Subcommittee on Housing and Transportation

Hearing to Examine Proposals to Promote Affordable Housing



June 20, 2000

Thank you, Chairman Allard and distinguished members of the Subcommittee, for the opportunity to testify before you today on the issue of increasing homeownership opportunities for Americans. My statement will be brief.

Mr. Chairman, helping people achieve the American dream of homeownership has been a priority of mine as Chairman of the House’s Subcommittee on Housing and Community Opportunity. As you know, on April 6th of this year, the House passed H.R. 1776, the “American Homeownership and Economic Opportunity Act of 2000”, a bill that I sponsored to help many of those who currently cannot make the jump to homeownership.

More than two-thirds of Americans today own their own homes, continuing the trend since the mid-1990s of high homeownership rates. Much of this success may be attributed to the strong American economy, a product of Federal fiscal restraint and the enterprising spirit of working men and women across the country. With this high level of homeownership, then, you may ask why we would need more legislation. Paradoxically, Mr. Chairman, the strong economy has in fact contributed to a growing housing affordability problem, as rents rise and homes become more expensive. In addition, there are specific sectors of the population for whom homeownership remains unattainable. In the African-American and Hispanic communities, for example, homeownership rates remain below 50 percent.

Mr. Chairman, your hearing is extremely timely. Just this month, The Center for Housing Policy, a nonprofit research affiliate of the National Housing Conference, issued a report entitled “Housing America’s Working Families.” I am glad to see that Ann Schnare from the Center is also testifying before you today. If I may, Mr. Chairman, I would like the contents of this report to be made part of the record.

The report shows that working families in many areas of our country are finding it difficult if not impossible to get adequate housing and achieve the goal of homeownership. National housing policy has traditionally focused on the very poor – in fact the poorest of the poor. The report highlights the reality that many of our low and moderate-income working families – America’s taxpayers -- the very fiber of our communities -- are being overwhelmed by their severe housing needs.

Here are a few illustrations of what the research in this report has found:

Even more troubling for the long-term health of our communities is the impact on workers like teachers, firemen, and policemen – those who are employed by localities and whose vocations are tied to serving the residents of these communities. The report finds that:

Chairman Allard, these are America’s taxpayers. You and I both are familiar with how the distinguished Chairman of the Senate Banking Committee, Senator Gramm, likes to say that we should strive to be more cognizant of those working Americans who, in his words, “pull the wagon”, and not solely focus policy on those who “ride in the wagon.” We do need to ensure that working men and women – the people who pull the wagon, are not forgotten. Right now, the people who pay the taxes – working class Americans, are being ignored by our housing policies.

Mr. Chairman, the time to act is now. Many of the provisions of H.R. 1776 were designed to accomplish the same goals now being advanced as policy recommendations in this report. These recommendations include encouraging states and communities to reduce regulatory barriers to affordable housing, and allowing localities greater flexibility to tailor their own programs to meet local needs. Federal programs such as HOME and CDBG, because of statutory income limits and HUD policies, are not now being used to help our working families build wealth and assets.

H.R. 1776 encourages local governments to reduce barriers to affordable housing and homeownership that arise from unnecessary and excessive regulation. I want to commend Senators Wyden and Bennett for introducing similar legislation in the Senate designed to reduce these barriers. We provide local governments with flexibility to help fashion homeownership programs for to develop communities by including teachers, police officers, firefighters, and other municipal employees.

This is a very important point that I wish to emphasize – what we do in the CDBG and HOME programs, Mr. Chairman is simply to allow greater flexibility within these programs so localities can fashion homeownership programs for teachers, firemen, and police officers. The reason we used this approach is not because we think other professions are less important – that is not the intent at all. However, these are professions specifically identified by local governments and officials as being especially important to maintaining the health of their communities. Having people whose vocation it is to educate and protect those who live in a particular community also live in that community only adds to its cohesiveness and stability. Many cities in fact have contemplated imposing residency requirements on their employees. Because of affordability problems, however, this would in some cities be tantamount to making such employees permanent renters, an unfair outcome to say the least. And allowing local flexibility to help individuals live in the communities in which they work is a much better approach to promote “smart growth” strategies than are blanket growth prohibitions which would adversely affect the supply of affordable housing. In this manner, we give localities tools to fight “urban sprawl”.

Mr. Chairman, our homeownership legislation contains many other provisions to assist homeownership. The legislation permits financial flexibility within existing federal programs, such as HOME and the Community Development Block Grant (CDBG) program, allowing the creation of “mixed-income loan pools” and loan guarantees. Low-income families are allowed to use Section 8 housing assistance in connection with homeownership programs, so that instead of paying rent, a family can use it as part of a mortgage, building assets and capital. These along with several other provisions in H.R. 1776 merit your worthwhile consideration.

Mr. Chairman, before I close, I would like to express my gratitude to you for your strong support and involvement in encouraging homeownership opportunities, and for holding this very timely hearing. I look forward to working with you and the other Members of the Subcommittee, as well as the members of the Full Committee, to ensure that we accomplish something important on behalf of America’s working families.

Thank you.

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