WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.) Tuesday questioned witnesses, including Senior Fellow at the Brookings Institution, Dr. Jenny Schuetz, and Chief Real Estate Officer and Director of Asset Management for Invest Newark, Gregory Good, during a Housing, Transportation, and Community Development Subcommittee Hearing entitled “Housing Supply and Innovation.”
The Senator questioned Dr. Schuetz about the efficacy of the FHA’s multifamily financing tool, given the rising cost of construction. FHA’s limits on multifamily financing are set by Congress and have not been updated in twenty years.
“I’m glad we’re exploring innovation in the housing sector, but we should also note that we could see similar benefits by updating many of our existing federal housing programs. The National Low Income Housing Coalition’s 2022 ‘Out of Reach’ Report showed just how hard it is for low-income renters to afford even modest housing. In my home state of New Jersey, a median-income renter is barely able to pay for a one-bedroom home,” Menendez said. “The fact is there aren’t just enough rental homes being built. And part of that is because federal lending programs through HUD and the Federal Housing Administration haven’t kept pace with the market.”
“Well, it seems to me that the current statutory limits pose a challenge to HUD and FHA meeting its mission to provide decent, safe and sanitary housing. That’s why I introduced a discussion draft earlier this year that would modernize FHA’s ability to finance multifamily housing construction around the country,” Menendez said. “It’s a simple, commonsense proposal that would update FHA’s lending ability to accurately reflect the increase in construction costs over the last 20 years. I look forward to working with our colleagues to pass this into law and empower FHA to better address the high cost of rent across the country.”
Sen. Menendez questioned Mr. Good about the work Invest Newark – an economic development agency that supports housing development initiatives in the Newark area – has done with prospective homebuyers in New Jersey. The Senator also asked Mr. Good how developers can be incentivized to build properties that include more affordable units for low- and moderate-income families that are trying to become homeowners.
“One of the ways we can reduce the pressure on the affordable rental housing supply is by making it easier for renting families to transition into ownership. This will free up rental units and allow families to begin building generational wealth. However, that transition is often difficult, especially for prospective homebuyers of color,” Menendez said. “One key problem seems to me that all too often first-time homebuyers are competing with institutional investors who can afford to purchase the home with cash. A study from the Rutgers Center on Law, Inequality, and Metropolitan Equity found that from 2017-2020, more than 47 percent of Newark’s residential property was sold to corporate buyers, rather than prospective homeowners. This also warps incentives for developers, compounding supply issues.”
Sen. Menendez concluded by asking Mr. Good how critical it is that we build more affordable housing near public transit so that people are better connected to good paying jobs and careers.
“Affordable housing is increasingly located in areas that are far away from job centers, forcing workers to pay higher transportation costs or work fewer hours. Thankfully, the Infrastructure Investment and Jobs Act that passed last Congress injected as much as $550 billion into reviving our nation’s transportation systems,” Menendez said. “That’s a good start, but that’s why I led the charge with my Livable Communities Act, which creates a federal grant program to incentivize the development of new affordable housing near existing mass transit.”
Sen. Menendez has long been a leader in the fight to build more affordable housing. I. Under FY 2023 Service Coordinator in Multifamily Housing and Congregate Housing Services programs, these funds promote health and wellness to support residents as they age in place in an independent housing setting.
In March, the Senator joined a group of 17 Senate Committee Chairs and Majority Leader Chuck Schumer (D-N.Y.) in sending a letter to President Biden urging the federal government to utilize a “whole-of-government” approach to address the nation’s housing crisis. In May, Sens. Menendez and Booker announced a total $12,237,784 for the state of New Jersey from the Department of Housing and Urban Development (HUD) through the nation’s Housing Trust Fund (HTF). This is an affordable housing production program that complements existing federal, state, and local efforts to increase and preserve the supply of high-quality, safe affordable housing for low-income households, including families experiencing homelessness.
In January 2022, Sen. Menendez announced $1,429,328 million in federal grants from the U.S. Department of Housing and Urban Development’s (HUD) Housing Counseling Program to seven local agencies throughout New Jersey to provide funds to HUD approved housing counseling agencies to advise people on buying or renting a home, defaults, foreclosure, and other financial challenges. In August 2021, Sen. Menendez introduced the Livable Communities Act that encourages local communities to partner strategically to develop bold, innovative solutions that reflect their unique character, while leveraging existing assets, including access to transit to help revitalize neighborhoods, spur economic development, create jobs, and address their affordable housing needs.
That same month, the Senator also introduced the Choice Neighborhoods Initiative Act of 2021, which supports locally driven strategies to revitalize underserved neighborhoods by making permanent the highly competitive Choice Neighborhoods grant program at the U.S. Department of Housing and Urban Development (HUD). In 2021, the Senator also secured $100 million as part of the American Rescue Plan to expand access to housing counseling and assistance services for millions of renters and homeowners struggling to remain in their homes amid the economic crisis created by the pandemic.