WASHINGTON — The Speaker of the Rhode Island House of Representatives described how his state has tackled the issue of affordable housing and how it could serve as a model for local and state governments across the country in a hearing before members of the U.S. Senate Budget Committee on Wednesday.
“My mantra has been production, production and more production,” said Joseph Shekarchi, speaker of the Rhode Island House of Representatives.
Shekarchi and housing experts urged senators to address the shortage of affordable housing with a multi-pronged government approach, including reforming land apply planning, expanding building land and simplifying permitting processes.
“I really believe that this crisis requires everyone to pitch in,” said Democratic Senator Patty Murray of Washington.
Murray said her state is brief 172,000 homes. She asked one of the witnesses, Paul Williams, executive director of the Center for Public Enterprise, how the federal government can aid state and local governments solve the problem. The Center for Public Enterprise is a think tank that helps public entities implement programs in the energy and housing sectors.
Williams said the federal government should encourage municipalities to review local permitting and zoning processes to determine whether they are delaying or preventing the construction of novel housing.
He added that financing could also continue to be a challenge.
Tax credits
Another witness, Greta Harris, president and CEO of the Better Housing Coalition, a Virginia-based organization that seeks to create affordable housing, said the federal government should consider expanding the U.S. Department of Housing and Urban Development’s Low-Income Housing Tax Credit, a program that offers local groups a tax incentive to build or rehabilitate public housing.
“The low-income tax credit program has proven to be extremely effective, allowing us to create more housing units while preserving existing affordable housing units,” Harris said.
She added that Congress should consider expanding federal housing vouchers and that closing and down payment assistance for home purchases is critical. Federal housing vouchers aid provide housing for low-income families, the elderly, people with disabilities and veterans.
Most wealth creation comes from owning a home and purchasing equity in it, she said.
“People can use that equity for retirement savings, to put their kids through college, to start a business, to get some breathing room,” Harris said.
How a state can be successful
Rhode Island Democratic Senator Sheldon Whitehouse, the committee’s chairman, asked Shekarchi to describe some successful impacts of the state’s housing approach.
Shekarchi said that “we have not replaced local control with state control,” but instead simplified the process of issuing building permits and resolving land disputes. He added that Rhode Island also created the position of Minister for Housing, to fix the problem.
“Overall, there has been an increase in building permits,” he said.
Indiana Republican Senator Mike Braun asked Harris whether housing construction should be left to local government and private entrepreneurs rather than Congress.
“If you leave the market to itself, it is not fair and it serves certain parts of our society but not all,” she said.
She said government at all levels – local, state and federal – must be involved in solving the housing crisis.
GOP criticizes Harris plans
The highest-ranking Republican on the committee, Senator Chuck Grassley of Iowa, blamed the Biden administration for housing costs
He also criticized a housing plan by Democratic Vice President Kamala Harris that would provide first-time homebuyers with a $25,000 down payment – a proposal that depends on congressional approval.
“Economists across the political spectrum have pointed out that such a policy would backfire by driving up housing prices even further,” Grassley said of Harris’ policy.
Ed Pinto, senior fellow and co-director of the conservative think tank American Enterprise Institute Housing Center, said there is a shortage of about 3.8 million homes. He argued that Harris’ plan to provide down payment assistance “will almost certainly lead to higher housing prices.”
“The millions of program recipients would set prices for all buyers in the neighborhoods where they buy,” Pinto said.
