On January 14th, 2026, Center for Public Enterprise was invited by the Congressional Progressive Caucus to testify on ways that Congress could address our housing crisis as part of their taskforce on lowering costs for all. Deputy Director of Housing Policy & Research Ashwin Warrior spoke to legislators about the work CPE is doing to assist public agencies across the country to establish revolving loan funds, and how those funds can also enable greater public development, offering a pathway to deeper and permanent affordability.
Good afternoon.
I want to begin by saying thank you to the Congressional Progressive Caucus, and particularly Chair Ansari for convening this hearing and for focusing on ways we can lower housing costs for all.
The United States faces a chronic housing shortage. While rental assistance and tenant protections remain essential, a core driver of high housing costs is insufficient supply, particularly of housing that is permanently affordable and insulated from market pressures.
At Center for Public Enterprise, we work with public housing authorities, housing finance agencies, and state and local governments to expand affordable housing production in the environment we face today: where federal subsidies are limited, interest rates are high, and in some areas, even families making more than the median income are feeling the squeeze.
In most states, the amount of affordable housing that gets built in a given year is determined solely by the availability of low-income housing tax credits and other subsidies. Once those are used up, affordable housing production typically stops. That means each year, viable projects go unbuilt simply because resources run out.
I want to focus on two public-sector tools that can help lower costs and unlock more affordable supply: state and local revolving loan funds, and mixed-income public development.
First revolving loan funds. When a private developer wants to build an apartment, they will typically go to a bank and get a loan, for anywhere from 50-60% of the costs. The developer may put in some of their own money, but in most cases they are turning to private investors for the rest of the financing, and those investors expect high double-digit returns.
To meet those expectations, developers either have to charge higher rents or put the project on hold until they can find a way to meet their investors’ return requirements.
Revolving loan funds change that equation. With a revolving loan fund, a state or local government replaces private equity with lower-cost public capital, making a short-term loan into a project to help it get constructed.
The state may ask for a lower financial return, but in exchange they can mandate affordable units in the project. Roughly three years later, when the building is completed and tenants are ready to move in, the revolving loan fund is repaid, the money “revolves,” and it can be put toward the next project.
A key feature of these funds is that they are short-term and flexible. They are a powerful solution to help unstick projects that might be stalled because of the return requirements of private equity, adding affordability where it otherwise would not exist.
In some jurisdictions, these revolving loan funds can be taken a step further and paired with ownership or development by a public entity such as a public housing authority to enable permanent affordability and to serve lower-income households.
A widely cited example is Montgomery County, Maryland, where a $100 million revolving loan fund has enabled a pipeline of thousands of units of publicly owned mixed-income housing, without needing to rely on LIHTC, allowing scarce federal resources to be targeted to households with the greatest need. Other cities, including Atlanta, Chattanooga, and Chicago, are now pursuing similar models.
These approaches align naturally with federal pathways like Restore-Rebuild (formerly Faircloth-to-RAD) and Choice Neighborhoods, helping communities emerge from redevelopment not only with replaced units, but with stronger, more financially sustainable housing portfolios.
I want to be clear: none of this replaces the need or urgency for robust federal funding to address the public housing capital backlog or provide rental assistance. That investment remains essential. But these tools can complement federal dollars stretching them further and reducing future capital needs.
Congress can play a direct role by capitalizing state and local revolving loan funds, strengthening Restore-Rebuild by making it easier for PHAs to use, and helping increase knowledge of and capacity to use these tools where communities are ready to build.
If the goal is to lower housing costs over the long term, we must invest not only in subsidies, but in financing, and public capacity that allows more housing to get built.
Thank you.