Key Takeaways
- •The House overwhelmingly passed the bipartisan Housing for the 21st Century Act with 390 votes, aiming to reduce regulatory barriers to home and apartment construction.
- •Mr. Brian Brooks stated that federal banking policy and overregulation since Dodd-Frank have significantly reduced banks' involvement in housing finance, shifting risk to taxpayers.
- •Rep. Waters (D-CA) asked Dr. Darrick Hamilton if closing the CDFI Fund and MBDA would harm small businesses, and he confirmed it would impede economic inclusion.
- •Republicans (e.g., Rep. Hill) blamed "Biden-era policies" and spending for rising costs, while Democrats (e.g., Rep. Waters) cited "Trump's failed economic agenda" and tariffs.
- •The discussion highlighted ongoing challenges in housing affordability and small business capital access, suggesting future efforts should focus on regulatory reform and targeted public investments.
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Hearing Analysis
Overview
The House Financial Services Committee held a hearing on February 10, 2026, titled "Priced Out of the American Dream: Understanding the Policies Behind Rising Costs of Housing and Borrowing." Led by Chairman J. Hill (R-AR-2), the hearing examined the persistent affordability challenges facing American families, specifically focusing on the housing supply deficit, the impact of inflation on borrowing, and the regulatory environment affecting small businesses and community banks. While the committee celebrated the recent bipartisan passage of the Housing for the 21st Century Act, the discussion highlighted deep partisan divisions regarding the root causes of economic strain and the appropriate federal response.
Chairman Hill opened the hearing by attributing current affordability challenges to "harmful Biden-era policies" and reckless spending that led to 40-year high inflation. He argued that while the economy has seen renewed momentum under President Trump’s second term, regulatory burdens continue to stifle housing construction and bank lending. Conversely, Ranking Member Maxine Waters (D-CA-43) criticized the Trump administration’s economic agenda, specifically citing "reckless and unlawful tariffs" on construction materials like lumber and steel as primary drivers of housing costs. She also accused the administration of undermining consumer protections by attacking the Consumer Financial Protection Bureau (CFPB) and the Community Development Financial Institutions (CDFI) Fund.
Key Testimony
The witness testimony provided diverse perspectives on solving the housing and capital crisis. Mr. Brian Brooks, Chairman and CEO of Meridian Capital Group, testified that the U.S. faces a housing deficit of five million units. He blamed local rent control laws and "magical thinking" for deterring investment and suggested that the Department of Housing and Urban Development (HUD) should withhold grants from localities that pursue anti-housing policies. Brooks also argued that the Dodd-Frank Act and over-zealous bank supervision have pushed community banks out of the mortgage market, leaving 90% of mortgage credit risk on the government’s balance sheet.
Overview
Mr. Kevin O’Leary, Chairman of O’Leary Ventures, focused on the plight of small businesses, which he noted create 64% of all new jobs. O’Leary criticized current tariff policies on scarce goods like potash and softwood lumber, calling for "fine-tuning" to prevent unnecessary cost increases for farmers and builders. He advocated for a "path to permit" in less than seven months for energy and housing projects to attract capital. Furthermore, O’Leary urged the passage of the Clarity Act to provide a regulatory framework for stablecoins, which he argued could significantly reduce transaction costs for small businesses.
Mr. Stephen Moore, Co-Founder of Unleash Prosperity, offered a more optimistic view of the current macroeconomy, noting that real median incomes have risen by $2,400 over the past year. However, he warned against repeating the housing policies of 2008, specifically cautioning against lowering down-payment requirements. Moore proposed indexing the capital gains tax for inflation on residential housing to "unlock" millions of homes currently held by baby boomers who are afraid to sell due to massive tax liabilities.
Dr. Darrick Hamilton, University Professor at the New School and Chief Economist for the AFL-CIO, provided a counter-narrative centered on "asymmetries in power." He argued that the affordability crisis is the result of public infrastructure that prioritizes profit over people. Hamilton advocated for federal investments in "human capacities," including housing vouchers, the right to unionize, and a higher minimum wage. He specifically highlighted the persistence of "invidious discrimination" in lending, a point echoed by Rep. Al Green (D-TX-9), who promoted the Fair Lending for All Act to create criminal penalties for willful discrimination by lenders.
Legislative solutions were a major focus of the hearing. Chairman Hill and Rep. Andy Barr (R-KY-6) discussed the Main Street Capital Access Act, aimed at reducing compliance costs for community banks to encourage local lending. Rep. Ann Wagner (R-MO-2) highlighted the INVEST Act, a package of 22 bills designed to strengthen capital markets and expand investment opportunities for Main Street. On the digital asset front, the GENIUS Act was mentioned as a successful step in modernizing payments, though witnesses pushed for the Clarity Act to finish the framework.
Policy Proposals
Notable exchanges occurred regarding the role of the CFPB and the impact of zoning. Rep. Emanuel Cleaver (D-MO-5) questioned the hostility toward consumer protection, while O’Leary and Moore argued that the "friction" of slow regulation is what harms the market. Rep. Bill Foster (D-IL-11) raised concerns from community bankers that interest-bearing stablecoins could drain deposits from rural institutions, a claim O’Leary disputed by suggesting banks should instead integrate stablecoin accounts.
Overview
The hearing concluded with a consensus that housing supply remains the critical bottleneck for the American Dream, though members remained split on whether the solution lies in further deregulation and supply-side incentives or increased federal investment and stronger consumer protections. Chairman Hill indicated that the committee would continue to move forward with its 119th Congress legislative agenda, focusing on capital formation and regulatory tailoring.
Transcript
Committee on Financial Services will come to order. [Gavel sounds.] Without objection the chair is authorized to declare a recess of the committee at any time. Today's hearing is entitled Priced Out of the American Dream: Understanding the Policies Behind Rising Costs of Housing and Borrowing. Without objection all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. I recognize myself for five minutes for an opening statement. The American dream has long been a symbol of opportunity, promising economic freedom, homeownership, and a better future through hard work. However, for many American families today, rising costs, housing supply shortages are making those milestones increasingly difficult to achieve and hence the title of today's hearing, Priced Out of the American Dream, reflecting that reality for many. Affordability has become a serious challenge after years of harmful Biden-era policies marked by reckless spending and inflation reaching 40-year highs, leaving households to absorb the consequences of those higher prices and increased borrowing costs. In 2024 we hit an all-time high for the cost of building a single-family home, and it's only expected to grow. Short rates set to fight persistent inflation are driving up mortgage payments and borrowing has become more expensive. These pressures are squeezing household budgets and limiting opportunity. As the 2025 Financial Stability Oversight Committee annual report makes clear, economic growth is essential to financial stability. In a growing economy, rising incomes make debt more manageable, standards of living improve, and the financial system remains stable and resilient. Since the start of President Trump's second term, we've seen renewed economic momentum driven by pro-growth policies and a clear regulatory framework. Under the president's leadership, the economy is back on track, reversing the damage left by the previous administration and restoring confidence in our financial system. This stands in sharp contrast to the warnings predicted by many across the aisle just before the president's inauguration. In 2024 Moody's Analytics predicted that a Republican-controlled government would lead to 3.5 percent inflation, 5 percent unemployment, a recession, and a budget deficit in excess of 6 percent of GDP. Those warnings were echoed repeatedly by Democrats who claimed that Republicans would derail the economy. The data have conclusively disproven those assertions. Inflation came in nearly a full percentage point below forecast, unemployment did not exceed 4.5 percent, no recession materialized, GDP growth is on track for three consecutive quarters above 3 percent, and the budget deficit has projected to fall to 5.4 percent of GDP. While the broader economy has improved, affordability challenges that I outlined remain for many households. That's why Republicans in this committee continue to introduce legislation that address this challenge head-on. We have direct solutions to improve the cost of living for all Americans. Throughout the 119th Congress we've unveiled legislative proposals that work to reinvigorate our banking system, expand access to credit, and remove unnecessary regulatory burdens. Recently I introduced the Main Street Capital Access Act with Subcommittee for Financial Institutions Chairman Andy Barr to revitalize local bank formation and right-size regulation so that banks can do what they do best, lending to local businesses and communities. Late last year, Subcommittee on Housing and Insurance Chair Mike Flood and I introduced and the committee advanced with the support of Ranking Member Waters, Mr. Cleaver, the Housing for the 21st Century Act, which reduced regulatory barriers and making building homes and apartments that are making that difficult. And last night the House advanced that bill by a vote of 390 votes. In December the House also overwhelmingly passed Subcommittee Capital Markets Chair Ann Wagner's INVEST Act with strong bipartisan votes of over 300 votes. This legislation will strengthen our capital markets, promote capital formation, and ensure that America's markets remain a global leader. President Trump has been clear about the importance of addressing the cost of living for all American families and these bills reflect our shared commitment. Through our work on housing, community banking, and capital formation, we're dedicated to restoring affordability, expanding opportunity, and making the American dream fully attainable for all Americans. I look forward to our discussion today, our panel, and I yield back. I now recognize the gentlewoman from California, Mrs. Waters, for an opening statement.
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