Mike Rounds Asks Witness To Explain Who Could Be 'Hit Hardest' By The Expiration Of USDA Mortgages

2 hours ago

During a Senate Banking Committee hearing prior to the congressional recess, Sen. Mike Rounds (R-SD) spoke about housing affordability in rural areas and USDA mortgages.

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00:00Thank you, Mr. Chairman. First of all, thank you to all of you for coming and visiting

00:06with us today. I think the one thing that we hear time and again, regardless of if you're

00:09a large community or a small community, is the need for appropriate housing. And in many

00:14cases, it can take a different form or a different priority, regardless, depending upon whether

00:19you're in a small community or a large community. But at the federal level, we need to be able

00:24to look at multiple types of programs that might be available to assist in incentivizing

00:30the development of new housing. Housing eventually wears out, and you've got to be looking towards

00:34the future. I'd like to begin with Ms. Willis. First of all, thank you for the work to help

00:42the people with the lowest incomes have the opportunity for quality and affordable homes

00:46in our communities. The last several years, I've focused on bipartisan housing work, addressing

00:52a range of topics, including the streamlining of the environmental review process, modifying

00:56homelessness prevention programs, and increased access to affordable housing in rural areas.

01:02For the past two Congresses, Senator Smith and I have introduced the Rural Housing Service

01:06Reform Act to preserve affordable housing units in rural communities across the country

01:11and make much needed updates to the USDA's Rural Housing Service. My question for you

01:16is, is that with your work with the National Low Income Housing Coalition, how could legislation

01:22like the Rural Housing Service Reform Act make a difference in rural communities and

01:26their ability to finance affordable housing? Thank you for the question, Senator. It is

01:33extremely important to ensure that we have affordable housing in rural communities. We

01:40talked a bit today about suburban and urban communities and tribal communities as well,

01:46but it is important to make sure that we focus on urban communities. We know that some

01:53of the challenges that are faced in rural communities are severe in terms of the building

02:00of affordable housing. Sometimes it's much harder to build in rural communities. Sometimes

02:06the wages for the people in rural communities are lower. What we have is really, when we

02:13talk about an affordable housing crisis, nationwide, one out of four people who are

02:21eligible for affordable housing get affordable housing or rental assistance of some kind.

02:28Another way of saying that is three out of four don't. I think in terms of if we're looking

02:34at the demand side, really it's making sure that the federal government invests in the

02:44and have resources for communities, including rural communities, to make sure that they

02:50also have, that the housing, that it's deeply targeted. If we're talking about building

02:57affordable housing, we're talking about ensuring that if a builder is building in a rural community,

03:05that they're using USDA funds or they're using low-income housing tax credits, but maybe

03:12even pairing that with home dollars or with the housing trust fund dollars.

03:19I think some rural housing, it's different in some cases than some of the urban housing

03:23challenges, but once again, you have fewer contractors. The contractors that are there

03:28may build fewer homes as well in those rural areas. Just curious, who are going to be the

03:35individuals hit hardest by the expiring USDA mortgages? What could that mean for available

03:41workforce housing? It sounds like a weird offset, but literally as these mortgages

03:48expire, things happen to those programs. Can you talk a little bit about that?

03:51Yeah, they do. What's happening is that as the USDA mortgages are expiring, also a lot

03:58of times they're paired with subsidies. We want to make sure that the families and individuals

04:04who are living in the homes or where the mortgages are expiring, that they can continue to use

04:11those subsidies. It's really decoupling.

04:13It's fixed. It needs to be done.

04:15That's right. Absolutely. To ensure that people can stay housed because it's important. These

04:21are mortgages after 20, 30 years where we want to be able to keep them in the housing

04:27stock because if not, landlords can raise the rents, can take them out of the stock,

04:32can do all sorts of things.

04:34Thank you. Dr. Glazier, just a real quick thought. CDBGs are really important. We use

04:44that in a lot of cases to determine infrastructure opportunities in small and rural communities.

04:50One challenge though is that in order to do a lot of those types of things, you've got

04:54to be able to identify the environmental review processes, but also the Davis-Bacon prevailing

04:58wage requirements. I remember correctly utilizing a $2,000 CDBG in a local community in a project

05:06that would require following Davis-Bacon requirements. That includes prevailing wage compliance,

05:13weekly certified payroll reporting, on-site labor interviews, contractor documentation,

05:19and administrative oversight. I guess my question very quickly is, wouldn't it cost more than

05:24$2,000 in administrative costs just to complete the Davis-Bacon reporting alone?

05:32That certainly sounds like a lot of work, Senator. I think while most of the regulations

05:36that we're talking about are local, I am certainly on board for a reducing the federal regulatory

05:40burden as well agenda.

05:42Thank you. Thank you, Mr. Chairman.

05:44Thank you, Senator Rounds. Senator Smith.

05:47Thank you, Mr. Chair and ranking members.

Mike Rounds Asks Witness To Explain Who Could Be 'Hit Hardest' By The Expiration Of USDA Mortgages

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