Housing affordability is an issue to be tackled from many directions; which ways are on lawmakers’ radar? The House Financial Services committee (which covers the real estate sector) provided insight into that during a hearing Tuesday on rising housing costs, titled “Priced Out of the American Dream.”
Those giving testimony at the hearing, where discussion ranged from permitting differences across states to the role of community banking in house, included Brian Brooks, CEO of Meridian Capital Group; Kevin O’Leary, commercial real estate investor (and reality TV star); economist and former President Trump advisor Stephen Moore; and Dr. Darrick Hamilton, chief economist of the AFL-CIO.
Legislation under discussion included several bills that would restrict large institutional investors from buying single-family homes, such as a “first look” policy that would give home-buying families a first look advantage over large financial firms. Earlier this year, Trump announced his intention to ban or at least restrict institutional investors from buying single-family homes and directed congress to take action. Reporting suggests the effort has hit roadblocks and the hearing showed that not all lawmakers are on board with the initiative.
Congressman Brad Sherman (D-CA) argued that “it sounds good to say (corporations owning homes) should be prohibited,” but pointed to data that only 0.6% of single-family homes are owned by institutional investors. He also noted that some homes should be available to rent for transient movers, while builders need back-up options to sell to, which large landlords can provide. Later in the hearing, Congressman Josh Gottheimer (D-NJ) also argued that eliminating build-to-rent single-family homes would lead to a downturn in supply.
Build, baby, build
Supply was another recurring topic during the hearing, which did not break the consensus that the housing market needs more of it. “Supply, supply, supply, that’s how you lower prices,” said Moore.
Noting that February is Black History Month, Congresswoman Ayanna Pressley (D-MA) noted homeownership as a key path for wealth-building which Black Americans were historically excluded from.
Congressman Sean Casten (D-IL) touched on what he called a “third rail” about housing supply and homeownership wealth-building; that high housing prices are “good for homeowners, bad for homebuyers,” and that “aggressively” working to cut prices would be “politically suicidal.” Casten argued increasing supply is thus the only viable way forward to improving market conditions for homebuyers.
He then asked Moore about housing proposals by the President, such as buying up mortgage bonds and allowing homebuyers to use 401ks towards a down payment, which (citing data from Redfin) Casten said could increase housing demand and thus drive up prices. Moore spoke in favor of these policies—as well as, earlier in the hearing, the proposal to index capital gains for inflation and alleviate one cost of selling a home.
Regulation, such as long waits on building permits, and zoning were frequently cited during the hearing as impediments to building. Representative Byron Donalds (R-FL), the last congressman to question those giving testimony, cited previous findings by the National Association of Home Builders (NAHB) on how high the percentage of regulatory costs are in the total percentage of building. (Donald cited 30%, while during questioning, O’Leary claimed it can be as high as 45% in California. NAHB has claimed that regulations can account for 25% of building a single family home and more than 40% for a multifamily home.)
Of those giving testimony, Moore took the most transformative view and argued there should be no real estate zoning at all, pointing to Houston (which does not have traditional land zoning laws) and the low cost of housing there. O’Leary’s testimony often returned to permitting, which he noted varies state by state, which creates different incentives in those states to attract capital. (O’Leary, as a commercial developer, frequently framed this in terms of the U.S. competing with China on building AI-data processing centers.)
During his questioning by Donalds, O’Leary gave praise to Utah’s Military Installation Development Authority (MIDA), which offers a streamlined permitting process. O’Leary’s views on “reducing friction” with permitting sparked a brief dispute with Congressman Emmanuel Cleaver (D-MO).
“I think every consumer should be protected, but not if it takes two years to determine whether they’re protected. That becomes a huge friction point and the market can’t work,” O’Leary argued. Cleaver responded with, “Those human beings’ lives stopped working… when they’re taken advantage of.”
Financing the problem
Banking, and how it affects funding for homeowners’ mortgages and housing development, was the other major topic of discussion throughout the hearing. Congressman Bill Huizenga (R-MI), a former real estate agent whose family owns a gravel-supplying and housing development company, cited a personal anecdote with struggling to get funding for a real estate development from a community bank because “the regulators thought (the bank was) overweighted in real estate.”
Brooks returned to the idea a few times during the hearing that community banks, rather than Fannie Mae and Freddie Mac, should be the primary holders of mortgages. These banks exist in the communities where the assets (housing) and owners also live, and so are better stewards, Brooks contended. (The Meridian Capital Group faced a fraud investigation, and subsequent blacklisting, from Fannie and Freddie in November 2023, though the bans are both lifted as of April 2025.)
One piece of legislation on the docket that could address this, and was cited during the hearing, is the Main Street Capital Access Act. One of the legislation’s provisions is to adjust the Community Bank Leverage Ratio framework to allow more banks to enter the framework and reap the benefits of removing certain capital calculating and reporting burdens. On the other side of the aisle, Representative Rashida Tlaib (D-MI) also voiced her support for a national public bank, based on the state-run Bank of North Dakota.
North Dakota Governor Kelly Armstrong told pro-housing advocates last year that the state bank has proved a tremendous boon in addressing affordable housing shortages.
To listen to the full hearing, click here.
