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Recap: Senate Hearing Focuses on Insurance Costs, Availability 

May 6, 2025

The Senate Banking Committee held a May 1 hearing titled Examining Insurance Markets and the Role of Mitigation Policies with the following witnesses:

• Robert Gordon, Senior Vice President, Policy, Research & International, American Property Casualty Insurance Association (APCIA);
• Alex Epstein, President and Founder, Center for Industrial Progress; 
• Michael Newman, General Counsel, Insurance Institute for Business and Home Safety (IBHS); and 
• Jessica Pyska, Supervisor, County of Lake, California 

During the hearing, senators and witnesses cited several underlying drivers of the higher cost and lower availability of property insurance, including:

• Demographic shifts to areas with higher climate risk,
• Inflation, particularly related to building materials;
• Legal system abuse, and 
• Regulatory limitations.

They also raised concerns about discriminatory practices, market competition, and how federal policy shifts, including tariffs, affect cost volatility across states.

Disaster mitigation, infrastructure resilience, and forest management featured prominently as strategies to lower long-term insurance costs. 

• Committee members and witnesses engaged in detailed discussions about property resilience efforts. Ms. Pyska affirmed the importance of hardening homes and discussed Lake County's attempts to "cluster harden" entire communities with wraparound fire breaks to ensure the entire community is resilient.
• Sen. Warner (D-VA) noted the U.S. Chamber of Commerce suggested that every $1 invested in resilience and disaster preparation reduces a community's economic costs by $7.
• However, it is not clear whether resilience efforts have thus far resulted in lower insurance costs for property owners.

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Tax Update: House Delays Action on Bill

May 6, 2025

Republicans delayed the rollout and consideration of key elements of the reconciliation legislation, including hearings on tax policy legislation and changes to Medicaid.

Why it matters: The House leadership still wants to pass a bill by Memorial Day, yet competing priorities among members of Congress and the White House are proving to be challenging. 

• SALT: Raising the individual state and local tax (SALT) deduction cap, currently $10,000, is still under debate. New York, New Jersey, and California Republicans have made raising this cap their “red line.” With a five-vote majority, they have enough votes to tank any bill without SALT relief. 
• Business SALT Cap: Colloquially known as B-SALT or corporate C-SALT, this provision has been under active consideration in House discussions. No details have emerged on what specifically would be covered, but conflicting reports indicate it would be pared down or potentially not included.
• Clean Energy Tax Credits: House Republicans have been targeting Inflation Reduction Act (IRA) tax programs as a way to reduce spending or offset some of the new tax cuts. But a group of 21 Republicans sent a letter in March urging leadership that any changes be “targeted and pragmatic” with a mind to future private-sector investment. Another group of 38 House Republicans sent a letter last week asking for a full repeal of the credits. 
• White House Priorities: While the President made no taxes on tips, overtime, and social security key campaign priorities, the White House continues to offer additional items. Last week, the White House told congressional leaders it would seek immediate and full expensing treatment for factory construction, both the buildings and the equipment. 

The big picture: The many loose ends on the tax front may contribute to a delay, but House leaders remain confident of meeting a May deadline. Challenges remain, however.

• The brewing fight on Medicaid, which Democrats are focusing their energy on highlighting, is raising political alarms for some Republicans and even the White House.
• Deficit hawks in the House continue to saber-rattle on spending cuts. Rep. Chip Roy (R-TX) and 20 House members sent a letter urging a number of “meaningful reforms” to Medicaid. 
• The Senate is not planning to mark up legislation, but it will likely have a heavy hand in moderating taxes or cuts once a bill passes the House. 
• The debt ceiling deadlines continue to loom over the entire legislation. Treasury is expected to clarify the “X date” in the next week or two. 

Contact David McCarthy (dmccarthy@crefc.org) with any questions. 

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Legislation to Raise FHA Multifamily Income Limits 

May 6, 2025

Two freshmen senators unveiled a bipartisan bill last week that would raise the loan limit caps for Federal Housing Administration (FHA) multifamily loans administered by the Department of Housing and Urban Development (HUD). 

Click here for the legislative text.

Why it matters: FHA multifamily programs insure loans for construction, rehabilitation, repair, refinancing, and purchase of multifamily rental housing properties. 

• Senator Ruben Gallego (D-AZ) and Senator Dave McCormick (R-PA) introduced the legislation. 
• If enacted, the bill would raise the base FHA multifamily unit income limits that determine eligibility. Those income limits have not been updated since 2004, though they have been subject to annual inflation adjustments and high cost-of-living multipliers. 

By the numbers: The bill would raise the base income thresholds and adjust the index for inflation: 

• The inflationary adjustment index would change from the Consumer Price Index (CPI) to the Price Deflator Index of Multifamily Residential Units Under Construction (published by the Census Bureau).
• Statutory threshold changes would impact the following HUD programs:
  • Section 207 – Multifamily Housing Insurance
  • Section 213 – Cooperative Housing
  • Section 220 – Urban Renewal Housing
  • Section 221 – Low- and Moderate-Income Rental and Cooperative Housing; 
  • Section 231 – Housing for Elderly Persons
  • Section 234 – Blanket Mortgage Insurance for Condos

What’s next: Republicans and Democrats continue to be interested in lowering the cost of housing, both single-family and multifamily. 

• If lawmakers find enough areas of bipartisan agreement, a larger housing-focused bill could move through Congress in the next year and a half. 
• However, methods lowering the costs of housing through subsidies, direct assistance, or supply incentives can provoke sharp disagreements. 
• While there are plenty of areas of bipartisan opportunity, the enactment of any housing policy, on a standalone basis or as a larger bill, will be challenging.

Contact David McCarthy (dmccarthy@crefc.org) with any questions. 

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