Transcripts For CSPAN2 Senate Finance Hearing On Affordable Housing 20170802

The committee will come to order. I want to welcome everybody to todays hearing entitled americas Affordable Housing crisis, challenges and solutions. This is an important issue in this hearing will allow the committee to hear from experienced and welleducated witnesses that can provide more context on Affordable Housing policies and the sections of the tax code with the intent of mitigating this longtime set of problems in our society. As many of you are aware the last time we underwent a National Comprehensive revision of the tax code was in 1986. The passage of the tax reform act, that some Affordable Housing tax incentives were baked into statute with the lowIncome Housing tax credit being chief among them. Since then this important section of the tax code has enjoyed bipartisan support. Still, it is worth examining this particular laws we continue to wrap up our work on tax reform. Throughout todays hearing a one each member to keep in mind some Guiding Principles for tax reform. Ive repeated these principles quite a bit in recent years but for those in the audience who may not have heard me mention them the principles are fairness, efficiency, simplicity and american competitiveness. These principles are important within the context of Affordable Housing tax policy because they should be able to help us improve upon what is currently in the code. I know the prospect of more oversight can be seen as a challenge but i think we should all give this examination an opportunity to determine where we can improve. While some sections of the tax code have undergone changes over the past three decades solutions on Affordable Housing redmayne as elusive as ever. They seem to remain in many households facing cost burdens associated with renting with perhaps as much his 26 of renter households having paid more than half of their income in rent in 2015 for example. The burden seems to fall heavily on lowerincome households and this is not to simply a problem of arithmetic. In 2015, 25 million children lived in households in which rent comprised of a fairly large share of Household Income. This is a problem that should be ready for a bipartisan solution. We have already introduced Bipartisan Legislation to address some of these issues and many are hopeful that cooperation on these efforts will continue. I personally believe they will. Without i would just like to thank everyone for attending today that forward to hearing from our distinguished panel of witnesses. Before we get to that id like to hand it over to the Ranking Member center wyden or his opening remarks at this time. Thank you very much mr. Chairman. Mr. Chairman let me thank you for focusing today on the low Income Housing tax credit which is a key part of the tax reform puzzle. I also want to thank our colleague from Washington State senator cantwell, who has been for years now the goto person on this committee on this issue and im going to talk a little bit or about the history in a minute. Id also like to note there was a lot of talk last week about bipartisanship, bipartisanship on key issues. Thats what this committee is showing today, that we are serious about tackling an issue in a bipartisan way. Colleagues, my bottom line is americas housing policy needs an urgent remodel. Today, millions of americans struggle to pay rent and they cant even dream of purchasing a home. To recall our classes on introduction to economics, a key housing challenge is increasing supply. When housing is scarce in the communities where people want to live and work working people get pushed out. Rent rises faster than peoples income even among those who are earning a pretty good salary and there are few incentives to build Affordable Housing near schools, Public Transit and amenities like parks and retail services. Oftentimes the only places where people can afford housing means that they are going to have to take an hour or more from where they work or where they want their kids to go to school every single day. A lot of americans either spend a small fortune on train tickets and bus fares or they spend an eternity sitting behind the steering will on the daily commute. A lot of our folks wind up in food deserts where its almost impossible to get healthy fresh food. This crisis is a five alarm fire across america and is certainly true in my home state of oregon. In portland band a story at medford in a lot of other places i see it on the faces of families, children, fats and folks that are living on the streets. Senator cantwell and senator hatch have an important bill that i have cosponsored entitled the Affordable Housing credit improvement act of 2017. In effect it supercharges the lowIncome Housing tax credit and it also builds on what the three of us got into the 2015 tax bill which made expanded lowIncome Housing tax credit permanent. In my view this is a bipartisan, smart way to attack the housing scarcity problem and its going to mean more housing goes up in communities for tax folks who want to work and plant roots. In the days ahead i will have other ideas about how to challenge particularly helping the middle class firsttime homebuyers and doing a better job of linking services, Services Like transportation with lowIncome Housing. Today we will talk to her witnesses about some of the ideas that senator cantwell and hatch have put forward and i want to thank the two of them and i will particularly note after the events of last week colleagues it is more important than ever to be very concrete about this issue of bipartisanship and not just make it a rhetorical talking point and thats what we are doing today. Thank you mr. Chairman. Thank you senator. I also would like to thank senator cantwell. She was the one who suggested this hearing and we have gone out of her way to make sure that we have it. I just want to thank you for your efforts in this regard. I would like to welcome each of our five witnesses today. Im confident we have some of the nations greatest on housing and urban development matters. We will hear from mr. Daniel garcia diaz director Financial Markets and Community Investment group of United States Government Accountability office. Mr. Garcia diaz leads a range of reviews covering mortgage finance, rental, Housing Economic Development and insurance specific way he led recent reviews of Management Issues in the department of housing and urban development of homeowner affordable rental housing. Low Income Housing tax credits and the federal terrorism Risk Insurance program. He is also led reviews and programs and regulatory changes authorized under the emergency Economic Stabilization act in the doddfrank wall street reform act. Mr. Garcia diaz joins the gao in 1998. He hasnt xers degree from Dartmouth College and a masters degree in Public Policy from Harvard Universitys Kennedy School of government. Then we will hear from mr. Granth whitacre president of the National Council of state housing agencies. Mr. Whitaker hails from my home state of utah and has been extraordinarily helpful as we have prepared for this hearing. He has dedicated his career to serving the financial needs of low to moderate income families in our small state of utah. He currently serves as president and ceo of Utah Housing Corporation a selfsupporting statesponsored Public Corporation which has been funding and promoting Affordable Housing in utah since 1977. Mr. Whitaker was appointed to this position or to the position of president and ceo in january of 2009 and has served in that capacity since that time. Mr. Whitakers experience at uh sea started back in 1979 before the last time we reform the tax code. Mr. Whitaker earned a bachelors degree in Business Management from the university of utah school of business process took only worked on postgraduate studies at the university of utah and the universitys professional education division. Third they arent both dr. Catherine or reagan professor of Public Policy and planning it and why use Wagner Graduate School of Public Service where she is also the faculty director of the firm and center for real estate in american policy. She recently served in april 2014 to january 2017 as the assistant secretary for policy development and research at the department of housing and urban development. Her primary Research Interests are at the intersection of poverty in states. Among other she has served on the board of the reinvestment fund, the vice report for and why you institute for poverty, policy and research and the Editorial Board for the journal of policy analysis and management. She has been a visiting scholar at the Federal Reserve bank of boston and economic studies group at the brookings institution. Doctors oregan holds the hd in economics from berkeley and spent 10 years teaching at the yale school of management. They will hear from dr. Curt mcclure of the urban Planning Program at the university of kansas. After mcclure has won several awards for his research on housing and urban planning produce academic careers included an appointment a scholar in residence and resident of the is department of housing and urban development. Serves on the board of editors of housing studies and the journal of planning, education and research. He is associate editor of housing policy and debate. After mcclure holds a masters in city planning degree from the Massachusetts Institute of technology and it ph. D. Degree from the university of california at her glee. Finally mr. Granger mcdonnell board of directors of the National Association of homeowners and president of them donalds companies. Mr. Met donnell is a texasbased donor and 40 years of experience in the homebuilding Affordable Housing for communities in need in the states ware and small metro areas. Mr. Mcdonald also has extensive experience working in the nahb leadership including more than 30 years on the nahb board of directors and cheering the federal government if theres Committee State and local Government Affairs committee the Housing Credit Group the multifamily council. Mr. Mcdonalds holds a degree in real estate and finance from the university of texas school of business. We will start with you mr. Garcia diaz. You will kick this off with your opening remarks if you will. Thank you. Mr. Chairman Ranking Member wyden members of the subcommittee thank you for the opportunity to be here today to discuss the work of the lowincome Tax Credit Program the nations largest source of federal business for developing Affordable Housing to the past three years we have completed three reviews of this program with in a current effort underway working on Development Cost under the program. We afford with a total of 17 different allocating agencies in 14 states and the district in conducting these forward reviews but i want to recognize the corporation of these agencies during our site visits and responding to requests for information. I look over to continuing a productive working relationship with them. The Internal Revenue service is in charge of administering the program. While local allocating agencies are responsible for daytoday implementation of the program my Statement Today focuses on allocating agencies implementation of federal requirements and irs oversight for the program. We found allocating implemented processes to address key federal requirements but we have some concerns i would like to highlight in my remarks in our prior reports the allocating agencies are responsible for learning irs about property noncompliance. Problems with property physical condition of the most common form of noncompliance. We found that agencies. When i submitted noncompliance reports to irs for types of violations were portable and the level of supporting details provided. Because of these differences it is not surprising that number submitted of noncompliance reports nine agencies we examined range from as little as one to more than 1700 a one year period and in fact we are aware some agencies have submitted a few were no complaints reports to irs over a 10 year period and irs has not followed up with them. Furthermore we found irs has done very little to assess the noncompliance information it receives. Iris is no method to determine if the issues reported that been resolved for companies have recurring noncompliance issues. In addition we also found Critical Data on allocation amounts of certification were not complete and reliable. For example we could not tell how often properties are placed within required timeframes. A common problem has been irs oversight of this program has been minimal. Over the past 30 years the irs is on its allocating agencies seven times. Even when these audits were conducted they also yielded multiple findings including Agency Policies that conflicted with the code or treasury regulation incomplete or outdated qualified application plans annual reports to irs with errors and so on. We have some thoughts on how to strengthen oversight and accountability in the light tech program. First with respect to noncompliance we made two recommendations to irs clarified when agencies should report noncompliance and evaluate how it can improve on compliance information by leveraging the physical inspection data system. These recommendations remain open. Second in response to our concern about data quality who recommended the irs stress reduces and control on credit allocations. Iris did not complete its implementation of this recommendation but has taken steps to improve and family and more significantly we continue to believe the irs, continued believe that hud a department of housing and urban development can be a resource to augment irs oversight capabilities. Other tax credit firms such as Neiman Marcus and the stark rehabilitation have a former partnership granted in statute for the relevant subject Matter Agency to assist in oversight Data Collection and analysis and reporting in technical assistance. How does well positioned and efforts to monitor physical and Financial Condition of properties address federal fair housing goals and perform other tasks of managing Affordable Housing programs all areas which irs has no specific expertise. Over the past 30 years itech has been the most tool for Affordable Housing nationwide and we believe investing in oversight and accountability will ensure the agencies made Program Requirements use federal resources effectively and ultimately achieve emissions goal of providing Family Safety and Affordable Housing which is so desperately needed today. This concludes my opening remarks and thank you for the opportunity spoke to speak today and id be happy to take any questions you have today. Mr. Chairman senator wyden members of the committee thank you for this opportunity to testify on the half of the National Council of state housing agencies. I am granted whitacre chief executive officer of the Utah Housing Corporation could also serve as president of nch essay a nonpartisan National Organization that represents state Housing Finance agencies through thank you mr. Chairman and senator cantwell for your steadfast support for the lowIncome Housing tax credit in private activity housing bonds per thank you for your leadership in introducing the Affordable Housing credit improvement act s. 548. I also want to acknowledge senator wyden and the many other members of the committee who have cosponsored this bill. We urge all senators become cosponsors. Bond programs have long enjoyed strong bipartisan support in this bill is no exception. Already nearly one third of senators republicans and democrats have cosponsored this legislation through the house companion legislation also has significant bipartisan backing. The need for Affordable Rent Housing across the countrys great and growing. Nearly half of all printers paid in excess of share of their income for housing and the crisis is most acute for the poorest households. Simply put we have a severe shortage of affordable rental homes. Nationwide there are more than 11 million extremely lowincome renter houses but only 4 million rental homes are available and affordable to them. This shortage continues to grow as hundreds of thousands of new renter households into the market each year while we lose countless Affordable Homes to conversion and obsolescence. The housing crisis impacts working families, seniors, people with disabilities and so many more. Those living in highcost cities suburban neighborhoods and rural communities. Coastal cities like seattle or wellknown to have extreme housing costs. Lowincome households in utah also struggle to find Affordable Housing. Over 58,000 renter households in my state pay more than half of their income for housing and we have a shortage of over 38,000 homes that are affordable and available to the extremely lowincome households. We are not unique. Every state confronts this challenge. This crisis will only get worse unless we act. If current trend in income trends continue the number of severely cost burden renders those paying 50 or more of their income for rent will reach 15 million nationwide by 2025 and thats a 25 increase. The housing credit and bonds are the most active response. These are highly successful private Public Partnerships with a proven track record. They are administered by publicly accountable hma to take seriously the responsibility for their operation in oversight that you have entrusted to us. Stay stippler these resources to respond to the needs we determine to be the most pressing. The housing credit and bonds create a quality Affordable Homes for families, seniors, People Special needs veterans and those experiencing homelessness. The stable housing created improves Better Health education Employment Health outcomes. These contributing Economic Growth by creating jobs and generating tax revenue. In utah we have had Great Success using the hows it credit and housing bonds. We have made considerable progress for example in reducing our chronically homeless population. In fact Utah Housing Corporation will devote 30 of our 2018 housing Credit Authority to Supportive Housing properties moving us closer to the goal of ending chronic homelessness but we still have significant work ahead as we continue to tackle family homelessness and help the many lowincome households who pay more rent than they can afford. In csh a urges you to advance to build on what works. We ask you to increase housing Credit Authority make the other critical brogue rand changes you have proposed an s. 548 such as facilitating the development of income targeted housing. Current housing credit authorities oversubscribed by measured nearly three had more nationally. Meanwhile other federal resources shrink as new demands are placed and credited from bsd to mitigate any unintentional negative that there is in the changes you make to the tax code thank you for your come and noble efforts to address the Affordable Housing we stand ready to assist you in any way that we can. Thank you. Ms. Oregan. Chairman hatch Ranking Member wyden America Committee thank you for inviting me here today. I want to begin by her money people of a few facts about americas Affordable Housing crisis. Housing cost burdens are extremely high particularly for renters. Nearly half of all renters have a cost burden of 2015 or more than a quarter of a severe cost burdens and spending more than 50 of their income on housing costs. These rates remain far above. Recession levels and the challenges are widespread. At least 37 of pointer households from each state across the nation for cost burden and 2014 the sharpest growth and cost burdens over the past 15 years has been among middle income households and finally housing supply and housing completion is in last year were lower than any at any other period since the late 1970s. The rental basis rate is at its lowest level in 30 years. So what to do about it. In terms of the federal response and tax policy the lowincome tax credit litech. With 30 years of litech experienced a villain its an opportune time for reforming litechometerright highlight three critical areas that are facilitated by senate bill 548 the Affordable Housing credit improvement act of 2017. First its working in a broader set of markets across a broader spectrum of incomes. While litechs income limits are 50 or 60 states are required to Prioritize Development reaching the lowest income tenants and indeed nearly half of tenants have incomes below 30 compared to ami preserving such households with extremely welcome require some form of additional rent assistance such as vouchers or other development structures yet those additional subsidies arent decreasing supply and even if available to require layering across multiple constraints. Income averages can address these challenges as well as improve Economic Feasibility and different architecting. It permits development to employ an average income cap of 60 of ami with no Household Income exceeding 80 of ami. Higher rent will be used to offset lower rent and a broader set of incomes can be served with Additional Resources needed to reach lowincome households within the finances of the development itself. Across subsidies useful in highcost markets development in the next Income Community revitalization plan and rural markets were maybe necessary to serve a broader set of income ranges to be economically feasible way. This accessibility is one of the most important litech performances. It increases basis for serving extremely long come tenants providing resources from within the tax credit itself for reaching the lowest income tenants and broadening the definition of Difficult Development Areas without mclean. Include indian areas and enable a high need environment that has been underserved. The secondary is achieving locational goals. Citing litech and a higher fertility neighborhood for ensuring litech contributes to get rid revitalization requires to rip arms contained an s. 543 prohibiting approval and contribution requirements which can act as local in clarifying the states authority to determine the definition of Community Revitalization plans. The third area is preservation of existing full of ford will housing which is a key and costeffective strategy for narrowing the demands. This would be greatly aided by the establishment of a permanent memo for the fourperson credit. Finally expected declines in the Corporate Tax rate are estimated to decrease litech resources by up to 70 in the future. Failure to increase the percapita allocation is equivalent to cutting litech resources relative to recent years giving the breadth and depth of affordability issues across the country now does not seem the time to draw federal resources for Affordable Housing. Thank you. Thank you very, very much. We will now turn to mr. Mcclure. Chairman hatch Ranking Member wyden moves to the committee thank you for the opportunity to do address you on this very important topic to the low Income Housing Tax Credit Program is the nations primary Affordable Housing Production Program. Its a good program but its one that is in need of improvements to make it perform better. I would like to make three observations about the performance of the program and use those observations to support recommendations to help with a better fit for current Housing Market conditions. The first issue answers the question, this lowIncome Housing Tax Credit Program produce units in the price range where theres a shortage of units and here sadly the answer is no. Generally rents on tax credits units called fall in the range of of a household is to spin no more than 30 of income to afford these units these incomes need to be in the 20,000 to 40,000 dollars per year range when we examine rental markets across the nation we find that there is in fact no shortage of units in this price range. Rather the number of units is far in excess of the number of households with these incomes. When we ship to the lowest tier we look at the rental markets below this one we see there is a significant mismatch. The number of households with incomes below 20,000 is far in excess of the number of apartments available for under 500. What this means is the lowIncome Housing Tax Credit Program is adding units to the Market Segment that is already in surplus and is unable to reach far enough to the households who suffer from a shortage so reform would be to ask state housing agencies to exercise greater rigor in their Market Analysis and certified the need for it Tax Credit Development supported by independent not developer driven Market Analysis. A second reform would be to permit state Housing Finance agencies to exchange tax Credit Authority or voucher authority to the vouchers could be freestanding where its appropriate to the marketplace or could they could be attached to the project to the vouchers would permit a poor population to afford the unit with 10 and contribution importantly set at 30 of their income not a flat round. This would eliminate the cost burden for these households. The second issue seeks to answer the questions as lowIncome Housing Tax Credit Program ad units to type markets and rehabilitate existing units in soft markets . The answer here is not very well. Typically the program should add new units where we have low vacancy rates and rehabilitate existing units in soft markets where we have very high vacancy rates. Built into the Tax Credit Program is a favor toward new construction. 9 credits are awarded against the construction cost, 4 credits are offered against rehabilitation costs independent that arctic conditions to developers have responded appropriately by developing 45 more to new construction units and rehabilitation favoring new construction whether its a tight, normal or soft market to this problem can be rectified by the benefits of the Tax Credit Program to favor rehab in soft markets and new construction only where market is very tight or eliminating severely dilapidated units for replacement. The final point asked the questions as lowIncome Housing Tax Credit Program supports mixed Income Housing and sadly again the answer here is no. Research demonstrates the projects fully populated by the poor notches for the households and not just for the projects and surrounding neighborhoods mixed Income Housing is a much more beneficial format for all concerned. The Tax Credit Program provides no incentives for mixed Income Housing previous result 76 of all Tax Credit Developments are occupied entirely by subsidized lowincome households. Fewer than 3 are configured with more than 1 2 of all units at market rates. The program can be improved by reconfiguring the benefits the Tax Credit Program to favor mixedincome developments provide holy markets were income developments are not feasible. The Tax Credit Program remains an important tool for resolving the nations affordability problems with improvements that can be made better. Thank you. Thank you. Mr. Macdonald we will turn to you. Thank you. Appreciate the opportunity to testify to the picnic up with a specialist in the Construction Management management of a portable or in the housing. Own and manage 4700 units throughout texas. For the past 20 years ive built affordable rental housing for the lowIncome Housing tax credit. We are here today because of Housing Affordability. The number of renter households so severely cuspert mean they have more than half of their income on rent hit an alltime high of 11. 4 Million People. This is one in four renters. The first step to solving this crisis is to pass senate bill 548 the Affordable Housing credit improvement act of 2017. I want to thank senator cantwell , senator hatch and all the bipartisan cosponsors. Bipartisanship seems to be red these days am i hope we can all unite around this bill and take action this year. The challenge we face is inadequate supply to growing demand. S. 548 will increase the supply of the most noticeably by boosting the tax credit allocations by 50 . In addition creating a 4 using housing bond. Our Housing Stock ages. The first tax credit projects are now 30 years old. Rehabilitation is a costeffective tool and fixing the 4 credit will help that. Enacting this bill is expected to result in additional thousands, 400,000 tax credit units over the next 10 years. That Construction Activity will increase the tax revenue by 11. 4 billion per ticket to the root of the crisis we need to look at the challenges facing developers. Theres no magic wand to raise the basic Development Cost. Rick tory compliant energy codes Building Materials plan in labor costs determine what rents are needed to make the project viable. The bottom line is that they want to increase the supply of Affordable Housing for lower income households it is financially impossible to do with without the tax credit for the tax credits are the most successful Affordable Housing Production Program in our nations history. Part of the successes they have ends up creating a tax code that investors have the predictability of the tax code which ensures affair with process of Affordable Housing. This rate is less than one tenth of 1 . It lacks the resources to keep up with demand. Without a sizable investment in our Housing Stock to take me as older units reach out we risk a worsening problem. Rental housing demands remains expected to grow stronger and thats grow stronger thats the news supplies this demand will increase rent and worsen the issues we now have. We also need to recognize the Important Role of Affordable Housing place in our communities. I see how Affordable Housing creates stability for my tenants and their families. My properties help revitalize neighborhoods and break the cycle of poverty that start with access to stable and Affordable Housing. The Housing Affordability crisis affects our economy as well. Housing affordability is critical in areas experiencing robust Economic Growth but our fellow citizens cannot afford to live where the jobs are because we are creating a divide based on housing costs. Some criticize the program for not directing more fertile housing to higher income areas. But he shed some light on these challenges that i face as a developer. In texas unless you have the blessing of the local community to put Affordable Housing projects project. The agency will never award and allocation. Many hiring income areas is an issue under the word affordable discussion turns ugly and may take on racial overtones. This is the reality for Affordable Housing developers face every day. Fortunate summary this possible. Senate bill 540 beauprez bit states from applying for local approval of tax rate developments. The zoning allows it and affordable project will be treated like any other development. We have an opportunity to do something not only that makes good economic sense but will uplift the lives of millions of americans. I greatly appreciate the bipartisan support for 548 and i urge the committee to pass at the soonest possible. Thank you so much. You have been an excellent panel and i think we have learned a lot from you. Let me just ask this question of mr. Whitaker and mr. Sub 10. One reason i support the lowIncome Housing Tax Credit Program is that it keeps decisionmaking on Affordable Housing away from the centralized Bureaucratic Agency of washington d. C. And allows decisions to be made within the communities where the housing is needed while involving the private sector. In both of you discuss how that helps decide which projects to build and how the Public Private partnership aspect of the Program Promotes more spending in Affordable Housing and what would happen if only the government was involved . In utah we offer up two different opportunities for developers, syndicators, advocates, public entities, private entities, nonprofit to come in and talk to us. There is a mandatory public hearing if we told them we also hold another one earlier in the session to get them put on how we should run our program. Specifically how we should modify our qualified allocation plan. We get a lot of input from Industry Partners through this effort. Obviously they dont agree with themselves all the time so we have to ferret that out but we also look at needs that are happening so i moment ago i mentioned we were going to set aside 30 of next years allocation for Supportive Housing as we know there is a horrendous homeless issue thats taking place right down town in Salt Lake City right now that the problem that cant be solved if there isnt some permanent place for them to be house. So we worked diligently with governmental entities and the private sector to find out how we can utilize these scarce resources the best that we can to meet the needs of our population . I would like to edit that everest date hasnt qualified allocation process which allows a decentralization of how rents are allocated. They are allocated on every state. Every states needs are different from another and its based on Economic Trends in the state the Housing Trend of the state and the demographic changes that are always occurring across the state. For example my home state of texas is a large say we go from one very rural area two very urban areas and from Family Housing to senior housing. Unless everything stays in balance our agency does a wonderful job this last year of changing the bounce between families and seniors houses and is very important and extremely wellbalanced process as mr. Whitaker said we are able to address these issues on wednesday aces with lots of public and private input, public hearings and the citizens and everyone gets to benefit from those decisions. It let me ask another question of grant whitaker. It does not appear the irs is doing much oversight of the program. I know there is much oversight that takes place in the state Housing Authority. This prison of the National Council of state Housing Agency and person of the Utah Housing Corporation can you address how you ensure your credit allocation is wisely and prudently afford it and how you monitor the use of these credits starting with the allocation process we have a process that is outlined very clearly and are qualified plan that is based on those projects is scored the highest in the area in the pool so we set aside for them and how thats allocated so the best projects are the ones who are awarded credits. In terms of the compliance of the properties we have a team of compliance auditors that look at properties on a more regular basis for those who have got problems and exhibit problems in their properties and less often those who are in full compliance as we go him. This team looks at the financial records and looks at the physical conditions of the properties. We do submit reports to the irs. Those it will imply that if they dont ask these things the tax benefit can go away from the investors. We make sure that Development Company that is managing the projects know that is happening. We think we get. Darn good compliance from our projects in utah. Thank you mr. Speaker men and thank you all. Its an excellent panel. I want to ask questions that relate to the overall tax reform puzzle. As you know these pieces are interrelated. Mr. Whitaker, the low Income Housing tax credit is a tax credit that is often claimed by Corporate Partners in qualifying for low Income Housing tax projects. Reducing the Corporate Tax rate could reduce the value of the lowIncome Housing tax credit. We have heard some talk about the credit declining by up to 17 . What do you think needs to be done to make sure that as we get into tax or form the credit is kept whole . Thank you senator. Yes we do see that. We have already seemed that not so much in utah. I think we are a little bit less than the cra industrial banks or credit pricing hasnt gone up as much as it has in other areas but we recognize to the national Housing Agency that this is very critical to some of the areas. Some are handling their allocations and different ways to try to get that out there so that the properties to work. Going forward to s. 548 we recognize there is a mechanism in there right now that would enable us to increase the benefits of the tax code such that is pricing might go down on tax credits, as Corporate Tax rates go down there is a mechanism built in there but we think there are opportunities for that to happen. With that you for the record get us those ideas because i think one of the areas im going to concentrate on is trying to make sure as we look at these critically important needs like increasing the supply of flowing come housing that we make sure that it fits into the tax reform puzzle and we dont end up having an inadvertent problem as a result of say a reduction in the corporate rate. Ms. Macdonald ms. Oregan lets give you. In my town Hall Meetings i hear from folks at home who are just apple plus about having to live in one place and then drive hither and yonder to get to work to take their kids to school, buy groceries and get medical care and so on. To make sure when you build it is more closely tied to the Services Like transportation and schools. This is a big issue we talk about the cost of housing and we should be talking about housing and transportation. There are some states that have been very aggressive in this and the qualified delegation plann planned. It is within driving distance and so they have a role to play a look at where the housing is located at the transit dollars. Thank you for doing some studies i would ask you there are some issues i would like you to comment on the organization found credit allocations come the certification information from the building dispositions and program noncompliance is either not collected or is rarely used. So can you describe what steps were taken togethe to giving the information and a lack of data in the ability to analyze basic Program Information . Thank you, senator. From our perspective it is a hard program to review. The lack of information on the federal level basic information about applicatio the location ad inservice dates that are critical requirements of the program is difficult for us to review and whats more when we ask the irs to provide information on how Many Properties have a recapture for instance for noncompliance they were unable to provide us with that information on the basic accountability measures. What are the preliminary information about the type of activities allocating getting to manage cost flex on the first part of the question, we are developing a database on the developing cost of the projects for 12 different allocating agencies representing the period the properties were placed inservice to 11, 12 and 15. This information does not exist in a central location. Weve had to go to individual allocating agencies to collect this. It has taken us well over a year and a half to build the database. If we had about 1,900 projects representing 122,000 units and we over the next year. The plan is to meet with the allocating agencies to share what weve done with the data so that we can see are there ways to build a data capacity o the f the programs particularly of the allocating agency level so that they can assess what the 12 agencies we are seeing a range of practice regarding processing project would cost by the availability of analyzing data at the agency level and so weve identified certain agencies that while they may have cost limits they impose on project applications, they dont essentially assess the cost. Other agencies are using the analyst judgment on whether the cost is reasonable and then finally you have another group of agencies doing sophisticated analysis to better understand the data so we are seeing quite a bit in analyzing the cost as costeffectively as possible. Youre going to hear from the indicators for Program Oversight because they have a vested interest in ensuring that programs runs effectively. Do you believe that this is sufficient oversight . I wouldnt say that its sufficient. If you look across the part of a housing programs weve never had an entity like this to perform their own Asset Management services however i dont think that it relieves the responsibility of having basic performance information. This might be my last question raising the concern the state housing agencies failed to conduct from the greatest need most are not being built in areas the housing shortage. Can you comment on what policies are in place in the state housing agencies to identify where the projects are most needed . The council of state housing agencies is putting together participation by all allocating entities some best practices that would probably improve those that are not doing quite as well. But only the secretary has the authority to deem for these purposes and formal guidance has not been a she one thats so as a result we have the families that are wrongfully losing access to Affordable Housing, which is critical to them because Developers Want to charge more so i wonder if this is something that you are seeing more broadly with members and if so what can we do to fix this . We have heard of it and i understand michigan has the problem. We know as 548 might have some language that will help to correct that so the allocating entities were the ones who can make that determination we have had i think very good compliance in this state of utah maintaining those properties through the extended use pure co. And beyond and required properties to have a 50 year compliance period beyond what the federal government requires. We would welcome the changes taken to enable us to handle that as opposed to the treasury. Do you know if there have been discussions or how they have reacted . Is it isolated do you think or have yowhere have you heard fror people . I wonder if there is any discussion going on about this. I dont think so much discussion because it is fairly rare. The state allocation process detailed and wailed down to the lenders to have the preservation right or syndicator if someone is and taking care of their assets like they should after that its not allowed and i understand the problem in auditing the Tax Credit Program but what makes the Tax Credit Program so wonderful is that it has 50 and its very regionalized its not a onesizefitsall program, so we tend to have a best practices idea like this or like what is being proposed in the bill to go forward and maybe it is something with the other 50 states but the decentralization has its positives. On a different note, the Affordable Housing is also affordable purchasing and people being able to get into Home Ownership. We all know what happened with the financial crisis and we lost 7 trillion in home equity. Shocking difference is im sure its happened in other places but in places like michigan it was unbelievable how hard they dropped and people are just now coming out a little finally with the recovery they are starting to build up a little bit of equity. When we go into tax reform, one of my concerns is that there are proposals that would limit the value of the mortgage Interest Deduction for families with a major increase in the standard deduction and with that, fewer taxpayers with itemized and wouldnt be a benefit in mortgage Interest Deduction unless you own a very large home. I wondered if youd like to talk about the different proposals and the impact that they would have on working families that are finally starting to regain their equity after being underwater for so long. Its very interesting between a person to be preserved. We also need to keep the same amount of funds that were generated in the existing tax code and there are several alternatives. The first Purchase Program is very important and something that is administered on a statewide basis for the housing agencies. Basically theres been a lot of discussion in reference to the tax credit homeowners credit and that can augment the deduction as well. Thank you mr. Chairman. Is my colleague from georgia next, mr. Chairman . Are we going back and forth . Thank you for holding the hearing along with the Ranking Member and thank you for your work on this legislation. I appreciate everything the witnesses have said and i disagree with very little of what has been discussed so far. I want to point out the reason and in fact the future than it down to such a low rate or next to zero is so impressive to take the population that we owe so much to deliver on the Affordable Housing. I do want to emphasize a couple things in this point that was made. We have 15 Million People in that the projections are getting worse. That 2025 number, like if we do nothing, this is just going to be exacerbated. You both mentioned or several peoplwere severalpeople mention increase over the last which is the largest on record. 10 the lack of supply that is the crazy thing but i guess you say that is not so unusual either because then you also have the lowest production of rental housing in 40 years because of this crisis. So i guess if anything youve eliminateilluminated the things. They are built with a tax credit. I dont know if somebody can clarify that information, but the majority of the affordable units use a tax credit so when you look at that chart and see this as increasing come if we dont increase the tax credit how are we going to get out of this crisis. Its suppressed the amount of capital going into this for a decrease in the amount of Affordable Housing. Its been a decrease because people are waiting to see the uncertainty so i dont know if you can address that but i do want to hear about the veterans success in utah. After the november elections, the tax reform came out into the 15 tax bracket was announced. It came to a grinding halt so now that there has been more discussion in the tax reform and the reality is that we are going to havnotgoing to have a 15 rae likelihood. Its probably more in terms of a 25 rate. We have seen some recovery in the prices but i will tell you that the fixing of the present rate as this bill does is the perfect way to fix that problem. The credit crisis was recovery and so by fixing the rate you get the prices back up and pick up 25 more funds. Is this the tool that we have . Ive heard the 90 of members i havent checked it myself so is in the range of that. What we know is when the markets are responding at a highend, bubbledouble the units that como the low market economists call it filter down. As they age, the value goes down in thand the local rent and the tighter the market the less likely you filter down into the markets you see then filtering up. Suppose that would affordable are no longer affordable into the production that comes in at the top of the market. So what you need to be doing is having a mechanism for producing the range of price points and its only these type of subsidies that can relieve the pressure at the lowend of the market so you are sagging basically the only thing we have to do is turn the dial. We want some of the other reforms that are in your proposal and in the high 48 to be able to have a little of the ability to reach deeper in the income level. I cant emphasize enough how this is a crisis across many parts of the country. Many times its trying to help the senior population so how did you address the population in your state . It was in conjunction with the Housing Authority. The county Housing Authority so put in application and for the 9 credited one of the things they proposed in the portion of the unit so they got points for that and have read in the homeless situation. Also the Service Providers who need to be there for issues related to addictions and Mental Health cases and so forth. We have a number of other projects that are doing something similar. Thank you mr. Chairman. They wouldnt be able to raise capital and offer a portfolio with affordable rent. It would just not have been a viable alternative at all. I think that program was great so all were in multifamily buildings . We dont 36 scattered Single Family homes and started a revitalization of the whole ar area. One is the conservation easement program. There have been some attacks on both of those programs in terms of the syndicators and others. The question is validity and one of the things we want to make sure its the integrity of the programs that raise the money is correct if you want to make sure there is no misrepresentation or otherwise. But we have to realize that is such and the only way we will have the two things that made the test for getting the tax credit and its the government taking the land and conservation easements owned by government and if this into devising the sector utilizing the capital that is invested by individual investors and Capital Investment tax credit was earned over time. In my correct . Site has a Multiplier Effect in terms of a Solid Program and has about as many motivations as you can have been programmed to incentivize the developer and the winner to take care of the property and make sure it is the right property. Is that correct . We have what seems to be a continual audit examined by the lenders in the syndicators. They notice what youre doing with the rent and make sure the property evaluation is complete Needs Assessment for the property is the 90 days to fix it. We are making sure the program is being carefully monitored. In terms of the cost of your units, what percentage of the average goes through the regulatory costs like impact and things like that . Approximately 25 . They asked the question a little while ago. When we talk about with the local governments do to bring the project to fruition and housing programs in, look at the Regulatory Burden of cost on the developer. Mr. Whitaker was talking about we have the committee and a family veteran in 1906 to 300 acres in West Los Angeles to the va. The zip code is now 90210 and they are going to use a lot of the data to build housing for veterans who have been homeless and its going to be the local governments exercising authority it has. Senator menendez . Thank you mr. Chairman. I think it is incredibly important, and i appreciate my colleague from washington driving the opportunity for the hearing and i want to make the case for her by speaking about the other issues that we have in housing that only strengthened the need for the legislation. They are finding places to call home and for the lowest income families, new jersey faces a shortage of more than 212,000 homes that are affordable and available and that is exacerbated by the fact that one out of every four eligible households receives federal rental assistance. So i cant help but point out that the president s fiscal year 2018 budget request slashes funding by more than 7 billion, and that would turn the crisis into an epidemic by eliminating the programs like that cdbg and cutting the Public Housing funds into eliminating a quarter million housing choice vouchers failing to provide sufficient funding for projectbased assistance renewals and require the low income families and people with disabilities to pay more in rent, the president is clearly not into the housing crisis that we have in this country. So, mr. Whitaker could you comment on how the communication between the block to a couple of Great Program and the Investment Partnership would impact the Affordable Housing crisis . I can surely talk about the home program because that is what funds the housing loan to fund that was the governor in the state of utah that had very ideal outlooks for Affordable Housing. And it funds this program and provides a gap funding so when we have a project that is submitted to us in order to score points, one of the things they would do is offer some of the units for very low incomes. Extremely low income below 35 . Typically 25 . Those units receive rent that is very low and doesnt contribute a lot of revenue to the project, so they are funded with their mortgage and tax credits that at the low level they have a difficult time supporting themselves, so they go to the other Funding Source and use that for the funding they get sometimes grants but usually soft seconds and that is what keeps the Program Going in utah and i think that is the same as it is for other areas. Cdbg i am not so familiar with. Professor, how would you view the Affordable Housing efforts, would they be hampered if the congress were to launch the Housing Voucher Program and create a greater income payment . There is an incredible overlap between the units that are funded and also that use the tax credit about 47 of the units receive some type of rental assistance and that is based on the voucher base. They are not allowed to discriminate on the source of income so the stock itself is critically important for the households as they go around and try to claim units. It is also paired with redevelopment and is a big infusion of capital into those plans, so they are very separate and on the ground of these are tools that you are using in the communities to be able to address the issues and the flexible tools, those make it even more difficult because you are looking for things that can work well with the plans that you are putting together. Let me follow up on that limits of 50 or 60 they are less than 30 of median incomes so the vast majority face severe cost burdens they will give a percent of their income on rent and its not enough to make the home of affordable, you highlight this in your testimony. Can you explain why additional subsidies are critical to ensure the lowest income families are served by the low Income Housing tax credit . There is a gap at 5 that 50 and go away to 30 but i will point out 59 of the tenets of income below 20,000 a year so they are piecing together the funding to be able to reach deep sso theres the budget changes, you are not going to see the units reached down so we will seek an increassee an increase p and surely outside of the allocation, state and local areas, jurisdiction for their own money and has other money goes away. They may not be putting the ability to have their resources and its kind of a patchwork fix the system work as well as it does currently. Senator scott. Thank you for being here this morning. Accessibility go hand in hand when it comes to housing that does not take into account utility payments. Why is it so important to start considering the data and who stands to benefit and we have legislation introduced today to hopefully help update the credit scoring model. Thank you for the legislation filed and we really look forward to studying it. It is an issue that has been asked the forefront of the homebuilders for quite some time, probably since 08 when the downturn in the economy came in we were trying to figure out why all of a sudden we were having so many prospective homebuyers losing the opportunity to purchase homes. We sat down with our Economics Department and have for over five of this artist ive ever met in my life and said tell us how it works. After about 30 days, they came back and couldnt figure it out. We emailed a unit and what kind of housing you will be able to provide your family is made up so you know what to do in il ho improve it and work toward having good credit. Good credit shouldnt be an accident at something you work out as a goal and if you understand the rules its a lot easier to play the game. Absolutely. Thank you. Mr. Diaz garcia on a different topic, so often in the discussion of Home Ownership affordability and manufacturing housing, this goes unnoticed one of five homes is indeed a prefabricated home, the highest percentage in the nations. Its about 52,000 nationwide and so are they the least equipped to deal with rising cost . A study found that higher financing costs keep the homes from being even more affordable. What conclusions did they reach on the homes and affordability . I dont have and accept answer but we will provide information i can submit on the financing. Thank you very much. Youve testified that many Home Builders struggle to fill vacancies because the work force lacks the skills like welding, carpentry and plumbing. The shortage of qualified workers permits housing inventories from keeping pace and ultimately leads to higher cost. I worked on legislation and apprenticeship programs and i think one of the ways we improve the Housing Inventory is to help folks learn and earn at the exact same time on the job sites. How do we ensure they are ready for the Skilled Labor jobs that are highpaying . The National Association responds in the apprenticeship programs they are exceptionally important. The average age is 61 int 61 ane average age of a master electrician is 61. That is a recipe for disaster we are not having skilled people come into the workforce and part of it is weve got to go back to moms and dads and School Counselors who will tell people that i its not a bad thing if u dont go to college. Weve also got to start offering more Technical Education in the high schools so people can develop job skills and have a wonderful career and possibly own their own business and not be burdened with debt. When i was in high school we need to restore dignity in all woroldwork and encourage every t of the society to participate and encourage strong income as a welder i understand you can make about 125,000 a year. Thank you for being here today. I am flattered senator scott thinks we were in high school at the same time. I need your cosponsorship on the legislation. [laughter] thank you for your comments about the importance and for your passion about that and related people how important it is that young people become carpenters and machinists in the sheet Metal Workers in the plumbers and electricians. A couple of comments and questions if i could. As we know, families are burdened by the high housing costs and fewer resources for food, transportation, medicine and may face homelessness. Matthew desmond says the rent is first in a person with a fulltime job needs t to burn up only 21 to afford a modest bedroom rental at the national leverage their market rate for the housing wage for one of the better terms varies along with the cost across the country into thandremains only 12 in the u. Sr a fulltime worker earning the federal minimum wage can afford a modest onebedroom rental home and my home state of ohio more affordable than many others, the average is still 15. The main rental wage is 1287. My wife and i live in zip code or 4105. Ten years ago there were more foreclosures than any zip code in the United States. So we see every day what comes from people not being able to afford decent places to live. Low Income Housing tax credits are a critical tool as you know from your service in the administration and she served to should be protected where it remains the partisan fantasy too many people talk about that all of you today as witnesses the mismatch goes far beyond the cost. We have had a lot of discussion on the 15 cut so we asked you a moment about th ago the proposan their own direction how can you provide more affordable home purchases when you make such cuts to Affordable Housing. So my question first can you discuss additional steps congress should take to address the needs of the rent burden working families and then the question for both of you, a pediatrician likens Affordable Housing to a vaccine due to its ability to improve or not improve Peoples Health and other outcomes so if the two of you with talk about what we know the lack of Affordable Housing how it has on Childrens Health if you would answer both questions and if you could take the second question. Thank you. I will start with the need for resources. They are a hit on the budget that will be felt severely around the country. Im not into position to affect the federal budget you want to find ways which the resources do not get cut for those in need i know theres a number of other proposals considered, things that can be used that would focus on the greatest need in a time that others are becoming less available. Additional flexibility within the tax credit can be used in more than one way is a way to help fill the gaps. You need to look for other places. On a vaccine part i would like to highlight a piece that came out radiating benefits that came from the families that were provided with longterm housing subsidies. Within three years a whole collection of additional impacts were seen. Domestic violence went down, family separations were what were collected for less mobile across schools and daycare and by the third year followup you were seeing the social behavior in a collection of all those outcomes that the longerterm Health Studies show are directly connected in the wellbeing and i think researchers will be following that for the next five years and use it to show the direct correspondence between stable Affordable Housing and good outcomes for kids. Mine will be short because im not much of a Health Expert but we do know that households that are on the cusp of being able to afford their daily lives, taking the rent, anything such as a significant car repair is something that can throw them into homelessness and theres nothing more pathetic than to go to the areas where we see that on a daily basis to see a shopping cart with mom and dad with all their goods in the shopping baskeashopping basket e street that is all they have and we know that is in the situation for those families. I loved your industry folks end up being quite an entrepreneur and it is really tremendous. When i read your testimony i end up a little bit like that is if it is pointing in different directions. With the kind of tossed that o out. You quote some of the research so on the one hand, there is data showing that if you analyze low income people, thats negative, so you pointed out, i cant see what the labels are but you suggested that we should have more policy forcing integration if you will, where income is richer neighborhoods. Sounds great except mr. Mcdonalds testimony points out that both people tend to live near Transit Centers and better schools and restaurants etc. But increases the Development Costs so we have kind of a pushback because it is going to increase the cost of the program and then similarly when you speak of is being underserved i think you quoted the research but most of the programs or for those who are kind of 40 to 50,000, not less than 20,000 but theres a certain when you were down on the level of poverty, there tends to be more economic segregation folks dont live near Transit Centers were nice whole foods has a place in new orleans. So i just tossed that out because it seems like the recommendations and realities of against each other. We need for housing for those with less than 20,000 but it will increase the housing Development Cost which gives you want to integrate them into the broad social fabric that the nature of such a neighborhood of social indicators may make it more difficult to do so. How do we reconcile that . Thank you senators you are correct. It is a tricky process what we have now is a onesizefitsall Tax Credit Program with very few flexibility is built into it. We have built an entire industry of developers, nonprofits who have found ways to layer to come up with some very impressive results. If we could make it more flexible if he was restored the type of development that better serve those households in need, the outcomes with improving the program. I would like to join in on that. Having a flexible is quite useful but you did point out something that is kind of inherited that may be in conflict so i think this is the benefit of it being a centralized program for the localities that have the Housing Market getting to be flexible but i want to point out one thing that is important is very good work by those that looked at creating low Income Housing and higher poverty neighborhoods that those investments themselves pay off in the neighborhood if you look at the properties nearby cover the housing volumes go up by more that 6 to go down if you see larger benefits. You see the composition coming in ucd households coming in t so the composition of the neighborhood changes over time so it is a Community Investment strategy if you look at the side of this where the Development Goes in now and it looks different so that is one way to think about some of the benefits you get on that side. Its interesting i was just in an area after the flooding they lost a lot of their rental stock for the pastor said they are not rebuilding them which means im losing my congregation who you are losing the fabric of the community. Community. Since your plate is perhaps we need to reward the publication of little but more. Certainly it was maybe sold some of that but sometimes the neighborhoods are closer to transit sites they are just older neighborhoods. It seems that rehabilitation would be part of the answer. I also think that the former site of this bill will aid in the rehabilitation. It willanthere willand we havo realize that rehabilitation is freely in a strong position because we are starting to get older and older units that need to work. We have to do something to revitalize the neighborhood said the Tax Credit Program does a wonderful job of that. I agree that in a Perfect World we would try to build in more affluent areas but the problem is the real estate cost and Everything Else that would reduce the amount of units on the ground to assist families, so if we are going to get the most bang for the buck we need to let that c. Is a states issue with those people back home so they know exactly where they need to develop and what is best for their communities in texas we will see the need for the revitalization and you will see an entire set of the reevaluation and its very important we wouldnt want to do anything despite that. They know exactly how to monitor this and they know what is good in baton rouge and what needs to happen. Thank you all very much. Thank you very much mr. Chairman. I just really want to sort of summarize and thank the witnesses for being here and particularly the chair man and a senator for your leadership on this issue. We need your leadership. Its more than ever before into the statistics indicate that we need to have a stronger tool available in order to meet the needs of people in this country and i think the legislation the two of you offered gives us a way to move forward in the best position so i first want to thank you all and also just as i see the work that is done in maryland wherever we can get a program started to provide additional Affordable Housing for people in need there isnt usually one tool available that will make that happen and you have to rely on a lot of different opportunities. Theres no questio question itr major tool available in strengthening the tool is the most important thing i think we can do for Affordable Housing but the tax credits are a major part that was created on the tax credit thats another important tool that is available and is combined many times. We have incentives for Energy Efficiency that can be coupled with the peace project to accomplish Additional Savings but also help us in regards to our Energy Policies in the country that can also help us. If we look at the low income they should also be mindful of the other tools that are available to the pathways that they can be strengthened and in some cases more targeted to the objective of Affordable Housing. I am not squeamish about looking at ways to make it more effective. We need to do that but at the same time, we need to expand and provide greater resources to deal with the tremendous needs we have and the communities. I know that in maryland to take incredible risk of times. To find ways we can improve the programs. Thank you all for being with us today. We appreciate you taking time away from your job and families to justify this morning. Affordable housing is an important issue for each of us in the states across the count country. As for the lower income individuals especially those just Getting Started or evil to afford. There are a number of federal programs in the provisions in the tax bill that are intended to make sure they are working effectively and efficiently your insights this morning are important. As a part of the tax reform, many of us on the committee have been looking at the Important Role of the cost for the recovery to play in helping ensure longterm Economic Growth and while much of the testimony this morning is focused on the link on housing tax credit, i understand the depreciation is also a significant component of the financing in the Affordable Housing projects. However, the current recovery could go with 27. 5 years can create a significant effect for the Residential Housing investment. So the question is if the tax reform were to include a shorter Recovery Period for the residential real estate, or acceleration of the deep appreciation how would you see that affecting Affordable Housing projects . And i will just prove that open to the panel. It would obviously bring down the price in 27 or 25 would be better, 26, however you come down the scale to help reduce the cost of. The focus on Affordable Housing is often centered on the larger cities and surrounding suburbs but theres also the need for Affordable Housing in the states like south dakota that are largely rural. In these areas we need Housing Properties that are smaller since the lowincome individuals are dispersed them into larger cities and due to the smaller scale of the housing projects they may not be as financially feasible as those being developed in urban communities into somand some suggested that enhancing the credit to encourage financing for Affordable Housing in areas so the question is do you agree that it presents the challenges for using the current tax credit and what do you think might be the most in forest credit that we might be able to come up with to address this issue . To develop the area syndicate the economic boost and to allow the states when they write the local area. In texas they do and thats what allows the development of Affordable Housing in texas. The bill actually has several things that would help the communities including making the change on the income definitions and i think the income average gives a Broader Market that he would be able to actually support this in rural areas and i am going to just a second the designations of the area is automatically designated took him with the basis. Dealing with this population is costing us 3 billion more because everything is more expensive if you are dealing with the same population without a roof over their head or like senator scott was talking about apprenticeship. So how do we communicate about the fact that doing nothing isnt really saving us any money here . I would say one of the things the language that is used on this is the wrong pocket issue which is there is an increase is is increasingly body of evidence on the role of housing for improvements in health and wellbeing of economic improvement for children. So how you get the attention of those who care about the range of outcomes to realize the best thing in housing now decreases all of those other costs over time. Do we know of a specific analysis of that now or could you help us with cbo in scoring that some way . At the bane of my existence in my previous job at the best evidence on Supportive Housing on the immediate cost savings from emergency room visits and actually from implications in the criminal Justice System so we have robust evidence there in the more recent evidence with homeless families outcomes of budget but certainly on the ones that are the most robust unAffordable Housing we get that too. Someone mentioned the numbers 25 per person it cost 25 more to deal with someone who is in this homeless situation than it is to have a roof over their head because of all the Health Care Costs and expenses. I dont know mr. Whittaker as you could comment on that. I cant comment on statistics of one of the things we are beginning to see in our state is the Health Insurers who are becoming very involved in investing in the tax credit projects through the Supportive Housing project that we just funded most recently with some left over funding has a major investment by one of the Health Insurers in utah because they understand that going forward, getting people into a home is going to be cheaper for them than it is to deal with their Health Issues particularly related to people who are moving into Supportive Housing from homelessness. Health insurers on testing and Affordable Housing because they think it helps drive down the cost of health insurance. Isnt that amazing . Thank you. Mr. Macdonald anything else on that point . I just want to second the comment about the criminal Justice System. Theres no way of ascertaining the cost to the taxpayer but the end result of homelessness and despair has an impact on criminal justice. Thank you. And again thank you mr. Chairman and thank you for your leadership on this issue and i thank all those in the utah area who created great models for us to follow. Thank you and i want to thank you for your leadership in this area. This would have wouldnt have happened without you. I just want to say this is one of the best panels i have seen in all my years on this committee. You folks have really been right on. You have made your points very well and i think youve been very persuasive and youve been coordinated with each other which is very very good as far as im concerned. We appreciate you taking the time to help us to understand this better and hopefully we can do a better job than we have done in the past but i want to thank again senator cantwell and other members of this committee for the work they are doing on this. Without any other questions that people have we want them to get the menacing as possible and we will adjourn this particular meeting at this particular time. Thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] not in a quorum call. Mr. Blumenthal thank you, mr. President. Mr. President , i know that later this afternoon we are likely to proceed to the