Subcommittee hearing pins U.S. housing shortfall on zoning, regulatory delay, labor and materials costs

The Subcommittee on Housing and Insurance of the House Financial Services Committee convened a hearing titled “Building Our Future, Increasing Housing Supply in America” to examine why the nation has not built enough homes to meet demand.

Chairman Flood opened the hearing by saying the central problem is supply, not wages or savings, and that “we are not building enough homes in this country to meet the demand,” citing published estimates of a national shortfall ranging from about 3,850,000 to more than 5,000,000 units. He added that the committee would examine local regulatory barriers, materials and labor costs, and financing frictions. "I am excited to dig deeper into each of these issues today and I look forward to our witnesses' testimony," Flood said.

The hearing assembled legal, policy and local-government witnesses who emphasized overlapping causes and proposed federal roles that do not necessarily displace state and local authority. Ranking Member Cleaver urged bipartisan work on “common sense solutions” and backed bills under consideration, including the chairman’s Identifying Regulatory Barriers to Housing Supply Act and the Housing Supply and Innovation Framework Act. Cleaver also highlighted the need for adequate HUD capacity to implement new programs.

Why it matters: witnesses described a multi‑headed problem. Paul Compton, a former HUD general counsel in the Trump administration, testified that land costs driven by land‑use regulation and the direct and indirect cost of regulation explain much of the real cost increase in housing. Compton recommended regulatory pruning at federal and local levels, and he urged removing many HUD programs from the procedural coverage of the National Environmental Policy Act (NEPA) — a change he said would preserve substantive environmental protections while reducing process delays. Compton told members that over the last six years NEPA review produced only four environmental impact statements for the many project reviews, which he used to illustrate excessive process costs.

Dr. Emily Hamilton of the Mercatus Center emphasized that modernizing local land‑use rules, expanding siting options for manufactured housing and improving the economic analysis used in model building codes would help. She cited Houston’s example of reducing lot requirements and producing roughly 80,000 houses on smaller lots as a replicable reform. Buddy Hughes of the National Association of Home Builders summarized five key supply constraints — “lending, lots, labor, lumber, and laws” — and said tighter ADC (acquisition, development and construction) credit, a national shortage of skilled labor (about 300,000 open positions month to month, witnesses said), volatile lumber and material costs, and local regulatory burdens all limit production.

Local perspective: Tara Vasacek, city administrator of Columbus, Nebraska, described local reforms — allowing accessory dwelling units by right, removing minimum lot sizes and streamlining permitting (permits issued within two weeks for complete applications) — and a public‑led subdivision that currently is building 325 housing units enabled by tax‑increment financing (TIF). Vasacek told the committee the city used local sales tax and TIF to buy and prepare lots to reduce builder risk and accelerate supply.

Other pressures: witnesses and members warned that recent trade actions and tariffs that affect building materials could raise costs, and several lawmakers and witnesses said HUD’s implementation capacity matters: Cleaver and other members raised concerns about reported staffing cuts at HUD affecting delivery of grants and programs. Nikitra Bailey of the National Fair Housing Alliance testified that fair housing enforcement and local fair housing partners could be harmed by cancellations or freezes of HUD funding.

What the committee discussed: members questioned witnesses on options ranging from federal knowledge‑sharing and model policies to targeted statutory reforms (for example, easing limits that keep federal property underused and aligning HUD and DOD for enhanced‑use leases), revising NEPA procedural coverage for many HUD programs, investment in workforce training (including Job Corps and proposed legislation called the Constructs Act), and recalibrating building codes and energy requirements that witnesses said can add to cost without proportional safety benefits.

Next steps and record: no formal votes were taken. Members asked witnesses to supply written responses; the chair set a deadline for witness responses of 2025-04-30 as part of the hearing record.