Bipartisan U.S. Senate Committee Hearing Addresses Lack of Housing Supply

(KNSI) — A hearing on Capitol Hill this week addressed the lack of housing supply and provided some suggestions to fix it.

U.S. Senator Tina Smith (D – MN) chairs the 15-member bipartisan Subcommittee on Housing, Transportation, and Community Development and explained to KNSI News she learned that right now, there are fewer homes for rent or sale than at any time in the last 30 years. One of the hurdles to homeownership is the current high interest rates and low vacancy rates in both homes and apartments, driving up costs. Smith says low vacancy rates could be due to people who bought a home at 3% interest and are unlikely to move because the cost of moving now with higher interest rates is so much greater.

The consensus after the hearing was that it’s “too complicated and expensive to build new homes, and a lot of that comes down to decisions that are made at the local level around land use, and zoning and building requirements” not allowing for multi-family housing like townhomes, row houses or smaller apartment buildings, Smith said.

One of the biggest expenses for building new housing is “land costs are so high, especially in urban and suburban communities.” Committee members and experts who testified discussed creative ways communities are making building homes, duplexes and tri-plexes possible.

Senator Smith pointed to what happened in Willmar. “The city changed the requirements for new construction for parking, and that has meant the city has been able to use more of the land for people to live,” and it was discovered that “they don’t need as many parking places as they used to think they did. That has made it possible for the city to use the land it has more efficiently.” She added loosening building and zoning requirements could lead to a boom in construction, creating jobs.

At the federal and local levels, Smith explained it’s important to have private financing and lending, and there are tools to support housing construction. She pointed to the Low Income Housing Tax Credit and the New Markets Tax Credit that have been “very effective. We just haven’t used them as much as we could have.”

She said it’s also difficult for companies to recruit workers if there is a lack of homes or apartments.

At a Downtown Summit at the River’s Edge Convention Center in December, two experts spoke to the need for developing downtown walkability and attracting more market-rate housing, even if that means converting parking lots into apartment buildings.

A bipartisan committee of state legislators toured the St. Cloud area Wednesday as the city plans to ask for $100 million in bonding money for revitalization projects, including the downtown area.

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