Housing Reform Gets the Spotlight in Washington Amid Severe Unit Shortage
Connecticut, like the rest of the country, is facing a severe housing shortage with supply and demand greatly off balance and the divide between housing costs and income widening, according to a recent report by Partnership for Strong Communities.
“Too many Connecticut residents continue to struggle to find or keep an affordable home,” Chelsea Ross, executive director of the nonprofit housing advocacy group, said in the report.
Citing statistics from the Office of Policy Management, the report found that Connecticut has a shortage of 120,000 to 380,000 housing units. Nationwide, the housing shortfall hit an all-time high of 4.7 million units in 2023, Zillow research showed.
With the midterm elections clearly in sight, momentum is building in Washington to address the issue.
On March 13, President Donald Trump signed two executive orders related to making housing more affordable. The first would streamline environmental and other regulations related to residential development and speed up permitting processes for construction. The second order would seek to improve access to mortgage credit.
The president’s actions came on the heels of the Senate’s passage of a comprehensive housing bill — the 21st Century ROAD to Housing Act — that tallied a resounding 89-10 vote. If signed into law, the Act would be the largest legislative housing package in decades, according to its sponsors Sens. Tim Scott (R-SC) and Elizabeth Warren (D-MA), respective chair and ranking member of the Senate Banking Committee.
At press time, the bill was headed to the House, which in February passed its own broad housing reform legislation, also with overwhelming bipartisan support.
The Scott/Warren Senate bill combines some provisions of that House legislation as well as an earlier Senate bill. To reconcile differences between their respective versions of the reform bills, members of both chambers were expected at press time to enter conference committee negotiations.
“We have been working on this bill for a long time,” Sen. Richard Blumenthal (D-CT) told The Goshen News. “It includes more than 40 separate provisions, and the emphasis is on housing supply and affordability.” Blumenthal, the ranking member of the Senate Veterans’ Affairs Committee, has led many of the specific measures in the bill, including housing initiatives for veterans.
Blumenthal said the bill, for example, includes reforms to increase housing fairness and access, and also addresses appraisal bias, preserves manufactured housing communities, improves Section 8 inspection policies to get families housed quicker, and supports home ownership. It would also create financial incentives for developers “but in no way overrides or interferes” with local zoning or decision-making, the senator said.
Other provisions included in the 303-page bill call for:
— Creating a pilot program to incentivize housing development in certain jurisdictions participating in Community Development Block Grant programs
— Cutting regulatory burdens around environmental reviews to allow state, local, and tribal governments to streamline reviews and increase housing development
— Authorizing a pilot program to offer competitive grants for state, local, and tribal governments with regional housing planning and community development activities
— Authorizing the Federal Housing Authority (FHA) to increase multifamily loan limits to better match housing market costs and enhance affordability
— Mandating that FHA, Housing and Urban Development, and other housing regulators annually testify before Congress on their operations, oversight activities, and program performances
— Prohibiting large institutional investors that own at least 350 single-family homes from buying more and requiring the sale of certain newly built rental properties within seven years
— Pausing the Federal Reserve from issuing a central bank digital currency, a cryptocurrency, until the end of 2030
Despite the enthusiasm in both chambers and parties for housing reform, the Senate bill faced significant pushback from some House members who charged that it neglects some of the priorities in their chamber’s bill.
In addition, Trump has vowed that he will not sign any bills until the Safeguard American Voter Eligibility (SAVE America) Act is on his desk. Senate Majority Leader John Thune (R-S.D.) was expected to bring the voter ID bill to the Senate floor for a procedural vote in mid-March.
House Financial Services Chair French Hill (R-Ark), who authored the House’s reform bill, said in a statement that the Senate took “an important step in the legislative process” with the passage of its bill. However, “the House has passed bipartisan legislation to empower homeowners and renters, strengthen communities, and foster more affordable choices for all Americans,” he said. “It is critical we get the details right and mitigate some of the concerns raised by House members with the Senate bill.”
Areas of concern for some House members and others include the limits on large institutional investors from buying single-family homes and the temporary ban on government-issued cryptocurrency.
“The provision requiring institutional investors to sell built-for-rent, single-family homes within seven years would severely reduce investment in rental housing and could slash single-family production by nearly 40,000 units per year,” Bill Owens, National Association of Home Builders chair, said in a statement following the Senate vote.
Blumenthal said he believes that the issues can be resolved in conference “because the need for housing is so deep and urgent, and the support for this bill is so bipartisan that I’m very hopeful that we can reach a consensus on all the other potential issues.” He said he expected a vote on final passage of the bill sometime in April.
