Full Committee Hearing: “Building the Future: How Small Home Builders are Closing America's Housing Gap”

Chairman Roger Williams (R-TX)SPEAKER_11

and he's also known as the Big O in his district, to lead us in the Pledge of Allegiance and a prayer. Good morning to everyone. I now call the Committee on Small Business to order. Without objection, the chair is authorized to declare a recess of the committee at any time, and I now recognize myself for my opening statement. Good morning and welcome to today's hearing titled, "Building the Future: How Small Homebuilders Are Closing America's Housing Gap." I want to thank our witnesses for joining us today and for lending their time and expertise to this important conversation. Homeownership remains a cornerstone of the American dream. Homeownership represents more than just a roof over your head. It's the foundation of personal stability and freedom and a place where families are formed, children are raised, and memories are made. It's where much of America's small business activity begins, with millions of entrepreneurs launching and operating businesses from their homes. Roughly half of all new businesses start in the home. But that dream, for too many Americans, feels increasingly out of reach. Our nation is facing a serious supply and affordability challenge. Today, more than half, one-half of the American households cannot afford a $300,000 home. When housing construction slows and housing becomes unattainable, communities stagnate, growth slows, and young families are priced out. Main Streets across the country feel the consequences as fewer people are able to plant roots, start businesses, and invest in their neighborhoods. Amid these challenges, small homebuilders have become essential. They are often the most agile, responsive, and innovative builders, willing to meet that moment. Across the country, small business and small homebuilders are pushing the boundaries of what is possible in housing delivery, whether through modular or manufactured housing, or emerging methods like 3D-printed construction. Small homebuilders are reimagining how homes are built, from concept to completion. These innovations offer real promise. By reshaping our approach to housing construction, these innovations can deliver faster construction timelines, lower material costs, reduce waste, and offer greater efficiency in bringing homes to the market. Yet, despite this momentum, significant barriers remain for small homebuilders across the country. Key challenges, such as overregulation and access to capital, continue to drive up home costs and constrain supply. In some cases, as much as 40% of the cost of multifamily home development is not tied to brick and mortar, but to navigating layers of compliance costs, locally, and state, and federal requirements. At a time when many families are struggling to find an affordable place to live, we must ask hard questions about whether our current system is helping meet those moments. Because often, the solutions already exist in the ingenuity of builders and entrepreneurs across this country. What they need is the space to build, the clarity to plan, and the freedom to innovate as they can deliver their homes to Americans that we need urgently. Local officials across the country are beginning to realize this, and needless to say, whatever local regulations have been loosened, like in Austin, Texas, the housing market has boomed. You also will hear from our witnesses today, small-business homebuilders are continuing to press forward despite their barriers, but it is time to stop hamstringing our best and our brightest. When small homebuilders are constrained, it affects people far beyond the housing market, and other industries feel the pressure. Local economies lose momentum, and worker mobility becomes restricted. Housing is a driver of economic growth, and when workers cannot find affordable homes near their jobs, certain employers struggle to recruit and maintain talent. Productivity suffers, and economic expansion slows. A shortage of housing does not just limit where people live, it also limits where people can grow, where workers can move, and how strongly local economies can compete. So, as a committee, it's our responsibility to look at the challenges facing small homebuilders and bring their obstacles to light with clarity and with purpose. It is also our duty to empower the people who build America to do what they do best, and our role is to ensure that the committee is a partner in progress, not a roadblock to it. Just yesterday, the ranking member and I, along with our colleagues, voted to pass the House-led bipartisan housing bill that we passed out of this chamber yesterday. We need to work together to ensure that small homebuilders can compete, innovate, and deliver the housing this country is counting on. I want to thank all of you again for being here, coming. It's a big deal that you will come. I look forward to the conversation ahead today. With that in mind, I now yield to our ranking member and my friend from New York, Ms. Velazquez.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you, Mr. Chairman, for calling this timely hearing on one of the most important issues facing our economy. And let me take this opportunity to welcome all the witnesses and to thank you for being here. Nowhere is our affordability crisis more evident than in housing, where half of renters are rent-burdened and a quarter pay more than half of their income. In New York City, our rental market is out of control. On average, New Yorkers who rent are paying 41% of their income. But this isn't a red or blue state issue, either. Cities in states like Texas and Florida also face rental affordability issues. Similarly, homeownership is drifting further out of reach. According to the Atlanta Fed, the salary needed to afford the median home is roughly $116,000, 36% higher than the median income of $85,000. Over just the past 6 years, the median home price has surged over 30%, and elevated interest rates are keeping many locked into their low-rate, pandemic-era mortgages. As a result, an entire generation has been priced out of homeownership. According to the National Association of Realtors, the first-time homebuyer share is now at a record low, and the typical age of a first-time homebuyer is an all-time high of 40 years old. We are not building enough housing to meet demand. Experts estimate we lack between 3 and 5 million units nationwide. Tackling this issue will mean addressing shortages of both single-family and multifamily housing developments. And I hope this hearing can identify causes and address solutions to this crisis, including by leveraging the power of small firms across the nation. Yesterday, the House began addressing some of those issues by passing the 21st Century Road to Housing Act, which makes important reforms to federal housing programs and includes language I offered on cooperative housing developments and oversight of monitors and receivers of public housing authorities. This bill is an important first step, but it's not the complete answer. I urge the Senate to act quickly and pass this bill. Yet we must all recognize that we still need substantial investment in housing programs to tackle this issue. While the issue of slow housing construction is caused by many structural problems, from labor and materials to financing to land regulations, it is clear that the administration, who campaigned on affordability, is making the problem worse. For instance, this administration's cruel and racist immigration policies has specifically targeted a large portion of the construction workforce. As a result, threats of ICE raids have deterred even documented workers and legal residents from showing up to jobsites, extending timelines and growing costs. Tariffs enacted solely by the president are adding costs to building materials, including Canadian softwood lumber, steel, aluminum, and copper, and even kitchen cabinets and furniture. These tariffs are inflating prices from foundation to finish. And to make matters worse, the war in Iran has caused diesel to surge to over $6 per gallon in many states, causing builders to face additional fuel surcharges in transporting building materials. High prices and growing inflation threaten to keep interest rates high while further straining the budgets of renters, homebuyers, builders, and sellers. Just last week, we received inflation data that confirmed price hikes are, once again, outpacing incomes, driven primarily by the president's signature policies: tariffs and the Iran war. The Kraft Heinz CEO said this plainly to the Wall Street Journal last week: Consumers are literally running out of money at the end of the month. Meanwhile, the administration is proposing to gut the very programs—rental assistance, Community Development Block Grants, and HOME Investment Partnerships—that help fill the gap between what the market can deliver and what families can afford. Taken together, these policies and economic conditions aren't alleviating the housing shortage. They are making it worse. Rather than focusing on the issue he was elected to solve, the president focuses on securing $1 billion in taxpayer funds for a ballroom and even spending $30 million on an outbid contract to paint the reflecting pool. Not to mention spending $1.7 billion on a slush fund for his insiders and cronies, some of whom ransacked the Capitol on January 6th. A billion dollars could build a lot of houses and go a long way toward helping small businesses fill this gap. I look forward to hearing from witnesses about how we could better allocate our resources to address this crisis and make life more affordable for everyday Americans. Thank you. I yield back.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentlelady yields back. We'll now move to the witness introductions. Our first witness today is Mr. Bill Owens. Mr. Owens is Chairman of the Board of the National Association of Home Builders. Mr. Owens is also the principal of Owens Construction, an Ohio-based residential construction firm he established in 1982 that is recognized for award-winning, energy-efficient home designs. Mr. Owens has also held numerous leadership roles across the homebuilding industry, including Chairman and positions with the NAHB Remodelers Council, Home Builders Institute, and The New American Home and Remodel Task Force. Mr. Owens is a longtime industry leader at the local, state, and national level. He has served on the NAHB Board of Directors for more than 20 years, has previously served as president of the Ohio Home Builders Association. Mr. Owens is also a member of the Harvard Joint Center for Housing Studies' Remodeling Futures Steering Committee, and remains active in professional education, workforce development, and community service along with his wife, Betsy. I want to thank you again for being here today. It's a pleasure. Our next witness is Dr. Ivan Rupnik. Dr. Rupnik is founding partner of MOD X, a research-based advisory group focused on accelerating the underutilized housing industry. Dr. Rupnik is also a professor of architecture at Northeastern University. His research focuses on industrialized housing delivery, particularly the regulatory and institutional barriers in offsite construction in the United States. Dr. Rupnik work has been featured in The New York Times, and he has presented at HUD, the Harvard Kennedy School, and the National Housing Summit. Through multiple HUD-funded projects, MOD X has produced major policy reports. Their work has identified regulatory reform as the top priority for scaling industrialized housing. Dr. Rupnik holds a PhD in architecture from Harvard University, where his doctoral research examined the relationship between building design, industrial management, and housing policy. And he also holds a Master of Architecture with distinction from the Harvard Graduate School of Design and a Bachelor of Architecture summa cum laude from Louisiana State University. I look forward to our discussion. Our next witness today is Mr. Eric Schaefer. Mr. Schaefer is the Chief Business Development Officer at Falling West Development—or Fading, sorry—Fading West Development, a Colorado-based modular home builder focused on providing affordable, high-quality homes, and he also helps lead Fading West's innovative modular housing projects focused on meeting the needs of communities. Mr. Schaefer plays a key role in building partnerships with developers, nonprofits, and municipalities across Colorado, Hawaii, and the broader Western region. Since the company's manufacturing facility opened in 2022, he has helped advance 25 projects, resulting in the creation of more than 500 homes across the western United States. Mr. Schaefer has testified before the Senate Banking Subcommittee on Housing, Transportation, and Community Development in 2024 and the House Financial Services Committee on Housing and Insurance in 2025. He holds a Bachelor of Science in Communication from Florida State University and a Master of Divinity from Columbia Theological Seminary. So I look forward to your testimony. I now recognize the Ranking Member Velazquez to briefly introduce our last witness appearing before us today.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you, Mr. Chairman. Our final witness today is Emily DiVito, Senior Advisor for Economic Policy at Groundwork Collaborative, where she manages the work on the housing crisis. Prior to Groundwork, she was the Director of Finance, Corporate Regulation, and Consumer Protection at Roosevelt Institute and a policy advisor at the U.S. Treasury Department. Her research has been featured in The Washington Post, The Guardian, and Bloomberg. She holds a bachelor's degree from Wellesley College and an MPA from Columbia University. Thank you for joining us today, Emily. We look forward to your testimony.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentlelady yields back, and I want to also say thank you to our witnesses. We appreciate all of you being here today. Now, before recognizing the witnesses, I'd like to remind them that their oral testimony is restricted to 5 minutes in length. That's an important number here—5 minutes. If you see the light turn red in front of you, it means your 5 minutes has concluded and you should wrap up your testimony. And if you continue on, you'll hear this. That means you got to stop what you're saying, okay? And I know you'll do fine. So with that in mind, I now recognize Mr. Owens for his 5-minute opening remarks.

Mr. Bill OwensSPEAKER_12

Chairman Williams, Ranking Member Velazquez, and members of committee, thank you for the opportunity to testify on America's housing supply crisis. I'm here today representing NAHB's members, most of whom are small businesses who build 10 or fewer homes per year, yet collectively they construct roughly 80% of all new housing in the United States. At its core, today's affordability challenge is driven by a simple imbalance: the nation is not producing enough housing to meet demand. NAHB estimates a structural shortage of roughly 1.2 million homes. Vacancy rates remain historically low, and the resulting supply-demand mismatch has pushed both home prices and rents beyond the reach of too many households. To explain why it's so difficult to build enough attainable housing, NAHB often points to the five L's: lending, lots, labor, lumber, and laws. These interrelated constraints make clear that the crisis is structural and cannot be solved by addressing a single factor alone. First, lending. Housing production depends on access to capital, and for many small builders, that means financing from community banks. Credit conditions remain tight, with borrowing costs elevated, limiting the ability of builders to move projects forward. We are encouraged by recent efforts to highlight project-based working capital options for homebuilders and look forward to working with the committee and the SBA to ensure these programs are available to all builders. Second, lots. The shortage of buildable lots remains a major obstacle as land development costs continue to rise. Restrictive zoning, infrastructure limitations, impact fees, local opposition, and federal permitting delays all constrain the ability to bring land to market. These challenges are especially acute for small builders who cannot spend or who cannot spread high fixed development costs across large-scale projects. Third, labor. The skilled labor workforce shortage continues to significantly limit housing production. At any given time, there are more than 200,000 open positions in residential construction. In 2024 alone, labor shortages prevented the constructions of roughly 19,000 homes and added nearly two months to project timelines. Congress can help by strengthening workforce development programs, expanding training and career pathways in the skilled trades, and ensuring legal and efficient workforce access where domestic labor supply is insufficient. Fourth, labor and materials. Construction input costs remain elevated, with continued price increases in 2026 compounding the challenges posed by financing costs, labor shortages, and delays. Even modest increases in material prices can determine whether a project is viable or not. Finally, laws, meaning regulation. Regulatory costs act as a hidden tax on housing production. NAHB research shows that regulation accounts for nearly 25% of the cost of a new single-family home and over 40% of multifamily development costs. These burdens increase carrying costs and financing risk. Permitting challenges are particularly burdensome for small builders. For example, under the Clean Water Act, the difference between a streamlined nationwide permit and an individual permit can add hundreds of thousands of dollars and more than a year in delays, directly reducing the number of homes that can be built. The bottom line is clear: there is a supply problem. Small builders are ready to help meet the challenge by delivering housing in local markets and underserved communities, but progress will remain limited if costs and delays continue to escalate across financing, land, labor, materials, and regulation. Congress can play a role by advancing supply-focused reforms that expand access to capital, strengthen workforce pipelines, increase the availability of buildable lots, and reduce the excessive regulatory costs and permitting delays. If we want to make housing more attainable, we must make it easier and less expensive to build. Thank you, and I look forward to your questions.

Chairman Roger Williams (R-TX)SPEAKER_11

Thank you. Gentleman yields back. I now recognize Dr. Rupnik for his five-minute opening remarks.

Dr. Ivan RupnikSPEAKER_14

Chairman Williams, Ranking Member Velazquez, thank you. Thank you for the opportunity to testify. This year, I co-authored, or published, a report from HUD that examined why the United States has persistently struggled to industrialize housing delivery, while our peer economies have not. What we found was that much of the work that was done abroad was first proposed in the United States, but never fully implemented. The industrialization of housing delivery is the integration of design, off-site production, and on-site assembly into a coordinated system. Most American industries operate within this regulatory framework that supports this kind of integration, including automotive. Housing does not. In 1968, HUD documented exactly this issue and concluded that the federal role is to create to create an enabling conditions within which companies can innovate to address housing affordability. In response, Congress authorized HUD to pilot a form of regulatory streamlining called housing system certification. That pilot, Operation Breakthrough, validated this approach through work in eight different states and 20 different companies. Six years later, Congress concluded that the lack of uniform housing and building regulatory provisions increases the cost of construction and thereby reduces the amount of housing and other community facilities which can be provided. The '74 Housing and Community Development Act then produced two performance-based regulatory reform actions. The first was the HUD Code, which has been discussed extensively. The second is the more exciting part for me was the establishment of the National Institute of Building Sciences, or NIBS, mandated by Congress to continue the work HUD had piloted, developing a performance-based fast track for small, innovative companies to deliver housing. That problem the problem had been identified and measured, a solution had been demonstrated, an institution had been established, but what was never completed was implementation. Our recent report renewed a call for housing system certification for three concrete reasons. It was proven out at a pilot level in the United States through Operation Breakthrough. It has been operating successfully in Japan for more than 50 years. Today, more than 28% of Japanese housing goes through this fast-track route and has serious benefits. And it is also the same framework that we already use to govern every other consequential American manufactured product: automobiles, aircraft, medical devices, our food, our pharmaceuticals. A housing system is essentially a product definition: the design logic, the structural and material systems, the off-site manufacturing and on-site assembly processes, quality assurance and quality control of a defined, repeatable housing offering treated as a unified whole rather than a collection of discrete decisions made project by project. What defines it as a system is the integration, the design for manufacturing assembly, coordinated supply chains, serial production, and continuous improvement. In other words, industrialized housing delivery. Permitting through this would be streamlined. Lenders and insurers could rely on the certification as a basis for underwriting. Code officials would retain their authority but exercise it against a known and tested baseline. Federal programs could utilize certification for awards and subsidies. This is what's done in Japan. This is not a proposal to preempt local code officials. It is a proposal to give them a tested performance baseline against which to exercise their authority. The savings would come not from redoing the same approvals on every project. The quality gains would come from concentrating expert review at the systems level rather than diffusing it across thousands of individual project reviews. In the US, the strongest endorsement for housing system certification has come from small, vertically integrated companies like my friend Eric Schaefer here, who is also serving on a technical committee to support our work. Fading West will be discussed today. Certification benefits factory, site, and hybrid delivery equally because what it certifies is the integrated system, not the technology itself—it also certifies the technology. Some innovative site builders have also endorsed this regulatory form for exactly the same reason, including Texas-based JPI, a major multifamily builder. We are working so MOD X is working with NIBS and a steering and technical committee of 21 people to develop the standard. We hope to be completed by December of 2026, and we're happy to say that the state of Washington is already working to pilot this at a state level. Todd Beyreuther, who is an industry expert and also the chair of the Building Council, is developing this. I wanted to make this committee aware of this important work, more than half a century in the making, and look forward to your questions and your thoughts about how federal action can support state, local government, and NIBS in helping this scale. Thank you.

Chairman Roger Williams (R-TX)SPEAKER_11

I now recognize Mr. Schaefer for his five-minute opening remarks.

Mr. Eric SchaeferSPEAKER_06

Thank you, Chairman Williams, Ranking Member Velazquez, and members of the committee, for the opportunity to testify today. My name is Eric Schaefer, and I am chief business development officer for Fading West in Buena Vista, Colorado. We are a fully integrated design, construction, modular manufacturing company focused on the lean process. The U.S. faces a crushing housing deficit, and this burden falls on both national builders and smaller home builders like Fading West. With little or no innovation the past 50 years in how houses are built, Fading West and the modular manufacturing industry firmly believe that this committee has a vital role to play in helping small home builders innovate, scale, and actively participate in resolving our national housing shortage. To understand the challenges small home builders face, we must look at how far the U.S. lags in the manufacturing adoption. In our country, modular construction represents less than 5% of all housing. For comparison, in Scandinavia, modular makes up over 45%. We are failing to address the root, systemic causes holding back our construction sector. First, it's because of a fractured labor pipeline. 41% of current construction workforce will retire by the year 2031. With fewer skilled trade professionals available, labor costs will rise and slow project timelines. Second, the price of residential construction goods is up over 40% since 2020. And third, the regulatory burden. Regulations account for 25% of the average sale price of a new home. And fourth, there are 43,000 individual building code jurisdictions across the United States, and this makes it difficult for modular factories to standardize. Fading West has shown that building homes using lean manufacturing principles in our 110,000-square-foot factory has helped us reduce waste from 30% down to 3%. We have over 100 employees who can build a house in less than 10 days in the factory and then complete the on-site work in less than 30 days, for a total of 40 days, far less than traditional construction. We build homes 20% cheaper and 50% faster. We recently built our 1,000th unit in our four-and-a-half years since opening. To see this in action, I'd like to highlight a partnership that we have with Rural Homes, a nonprofit developer in Telluride. In high-cost mountain and rural towns in Colorado, traditional site building the cost is prohibitive for workforce housing. Together with Rural Homes, we have scaled a unique public-private, philanthropic partnership blueprint. Under Governor Polis, Colorado has become a modular-friendly state. Through initiatives like Proposition 123 equity funding and Senate Bill 24-009, the state is streamlining factory certifications and has slashed red tape. By pairing donated municipal land, low-cost philanthropic capital, and Fading West's factory speed delivery, we are building workforce housing at prices well below regional and market pricing. We are currently building projects all around Colorado, in Wyoming, in Texas, in Montana, and have signed first contracts in the Pacific Palisades for families that lost homes in the fire. We built 85 homes in our Colorado factory and shipped them to Lahaina for the FEMA disaster relief project in Maui. We are currently building 24 homes for the Department of Hawaiian Home Lands for a pilot project in Honolulu for the beneficiaries, and partnering with DHHL to build a factory in Hawaii, which will speed building and reduce cost. To empower small business, I offer three recommendations: provide direct capital incentives for facilities through federal grants and 0% interest loans; to create regional building codes for different climate zones, this will unlock standardization and allow factories to flourish; and to prioritize and reward vertically integrated public-private partnerships. Housing policy is education policy, it's economic policy, it's environmental policy, it's transportation policy, it's community policy. The committee can empower small businesses to be the master key that unlocks a new era of attainable housing, vibrant communities, and thriving local economies across America. Thank you, and I look forward to questions.

Chairman Roger Williams (R-TX)SPEAKER_11

Thank you. And the gentleman yields back. I now recognize Ms. DiVito for her five-minute opening remarks.

Ms. Emily DiVitoSPEAKER_07

Chairman Williams, Ranking Member Velazquez, and members of the committee, thank you for the opportunity to testify. My name is Emily DiVito. I am the senior advisor for economic policy at Groundwork Collaborative, an economic policy think tank in Washington, D.C. We face a housing affordability crisis worsened by existing housing shortages and a failure to build more homes of all types. Congress is already taking on barriers to building, such as restrictive zoning, through the 21st Century ROAD to Housing Act. Such efforts are important, but zoning reform alone will be insufficient to fix the housing affordability crisis. Homebuilders and homebuyers face economic headwinds that Congress must tackle head-on. As this committee knows, small and medium-sized homebuilders play a hugely important role in the U.S. housing system. I would like to highlight two particular cost challenges for builders that ultimately put housing out of reach for many families: the rising cost of construction and the high cost of capital. The Trump administration is driving up the cost of construction through its mismanagement of the economy, specifically tariffs on core building materials, as well as higher transportation costs and higher interest rates due to the Iran conflict. In the latest Producer Price Index, the price of goods used in residential construction was up 1.2% over the last month and up 6.1% from last year. Higher prices place a particular strain on small builders who do not have the resources or scale to mitigate tariff costs or to pass rising transportation costs through to consumers. The Center for American Progress recently estimated that higher building costs due to the tariffs will lead to 450,000 fewer homes built over the next 5 years. At the same time, a lethargic labor market and the Trump administration's immigration crackdown make it more difficult for firms to find and retain construction workers, adding further time delays and additional costs to the homebuilding process. These higher construction costs get passed on to homebuyers in the form of higher prices. Meanwhile, just months after DOGE cut staffing at federal housing agencies, the Trump administration is pulling back on federal housing funding by proposing the elimination of programs like HOME Investment Partnerships and Community Development Block Grants. These programs have channeled millions of dollars to local businesses and community partners, helping meet the needs of over 2 million people and resulting in the construction or rehabilitation of more than 1.3 million units of affordable housing. Let's be clear, these challenges didn't come out of nowhere. The higher prices we see today are the result of specific policy choices by this administration that Congress can rein in. But even before the price hikes, cost of capital had already been a major constraint to new construction. Building the capital stack, the specific blend of debt and equity required for a given project, can be costly for firms raising capital from investors seeking returns. Small and emerging developers without the same resources or established track records of large firms have more challenges securing construction loans and recruiting investors in the first place. And even when small developers secure financing, investors often impose strict repayment schedules and high return expectations, which ultimately result in higher costs for consumers. Congress should target interventions that lower the cost of capital and make it easier for homebuilders to build to affordability. First, Congress should allow entities like Fannie Mae and Freddie Mac to buy and sell construction loans, especially the tranches of debt costlier for developers. Existing programs within the Federal Home Loan Bank System should also be expanded. Second, governments should leverage their borrowing power to help cities and states establish revolving loan funds that can extend financing with low interest rates at long maturities to facilitate new construction. Third, Congress should play a bigger role in ensuring mortgages are affordable to homebuyers. This can be achieved through popular policies, such as providing low-rate direct federal mortgages, reducing mortgage insurance premiums, and allowing families to utilize portable mortgages. Ultimately, policies such as these will make it easier and cheaper for businesses to access the financing they need to build more homes. If Congress can lower the cost of construction and the cost of capital, more builders, especially small ones, will be able to meaningfully expand the housing supply at lower prices, which ultimately means more homes that working families can afford. Thank you, and I look forward to your questions.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentlelady yields back. We will now move to the member questions under the 5-minute rule. I recognize myself for 5 minutes. Mr. Owens, as chairman of the National Association of Home Builders, you spent more than four decades in the residential construction industry and have seen firsthand how the regulatory landscape has evolved on the local, state, and federal levels, and small homebuilders play a critical role in meeting housing demand. But many say increasingly complex and costly requirements have made it harder to build homes efficiently and affordably. So my question would be, to give a small homebuilder a fair chance to succeed, how important is it to reduce unnecessary regulations? And over the years, have these regulations been easier to navigate or increasingly burdensome for some homebuilders?

Mr. Bill OwensSPEAKER_12

Thank you for the question, Chairman. That definitely strikes home. We deal with this every day. What we've done with, or what we've dealt with over the four decades of increased regulation just isn't from a code or a land use point of view. It has nothing to do with any one particular item. But when we talk about a combination of factors, at the land development phase, we talk about issues with restrictive zoning, with impact fees, and again, we understand this isn't all federal-mandated. This can be state as well as local regulation as well. But then when we look at infrastructure constraints, even the the NIMBYism, the local opposition, can can add in, an interesting kind of twist into our ability to build. And I think what we're trying to do right now is to just recognize that—and as we bring this to Congress, and I knew at some point I probably would be able to share this with you all—is there's not one particular item as far as regulation goes. There's not one thing in particular that if we did away with today, that we would be in a much better place tomorrow to provide attainable and affordable housing. It's, I call it, death by a thousand cuts. But every one of these adds another layer of cost that we simply just cannot absorb. And that ultimately is going to be passed on to the consumer, much like everything else. When our costs go up, that is a direct impact then on on the the eventual homebuyer.

Chairman Roger Williams (R-TX)SPEAKER_11

All right, thank you. Dr. Rupnik, as a professor of architecture and a leading technical expert in offsite construction and building innovation, you've spent years studying how design, manufacturing, and regulation interact in the housing industry. And through your work with MOD X and your collaboration with the National Institute of Building Sciences, you've explored ways to modernizing housing construction and reduce regulatory barriers that slow the development. Offsite and modular construction are often viewed as promising solutions to improve efficiency, lower costs, and expand housing supply, but they also face significant challenges because of codes, permitting, and inspections, etc., standardization. So my question is quickly, could you walk us through some of the innovations, technologies, and regulatory reforms you are exploring to make the process more scalable and more manageable?

Dr. Ivan RupnikSPEAKER_14

Thank you, Chairman, for that question. I think that there's a lot of interesting technologies out there, but in reality, if we look globally, light-wood frame construction, an American form of construction, is actually seen in many countries as an innovative form of construction. So I say that that there are a lot of innovative technologies. The innovations that we're excited about are in the code compliance space, and that's what we're really advocating for because as Mr. Owens pointed out, there are a lot of regulations. We can't point to one of them, but what we can what we can point to is the structure of code compliance. So we have a single model We have now a smaller number of model codes that are then adopted by states and then modified, adopted by counties and modified, and then actually interpreted project by project. The multiplication of what actually a company has to deal with, small or large, are infinitesimal. The investment in streamlining code compliance is the is the single tool that we think would benefit both conventional builders and off-site builders. And that is something that we've seen AI, other digital tools used in this space. And every industrialized economy has had the difficult process of saying our code compliance system is fragmented, it doesn't work. Doesn't work for conventional, doesn't work for new technologies, and we need to reform it.

Chairman Roger Williams (R-TX)SPEAKER_11

Uh, thank you. I now, uh, recognize the ranking member for 5 minutes. My time is up.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you, Mr. Chairman. Ms. DiVito, housing costs are at the root of the affordability crisis and putting significant pressure on family budgets and limiting the ability of people to save money or even meet their basic needs. Can you outline some of the root causes of the housing shortage?

Ms. Emily DiVitoSPEAKER_07

Thank you for the question. For decades, the U.S. has underinvested in housing. Construction never really recovered after the Great Financial Crisis, and since then we've only had persistent labor and construction shortages. At the same time, as my testimony mentioned, acute price hikes are making it worse as builders and contractors contend with high prices on core construction materials from tariffs. And one of the biggest underlying challenges we face today is the high cost of capital that makes it incredibly expensive, time-consuming, and overall difficult for developers, especially small firms, to build affordable housing. And this is why I believe that if we want to fix our housing affordability crisis, we have to fix our housing financing system.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you. Mr. Owens, the National Association of Builders testified before the Financial Services that uncertainty from tariffs was constraining investment. What impact do Section 232 tariffs on lumber, steel, and aluminum and kitchen cabinets and finished wood products as well as potential future 301 tariffs have on small builders?

Mr. Bill OwensSPEAKER_12

Thank you very much for the question. Our research through our econ team has shown a fairly insignificant burden when it comes to tariffs. Somewhere around—when we look at total building costs, everything that goes into the home, we're estimating that about 7% of building materials that go into that home are actually imported. So we're somewhere under 10% of our net costs there. So, currently with the administration working toward the America First environment, that's influencing some of our work, but it's fairly minimal, at least from our

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

aspect. And you disagree with the member of the National Association of Home Builders that tariffs is constraining investment?

Mr. Bill OwensSPEAKER_12

I don't think there's any question that they're having some impact.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Okay. Wouldn't you agree that these tariffs have increased the cost of housing? You're saying no?

Mr. Bill OwensSPEAKER_12

Slightly.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Okay. And the president has proposed significant cuts to programs at HUD. Ms. DiVito, what are some of these cuts, and how do they impact housing affordability?

Ms. Emily DiVitoSPEAKER_07

That's right. The president has been trying to eliminate some of the nation's most flexible housing programs, including the HOME Investment Partnerships Program and Community Development Block Grants. In the president's proposed budget for fiscal year 2027, that would cut funding for the Department of Housing and Urban Development by roughly $11 billion, or 13%. Cutting this funding means that these communities and businesses that are counting on these programs for the flow of capital won't get it and may not be able to build as many homes or at rates that families can afford.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

So do you agree that if the president and members in Congress are serious about addressing the housing production, that they will be increasing, not decreasing, HUD's housing production program?

Ms. Emily DiVitoSPEAKER_07

Yes, ma'am.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

On both sides of the aisle, Ms. DiVito, many of us recognize that NIMBYs have abused land-use regulation to slow the construction of new housing starts. But solving that issue is only part of the problem. Why is expanding government options for access to capital so important for new construction, and particularly for small builders?

Ms. Emily DiVitoSPEAKER_07

Thank you. Yeah, I mean, I think everybody on the panel agrees that there is— there's no doubt that zoning restrictions and complex permitting processes have worsened our housing affordability crisis. Unfortunately, though, I feel strongly that fixing zoning alone will not dissipate the underlying costs of securing financing, which is one of the major drivers of the affordability crisis we see today.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you. Mr. Owens, to that end, your testimony mentioned exploring SBA financing to help get more access to capital for small developers. I'm working on a bill to modernize the 504 CDC program to support renovation of mixed-use developments for commercial and residential units. Would this be a provision you will support?

Mr. Bill OwensSPEAKER_12

I think we'd want to look into that a little bit more, but I think that we're absolutely in alignment and very hopeful that the Small Business Administration grant process, the lending process will help us out. We represent the small builders, and anything that we can do—capital is always an issue for us, not just in mainly the carrying cost of the business more so than just actually financing the land.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you. Oh yeah, my time expired.

Chairman Roger Williams (R-TX)SPEAKER_11

She forgets that sometimes. I now recognize Mr. Meuser from the great state of Pennsylvania for 5 minutes.

Rep. Daniel Meuser (R-PA)SPEAKER_02

Thank you, Chairman. Thank you all. Very interesting and important discussion and hearing here. We all agree construction costs, regulatory delays, outdated zoning constraints fueled decades of underbuilding. Perhaps as many as 3 to 4 million single-family homes we need to build and make available. Small homebuilders play a very vital role, Mr. Owens, as you are clearly bringing out, as you did in your testimony earlier this week. As has been mentioned, we did pass a very bipartisan amendment to the 21st Century Road to Housing Act that will address many of these shortage issues by reducing unnecessary barriers to new home construction, modernizing HUD programs, allowing banks to more freely deploy capital, and have some restrictions on institutional purchases of single-family homes—not the building of single-family homes, but the purchasing of them. So, Mr. Owens, very intrigued by your testimony. You had some real good ideas in there. I like this lending, lots, labor, lumber, laws. That's good. That really sums things up and helps us focus, I think. The banking, as the ranking member was just talking about, our Housing Act allows banks to lend more to finance home construction. This should make a difference. It should double it. It could actually double it according to the intent of the law anyway. And I'm intrigued about the idea of expanding 7(a) loans for home construction, maybe double it. Right now it's at $5 million. We'd bring it up to $10 million. One builder alone, perhaps that could equate to, well, you do the math, 13, maybe 14, 15 new homes. Your thoughts on that?

Mr. Bill OwensSPEAKER_12

Thanks, sir, for the question. For us, access to capital is a must. We absolutely cannot build without that. So when we talk about the possibility, as I said earlier, we're encouraged by the SBA 7(a) or 7(b) program as a way to finance direct costs. I think there are limits, though, to that. What we'd seen, for example, phased development would be excluded from that, and actual project-based working capital would be something that I think I understand would have been excluded. I think when we're looking at the overall landscape of construction financing, larger builders, I think, have more varied access to different capital pathways. We represent the small-volume builders. Our average builder is building 10 or less homes a

Rep. Daniel Meuser (R-PA)SPEAKER_02

The ones I know. Yeah, sure.

Mr. Bill OwensSPEAKER_12

Yeah. So that's the one thing right now that we're looking at is what are some means that these smaller builders would have access to capital, and that's why we sort of are encouraged by some of your discussions with the SBA on this. And the

Rep. Daniel Meuser (R-PA)SPEAKER_02

SBA would be, I think, more effective, maybe faster, than the HUD programs that exist.

Mr. Bill OwensSPEAKER_12

It may be.

Rep. Daniel Meuser (R-PA)SPEAKER_02

Okay. So, Dr. Rupnik—well, first off, yeah, Dr. Rupnik, the 21st Century Road to Housing bill, from a regulation standpoint, or any aspect of that bill, could you give me your feedback on that, some of your thoughts?

Dr. Ivan RupnikSPEAKER_14

I haven't studied the specifics of it, but I think the issue is that we have not yet really understood, based on the conversation today, where the cost is, because we're talking about the cost of regulations. We're not talking about the structural cost of our code compliance. So that, I think, from what I've seen in the bill, and I haven't spent as much time as I'd like to because it's been changing, all I would caution is that from our research from 20 years, it's really code compliance, not the regulations themselves, that have been a burden in the US, also in Pennsylvania, which has a very strong modular sector. And it is the thing that—what I don't see is specific tools for really understanding first and then assessing those. And that's where I think we really need to understand, before we even allocate funding, really understand the hidden costs of our code compliance regime.

Rep. Daniel Meuser (R-PA)SPEAKER_02

Okay, thank you. Mr. Schaefer, any feedback you can provide on our Housing Act?

Mr. Eric SchaeferSPEAKER_06

Yeah, the, the certainly the innovation for modular is, is a huge plus that we see in the cutting the red tape is again big for us because again, if entitlements take 12 to 18 months before you can even build a house, a lot of times in affordable housing projects, by the time you get to the entitled moment, it doesn't pencil anymore. So we can't even do the project. Thank you.

Rep. Daniel Meuser (R-PA)SPEAKER_02

Thank you very much. I yield back, Mr. Chairman.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentleman yields back. I now recognize Mr. McGarvey from the great state of Kentucky for 5 minutes.

Rep. Morgan McGarvey (D-KY)SPEAKER_13

Thank you, Mr. Chairman. Mr. Owens, in your testimony, you opened up and said there were a shortage of 1.2 million homes in this country. I think that number could be low, but regardless, we're all agreeing that we are millions of homes short in this country. And I think this is really important, because one of the things we talk about here in the Small Business Committee is the American dream. The American dream: you can work hard, you can provide for your family, you can leave the world a little better than you found it, and you can put your kids in a better spot than you were in. And I think owning a home is a foundational cornerstone of this American dream. We still know that owning a home is a generational wealth builder. It's an asset you can pass on. But when we're talking about building homes, I want to talk about what people are going through right now when they want to buy a home, because it is far from easy. So, I wanted to run the numbers a little bit for you. I'm from Louisville, Kentucky, and I was looking at my town, Louisville, Kentucky. And I wanted to find a home that was $250,000. Why? I wanted to make the math easier for me. So, I got on Zillow and found immediately four homes listed for $250,000: one in Shively, one in Okolona, one in Germantown, one just east of J-Town. All have two bathrooms. One of them has two bedrooms, the other three have three bedrooms. Three of them are between 1,200 and 1,400 square feet, one of them was 2,100 square feet right there in Louisville, Kentucky—$250,000. Okay. So, the area median income for Louisville, Kentucky is about $89,000 annually for a four-person household. After taxes, that's about $65,500. So, that shakes out about $5,500 per month that you're bringing home after taxes. If you want to buy a $250,000 home, let's pretend—and I say pretend because 50% of Americans don't have access to $500 cash—let's pretend that you can put $50,000 down on this home. That's 20%. I told you I'd keep the math easy. 20%. Now, you're going to look at a $200,000 mortgage. Current interest rate: 6.16% fixed on a 30-year mortgage. That's going to cost you $1,400 a month. That is $16,800 per year. Now your 65-5 is down to $48,700. Okay. Let's say that you're a young family of four, you got two kids: childcare. We all know what this looks like. In Louisville, Kentucky, the average cost, that's going to put you at $380 per week, $1,500 per month, $18,000 per year. Now, that is down to $30,700 that you are bringing home after you've got your mortgage, after you've got your childcare. Bear with me. We know what grocery prices are doing right now. Just walk through the grocery, walk through a Kroger in Louisville. So I'm going to go conservative. I'm going to say for a family of four, you're spending $250 per week for all four of you. That's $13,000 a year. Now you're down to $17,700. But guess what? We haven't talked about taking care of these kids yet. Health care, especially with what Trump did to the Affordable Care Act, is now $1,800 per month on average in Louisville, Kentucky. That's $21,600 per year. Guess what? You are now minus $3,900. That's your family of four in a $250,000 home. You are $3,900 underwater. And what have we not talked about? We haven't talked about your utilities. You haven't talked about your water, your cell phone bill, your car payments, your insurance, your gas, which you can just drive—it's $4.40 when I left Louisville on Bardstown Road this week. You're $3,900. And guess what? We haven't even talked about what the actual payment on the home is. In the above scenario, we had a 30-year mortgage. By the end of it, you will have paid $250,000 in interest on that $200,000 loan. So we got to get the affordability under control here. And one of the ideas that's been floated, Ms. DiVito, is the idea of a 50-year mortgage. And I want to talk about what impact that has on affordability and what you think about what that would do for families.

Ms. Emily DiVitoSPEAKER_07

Thank you for the question. Yeah, the 50-year mortgage I think is a misguided attempt to make it seem like it's providing relief for homebuyers without fixing the underlying problem. On a 50-year repayment plan, families would end up spending significantly more on interest over the lifetime of their loan and build equity much slower than other families. I don't think that Americans want their debt to last longer. They just want their housing to be more affordable.

Rep. Morgan McGarvey (D-KY)SPEAKER_13

Yeah, so you're gonna pay significantly more over the cost of 50 years. And even if you're able to buy something a little bit cheaper upfront, we're still looking at this math. You're still looking at a $250,000 home. You're still in the red. And guess what? Even if you think you can buy it for a little bit cheaper upfront, look at what the tariff policies are doing right now. You're looking at building and material prices up 3.5% year over year. Mr. Owens, have you seen this in your business, that the cost of lumber and materials right now is rising?

Mr. Bill OwensSPEAKER_12

We have to a certain extent, but it's more in the metals, I think. As of recent, we've seen some stability in the lumber prices, certainly from the, you know, the peak there during COVID

SPEAKER_UNKNOWN

Yeah,

Rep. Morgan McGarvey (D-KY)SPEAKER_13

and this, these, this rise in cost is making it harder to build homes. It is making it harder to find the American dream on every level. And I think we have to address the affordability crisis to start talking about this. Mr. Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_11

Yields back. I now recognize Mr. Cisneros from the great state of California for 5 minutes.

Rep. Gilbert Cisneros (D-CA)SPEAKER_05

Thank you. Thank you, Mr. Chairman, and I want to thank you, the ranking member, for bringing us together for this important hearing on housing. I represent a district in Southern California, in the San Gabriel Valley, and I don't even know where you can find a house for $250,000 anywhere there. It's just not possible, right? And the rising cost just continues to add, right? And, look, I look at it in a very simple way when kind of looking at economics, and it's supply and demand, right? We need a lot more supply in order to help bring down the cost of housing. And it's not just single-family homes people could afford, but also renting, rentals, right? And then even as my, I think of my grandmother, years ago, as she started to age, she moved into senior citizen housing that provided opportunities for more people to kind of move in there as well. And, look, my district is not that far away from where the Eaton fires were last year, which only adds to the, the, the shortage of housing there as well. And now those people are going to need to build, and it's going to cost them even more as insurance companies continue to make higher demands on, on the way that construction happens and what they can do. And, look, there's been a lot of great innovations there, I think, to kind of help and prevent fires or to help the homes become more stable during those times, but it comes at a cost as well, right? Not only at a cost to the, the owners of these homes who are going to have to rebuild, but also it's going to be rising insurance costs as well. So we definitely need to help, I believe, our homebuilders kind of do more to, as you say, free up capital so that they can build more. So, Ms. DiVito, I'm going to ask you something that kind of intrigued me in your opening statement there is Fannie Mae and Freddie Mac providing construction loans to, to companies. What do we need to do in order to make that happen?

Ms. Emily DiVitoSPEAKER_07

Thank you for the question. That's right. I think the government-sponsored entities, Fannie Mae and Freddie Mac, should be expanded to allow the the securitization of construction loans. This will functionally spread risk for investors and free up capital. I think that can be an important way to make sure that already existing private capital out there makes its way to small and emerging homebuilders Okay .

Rep. Gilbert Cisneros (D-CA)SPEAKER_05

So would that take— I guess it would take legislation from us in order to make that happen?

Ms. Emily DiVitoSPEAKER_07

Oh, yes. I apologize.

Rep. Gilbert Cisneros (D-CA)SPEAKER_05

Okay, no. All right, I would love to work with you on that and see how we can kind of move forward and really kind of find a way to make that happen. Fantastic. Great. Mr. Owens, you're from Ohio and you're from that area, and I don't really know what the workforce is like over there, but I know what it is in California around homebuilders, and it's an immigrant workforce, right? A lot of people immigrate here to the United States and they get into this industry, and they've become very valuable resource to our construction companies out there that are building homes. But unfortunately, the president has asserted that these mass deportations are going to help free up jobs, actually, when I think it's actually done the opposite. But what are you hearing from your homebuilders, the people in your association out west? What impact have these ICE raids and Border Patrol raids had on the workforce there out west, like in California and in other areas across the country?

Mr. Bill OwensSPEAKER_12

Thank you for the question. The labor shortage existed way before we had the immigration crackdown. We lost, I think, about 1.5 million construction-related jobs during the Great Recession. So I think it's very localized, how you pointed it out. We see that a little bit. I build in Arizona as well, and we've seen this being a little bit more localized, but it has disrupted some of local operations, but we don't see that headwind, if you will, as a severe constraint right now on housing supply.

Rep. Gilbert Cisneros (D-CA)SPEAKER_05

Well, I feel like I'm hearing different from some of the homebuilders I talk to out west, but it definitely is having an impact. Look, I'm with you. Again, I think we need to figure out ways how we can increase housing, whether it's modular housing, and I don't know how that would kind of really work. Like you said, there are a lot of restrictions, and California does have restrictions, especially around earthquakes and things like that, but would love to meet more with all of you to kind of find out how we can make this work, right? How we can have more access to capital and how we can make things more available so that we can increase that supply number to help bring down the costs. But with that, I yield back. Thank you.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentleman yields back. I now recognize Mr. Jack from the great state of Georgia for 5 minutes.

Rep. Brian Jack (R-GA)SPEAKER_04

Thank you very much, Mr. Chairman. And if I could, I will start with Mr. Owens. Thank you for your testimony today. Could you walk this committee through the cumulative impact federal regulations, whether environmental permitting, labor rules, energy codes, or financial reporting requirements, have had on the final cost of a home for an average American family trying to buy their first house?

Mr. Bill OwensSPEAKER_12

Thank you for the question. As I mentioned earlier, I think it's just it's an aggregation of a lot of different cost impacts that come in. We could talk from the federal point of view. I think about the wetlands permitting process. Perhaps when we look at permitting reform, that might be a possibility, too, that would give us some relief. When we looked at individual permits versus nationwide permitting, if we stayed on the Clean Water Act and the— pardon me, that's a mouthful— the compensatory mitigation reform that might be helpful for us. I think, again, when we go back in and we look at some of the OSHA regulations that are applied at the federal level, when we look at the heat compliance standard, the electronic reporting requirement. Again, we represent the smallest core of the home builders. We don't represent the nation's largest home builders that our builders are very much rooted in this small business environment. And that's where we look at some of these costs that might be able to be absorbed by the larger builders, particularly in the land development end of things. These are things that are almost prohibitive for many of our smaller, smaller builders to do any land development at all right now.

Rep. Brian Jack (R-GA)SPEAKER_04

Your testimony indicated that you estimate, I believe, is it 25% of the cost of a home is due to regulations? You want to comment on that a little further?

Mr. Bill OwensSPEAKER_12

Sure. Um, I think if my numbers are correct, I think through the land development phase it, it is about 10%. And I think we're a little bit north or more than 13% of the costs actually during construction that make up that 25% cost of regulation and fees above sticks and bricks, essentially. And it's even more than that, around 40% in the multifamily.

Rep. Brian Jack (R-GA)SPEAKER_04

Thank you. Could you comment— this week the House took action on housing, as you saw, no doubt, a few days ago. Actually just yesterday, if I'm not mistaken. Could you comment on how that's going to help Americans achieve that American dream, buying their first home and helping their families grow?

Mr. Bill OwensSPEAKER_12

Yeah, I very much appreciate that question because that's something that the effort that Congress has made, I think, is going to go a long way to really supporting what we feel is completely underserved housing inventory right now. I think one thing, although a little bit controversial, but in the end, again, because we don't represent institutionalized investment, removing the seven-year forced requirement to sell build-to-rent properties was something that is very, very important to us because that's about 10% of the overall addition to the inventory on an annual basis at this point. I think also, too, that the ROAD to Housing, the House version, increased stronger land use reforms, enhances multifamily finance tools, creates some new renovation programs, and I think one of the most important things that really helps the small builder contingent out there is it provides some regulatory relief for the community banks to get a little bit more flexibility where we typically go for our money to build these homes.

Rep. Brian Jack (R-GA)SPEAKER_04

We often talk in this committee about workforce development. I'm honored to chair the Subcommittee on Workforce Development. Thanks to our chairman's appointment of myself in that capacity, and would welcome in these closing 50 seconds you talking about what more Congress can do to help ensure we've got a pipeline of skilled employees and folks coming out of trade schools to help build these homes.

Mr. Bill OwensSPEAKER_12

I'll be brief. Maybe we can circle back to it. The CONSTRUCTS Act certainly supports career tech schools as a primary alternative to the traditional four-year. We absolutely need your help on a program that started back in the mid-'60s, the DOL Job Corps program that's administered through the Employment and—DOL's Employment and Training Administration, and probably a couple other ideas.

Rep. Brian Jack (R-GA)SPEAKER_04

Thank you. Well, Mr. Chairman, I appreciate you convening this hearing today. It was timely given everything else that happened in the House this week. And with that, I yield back, sir.

Chairman Roger Williams (R-TX)SPEAKER_11

Gentleman yields back. I now recognize Mr. Olszewski from the great state of Maryland for 5 minutes.

Rep. Johnny Olszewski (D-MD)SPEAKER_03

Thanks so much, Chairman Williams. Thank you also to Ranking Member Velazquez, to my colleagues on the Small Business Committee, and to our witnesses for being here today. I believe that we all know that tackling the housing crisis in America is a top priority for members of Congress across the aisle and across this committee. To be clear, America is facing an affordability crisis, and America's affordability crisis begins with housing. If you can't afford a roof over your head, little else matters. Unfortunately, this is a crisis that is exacerbated by President Trump's stunning ability to so easily turn his back on a promise that he made to lower costs for Americans on day one. President Trump said it himself, quote, "I don't want to drive housing prices down," and, quote, "I don't think about Americans' financial situation," when referring to impacts from the still unauthorized war with Iran. Trump's war of choice has also increased mortgage rates to unattainable levels for many Americans, who are also grappling with gas prices of $4.50 per gallon or more across the country, while inflation surges to the highest level it's reached in nearly 3 years. As I've pointed out in this committee before, 99% of Americans are paying more out-of-pocket, in some cases much more than they were under Trump before Trump 2.0. I think my colleague Mr. McGarvey did a good job of going through some specifics. I don't know how anyone can call this a win for America. Unlike the president, lowering costs for my constituents and the American people is my number-one priority. When it comes to housing, more than half of Maryland families who rent their homes are cost-burdened, which means they spend 30% or more of their income on rent and utilities. The share of Maryland households able to afford the median-priced home is also less than half. Alongside these unattainable realities to simply live in a home, the overall cost to build out our housing supply across the country has reached historic highs. The costs of material and labor have increased significantly. I want to thank the National Association of Home Builders for pointing out the impact of the tariffs, which alone are projected to raise the cost of imported construction materials by billions of dollars. And before I turn to questions, I'll just conclude by saying this: We must view housing as a workforce issue. Without enough housing to accommodate job growth, housing prices increase, which pushes out current residents and deters prospective residents, only serving to slow economic growth. We must work to address attainability as a holistic problem, and I look forward to discussing what policies can help small homebuilders who need support from Congress at this time. Ms. DiVito, I'll start with you. For much of our history, small builders were able to obtain loans from local financial institutions for homebuilding, but that access to capital has become more constrained in recent years. How can the U.S. government get more financing in the hands of small builders and contractors?

Ms. Emily DiVitoSPEAKER_07

Thank you for the question. That's right. Getting more financing into the hands of small builders is vitally important to alleviating the crisis. I think the federal government is well positioned to expedite that effort. We discussed, I think, allowing the government-sponsored entities to buy and sell construction loans. There are some existing programs within the federal home loan bank system that I think could be better utilized. And then finally, filling the gap in financing for needed projects that the private market is reluctant to fill or for which the private market would charge exorbitant returns are, I think, all required tools.

Rep. Johnny Olszewski (D-MD)SPEAKER_03

Great. Thank you. And Mr. Owens, I know that builders can occasionally gain a higher profit by building on a building with more square footage or adding more square footage, which can price out younger first-time homebuyers looking for a starter home. What do you think can be done to encourage the building of smaller, more affordable starter homes and multifamily units to help have a spread of a diversity of housing options?

Mr. Bill OwensSPEAKER_12

Again, being proud to represent the nation's smaller volume builders, I think that we follow the market. We— one thing that we have learned, and there's such little spec inventory, if at all, from our builder contingent, we become a lot more custom builders. Infill builders, we, you know, I think what we can do is to just simply say we're going to follow whatever makes sense for our buyers because we're basically building one at a time. And in saying that, there is a sensitivity to these overall costs. The worst thing we can do is build something that people can't afford. We pay a lot of attention now too to the operating costs of a home. What is it once that house is built to your— I'm sorry, an earlier point of how expensive it is to actually maintain that house and to have the monthly utility costs factored into that. So I think it's incumbent upon us. Again, we're trying to be and always have been part of the fabric of these smaller communities. We're in every community in America versus the larger of the nation's builders that pretty much handpick and select their market. So we have to be very responsive to not only what the costs are, but also to provide the proper product that people can afford.

Rep. Johnny Olszewski (D-MD)SPEAKER_03

Appreciate those responses. Thank you, Mr. Chairman, for having this hearing. With that, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentleman yields back. I now recognize Ms. McIver from the great state of New Jersey for 5 minutes.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Thank you so much, Chairman, and thank you to our Ranking Member for holding this hearing today, and thank you to each one of our witnesses for being here today. America's housing crisis is getting worse by the day. 30 years ago, the average age of a first-time homebuyer was 28 years old. Today, that age is 40. Homeownership is quickly becoming a far-off dream for our younger generation. Renters are being hit hard as well. Half of them are spending so much on rent that they have little left for anything else. Families across the country are being pushed out of stable, affordable homes, all while the construction of new homes is dwindling. What the nation needs now are more initiatives like those taken in my district in New Jersey's 10th, where we had nearly 200 new affordable housing units built last year, helping families keep a roof over their heads. The Trump administration's economic policies have only made these problems worse. Inflation has spiked to the highest level in four years, driving up costs all around the country. Today, gas is high, grocery prices are high, health insurance is high, prescription prices are high, utility bills are high. The list goes on and on. These price increases leave millions of hardworking Americans with nothing left over for savings after paying bills, ensuring the dream of homeownership remains even further out of reach. If we are serious about closing America's housing gap, we need policies that actually lower these insane costs and expand the supply of affordable homes. Ms. DiVito, thank you for your testimony today, very enlightening, and you talked a little bit about this. Today, home buying is at its lowest level since the mid-1990s, while nearly half of the renters spend a third of their paycheck on rent. From your perspective, can you elaborate on what are the biggest drivers behind the worsening of the housing affordability crisis families face today?

Ms. Emily DiVitoSPEAKER_07

Thank you. Yes, in addition to the acute pricing challenges that this committee has covered and is well aware of, I think the trend of wealthier homebuyers purchasing larger and larger homes, and therefore especially large homebuilders being incentivized to build them, is a big problem today. It is increasingly challenging for young working-class families to find, but certainly to afford a home.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Yeah, especially when you're being beat out by cash prices. That is a big deal. Despite how dire the housing situation is today, the Trump administration is still finding new ways to make it worse, unfortunately. We have learned that the administration is preparing to privatize Fannie Mae and Freddie Mac, which are critical to keeping the mortgage rates stable, the mortgage market stable. How would this privatization affect first-time or low-income homebuyers?

Ms. Emily DiVitoSPEAKER_07

So since the Great Financial Crisis, Fannie and Freddie have been under government conservatorship, and their sort of operating model and overarching priorities have shifted from just serving shareholders or considering shareholder interests and returning returning profits to public interest. With the privatization, that could shift, and capital could be restricted, become more expensive, and shareholders would would certainly benefit with some pretty sizable windfalls.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Yeah. Another thing too that I'm hearing a lot of homeowners talk about is around insurance costs, right? That has been a big rising cost as well. How are increasing insurance premiums and climate-related risks affecting affordable housing projects and smaller home builders?

Ms. Emily DiVitoSPEAKER_07

Yes, thank you. Climate change is getting significantly worse by the year. I am from Florida, and we have suffered many hurricanes that have wiped out entire communities, preventing them from moving back into their homes for months at a time. All of these climate risks just add insurance costs onto the cost of a home as increasingly insurers grow concerned about potential payouts and then certainly actually have to pay out more and more as catastrophe hits U.S. communities.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Yeah, well, thank you so much for that. You know, I appreciate everybody's comment and, you know, expertise on this. I think we definitely have to look at this issue as something that is multifaceted and needs multifaceted solutions. It's not a one-all fix-all. And lastly, I think it's crazy too when you speak to a lot of young people these days who are paying $3,500 for studios but unable to get approved for a mortgage for a home. It's just incredibly crazy, and we need to really take a real strong look at this country and where we're headed and where we are currently at right now. With that, I yield back, Mr. Chairman. Thank you.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentlelady yields back. I now recognize Dr. Morrison from the great state of Minnesota for 5 minutes.

Rep. Kelly Morrison (D-MN)SPEAKER_10

Thank you so much, Chairman Williams and Ranking Member Velazquez, for holding this important hearing, and thanks to our witnesses for being here and for your testimonies. I think we all agree that the cost of housing is too high. Due to shortage of housing supply, we've seen housing prices skyrocket, and families are being forced to spend more and more of their income paying for a place to live. Both renting and buying are increasingly unaffordable, and unfortunately, many of the administration's policies are only worsening this affordability crisis. The 21st Century ROAD for Housing Act is an important step toward addressing our affordable housing program. But the administration's policies continue to create serious headwinds. The Trump tariff policies and rising inflation are causing the cost of building materials to continue to increase, and of course the terror of Trump's mass deportation policy is worsening the labor shortage in the construction industry. Ms. DiVito, during your testimony you mentioned that over half of builders reported rising inflation and the cost of building materials are significant problems they faced in 2025. You also highlighted that small builders are disproportionately impacted by the high price of building materials. Could you elaborate on why the tariffs imposed by the Trump administration hurt small builders more than large builders and put them at a greater disadvantage?

Ms. Emily DiVitoSPEAKER_07

Thank you. Yeah, that's right. Even before the war in Iran and some of the tariffs went into effect, inflation was persistently above the Fed's 2% target. These broad pricing pressures make homebuilding significantly more expensive. Small builders often don't have the same kind of resources or margins to shift supply chains or stock supplies to defray these costs and end up either absorbing them or reducing production.

Rep. Kelly Morrison (D-MN)SPEAKER_10

So how do small builders navigate the uncertainty around these tariff— these ever-changing tariff policies?

Ms. Emily DiVitoSPEAKER_07

I think we're seeing that it's very challenging too. There is a lot of uncertainty in obviously the economic policy environment and especially the fiscal policy space. And so uncertainty about interest rates is driving mortgage rates up and the cost of capital becomes more and more expensive. There have been many vacillations of tariff policies for particular goods, which just creates more disruption and more concern about being able to consistently plan for the future.

Rep. Kelly Morrison (D-MN)SPEAKER_10

Thank you. You know, I have the honor of representing Minnesota's 3rd District, and I've been hearing from small business owners from across my district and the greater Twin Cities metro area about the devastating impacts of Operation Metro Surge on their businesses, with businesses across the Twin Cities losing over $610 million in revenue because of it. Foot traffic was down, staff were afraid to go to work, and some businesses were forced to close. We have an ongoing labor shortage that we've discussed some this morning in the construction industry, with contractors reporting that the shortage of skilled labor is one of their top issues and a leading cause of delays. Ms. DiVito, I'm returning to you on this one. How have ICE raids worsened our existing construction labor shortage, and what are the implications for housing affordability?

Ms. Emily DiVitoSPEAKER_07

That's right. The ICE raids and mass deportation efforts that the president has made a priority for his administration create a huge shock to the construction labor market that had already been suffering from shortages. Immigrant workers comprise a large percentage of that workforce, especially of the construction trades, and ICE raids and threats of deportation are reducing their ability to show up. It is having a chilling effect. Many folks are scared to go to work. And then, of course, some are being specifically targeted for deportation. So builders, especially small builders, have reported many incidents of disrupted work, which just adds time delays and a general inability to find and retain construction workers.

Rep. Kelly Morrison (D-MN)SPEAKER_10

Thank you. And then lastly, the housing insurance industry is facing substantial pressures—you're from Florida—from the escalating frequency and severity of extreme weather events, largely driven by climate change, leading insurers to either increase premiums or exit high-risk regions altogether. How does this impact housing costs for Americans and the development of new housing?

Ms. Emily DiVitoSPEAKER_07

Yeah, exactly. So insurers have every right to be concerned about the future of increasing costs, especially as climate change gets worse, in particular in specific states like Florida. So all of that just adds on to ultimate consumer costs as insurers obviously try to hedge against the potential for increased claims. And consumers have a harder and harder time, I think, actually getting the help they need when a mass event like a fire in Hawaii or a hurricane in Florida damages their community.

Rep. Kelly Morrison (D-MN)SPEAKER_10

Thank you for that context. And I see that my time has elapsed, so I yield back. Thank you, Mr. Chair.

Chairman Roger Williams (R-TX)SPEAKER_11

Gentlelady yields back. I now recognize Ms. Goodlander from the great state of New Hampshire for 5 minutes.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you, Mr. Chairman. And thank you to our witnesses for being here today for this really important hearing. I'm going to jump right into it because, Mr. Owens, I'm very grateful for the 5L framework. I think this is very, very useful. My grandfather raised us with a with a 6P framework: Prior planning prevents piss-poor performance. But I I'm a big fan of the 5 L's, and I want to jump right in and on what you've designated your 5th L, the cost of laws and regulation. And I really look forward to reading the study from 2021 was eye-opening for me. When you think about it right now, 65% of American households are priced out of a median-priced home in this country. And as you point out in your testimony, a $1,000 increase in home prices would price out another 156,405 households. So this is this is a genuine crisis. We've got to lower costs by increasing supply and by lowering the cost of building. And what you've pointed to, as of 2021, more than $93,000 attributable to the costs of development and construction. I want to ask you about something that I'm not sure has come up in this hearing yet, but the the Build America, Buy America provisions that were included in the Infrastructure Investment and Jobs Act—I'm very supportive of the underlying goals. In practice, what I've seen on the ground in New Hampshire is that the way that they've been implemented, particularly as it relates to the construction of new residential housing, has created some really, I think, unintended effects and costs, and made additional barriers to building quickly. So I wanted to start with you, Mr. Owens. Can you talk about some of the challenges that your members have faced with respect to the Build America, Buy America, or BABA, compliance?

Mr. Bill OwensSPEAKER_12

I wish I could. Yeah, I haven't seen any direct effects in my own business. We've seen delays being one of the bigger, mainly on when we look at some of what happened with the lumber market, the domestic lumber market over the years where mills closed. We had less mills out there doing the OSB, and then when the reinvestment or the ask was the Build America, Buy America came back into play, it was one of those things, I live that every day in Flagstaff, Arizona, where we've had our trees to be harvested marked for the whole 10 years I've been out there. And we just can't get enough workforce in quickly enough, let alone to get those logs to a mill versus even getting the mill back up to speed and producing OSB at maybe a more affordable rate than we're paying now. So that's really the only thing that I could comment on at this point.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Good. Well, I'll submit questions for the record. I'd be interested to hear from from all of our witnesses on that front. Just to go to the material costs, lumber, as you've put it, the costs of material costs. You point out in your testimony that in April 2026, we've seen costs on the rise in 2026. Ms. DiVito, you pointed to some pretty eye-popping numbers when when we think about just the costs of tariffs on small home builders. Can you speak to that? Because this, of course, is directly in the lane of the United States Congress to end these unconstitutional and costly and chaotic tariffs.

Ms. Emily DiVitoSPEAKER_07

Yes, thank you. Right, I think the president's policies are putting additional pressures on certainly on families struggling with rising prices, but also on businesses, especially small businesses, with tariffs on core construction materials. Recently, 62% of small builders reported that building material prices are a significant problem that they face, and that's compared to just 25% of some of the largest builders. So small businesses are particularly prone, I think, to some of the suffering around tariffs on construction materials.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Mr. Schaefer, can you speak to this in your own experience?

Mr. Eric SchaeferSPEAKER_06

Yes. For us, tariffs, the impact has been about 3 to 5% is what we've experienced. Again, we're not— we're building 200 to 300 homes a year, so we're in the middle. We can buy in bulk. We're not a big builder, but we're not building 1 or 2 homes. So the impact has not been dramatic, but about 3 to 5%.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Well, on thin margins and in the midst of a crisis, every cost increase has a massive impact. I want to thank you all. This is such an important hearing. With that, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentlelady yields back. I now recognize Ms. Scholten from the great state of Michigan for 5 minutes.

Rep. Hillary Scholten (D-MI)SPEAKER_08

Thank you so much, Mr. Chairman. I came up here a little bit sooner than I thought, so I'm just pulling my remarks up here. I am grateful for the opportunity to connect with our witnesses today. Ms. DiVito, thank you so much for your work and your help in my office. I apologize. Let me just pull these up one quick second. It's okay. They're not in here. Perfect. Okay, there we go. Sorry about that. There is clearly a need across the country for diversified supply of affordable housing, and our small businesses should have a larger role in addressing that challenge. Do we want to pause? Okay. All right. In addressing that challenge, we know that the industry consolidation is an increasing trend across the economy, which puts small businesses at a disadvantage. My bill, the Main Street Competes Act, just passed out of this committee yesterday. Thank you for the committee's support on that. And would prompt the federal government to examine our antitrust laws to find ways for our small businesses to compete in every market. Ms. DiVito, my first question is for you. How does increasing builder consolidation create an unfair playing field for small businesses?

Ms. Emily DiVitoSPEAKER_07

Thank you. And that's right. I mean, of course, there are still many, many small builders in the U.S., but we have seen more industry consolidation over the last several years. Housing markets are highly localized, and these impacts can look different from area to area, but Small builders already at a disadvantage against larger players, and the underlying economic uncertainty and pricing pressures are putting a lot of them on the brink. Consolidation is bad for homebuilders trying to compete, but it's also bad for homebuyers and communities. So I commend you for attempting to stop this trend.

Rep. Hillary Scholten (D-MI)SPEAKER_08

In West Michigan, I consistently hear from constituents not only about the cost of housing, but also the quality of existing housing supply. According to an analysis by Housing Next, there's approximately 1,454 renter households and 1,095 owner households in Ottawa County in my district that live in substandard housing conditions. This means that they are living in spaces with issues like overcrowding or lacking basic features like plumbing or kitchens. Ms. DiVito, sticking with you here, your testimony highlights how some of the largest construction companies are facing legal troubles for building low-quality housing. Are there accountability measures that Congress should consider to discourage these companies from cutting corners?

Ms. Emily DiVitoSPEAKER_07

Thank you. Yes. And just this week, there was reporting that some of the largest homebuilders are increasing their legal costs due to litigation against sub-quality building. Ensuring strong federal enforcement, I think, is crucial. But Congress can also just help promote competition in the homebuilding industry to prevent some of the bad practices. That we tend to see when larger builders have a larger share of the market without any competition.

Rep. Hillary Scholten (D-MI)SPEAKER_08

And what do you think in terms of enforcement and follow-up? Where are some of the gaps that you see in making sure that those are consistently enforced?

Ms. Emily DiVitoSPEAKER_07

That's a good question. I am not as familiar with what actually happens when the home comes online, but I think making sure that there is clear and consistent federal oversight, state and local requirements. We've talked a lot about streamlining some of those codes, which does not need to mean compromising on safe— on health and safety standards.

Rep. Hillary Scholten (D-MI)SPEAKER_08

Yeah. Invite you and any of our other panelists into the conversation too, just about where we could be helpful there, and feel free to follow up and submit them for the record after, as well. One last one in the last few seconds remaining. We know that the president's tariff policies have created real instability. We've been—this is a theme of the morning. We've talked about it a lot for many small businesses, particularly those in the construction industry who rely on critically imported housing materials. Ms. DiVito, again, you mentioned how small firms often do not have the resources to navigate these erratic tariff policies. Can confirm. How can the Small Business Administration do more to insulate small businesses from the worst of these impacts?

Ms. Emily DiVitoSPEAKER_07

Thank you. We can certainly provide, I think, more small business resources by returning investment to the agency after it lost significant workforce last year. But ultimately, I believe we need to address the root cause of these acute pricing pressures, which is the tariffs.

Rep. Hillary Scholten (D-MI)SPEAKER_08

Thank you. I yield back.

Chairman Roger Williams (R-TX)SPEAKER_11

The gentlelady yields back, and I now move as chairman to, for one more final question from my side, and recognize myself for 5 minutes. Mr. Schaefer, as a leader at the Fading West Development, you've been at the forefront of using modular construction to deliver housing in communities facing urgent need, including supporting recovery efforts for disaster-impacted residents in Lahaina, Hawaii, as well as providing workforce housing in mountain towns like Breckenridge. So, my question is, from your experience deploying modular housing in these very different contexts, could you explain the key advantages of modular construction compared to traditional construction? More broadly, how do you see modular housing helping to address challenges today's relating to housing affordability, speed of delivery, and overall supply constraints in high-need communities?

Mr. Eric SchaeferSPEAKER_06

Yes, thank you for the question. So again, it's speed to market. It takes us 10 days to build a house in the factory. Specifically in Lahaina, we built 85 houses in two months. They were shipped. Two months later, people were moving in after experiencing complete loss of their homes and and community. So all the subcontractors are in a factory. We are built as a manufacturing group, so we see ourselves as 18 stations. It's more set up like a car factory. So very high standard building, high quality, architecturally interesting. And what this allows us to do then is build cheaper and faster. And again, the repetitive motion of doing a three-bedroom, two-bath house over and over again, you can speed it up, and that's really what the affordable housing market is is lacking right now. So what manufacturing does then is it it makes them cheaper and faster, which allows us to move folks in in a in a very quick way.

Chairman Roger Williams (R-TX)SPEAKER_11

Good. In my time remaining, Dr. Rupnik, in your testimony you wrote about the need to standardize terminology for industrialized housing and how it impacts small builders. So the question would be, could you elaborate on the benefits of standardized terminology and why it is important to tackle it first?

Dr. Ivan RupnikSPEAKER_14

Yeah, we have found through analyzing all of the great work that all the agencies, the federal agencies, do in supporting housing, not just at HUD, but at the Department of Transportation, U.S. Department of Agriculture, that even when we talk about industrialized, factory-built, modular, manufactured, the agencies themselves do not use consistent terminology, which makes it very difficult for those very well-intended funding to reach small businesses. And that signals to finance and insurance that they don't know what the heck we're talking about. It's very difficult to understand many of the barriers that we're talking about with finance, and some of the opportunities where this is a less risky process for insurance, we are still not consistent in what they are. And so the United Kingdom, for example, has spent very cost-effective public funds in just saying, we're going to pick a term and we're going to stick with it, both for their equivalent of subsidies and awards, but also their way of signaling to finance and insurance that we are talking about a particular process.

Chairman Roger Williams (R-TX)SPEAKER_11

Okay, Mr. Schaefer, in the time I have left, in your testimony you mentioned that 41% of the construction workforce will retire within the next five years. In February, the committee heard the testimony from witnesses who spoke about the role career and technical education strengthened the pipeline for high-demand jobs. So quickly, would you agree that opportunities through CTE like that of the Boulder Valley School District could support the next generation of the construction workforce?

Mr. Eric SchaeferSPEAKER_06

Absolutely. Thank you for the question. Yes, working with trade schools, working with high schools, working in in all university settings is gonna be a big part of this because there will not be enough workers. We're already in that position. The good thing about modular is it's a controlled environment. You can cross-train, you can be a part of our workforce with very little training so we can train you on while you are working and it hopefully will allow for many more jobs for our workforce.

Chairman Roger Williams (R-TX)SPEAKER_11

Okay. Thank you very much. My time is up. I now recognize Ranking Member Velazquez from the great state of New York for 5 minutes.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you, Mr. Chairman. You know, I am really struck to the fact that here we are discussing what can we do in Congress to facilitate increasing the housing supply. And I really, truly believe that immigration is part of the equation. And I don't think that we will offend the administration by saying that a lot of the workers that are legally here do not show up to work because of the fear of being arrested and sent to a detention center and to any foreign country where they do not belong. So I just would like to— and then there is a study that The New York Times wrote an article about in terms of who the worker— who represents the workforce in the construction industry. A lot of Latinos, immigrants, a lot of them, and they are not showing up. Mr. Schaefer, can you talk to us about the main barriers to financing for modular companies and how can the federal government fill the gaps?

Mr. Eric SchaeferSPEAKER_06

The challenge— thank you for your question. The challenge with modular on the financing side is that you have to pay for the house before it is built. It only takes 10 days to build in the factory, but it's the opposite of how typically payments are done in construction. So you're paying a large portion before the home is built. So that is a challenge for many banks and frankly developers to understand it. And I think personally that has been one of the problems why modular has not caught on more in our country. So it's going to be education of banks, the federal government, the state government to allow for financing to happen, whether it's a bridge loan, whatever the case may be, to get the financing done so that we can build them. So that has been our biggest challenge.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Rupnik, in your testimony you mentioned a dormant authority passed by Congress decades ago. What is preventing this authority from being used right now?

Dr. Ivan RupnikSPEAKER_14

the knowledge that it existed. And so we very much thank HUD and the PD&R department for funding us to look at what is out there and what we can use. And we discovered that National Institute of Building Sciences is really designed to help both local and state governments, as well as industry, to really streamline their regulations. And again, streamline compliance, I want to be specific about that. It's not the regulations themselves. It's how we meet those regulations. Those are very different things. And so we are we're working with mostly states, many of the states here, and we're working with industry right now. But what we going back to the the work that and the standardization of award criteria that's brought up is that for the federal government, what we would love to see is helping states and industry by adopting a single certification process for housing products, not for factories. And then what other countries have done is pointing as many federal programs, simplifying compliance by saying, if you're certified as a housing product, you qualify for X, Y, and Z, whatever that is. That will bring standardization. It will increase competency. It'll make your lives easier because we're not constantly looking for new ways to create compliance for new societal issues, because we'll have new societal issues. Right now, we create new compliance for new issues, which is where the real cost comes from, not from the societal goals that we should have. Aging in place, natural resilience—we want those things, but every time we add one of those—so that's where the federal, state, and it is a federal, state, and local, and industry piece. And National Institute of Building Sciences has been set up for that, and we're trying to resuscitate that. And it was really research, it's federally funded research that discovered that needle in a haystack that has allowed us to think through that.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_09

Thank you. I yield

Chairman Roger Williams (R-TX)SPEAKER_11

The lady yields back. I now recognize Ms. Goodlander from the great state of New Hampshire for 5 minutes.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you. I appreciate it. I wanted to just come back to financing constraints and the cost of capital and just ask, before I came to Congress, I worked in the Antitrust Division at the Justice Department, and one of the things we see, and many of you pointed it out in your testimony, the consolidation in the banking industry, the assault on community banks has been a huge barrier and cost driver for increasing the supply. The 21st Century Road to Housing Act had some good provisions to strengthen the hand and provide relief to our community banks, but I wanted to ask our witnesses if you have other ideas, anything that we left on the table that we could do to support our community banks. Did we get it all right? That would be a remarkable feat in the history of this Congress. Well, I'll, if Mr. Owens, unless

Mr. Bill OwensSPEAKER_12

something. If I may. Please. A little bit out of my wheelhouse here, but we'll see. Staff will be happy to get back to you on that. I think we've consulted with you, uh, as well as the Senate as much as probably any other entity to get this right. We truly appreciate all your efforts to carry this forward, but I think that's a something that's more of a heavy lift for, for our staff to get back to you.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Great. Ms. DiVito.

Ms. Emily DiVitoSPEAKER_07

Thank you. Yes, I think there's a really good opportunity to work on follow-up legislation to maximize the effect of ROAD to Housing, specifically, I think a bipartisan package that focuses on those financing constraints and leveraging all of the government's potential to resolve some of them.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you. I wanted to just come back for a moment to the homebuyer. In New Hampshire, we have pioneered and seen real success in resident-owned communities, which are overwhelmingly communities with manufactured homes. This is truly one of the last remaining affordable paths to homeownership, and I really look forward to working with you all in building on the progress that we made in the bill passed yesterday. But what I'm seeing on the ground in New Hampshire, resident-owned communities work really well because it gives people a stake in the decision-making and the stability of their communities. But what we are also seeing is a trend of big corporate investors who are buying up manufactured home communities. What they're doing is they're raising the rents, they are adding junk fees, and they're often leaving residents with nowhere else to go because moving a manufactured home, as you know well, is practically impossible. So I wanted to ask about I think, unfortunately, a disturbing trend in rising abusive practices by corporate owners of these communities and the ways in which they're jacking up costs. So I wanted to begin with you, Ms. DiVito. Do you think that there are measures Congress could take, including prohibiting corporate ownership of these types of communities?

Ms. Emily DiVitoSPEAKER_07

Thank you. Yes, I think Congress should very much build on, I think, some of the negotiations in the ROAD to Housing package to make sure that institutional investors in particular and some of the biggest large builders are not able to just extract from communities by hiking up rates and rents and tacking on unnecessary fees.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Mr. Schaefer, could you just speak to what you've seen in your own experience and what you think Congress might be able to do to support resident-owned communities that are stable and and affordable?

Mr. Eric SchaeferSPEAKER_06

Yeah, thank you. So again, the things that I highlighted were the public-private philanthropic partnerships. We've seen those be the most successful. Again, when we talk about the word affordable in housing, it really shouldn't even be used in the same sentence because there's no such thing as affordable housing. If you're already paying $100,000 before you even start building it, it's almost impossible. So most of the projects we're involved in include either state funding somehow to bridge that gap or federal funding, or local communities are in such dire needs that they're waiving tap fees, they're making the entitlement process quicker so that the the cost of the overall house is cheaper to hit that kind of 80 to 120 AMI, which is the area we work in. Thank you.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you. Well, thank you all. And with that, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_11

Gentlelady yields back. And I'd like to thank our witnesses today for their testimony, for being here, and for appearing. Without objection, members have 5 legislative days to submit additional materials and written questions, uh, from the witness to the chair, which will be forwarded to the witnesses. I'd ask the witnesses to please prompt— or please respond promptly. And if there's no further business or objection, the committee is adjourned.