Brown: Too Many Americans Are Priced Out of the Housing Market
WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, delivered the following opening statement at today’s hearing entitled “Priced Out: The State of Housing in America.”
Sen. Brown’s remarks, as prepared for delivery, follow:
You can’t open up a paper or turn on the news without hearing about housing – how much it costs, and how hard it is to find. The headlines tell the story.
“The Housing Shortage Isn’t Just a Coastal Crisis Anymore”
“Why High Housing Costs Could Keep Climbing”
“High costs spur more baby boomers to find roommates”
“What’s up with the crazy housing market?”
And that’s just in the past month.
But this isn’t a new problem. Wages haven’t kept up with the cost of housing for years.
And this country hasn’t done enough to produce the housing we need. From 2000 to 2015, 23 states – about half the country – fell 7.3 million homes short on housing production.
And this shortage makes housing more expensive.
Congress hasn’t done its job for years. It was just last year that we hosted the first hearing on the state of housing in America in nearly a decade.
We talk about housing so much because it’s the foundation of everything else in our lives. Where you live determines so much about your life – where you work, where your kids go to school, where you do your grocery shopping.
And it eats up the biggest chunk of most people’s paychecks. As Matthew Desmond, the author of the book Evicted, says, the rent eats first.
When housing costs are up, it means less money left over for groceries and gas and school supplies and prescriptions.
For a lot of families, it also means crippling stress at the end of each month. How do I pay my rent? After I pay my rent, do I pay my electric bill or the water bill or the internet or daycare or the credit card?
For years, the market hasn’t produced enough housing that working people can afford.
Home health aides, nursing assistants, and restaurant workers, working full-time, have long been paid too little to afford even a one-bedroom apartment, let alone dream of owning a home.
Meanwhile, young aspiring homebuyers have long faced insurmountable barriers to homeownership. They’re crushed by student loan debt. Black and brown families’ parents were denied the dream of homeownership or had it ripped out from under them by predatory lending and can’t help with a down payment.
Over the past two years, with low rates making monthly mortgage costs just a little more affordable, some of these families thought that maybe, just maybe, now was their chance to finally buy a home.
But they found themselves competing with wealthy buyers for too few homes. Often they weren’t losing out to a family with a little more money – they were outbid by Wall Street investors from out of town, paying all in cash.
Families told stories of spending more than a year looking for a home. A man in Bozeman, Montana, even resorted to standing on the side of the road wearing a sandwich board asking someone, anyone, to sell him their home after he’d put in 18 unsuccessful offers.
But there was just nothing to buy.
And now, with home prices rising to record levels and mortgage rates going up, homeownership is increasingly out of reach for renters hoping to lock in a steady monthly payment, find some stability, and build wealth.
Recent cost increases have priced an estimated 4 million families out of homeownership. Those are families who will now be renting, in a rental market that was already too tight.
In May, median rents topped $2,000 a month.
And that’s if you can find somewhere to live at all.
Bidding wars that used to be limited to homebuyers in “hot” housing markets are now breaking out between renters in communities from Chicago to Port Orange, Florida, who are just trying to find a place they can afford.
All this will exacerbate the wealth gaps we already had and put first-time homeownership further out of reach, especially for families of color.
Because while millions of existing homeowners, who already had 40 times the wealth of the average renter, saw their wealth skyrocket as home values rose, renters – disproportionately people of color – fell further and further behind.
We have underinvested in our housing and communities for decades. Now we’re seeing the consequences.
A recent report found a shortage of nearly 3.8 million homes nationwide, more than double the shortfall we had just 10 years ago.
Not a single state has enough homes to meet its families’ needs.
Unless we act, it’s tough to see how renters – whether or not they want to buy a home– will ever catch up.
The answer is clear. We need more housing.
We need more housing available to buy for the millions of aspiring homeowners just starting out.
We need more housing for renters, especially those with the lowest incomes.
Our committee members are leading on efforts to find solutions.
Senator Van Hollen has a bipartisan proposal with Senator Young to expand support for renters with the lowest incomes, because we know the market doesn’t build housing that they can afford.
Senator Reed and Senator Collins have a bill to increase the efficiency of our housing.
Senator Menendez has a proposal to help communities that want to make comprehensive housing and transit investments.
Senator Warren has a bill to repair more of the homes we have, and to produce new housing that lower-income families, including families in rural areas and Tribal communities, can afford.
Senator Cortez-Masto has a proposal to fund repairs in manufactured housing communities, to keep those communities affordable for their residents.
And Senators Warnock and Van Hollen are cosponsoring a proposal to help communities invest in meaningful local projects and preserve the housing we have, so we don’t fall further behind.
And we can do this while ensuring that we’re not displacing families and seniors from the neighborhoods they love.
I look forward to hearing from today’s witnesses, the challenges they’re seeing, and their recommendations to support new housing in communities across the country.
We can’t deny this problem any longer—we see it in every community across the country. It’s not a Republican or Democratic problem. Congress must act.
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