The impact of the country’s longstanding and severe housing shortage was the focus of the September 25 Senate Committee on Budget hearing, “The Costs of Inaction: Economic Risks from Housing Unaffordability.”

That shortage, Committee Chair Sheldon Whitehouse (D-RI) said, has driven up the cost of both rental and homeowner housing.  While the pace of multifamily and single family housing has increased in the past year, the shortage will persist without concerted action to expand the supply, Chair Whitehouse said, referencing a September 2024 report from the Congressional Budget Office report on new housing starts. Chair Whitehouse mentioned his support for a wide range of housing programs for both single- and multifamily housing, including the low income housing tax credit and downpayment assistance programs.

Committee Ranking Member Chuck Grassley (R-IA) recommended that, before any programs are expanded or new housing programs created, current programs should be assessed for their complexity and duplicity. The government should focus on program effectiveness, Chair Grassley said, by simplifying programs and increasing their accountability.

Rhode Island House Speaker K. Joseph Shekarchi was one of the hearing’s witnesses. Describing his four-year tenure as Rhode Island House Speaker as focused on the mantra of affordable housing “production, production, and more production,” Speaker Shekarchi said, “Housing is the core issue.”

The housing crisis “complicates almost all other challenges facing our communities,” he said. “If we don’t solve the housing crisis, how can we improve our educational outcomes or shore up the job market? How can we ensure a proper healthcare workforce, grow our economy, or lift our families out of poverty?”

“Housing issues are not unique to Rhode Island,” Speaker Shekarchi said. “At a recent National Governors Meeting, every single state listed housing as its top issue, and HUD estimates that the national shortage of housing units is more than six million homes … I respectfully request that Congress provide states with greater funding mechanisms and grant opportunities to develop more housing and to foster public private partnerships. I would also like to see further expansion of financial assistance for renters, like rental vouchers, as well as down payment support for first-time homebuyers.”

Edward Pinto, Senior Fellow and Codirector, American Enterprise Institute Housing Center, another hearing witness, countered, testifying that “subsidized projects are all too often a revolving door of subsidizing, rehabbing, tearing down, and rebuilding. This committee should require HUD to document project by project this revolving door of waste.”

Watch the hearing here.