Congress examines economic impact of ongoing housing shortage crisis

WASHINGTON, D.C. — New federal data shows more than 21 million renters spent more than 30 percent of their income on housing last year. That means less money for other essentials like food and healthcare.

Recently, on Capitol Hill, housing advocates like Greta Harris warned lawmakers that inaction on the housing crisis could lead to major consequences.

“The longer we wait to address this housing crisis, the more costly it will become,” said Greta Harris, President and CEO, of Better Housing Coalition.

Harris runs the Better Housing Coalition in Richmond, Virginia. The not-for-profit community development corporation has invested hundreds of millions of dollars in the area and it provides affordable rental homes for nearly 3,000 thousand low-income families and seniors.

Harris told Congress she’s seen their work transform lives.

“Individuals further their education, secure better jobs, and even sometimes transition to homeownership, creating a cycle of positive economic social outcomes,” she said.

But it’s getting harder to find affordable housing. Lawmakers say there’s a shortage of nearly seven million housing units nationwide.

Some state leaders are taking action through new legislation. Rhode Island State Rep. Joseph Shekarchi said his state has passed nearly 50 new housing laws in four years to address the housing crisis.

“My mantra has been production, production, and more production,” said Rep. Joseph Shekarchi, D - Rhode Island House of Representatives. “He legislation we passed has focused on reducing barriers to development, eliminating red tape and redundancy.”

Another factor driving up prices is the current home sellers’ market.

“Sellers’ market provides upward price pressure which worsens if demand is further stimulated,” said Ed Pinto, senior fellow and co-director, AEI housing center.

Ed Pinto works at the American Enterprise Institute, a conservative think tank. He’s critical of Democratic proposals like one the Harris-Walz campaign has endorsed which would provide up to $25,000 in credit to first-time home buyers.

But Pinto said that could lead to even higher home prices.

“Thereby more than eliminating the intended benefits. Millions of program recipients would become price setters in their neighborhood for all the buyers,” said Pinto.

That’s why he’s suggesting Congress take a different approach.

“A 10-year plan to auction off federal land for new market-rate home construction could add 200,000 homes per year however for this to be effective the rules have to follow the keep it short and simple or KISS rule,” he said.

There is some good news when it comes to interest rates for homebuyers. Recently, mortgage rates hit the lowest level since last February.

This is a developing story. Check back for updates as more information becomes available.

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