do this with Section 3797requirements. We could do the same thing with some of the other798issues relating to BABA. With that, my time is up, so I am799going to recognize the ranking member for his opportunity to800question you all for 5 minutes.801    Mr. Cleaver. Thank you, Mr. Chairman. I have pastored a802church almost all my adult life, and we have a panel and803probably members who agree on things better than a church804meeting and sometimes church--I should not have brought that805up--church meetings can be difficult, but I am appreciative of806all of the energy that has been put into this effort that we807are laying out. Putting aside my disagreement with808appropriators about the amount of funding currently spent, Ms.809Bohee, do you think that providing new funding, along with some810creative things that we are able to get into legislation, could811ignite a program like those who created this program way back812anticipated?813    Ms. Bohee. Thank you, Congressman. Yes, absolutely. We814believe the HOME Program, with the modernization proposals that815have been proposed, will absolutely help to streamline and816build affordable housing cost effectively and faster.817    Mr. Cleaver. Thank you. Last night, I had dinner with a818labor leader, the American Federation of Labor and Congress of819Industrial Organizations (AFL-CIO) leader, here in D.C., and820talked about the HOME Program, and I raised the question if821Davis-Bacon was created in 1931 and we are now in 2025, and8222,000 was the key number in 1931--I actually think it was a823little higher than that; I think it went back down--I am asking824all of you, what number would you suggest as the trigger number825on Davis-Bacon?826    Ms. George. Thank you, Congressman.827    Mr. Cleaver. Considering 1931 until today.828    Ms. George. Thank you for that question. One of the biggest829challenges I see is with our rural communities and making sure830that we have enough bids to actually do the work that needs to831be completed in our rural communities; and so, what we are832recommending, COSCDA, is that the threshold be increased to 50833units to ensure that we are able to get those projects moving834in our rural communities throughout Colorado.835    Mr. Cleaver. Units instead of dollars.836    Ms. George. Focus on units, yes.837    Mr. Oberdorfer. Thank you for that question, Ranking838Member. For the HOME Program, NAHRO would agree that 50 units839is an appropriate trigger for Davis-Bacon requirements. Again,840this will help especially smaller communities but also smaller841projects in larger cities and suburban areas be able to build842more units more quickly, which will make those HOME dollars go843further.844    Mr. Cleaver. Miss Ellen.845    Mrs. Woodward Potts. I completely agree. Fifty units are846what we also recommend. We agree with my colleagues here.847    Mr. Cleaver. Ms. Bohee.848    Ms. Bohee. Congressman, we do agree that 50 units is an849appropriate threshold. It does work in both our rural areas as850well as in a number of our urban areas.851    Mr. Cleaver. Is there greater difficulty in getting workers852in rural areas, even if we were doing a larger project? I have853a town in my district, Marshall, Missouri, 12,000 people, but854they are having difficulty, and I think they might even have855difficulty with 50 units because in a lot of these small towns,856they are going to build 10 under. I would like to conduct a857survey to find out how many 50-unit projects we have in rural858areas. Any of you see that as an impediment?859    Ms. George. Thank you, Congressman. By increasing the860threshold, that means that in rural areas where they might be861focusing on a project that is less than 50 units, they would862not be doing the administrative paperwork for Davis-Bacon. That863is the idea of increasing that threshold.864    Mr. Cleaver. Thank you.865    Chairman Flood. The gentlewoman from Texas, Ms. De La Cruz,866is now recognized for 5 minutes.867    Ms. De La Cruz. Thank you so much, Mr. Chairman. Thank you868to all of our witnesses for being here today, and I would like869to talk a little bit about this important topic that I know is870so important to my community. I serve a largely rural871community, a Hispanic community, in fact, one of the most872Hispanic communities in the entire Nation in deep South Texas.873Many of my constituents are impacted by key HUD programs, like874HOME, and it makes me happy to serve as vice chair of this875subcommittee as we work to enhance these programs, making them876more impactful and sustainable, and I know my constituents feel877the long-term benefits. I have represented South Texas here in878Washington, DC. for 2-and-a-half years. I have learned that879change here in Washington can come more slowly than what I am880used to as a small businesswoman. A good example of this is881with the HOME Program, what we are discussing here today and882what has not been reauthorized since 1992. It is just883incredible when I say it out loud. It is as if the world has884not changed in 30 years, and we know it has changed quite a bit885since then.886    I appreciate the subcommittee's continued focus on housing887issues as many of our constituents continue to struggle to888purchase a home or make the rent. It is in the strategic889interest of our Nation and our constituents back home for us to890use the resources available to bring high-quality units to the891market as quickly and effectively as possible. The positive892reforms to the HOME Program included in the draft text notice893for this hearing will do just that: shorten timeliness and894increase effectiveness. Looking at this panel before us today,895I see a great slate of witnesses comprised of policy experts896and people with real boots on the ground. I would like to give897each of you the opportunity to share with us one positive898reform included in the HOME Reform Act, and for you to explain899to our constituents watching today how that change will help900enhance the supply of affordable housing. Let us start with Ms.901George.902    Ms. George. Thank you, Congresswoman. I love being first903because that does not give me a lot of time to think about904that. There are a lot of modernization aspects that we are905looking at now that are important. I think I want to focus on906the flexibility that the HOME Program has, and it is one of my907many hopes as you are looking at this modernization that you908keep because we have been able to pilot new ideas with HOME909that have grown across our State because of the flexibility910that it has. I want to stress maintaining that flexibility, not911necessarily a change, because I think testimony thus far has912already touched on several of those, so I will let others go913from there. Thank you.914    Ms. De La Cruz. Flexibility. Thank you.915    Mr. Oberdorfer. Thank you for that question, Congresswoman.916I think what is most important is that the bill does is exempt917HOME from certain requirements, like Build America, Buy918America, increases the threshold to Davis-Bacon, as well as919streamlines environmental review processes. HOME does a lot of920things, and the flexibility in HOME is critical to the program,921but one thing that is incredibly important about HOME is it922acts as gap financing often for low-income housing tax credit923deals. When HOME is applied to make the low-income housing tax924credit work, which we just saw a significant increase in the925tax credit come from Congress, those HOME requirements then926fall onto the low-income housing tax credit, making it more927difficult to move forward.928    Ms. De La Cruz. Now, when you said, ``exempt homes from929certain requirements,'' which requirement were you specifically930speaking of?931    Mr. Oberdorfer. Build America, Buy America.932    Ms. De La Cruz. Build America, Buy America.933    Mr. Oberdorfer. Then also just the changed thresholds for934Davis-Bacon and the environmental review processes.935    Ms. De La Cruz. Thank you. Yes, ma'am?936    Mrs. Woodward Potts. I would agree that the best thing is937to reduce the amount of burdensome paperwork and regulations938associated with using this very critical funding.939    Ms. De La Cruz. Good job. Yes, our last witness.940    Ms. Bohee. Thank you, Congresswoman. Yes, the streamlining941of environmental regulations, the exemption provided for under942NEPA and certainly making it easier to build so we can deliver943these homes faster for those in need.944    Chairman Flood. The gentlewoman's time has expired. Thank945you.946    Ms. De La Cruz. I yield back.947    Chairman Flood. The gentlewoman from Texas, Ms. Garcia, is948now recognized for 5 minutes.949    Ms. Garcia. Thank you, Mr. Chairman, and I am going to try,950frankly, to contain myself because I just cannot believe some951of the words that I am hearing. I agree with the Chairman: we952all want more housing, especially affordable housing, but I do953not think I want to see affordable housing being built in an954old landfill. I do not think I want affordable housing to be955built by young people that are getting meager wages or by956subcontractors and contractors that are not even meeting the957minimum wage. I do not want to see housing built that, frankly,958is goods or lumber or nails that are coming from another959country and not the good old USA, that are going to fall apart960after 2 years of people living in it. I just cannot believe you961all are, basically, wanting us to toss out all the kinds of962protections that we need to make sure that we only not be able963to have affordable housing, but good-quality housing.964    I will be honest with you. I have been around for a long965time in local government, State government, and I have never966seen a panel actually talk about tossing all the rules out967because we want to build anywhere, anytime, any way we want,968because that is what I am hearing from you all. I mean, have969not you all heard about how great it is to support American970manufacturing and products and buy American? We have all been971talking about that for years, but you want an exemption from972that? I mean, really, you all do? I mean, I am disappointed in973all of you, especially Habitat. I mean, Habitat is Jimmy974Carter's group. I mean, he was as American as they got. He is975probably rolling in his grave, poor dear, right now.976    I ask you first, ma'am, you say you want to protect small977business from Davis-Bacon, but yet you do not want to support978small U.S. businesses by buying American. Can you help me979reconcile that?980    Mrs. Woodward Potts. We support our local contractors. We981only hire electricians, plumbers, HVAC contractors, and brick982masons, people like that. All of these people are making above983the prevailing wage for Davis-Bacon. Most of our labor is984provided either by our construction crew, who are all paid985fairly with health insurance, or it is provided by volunteer986labor.987    Ms. Garcia. But you are asking us to do away with the Buy988American Act. You want an exemption.989    Mrs. Woodward Potts. Our issue with it is that it is very990difficult to determine when we are going to 84 Lumber in991Tuscaloosa, Alabama, where did those nails come from where did992the----993    Ms. Garcia. Have you tried just asking the seller?994    Mrs. Woodward Potts. It is very difficult for a local995business in Tuscaloosa, Alabama, to know tens of----996    Ms. Garcia. Ma'am, just like I said, I am completely997baffled by this panel. I can walk into Home Depot, and they998will tell me what is American made or not. I remember one time999going to four stores just trying to find a button-down shirt1000that was made in America. It is hard, but you have to just ask.1001I am having trouble reconciling your positions, and you, sir,1002you talk about the prices and Davis-Bacon and costs. Do you not1003realize that the tariffs alone are going to cost about 401004percent more in building the home? At least that is what the1005home builders told us in another hearing about 4 weeks ago, and1006then with a lack of immigrant labor, it is going to raise it1007another 30 percent.1008    Mr. Oberdorfer. Yes, I appreciate----1009    Ms. Garcia. You would not just build any damn thing you1010want to any damn place you want to?1011    Mr. Oberdorfer. No, I appreciate the question, and I want1012to reiterate that NAHRO supports American-made products and1013manufacturing. The problem is the industry just is not set up1014for that yet. We have been working----1015    Ms. Garcia. Which industry, sir?1016    Mr. Oberdorfer. The construction industry, manufacturing,1017all of the things that we would need to meet the Build America,1018Buy America requirements. It is incredibly difficult.1019    Ms. Garcia. Sir, we have been talking about that since I1020was a county commissioner about 15 lives ago.1021    Mr. Oberdorfer. Although the Build America, Buy America1022requirements have just come into compliance----1023    Ms. Garcia. It is not that hard.1024    Mr. Oberdorfer [continuing.] a couple of months ago, and so1025the system is just not set up at this point for developers or1026for contractors to find those products they need----1027    Ms. Garcia. Do you really want to build on a landfill? Do1028you really want to build on a site that is flood prone? Do you1029really want to build in a place that has contamination of oil1030or gas or some toxic waste because you do not want to go1031through an environmental?1032    Mr. Oberdorfer. No, absolutely not, ma'am, and our1033recommendation is not to prohibit environmental reviews, but1034rather, to make sure there is one environmental review per1035project as opposed to having to go through duplicative----1036    Ms. Garcia. Sir, I have built a lot of things. I was a1037county commissioner. I remember one time, one road that took me1038almost 3 years to build because not only did I have to face1039environmental, once they started digging, they found a gas1040pipe, so then we had to do that review, and then we went1041further down the road, and they found an archeological site.1042They had to do that review. Those things----1043    Chairman Flood. The gentlewoman's time has expired. The1044gentleman from New York, Mr. Lawler, is now recognized for 51045minutes.1046    Mr. Lawler. I want to thank Chairman Flood for having this1047hearing and prompting us to begin to really take a look at the1048programs at HUD. In many ways, the HOME Program exemplifies the1049larger problems with many of our housing programs. Despite its1050status as HUD's second largest block grant program and seventh1051largest program overall, the HOME Program has not been1052reauthorized since 1992. We have continued to pump money into1053this program while program outcomes have diminished under1054outdated regulatory frameworks, administrative burdens, and1055inconsistent project tracking.1056    One of the most common refrains I hear in the 17th District1057of New York is concerns about the affordability of housing.1058This is a basic supply and demand issue. We are 7-and-a-half1059million units underbuilt nationwide. We need to build more1060housing, period. With mortgage rates near their highest since1061the turn of the millennium, it is perhaps the most difficult1062time to purchase a home in our Nation's history. However, so1063much of the crisis comes back to the fact that we are not1064building enough. The HOME Program, like other programs at HUD1065and other Federal policies, needs targeted modernization for1066the housing needs of the 21st century. We need to be1067structuring these programs to enable Federal, State, and local1068partners to work together to incentivize to growing our supply.1069    Ms. George, Mrs. Potts, and Mr. Oberdorfer, how would you1070describe the cumulative regulatory burden of the HOME Program1071on participating jurisdictions and developers?1072    Ms. George. Thank you for that question, Congressman. Time1073is money. I have actually worked as a developer doing1074affordable housing and at the State, and then represent, of1075course, the Council of State Community Development Agencies.1076The regulatory items that we have talked about are not the1077wholesale elimination of these rules but really trying to1078target where they have the most need, and so, like with BABA,1079in particular, we are in full agreement. We want things built1080and purchased that are made in America, absolutely agree. The1081challenge is the uncertainty, and coming from a developer's1082perspective, when you are uncertain that you are going to be1083able to get the financing or you will get in trouble for1084something that you meant to do correctly, you might choose not1085to do that deal, and that is a problem because we need more1086housing. We are here to talk about doing more housing more1087rapidly, and so the proposals that we are considering today are1088what we believe from practitioners as ways that we can achieve1089something that is better for all of us.1090    Mr. Lawler. Mrs. Potts.1091    Mrs. Woodward Potts. After the April 27, 2011, tornado in1092Tuscaloosa destroyed a sixth of the city in about 5 minutes,1093hundreds and hundreds of houses were destroyed. Habitat wanted1094to buy 33 lots on Juanita Drive in the heart of the tornado1095zone, and it took more than 2 years, nearly 3 years to complete1096the environmental reviews and build homes for homeownership for1097Tuscaloosans who had lost everything they owned, and many of1098them had lost family members.1099    Mr. Lawler. Yes.1100    Mrs. Woodward Potts. That is the kind of regulatory burden1101that I would like to see eased. It is not that we want to do1102away with environmental reviews.1103    Mr. Lawler. A thousand percent. Mr. Oberdorfer, what1104reforms would best support new single-family construction1105through the HOME Program, especially in areas with acute1106homeownership demand?1107    Mr. Oberdorfer. Thank you for that question, Congressman. I1108think what makes the HOME Program so critical and important is1109the flexibilities that are included within that. What that1110allows is for grantees to determine what makes sense on the1111ground for them. For areas where single-family homeownership or1112single-family building makes sense, HOME would allow them to do1113that. I think what is most critical about the HOME Program is1114that flexibility that allows communities to do what makes sense1115for their local needs.1116    Mr. Lawler. Look, this is one of the biggest issues facing1117the country, the issue of affordability and access to housing,1118and the sheer fact is we just do not have enough housing. There1119needs to be greater cooperation between the Federal Government,1120our State and local partners, and developers to actually1121incentivize the construction of new housing----1122    Chairman Flood. The gentleman's time has expired.1123    Mr. Lawler [continuing.] or the affordability crisis will1124worsen.1125    Chairman Flood. The gentlewoman from Georgia, Ms. Williams,1126is now recognized for 5 minutes.1127    Ms. Williams of Georgia. Thank you, Chairman Flood and1128Ranking Member Cleaver, for this hearing today, and thank you1129to all of our witnesses for being here to talk about such an1130important issue across the board for all Americans.1131    Today, my Republican colleagues are holding this hearing1132because they want people back home to think that they will1133boost the HOME Program to address the affordable housing1134shortage, and that will be noble if only my Republican1135colleagues' actual actions lined up with this premise. You know1136what is not noble? Republicans saying nothing while the1137President continues to push an anti-affordable housing agenda,1138including eliminating the HOME Program in his Fiscal Year 20261139budget proposal. Before we can talk about expanding the HOME1140Program, we need to make sure there is a HOME Program left to1141even expand. I have always worked with my colleagues on the1142other side of the aisle in this subcommittee, and now I am1143calling on my Republican colleagues to do the same: work with1144Democrats and hold the Trump administration accountable for1145what they are doing in the housing space to make it more1146unaffordable for Americans.1147    In the span of just 6 months, we have seen the Trump1148administration fire 700 HUD staff. We saw Trump give his once1149bestie, now frenemy, whatever you want to call him, Elon Musk,1150his Department of Government Efficiency (DOGE) passion project:1151access to sensitive housing discrimination data. We have1152watched this administration slash and cancel fair housing1153funding grants, and we all know why this is happening. It is1154because housing investments are meant to help low-income1155families and individuals. It is meant for those who struggle to1156afford a roof over their head, and clearly, these are not the1157people that Donald Trump has shown us that he fights for1158because they are not billionaires, and they are not lining his1159pockets. In fact, he does not fight for me or the constituents1160that I serve. In my district alone, we have the widest racial1161wealth gap in the country and housing prices that continue to1162skyrocket, and in the Atlanta area, Trump's plans to gut1163housing investments will only make homeownership a more harder1164reality for so many people already struggling. If Republicans1165want to say today that they truly care about housing supply,1166which I think that they actually do, I need them to understand1167exactly how important the HOME Program is before they allow1168President Trump to totally gut that, too.1169    Ms. Bohee, HOME Program funds can be used to finance a wide1170variety of affordable housing activities that generally fall1171into six categories: new construction of homeowner-occupied1172housing, rehabilitation of owner-occupied housing, assistance1173to homebuyers, new construction of rental housing,1174rehabilitation of rental housing, and tenant-based rental1175assistance. Are there investments the HOME Program can make1176that are not eligible activities under any other Federal1177program?1178    Ms. Bohee. Thank you for the question, Congresswoman. We do1179believe one of the greatest tools is streamlining, eliminating1180duplicative requirements, absolutely. This program must1181absolutely be preserved. It is, again, the only source of1182Federal block grant funding specifically targeted to low-and1183moderate-income households.1184    Ms. Williams of Georgia. You all, the HOME Program is very1185flexible. It provides funding dedicated exclusively to1186increasing the availability of adequate, affordable housing for1187low-and very low-income households. The program places a1188particular emphasis on giving States and localities flexibility1189in how they achieve their affordable housing goals and funds1190and can be used for a variety of activities related to both the1191rental and owner-occupied housing. Ms. Bohee, can you discuss1192instances in which HOME funds were used effectively on any1193project? Just give me an example of a project on how it was1194used effectively.1195    Ms. Bohee. Absolutely. Recently in Savannah, Georgia, we1196did use HOME dollars to redevelop a public housing site into1197484 modern homes. These are multifamily, affordable housing for1198families, seniors, and folks exiting homelessness. We leveraged1199those HOME dollars in conjunction with housing tax credits. The1200layering of those funding sources often takes many, many1201multiple funding sources to get affordable housing built, so1202the streamlining of those regulations associated with all of1203the funding sources is critically important to building those1204housing faster.1205    Ms. Williams of Georgia. So, it is the streamlining that1206made this be more effective for you said over 400 people for1207affordable housing in Savannah, Georgia.1208    Ms. Bohee. Over 400 families, yes.1209    Ms. Williams of Georgia. Thank you, Ms. Bohee. You all, the1210HOME Program is just one of the many things in President1211Trump's proposed budget that he is looking to eliminate. House1212Republicans and this administration are pretending that the1213private market can fix the affordable housing crisis. We must1214do something about this together, Chairman Flood. Thank you,1215and I yield back.1216    Chairman Flood. The gentlewoman yields back. The gentleman1217from Montana, Mr. Downing, is now recognized for 5 minutes.1218    Mr. Downing. Thank you, Mr. Chair. Thank you for holding1219this important hearing. Thank you to the witnesses.1220    Housing is obviously on all of our minds in solving1221problems. I really see it as the basis of the American Dream as1222being able to own your own home and finding solutions,1223especially for those that have barriers. The United States is1224over $36 trillion in debt, and taxpayer dollars are precious. I1225support efforts to make sure they are used responsibly, so it1226is important that we do think very strongly about how we get1227the most bang for our buck. The HOME Investment Partnerships1228Program created in 1990 is HUD's largest block grant program1229dedicated exclusively toward affordable housing, and the1230program receives over a $1 billion in funding annually.1231    I am going to start with Mrs. Potts. Can you share examples1232of how HOME Program funds have been used to attract additional1233private or philanthropic capital and what barriers remain in1234maximizing that leverage?1235    Mrs. Woodward Potts. We have lots of corporate partners,1236but many of them are not able to fully fund a house. For1237instance, Public Supermarket Charities gives us $50,000 a year.1238That will not fully fund a house, but we can pair that with1239HOME dollars and provide a home, build a home for a family with1240that paired funding. We also can build handicap-accessible1241housing for families, which they would never be able to even1242find, much less afford otherwise.1243    Mr. Downing. Do you see barriers to this type of1244investment, these philanthropic or private investments?1245    Mrs. Woodward Potts. There is only so much philanthropic1246and private investment available, especially in communities1247like mine, which are not huge communities. It is a wonderful1248thing. Maybe 20 percent of our funding in terms of new1249homeownership comes from HOME, and then the other 80 percent1250comes from private funders, whether it is foundations,1251businesses, faith-based organizations, churches, and others.1252    Mr. Downing. Thank you. My district, the 2nd District of1253Montana, is very rural. In fact, it is the largest1254congressional district by landmass, other than Alaska. We have1255very long roads, a lot of dirt, small communities, very rural.1256Very rural. I am going to move to Ms. George here. Can you1257describe any differences you have noticed in the HOME Program's1258success in suburban areas versus rural areas?1259    Ms. George. Absolutely. Thank you, Congressman. We1260administer the program for the State, and what we find is that1261the developers that are prepared to administer the HOME Program1262and meet the requirements of both the environmental review,1263Section 3, the four horsemen. As the chairman says----1264    Mr. Downing. Right1265    Ms. George [continuing.] they need to be prepared, and so1266the number of people or developers that can respond to an RFP,1267request for proposals, is smaller because they do not have that1268experience to actually administer the program. So, what we find1269in our rural communities is we limit the number of contractors1270that can actually apply and carry out a construction project,1271which is a challenge because you are trying to get as much1272competition----1273    Mr. Downing. Right.1274    Ms. George [continuing.] in the community as possible to1275get the best product.1276    Mr. Downing. How else could this be reformed to better1277serve these municipalities in rural or under-resourced1278participating jurisdictions?1279    Ms. George. Thank you, Congressman. What we are proposing1280is that the threshold for these requirements be lifted to 501281units. That way, we can ensure that we are getting the most1282people applying to rural projects so that we can actually1283complete these projects in a timely way.1284    Mr. Downing. Thank you. What additional performance metrics1285or public reporting would you recommend HUD publish to give1286Congress and the public clearer insight into the HOME Program's1287cost effectiveness?1288    Ms. George. Thank you, Congressman. That is a good1289question. That is actually one that I would like to come back1290with information on at your request.1291    Mr. Downing. Anybody else would like to respond to that1292last one?1293    Mr. Oberdorfer. Just to make sure I understood, so the1294question is, what could HUD provide to make sure that these1295dollars are going as far as possible?1296    Mr. Downing. Exactly.1297    Mr. Oberdorfer. I think what we have seen with the HOME1298Program, especially when you are looking at the economic1299benefits, both to the number of new units that have been1300constructed as well as the impacts to the local economy, those1301are two really critical points that are helpful to understand.1302    Mr. Downing. Thank you very much. I have run out of time,1303Mr. Chair. I yield.1304    Mr. Downing. The gentlemen yields back. The gentlewoman1305from Michigan, Ms. Tlaib, is now recognized for 5 minutes.1306    Ms. Tlaib. Thank you so much, Mr. Chair, and my colleagues1307and the witnesses here today. It excites me to actually talk1308about affordability and housing, some of the most real issues1309for my residents back home in the 12th congressional District1310in Michigan. However, it is hard to sit here and have detailed1311policy discussion when the President of the United States has1312called for eliminating the HOME Program entirely, in addition1313to cutting rental assistance by 43 percent in the middle of a1314housing crisis. I am not here to blame anybody because it1315existed under the previous President, and now it is here in the1316current President, but to cut rental assistance by such a1317drastic amount is immoral. Already, this administration has1318repealed much of the fair housing protections that many of my1319residents--disabled, Lesbian, Gay, Bisexual, Transgender, and1320Queer/Questioning (LGBTQ), Black, Latino, moms, the children--1321all of it. They canceled grants to organizations that help1322enforce fair housing laws and fired hundreds of HUD staffers,1323but I do want to take this opportunity, though, to discuss how1324we can improve the ``only'' Federal block grant focused1325exclusively on affordable housing for our low-income1326households, not just in Detroit, in all of our districts.1327    Under current program requirements, for example, the funds1328must be committed within 24 months, or they expire; so,1329organizations in my district, for instance, have said that this1330makes it very hard for them, for smaller, emerging, affordable1331housing developers without mature, what we call capital stacks,1332to access funding. Ms. George or Mr. Oberdorfer, do you know of1333early stage projects or emerging developers who have1334experienced similar difficulties accessing HOME funds? If so,1335what are some of those challenges that they face?1336    Mrs. George. Thank you, Congresswoman, for that question.1337It is an excellent question because 24 months, it sounds good.1338    Ms. Tlaib. Yes.1339    Mrs. George. The challenge is the development timeline for1340a multifamily development takes a while to get all of the1341approvals for the funding. In Colorado, we have been trying to1342expedite the processes and the approval processes throughout1343the timeframe of when you have an idea through when you start1344construction and complete construction. The challenge is, it1345still takes 24 months if everything works perfectly, so what we1346are proposing from COSCDA is to extend that time or to1347eliminate that commitment period for the HOME Program.1348    Mr. Oberdorfer. Yes. Thank you for that question,1349Congresswoman, and I would agree. The 24-month commitment makes1350it very difficult to make development deals, and especially1351when you are already dealing with layered subsidy and layered1352funding streams, which are challenging to do in the first1353place. That 24-month commitment makes it very hard to get1354everything in line. We would agree with COSCDA to eliminate1355that 24-month commitment, especially knowing that there is a 4-1356year deadline to complete projects with HOME dollars----1357    Ms. Tlaib. Yes.1358    Mr. Oberdorfer [continuing.] so you know that things would1359move forward anyway.1360    Ms. Tlaib. I agree. Turning to some of the other proposed1361changes I appreciate in the HOME Reform Act, it does aim to1362address the housing affordable crisis. I enjoy the intent, but1363sometimes implementation, well, all the time implementation1364matters. However, I am worried that in expanding the1365eligibility up to 100 percent of AMI, the funding will not go1366where it is most needed; and so, in the Detroit area, for1367instance, the wealthier suburbs push up the AMI, the average1368medium income, so you can see already the disparities in that1369regard. To any of our panelists, how do we ensure that the1370funds are going through where the greatest need is?1371    Mr. Oberdorfer. Thank you for that question, Congresswoman,1372and I think we can all agree that there is a real need for1373affordable housing across the board right now. One of the1374things that is so important about HOME is the fact that it does1375provide affordable housing for lower-income families. I would1376recommend if there were conversations or discussions about1377potentially increasing the AMI, that would also need to go hand1378in hand with an increase to the program. Additional funding1379could ensure that you could grow the HOME Program to1380potentially have the eligibility go up to 100 percent AMI while1381still being able to serve those families, but that funding1382would be critical to make that work.1383    Ms. Tlaib. I do not have much time, but I can tell you, if1384anybody has any other remarks, but I just caution my1385colleagues, the HOME Program is irreplaceable. It works well1386when we implement it the right way, and so I just urge my1387colleagues to please reconsider in supporting elimination of1388the HOME Program. Thank you.1389    Chairman Flood. The gentlewoman yields back. The gentleman1390from South Carolina, Mr. Timmons, is now recognized for 51391minutes.1392    Mr. Timmons. Thank you, Mr. Chairman, and thank you to our1393witnesses for committing to testifying today, even with our fun1394schedule changes. Today's hearing topic is a piece of a much1395larger problem: government efficiency and contradicting1396regulatory requirements. As I examined the HOME Program, I1397discovered that many policies, though often well intentioned,1398frequently contradict one another, making it much harder to1399solve our Nation's housing supply problems. This creates1400unnecessary challenges and places a heavier burden on those1401working within the system. Given these complexities, it is1402essential to clarify the expectations placed on participating1403jurisdictions. To better understand these obligations and how1404participating jurisdictions manage program requirements, it is1405important to hear from people in the field who work with the1406program day in and day out.1407    Ms. George, what are the core responsibilities of1408participating jurisdictions that receive HOME Program funds?1409    Ms. George. Thank you, Congressman. That is a very broad1410question, and so I would say the ultimate responsibility is1411ensuring affordable housing is built and is serving the1412intended constituents of that State or jurisdiction; and so, it1413would be initially ensuring that there is competition in1414application, and then it is ensuring and reviewing that there1415is a viability of a project that is being done, and then as you1416go to contracting, ensuring that people are following through1417with what they committed to do through their application and1418their contract, and then the long-term viability and ensuring1419that into the future, that people are actually being housed as1420was the commitment in the original contract.1421    Mr. Timmons. Thank you for that. Can you walk through the1422flow of HOME Program funds from HUD to participating1423jurisdictions and then developers or project sponsors, how the1424money flows through the system. Am I stretching it here?1425    Ms. George. Thank you, Congressman. Okay. I believe that1426Congress would appropriate the funds, and we are hopeful that1427Congress appropriates the funds because there is a tremendous1428benefit to people throughout the country for these dollars.1429Once they are appropriated to HUD, HUD then goes through an1430assessment of how those funds should be divided up throughout1431the country.1432    Mr. Timmons. Is that based off of the Census and population1433densities and costs of different areas?1434    Ms. George. That is correct. It is based on need, based on1435the statutes that you all create. Once the funds come to,1436whether they are the State or through a participating1437jurisdiction, a local jurisdiction, we would know what our1438allocation would be. From there, we would have a competitive1439process where applicants, whether they are a developer, a1440nonprofit like Habitat or Mercy Housing, would apply for those1441funds because they have a great idea or they have a pilot of1442how they want to serve people, and so from there, they would1443apply. They would compete with other applicants. Then that1444jurisdiction, whether it be State or a local jurisdiction,1445would award those funds. In the State of Colorado, we do that1446through our State Housing Board in a public meeting. From1447there, we contract for those funds, and so the recipient1448developer would actually administer those dollars, whether it1449be a project or a program, and then people would move in once1450the housing is built.1451    Mr. Timmons. I would imagine there is continual1452verification that they are indeed eligible for the assistance.1453I am running out of time. I will finish with this. Ultimately,1454it is our responsibility in Congress to streamline government1455operations and improve the efficiency of all Federal programs.1456We are literally running out of money. We have $37 trillion in1457debt, we got a $1.8 trillion annual deficit, and we must1458carefully review each agency and program to eliminate waste,1459reduce duplication, and ensure that the American people can1460easily and fairly access the services the government provides.1461I look forward to continuing the discussion on the HOME Program1462and working across the aisle to find practical solutions during1463this Congress. Thank you, Mr. Chairman. I yield back.1464    Chairman Flood. The gentleman yields back. The gentlewoman1465from Massachusetts, Ms. Pressley, is now recognized for 51466minutes.1467    Ms. Pressley. Thank you, Chairman Flood and Ranking Member1468Cleaver, for this hearing today. Thank you to our witnesses for1469joining us today and for your work in our communities.1470    Our seniors are being displaced from homes that they have1471lived in for decades. Young families cannot afford to buy, and1472low-income renters have barely enough to get by. Too many1473families are one missed paycheck away from eviction. The HOME1474Program was created to give cities and States the tools to1475build and preserve affordable housing, but for decades,1476Congress has underfunded it, and now the Trump administration1477wants to eliminate the HOME Program completely. This is the1478same administration that has already fired 780 housing agency1479staff, slashed half of all fair housing programs, or grants1480rather, repealed critical housing discrimination enforcement,1481and proposed a budget that guts nearly every rental assistance1482program. Make it make sense. You cannot. It is unconscionable.1483When we say housing is a human right, I know some people think1484that is like a bumper sticker slogan, what we mean is no child1485sleeps in a car, no senior is pushed into a shelter, no1486survivor is trapped in an unsafe home. We do not lack the1487resources to make this vision a reality, simply the empathy and1488the political will.1489    Ms. Bohee, we hear a lot about streamlining the HOME1490Program. I agree that excessive red tape can drive up costs and1491slow down urgently needed housing. Where do you see the most1492opportunity to reduce burdens and delays without weakening1493tenant protections or environmental standards?1494    Ms. Bohee. Thank you for the question, Congresswoman. For1495example, in markets where we develop high-cost markets, for1496example, in California, it often takes six to eight different1497funding sources in order to build that affordable housing. The1498Terner Center in California cited a study in which they1499examined LIHTC housing credit projects and found that for every1500additional funding source, it adds 4 months to the start of1501construction and an additional $20,000 per residential unit to1502develop, so the streamlining there would be to align1503regulations upfront. For example, housing credits are exempt1504from BABA, but often we use the HOME Program as a topper and an1505essential gap financing in order to make those projects happen1506and to target deep affordability for residents; so, aligning1507the regulatory requirements to the primary funding source would1508be absolutely important.1509    Ms. Pressley. All right. Thank you, Ms. Bohee. I want to1510get one more answer on the record here. Under current HUD1511regulations, survivors protected under the Violence Against1512Women Act must get jurisdictional approval for external1513transfers when survivors request to move to a different1514property. From your experience, how long do these transfers1515typically take, and have there been instances where this delay1516in endangered survivors or prevented them from accessing safe1517housing?1518    Ms. Bohee. That is an excellent question, Congresswoman. I1519am actually not prepared to speak on that particular topic1520today, but I would be glad to follow up in writing.1521    Ms. Pressley. Anyone else?1522    [No response.]1523    Ms. Pressley. Okay. All right. I want to be unequivocal:1524the affordable housing crisis did not just happen on its own.1525It is the result of decades of disinvestment in our housing1526programs. In Boston and surrounding areas, the average monthly1527rent for a 2-bedroom apartment has skyrocketed to over $3,600,1528and in the Massachusetts 7th, more than 27 percent of renters1529are severely cost burdened, paying over half of their income in1530rent. The HOME Program is one of the few Federal tools we have1531to change that, but instead of strengthening it, the Trump1532Administration wants to do away with it altogether. This is the1533moment to increase investments in housing, not defund housing1534agencies and programs that are making a difference. This is1535deeply consequential for our survivors of domestic violence and1536so many more. Thank you, and I yield back.1537    Mr. Timmons. [presiding.] Thank you. The gentlewoman from1538Colorado, Ms. Pettersen, is now recognized for 5 minutes.1539    Ms. Pettersen. Thank you, Mr. Chairman, and thank you all1540for being here today to discuss such an important issue. A1541special thank you to Ms. George, who has faithfully served1542Colorado and the Department of Local Affairs for over 15 years1543and has spent the last 10 years as the director of the Division1544of Housing. Alison is set to retire this fall and will be1545sorely missed, so thank you so much for your service to1546Coloradans.1547    In our State, housing affordability is the number one pain1548point that we hear from constituents. Their inability to afford1549to put a roof over their head, the number one most basic1550necessity, is becoming harder and harder. According to the1551report from the National Low-Income Housing Coalition, Colorado1552is now the sixth most expensive State in the country, and the1553median sale of a home in Colorado roughly doubled over the past155410 years. People are experiencing homelessness at an increased1555rate. Low-income renters and aspiring homeowners are feeling1556the pressure of these rising costs, and the HOME Program has1557served as a vital lifeline for communities and families in1558Colorado by providing homebuyer assistance, housing1559rehabilitation grants, and direct rental assistance.1560    I am grateful to the chair and the ranking member of the1561subcommittee for bringing us together in a bipartisan way to1562improve the HOME Program, but I am deeply concerned that the1563very program we are discussing has been proposed to be cut by1564Trump's budget. I hope that we can continue to show bipartisan1565support for this program as it goes through the appropriation1566process. Unfortunately, with housing, like so many complicated1567issues, there is no silver bullet, and it really needs to be an1568all-hands-on-deck approach, and investing in expanding programs1569like HOME is a critical step forward. With that, I have a few1570questions.1571    Ms. George, as you know, one of the many reasons that the1572State and local localities target HOME funds is that the1573program is quite flexible to meet the needs of the community,1574and I would love to hear from you on how Colorado has explored1575different uses for the HOME Program to meet community needs.1576    Ms. George. Thank you, Congresswoman, and I appreciate you.1577What I would really like to highlight is that flexibility that1578you mentioned. We have been able to pilot things in Colorado1579that we would not have been able to do but for the Federal HOME1580Program. Tenant-based rental assistance is something that we1581use that HOME allows. We actually piloted a program, first in1582Mesa County where we were partnered with the local school1583district. In the school district, children were identified as1584being homeless. With the HOME funding we were able to work with1585the local housing authority, the local school district to1586partner that family and provide the housing assistance to1587ensure that child had a place to call home. We have been able1588to expand that program because of the seed funding from the1589HOME funds throughout Colorado, so thank you, and thank you for1590your support of the program.1591    Ms. Pettersen. I love that innovative way of how you are1592helping to support families and being able to identify them1593through the schools and the education system and making sure1594that they get the support that they need; so, thank you for1595that. Ms. Bohee, similarly, to our State in Colorado,1596California has been confronted with astronomical housing prices1597that have priced out not only low-income families but working-1598and middle-class families who are now struggling to pay rent1599and keep food on the table. How does the current structure of1600the HOME Program limit your ability to connect working-and1601middle-class families to resources like tenant-based rental1602assistance, and how can we expand the income thresholds to meet1603that need?1604    Ms. Bohee. Thank you, Congresswoman, for the question. We1605do believe aligning the regulations, really focused on the1606tenants, would be very beneficial. For example, often, our1607projects across the Nation, and certainly in California, will1608utilize tenant-based vouchers, which have a certain level of1609income restriction. On the one hand, the HOME Program has a1610different level of income restriction. There is a lot of back-1611and-forth with the agencies to really figure out how to1612implement that, all the while you have residents living side by1613side with different sets of requirements in which they live in1614their homes, and it creates operational challenges.1615    Ms. Pettersen. Thank you all for this discussion. I know1616that we need to streamline some of these processes. We are not1617doing our job if we are directing dollars and trying to help1618support communities and they are unable to actually take1619advantage of these dollars to meet the need because of the1620barriers that they are facing at the local level. I appreciate1621the discussion today and look forward to working with all of1622you on addressing one of the most important issues that we need1623to focus on here in Congress.1624    Mr. Timmons. Thank you. The gentlewoman from Oregon, Ms.1625Bynum, is now recognized for 5 minutes.1626    Ms. Bynum. Thank you to all the witnesses for your1627testimony and thank you to Chairman Flood and Ranking Member1628Cleaver for convening this important meeting.1629    As you can guess, in Oregon, we, too, are struggling with a1630lack of housing supply, which has created, of course, a housing1631crisis, and buying a home has become out of reach for far too1632many Oregonians, and that has become a top priority of mine in1633Congress. One area that I am interested in is modular1634construction, particularly for multifamily developments,1635Unfortunately, many of our housing programs currently do not1636support modular construction; and so, the idea behind modular1637construction is that, instead of building the entire house at1638the location, large sections are built offsite and transported1639to the location. Imagine if you wanted to buy a new car but you1640had to coordinate with a mechanic, an automotive engineer, an1641electrician, a welder, and six other contractors to come to1642your driveway to design it. The cost would be astronomical, so1643the question really remains is, why would we do that to1644housing? So instead, modular housing would potentially bring1645down home costs by making building a house easier, quicker, and1646cheaper.1647    My question is for Mrs. Potts. You are on the hot seat.1648Currently, HUD programs, including those supporting multifamily1649housing, do not explicitly permit or facilitate offsite modular1650construction, despite its potential power to lower housing1651costs. Given your experience, how do you view the role of1652modular and offsite construction in addressing the affordable1653housing shortage, and what specific barriers--regulatory,1654financial, or otherwise--need to be addressed in order to make1655it scalable through HUD programs?1656    Mrs. Woodward Potts. Thank you for your question. I would1657say that modular construction is one of our tools in our1658toolshed. In Tuscaloosa, we are very fortunate that we can1659build year round outside and on our build sites, but I know1660that our friends who live in colder climes in the winter, they1661often build their homes inside and then move them out to the1662build site. I think that is an important tool. It is not1663necessarily for everybody, but I do believe that it could1664increase the supply of affordable housing, and it needs to be1665one of the tools that is allowed by HOME funding.1666    Ms. Bynum. Thank you. I yield back.1667    Mr. Timmons. Thank you. The gentleman from California, Mr.1668Liccardo, is now recognized for 5 minutes.1669    Mr. Liccardo. Thank you. I appreciate, Mr. Chair, and I am1670sorry that Chair Flood is not here to hear me praise him, but I1671do want to thank Chair Flood for his leadership and convening1672this as collaborative efforts and working with Ranking Member1673Cleaver, and I am grateful for ranking member's collaboration1674as well on this issue and on many others. We are not seeing1675enough of it in Congress these days, and it is refreshing to1676see it happening here. I also want to thank you for allowing me1677to waive on.1678    Chairman Flood asked me about my experience as a Mayor in1679San Jose with HOME funding, and I did not have a lot to say,1680and the reason why I did not have a lot to say, and I think a1681lot of other large-city mayors would have said the same, is1682that it is just not enough money. We do not really see HOME as1683being a major mover. At times it provides gap funding in a very1684complex stack of financing in projects. According to the Urban1685Institute, maybe 20 percent of low-income housing tax credit1686projects use HOME funding as a gap source of funding, but for1687the most part, there are just not enough dollars there, and so1688I join my colleagues in saying we cannot be cutting this. We1689certainly cannot. We have already seen HOME funds decline since16902011. In absolute terms, in real terms, they have been1691declining for decades, inflation-adjusted terms. Now, we have a1692proposal from this President to cut the funding by 43 percent,1693and right now, we know there is not nearly enough funding to1694address the housing crisis we have.1695    All that being said, let me just say I really thank the1696chair for the HOME Reform Act. The proposal that we see here, I1697think, gets a lot right. I certainly support exemptions on the1698Build America Act, eliminating duplicative reviews under NEPA.1699I probably would have even gone farther than that to explore1700categorical exclusions for infill affordable housing. I would1701like to see the greater flexibility of the definition of1702``community housing development organization,'' lengthening the170324-month commitment deadlines, the expansion of the use of1704funds for utilities. I was a little hesitant to support lifting1705the threshold in Davis-Bacon, but I think Ms. Bohee's testimony1706was persuasive to me, and I know that Mercy does great work. We1707have worked with them many times in my neck of the woods.1708    The one concern I have, though, is the change in the income1709ceilings, and I hope that perhaps we can talk about this1710further before this bill reaches us for markup. The bottom line1711really comes back to what I said at the beginning, which is1712there is not enough money. There is not enough Federal money1713for everyone. HOME funding, I have already described, has1714dropped in several different ways in the last decade and a1715half, and the free market is going to provide options for some1716families. We know that. If they are at 95 percent, 100 percent1717of area median income, those options may be limited, but there1718are options. My concern is that for families at 60 percent of1719area median income, there are no options except subsidized1720housing, except for obviously very, very poor ones, poor1721options, I should say.1722    Right now, we have 9 million extremely low-income families1723in this country who qualify for Section 8 funding or vouchers,1724and about one-quarter of them actually get vouchers. We have1725millions of families without, and that is just extremely low1726income. If we go to the very low-income and low-income1727categories, now we are into tens of millions of families who1728desperately need help with very poor housing options that they1729cannot afford; and so, I am very concerned about diluting this1730limited pool and expanding it to 100 percent of area median1731income when we know that there are developers who can1732profitably build in many jurisdictions, not all, but many1733jurisdictions to address that market segment.1734    So my question, I guess I will start with you, Ms. George,1735since you have a big portfolio in Colorado, are you finding1736that, hey, there is a problem, we do not have enough proposals1737for sub-80 percent AMI housing, that we should expand the1738eligibility for HOME funds well above 80 percent?1739    Ms. George. Thank you, Congressman. I will answer the first1740question, which is do we have a limited supply or number of1741applications for below 60 percent AMI. Absolutely not. There is1742a tremendous need for affordable housing. That said, I think1743the beauty of HOME is the flexibility of HOME, and so it is a1744matter of responding to the local needs of your community. It1745might be that first-time homebuyer, and then it also could be1746that 30-percent AMI and below. The example that I used, Harvest1747Hill in Broomfield, I am most enthusiastic. It is 152 units,1748which is fantastic, but it is those 30-percent AMI units. I am,1749as a houser, excited about the expansion of the tax credit1750program, but the HOME Program provides the essential gap1751funding in order to achieve that lower AMI.1752    Mr. Liccardo. Thank you. I yield, and I look forward to1753working with my colleagues on the side of the aisle on this1754issue.1755    Ms. De La Cruz. [presiding.] The chair now recognizes from1756Tennessee, Mr. Rose, for 5 minutes.1757    Mr. Rose. Thank you and want to thank Chairman Flood and1758Ranking Member Cleaver for convening today's hearing and thank1759you to our witnesses for your time today and for being with us.1760    I would like to applaud Chairman Flood and Ranking Member1761Cleaver for their work on the discussion draft of the HOME1762Reform Act of 2025, which is attached, of course, to today's1763hearing. It has been over 30 years since the last time the HOME1764Program was reauthorized by Congress. The world has changed a1765lot in that time, but, unfortunately, many of the HOME1766Program's outdated requirements have lived on. These outdated1767requirements can increase costs and needlessly add time to1768completing housing projects. I am pleased that today's1769discussion draft includes commonsense changes to the HOME1770Program, including exempting National Environmental Policy Act1771mandates, and it creates a small project exemption that will1772ease Davis-Bacon workforce requirements as well. The Nation's1773shortage of homes is at a crisis level in many parts of the1774country, and I think we are all aware of that. I look forward1775to working with Chairman Flood as well as Ranking Member1776Cleaver to successfully reauthorize the HOME Program, which is1777an important step Congress can take right now to help alleviate1778our Nation's housing shortage.1779    Mrs. Potts, one theme that this subcommittee has heard over1780and over again is the unaffordability of starter homes in so1781many areas around our country. I was really happy to see that1782you had an entire section of your prepared testimony devoted to1783barriers to constructing or rehabilitating affordable starter1784homes. Could you describe your personal experiences with1785barriers to affordable starter homes?1786    Mrs. Woodward Potts. I would be happy to. Thank you for1787your question. We have a local developer who is a partner, and1788they have been building affordable starter homes in the Cherry1789Stone neighborhood for six iterations. They had another area1790adjacent that they were going to develop. They started with the1791infrastructure, but by the time they got three-quarters of the1792way through the infrastructure, they realized that what was1793going to be affordable housing, because of the increase in1794interest rates and the increase in building materials and1795things, they were not going to be affordable houses for the1796starter market, so they approached Habitat for Humanity. They1797donated some of the 32 lots and they sold others to us, and we1798are able to develop those homes for first-time homebuyers.1799These are people who work in environmental services, people who1800work in food service, our Tuscaloosa City school bus driver for1801special needs children. These are people who would never be1802able to afford homes otherwise to purchase a home.1803    Mr. Rose. Mrs. Potts, if Congress, working in partnership1804with State and local governments, were to begin removing some1805of the barriers to affordable starter homes that you1806identified, could this help enhance the effectiveness of the1807HOME Program, particularly if Congress is able to successfully1808reauthorize the program?1809    Mrs. Woodward Potts. Yes. It would decrease the amount of1810time from when we get to our concept through the environmental1811review process, all of those things. It would decrease the1812time. It would also actually increase the number of contractors1813that we have who want to bid on projects because some of our1814contractors just do not want to have to deal with the Federal1815regulations, for instance, Davis-Bacon. It is not that they are1816not paying those wages. They are, but it is just the amount of1817paperwork required to comply. Many of our really small1818contractors just do not have the staff to make that happen.1819    Mr. Rose. Thank you. Mr. Oberdorfer, your testimony focuses1820on the significant burdens housing projects face as a result of1821the HOME Program's required environmental reviews. You1822specifically highlighted that, in many cases, if projects1823receive additional funding, they are required to undergo a1824second environmental review. Can you discuss the compliance1825burdens that environmental reviews place on housing programs1826and the importance of environmental review reform in any1827reauthorization of the HOME Program? In 30 seconds.1828    Mr. Oberdorfer. Yes. Thank you for that question,1829Congressman, and obviously, we need to find the right balance1830with environmental reviews, but what typically occurs,1831especially with HOME funds, is that it adds to delays to the1832project, and there are two things I would point out. The first1833is that, oftentimes, when you are using HOME financing to fill1834a financial gap in a project, that means you have other1835timelines that you need to meet as well that could slow down1836the process. The second is you have oftentimes already done an1837environmental review for either of the projects that you are1838working on. It is just once you add that additional gap1839financing through the HOME Program, because of the1840requirements, you need to do that second environmental review,1841so it becomes duplicative.1842    Mr. Rose. Thank you. Our time has expired. I yield back.1843    Ms. De La Cruz. I would like to thank all of the witnesses1844for their testimony today.1845    Without objection, all members will have 5 legislative days1846to submit additional written questions for the witnesses to the1847chair. The questions will be forwarded to the witnesses for1848their response. Witnesses, please respond no later than August184921, 2025.18501851    [The information referred to can be found in the appendix.]18521853    Ms. De La Cruz. This hearing is adjourned.18541855    [Whereupon, at 3:40 p.m., the subcommittee was adjourned.]18561857                                APPENDIX18581859                               ----------18601861                   MATERIALS SUBMITTED FOR THE RECORD18621863[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]18641865                                 [all]