Key Themes in Senate Banking Hearing Include Equitably Rebuilding Communities, Surface Transportation Reauthorization

The Senate Banking, Housing, and Urban Affairs Committee held a hearing to discuss infrastructure investments on May 20. Witnesses included Housing and Urban Development Secretary Marcia Fudge and Transportation Secretary Pete Buttigieg.

While much of the discussion was sector-specific, one area that serves at the nexus of both housing and transportation and has recently received more attention by both housing and transportation stakeholders arose multiple times: restrictive zoning. Chairman Sherrod Brown (D-OH) and Sen. Elizabeth Warren (D-MA) both raised that restrictive zoning contributes to housing unaffordability, and Sec. Fudge pointed to provisions in the American Jobs Plan that address this issue by providing technical assistance to communities to change zoning laws.

Sens. Tina Smith (D-MN) and Raphael Warnock (D-GA) asked about the role that federal highway infrastructure has historically played in dividing communities, in particular communities of color. Sec. Buttigieg discussed a federal responsibility to create connections where community divisions have been made, though he indicated that the approach for rebuilding communities will look different depending on context. In some places, it may mean removing a highway while in others, it may mean working around it—for example by capping over it— to rebuild a community.

Sens. Bill Hagerty (R-TN) and Steve Daines (R-MT) both asked about speeding up project delivery through accelerated permitting, and while Sec. Buttigieg offered a readiness to work with Congress on ways to “find where there may be duplication, [and move things along] with fewer steps or simpler, more predictable processes,” he stopped short of offering specific details on permitting reform.

With respect to transportation funding, several committee members attempted to tease out the interplay between surface transportation reauthorization and the American Jobs Plan. Sen. Chris Van Hollen (D-MD) asked if the federal government’s incentivization of highway projects over transit should be changed in the AJP, to which Sec. Buttigieg responded that the “once in a lifetime investments” in the AJP are to be “rolled out on a different basis” than surface transportation funding, and that the relative prioritization of transit in the AJP is based on “where the needs actually are.” Asked directly by Sen. Kevin Cramer (R-ND) if the 80/20 split of the Highway Trust Fund should be kept in place, Sec. Buttigieg hinted at the legislative merging of the AJP and surface transportation reauthorization but stated that “conceptually, we’re talking about two different things.” He also stated that most communities are less concerned with technicalities of how funding is allocated and more concerned with making sure infrastructure priorities are funded, and that while transit is often perceived as an urban issue it also plays an important mobility role in small communities.

Sen. Thom Tillis (R-NC) raised concern of COVID relief fund surpluses restricted from transportation in some areas (he pointed to a roughly $70 billion surplus in California), and asked whether that may be repurposed for infrastructure projects. Sec. Buttigieg responded that while it’s important for there to be state and local flexibility in how dollars are used, it’s also important not to “spend the same dollar twice” in terms of funding that is unspent because it is uncommitted as of yet. He indicated that there’s a multi-year vision for some of the relief funding and gave an example of transit agencies whose ridership has not recovered to pre-pandemic levels, so some funding designed to keep them afloat won’t be obligated right away.

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