Heritage Foundation Research Fellow Joel Griffith testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs twice in one week. On Feb. 9, Griffith discussed community lending centers, and just one day later, on Feb. 10, he testified on the housing market.
On the topic of community lending centers, Griffith stated that groups like the federal Community Development Financial Institutions Fund fail to help those in need. “In fact, they have a history of unintended consequences and corruption,” said Griffith.
He added, “The CDFI all too often amounts to corporate welfare in the form of grants, bond guarantees, and tax credits. This favoritism hinders competition and distorts private markets— misallocating limited resources.”
On the housing market, Griffith spoke about soaring home and rental property prices. According to Griffith, over the past 12 months, home prices are up 19.5%, dwarfing the prior 12 months’ jump of 7.1%.
He testified that the primary drivers of rising prices nationally are government subsidies, the Federal Reserve, and local regulations. “Government subsidies have increased borrowing and demand for housing without increasing supply, leading once again to higher home prices and increased taxpayer risk,” said Griffith.
He concluded, “Optimally, Congress will work to make housing more affordable by gradually removing federal guarantees and subsidies and eliminating federal mandates.”
Griffith writes and speaks regularly on free-market economics, specifically on topics such as taxes, federal spending choices, and welfare. To read more of Griffith’s work, click here.