Rhode Island House of Representatives Speaker Joseph Shekarchi testifies before the U.S. Senate Budget Committee on Sept. 25, 2024. (Screenshot from committee webcast)
WASHINGTON — The speaker of the Rhode Island House described how his state has tackled affordable housing and how it could be a model for local and state governments across the country in a Wednesday hearing before members of the U.S. Senate Budget Committee.
“My mantra has been: production, production, and more production,” Rhode Island House of Representatives Speaker Joseph Shekarchi said.
Shekarchi and housing experts urged the senators to take a multipronged government approach to tackling the lack of affordable housing, such as reforming zoning, expanding land for building, and streamlining permits.
“I really believe this is an all-hands-on-deck crisis,” Sen. Patty Murray, Democrat of Washington, said.
Murray said that in her state, there is a shortage of 172,000 homes. She asked one of the witnesses, Paul Williams, the executive director at the Center for Public Enterprise, how the federal government could help state and local governments tackle the issue. The Center for Public Enterprise is a think tank that aids public agencies in implementing programs in the energy and housing sector.
Williams said the federal government should encourage municipalities to look at local permitting and zoning processes to see if those delay new apartment construction projects or prevent them from happening.
He added that financing can also remain a challenge.
Tax credits
Another witness, Greta Harris, the president and CEO of the Better Housing Coalition, an organization based in Virginia that aims to produce affordable housing, said the federal government should consider expanding the U.S. Department of Housing and Urban Development’s Low-Income Housing Tax Credit. That program provides local groups with a tax incentive to construct or rehabilitate low-income housing.
“The low-income housing tax credit program has been extremely effective in allowing us to produce more housing units and also preserve existing affordable housing units,” Harris said.
She added Congress should consider expanding federal housing vouchers, and that closing and down payment assistance in home purchases is crucial. Federal housing vouchers help provide housing for low-income families, those who are elderly, people with disabilities, and veterans.
Most wealth building is through owning a home and acquiring equity in that home, she said.
“People can use that equity for retirement, to help their kids go to college, to start a business, and to be able to breathe a little bit,” Harris said.
How a state can be successful
Rhode Island Democratic Sen. Sheldon Whitehouse, the chairman of the committee, asked Shekarchi to describe some successful impacts of the state’s approach to housing.
Shekarchi said that “we haven’t substituted state control for local control,” and have instead made the process to get building permits and address land disputes easier. He added that Rhode Island also created a role for a housing secretary, to address the issue.
“Overall, you’re seeing an increase in building permits,” he said.
Indiana GOP Sen. Mike Braun asked Harris if housing should be left to local government and private entrepreneurs, rather than Congress.
“Left to its own devices, the market is not equitable and it serves certain portions of our society and not all,” she said.
She said the government at all levels – local, state and federal – should participate in addressing the housing crisis.
GOP bashes Harris plans
The top Republican on the committee, Sen. Chuck Grassley of Iowa, blamed the Biden administration for the cost of housing
He also criticized a housing plan released by Vice President Kamala Harris, the Democratic presidential candidate, that would provide $25,000 in down payment assistance to first-time home buyers – a proposal that hinges on congressional approval.
“Economists from across the political spectrum have noted how such policies would backfire by pushing up housing prices even further,” Grassley said of Harris’ policy.
Ed Pinto, a senior fellow and co-director of the conservative think tank American Enterprise Institute Housing Center, said that there is a shortage of about 3.8 million homes. He argued that Harris’ plan to give down payment assistance “is almost certain to lead to higher home prices.”
“The millions of program recipients would become price setters for all buyers in the neighborhoods where the recipients buy,” Pinto said.