Transcripts For CSPAN3 Hearing On Housing Availability And Affordability 20220723

These homes tend to be located in communities with more families of color than the national average. They tend to be located in neighborhoods with more working people and single mothers than average. These private equity firms have the advantage of being able to purchase these homes with cash, therefore they easily outcompete individual buyers who may require loans. This all has the troubling effect of displacing residents of color and leading to gentrification of these communities. Private equity firms have demonstrated themselves to be very poor landlords. Evidence shows these companies implement increases in rent on these homes. Evidence indicates they evict tenants at a higher rate and account for a higher percentage of evictions. Statistics show that evictions by corporate landlords proceeded throughout the covid 19 pandemic. This was despite federal, state and local protections against such evictions. And these evictions are disproportionately of renters of color. This is shameful. Corporate landlords are more difficult to contact. Therefore, there tenants find themselves unable to amicably resolve issues involving brent. Rent. Once these homes have been purchased by a private entity firm, they tend to be sold in bulk. This can remove these homes from the market for individual homebuyers. This predatory purchasing contributes to our nations shortage of Affordable Housing. Because predatory lending contributed to a housing bubble, we must concern ourselves with predatory purchases. I look forward to hearing from our witnesses. I now recognize the Ranking Member of the subcommittee for five minutes for an opening statement. You may be unmute. On mute. Thank you mr. Chairman. Can you hear me now . You sound much better off mute. Thank you. Americans are being punched in the face with a. 6 inflation. When our constituents go to the Grocery Store when they look for housing, they see the failure of congresses policies. While Many Americans cannot afford a full tank of gas, are subcommittees is focusing on institutional homeownership. In todays hearing, my democratic colleagues may claim private equity firms have strongarmed a majority of the singlefamily home market. These entities capture only 2 of the market. It is clear todays hearing is nothing more than the majoritys attempt to use Institutional Investors as a scapegoat for poor housing policies that they are responsible for and as an excuse to avoid the real problem, inflation. Singlefamily rental homes are for americans an attractive alternative to other housing options. As prices increase, homeownership is a dream further out of reach than ever before. Americans are facing the largest cost differential in 20 years to own verses to rent. 67 of renters say they will brent their next home because they cannot afford to own. Institutional homeowners invest an average of 30,000 in every home purchase before it is rented, given tenants quality shelter. As we examined the role of Institutional Investors, we must not forget that singlefamily homes fill a gap for a Large Population of our country who either prefer or need to rent. It offers parents and affordable way to give their kids a guard to play in, access a Good School District or simply a good and safe neighborhood to live in. While it may seem like institutional home rentals are pervasive and problematic, of the 5 million homes purchased in 2021, 70 1 went to an individual owner. 28 went to an individual investor. 1 went to an institutional owner. Lets contrast that with a problematic economic reality that americans are dealing with. 8. 6 inflation. The food index increased 10. 1 . Shelter increased 5. 5 , the highest since 1991. For far too long, the white house maintained inflation was transitory. By the time they acknowledged inflation is not going anywhere, they had to rush to raise interest rates, which deeply impacts Mortgage Rates. This hearing is misdirected. Our committee must wake up and focus on solutions because no american should have to cut back on essential expenses like groceries or gas to make mens me. Ends meet. I yield back. The gentleman it yields back. I now recognize the chairwoman, ms. Waters. Thank you so very much for holding this meeting today. And while the republicans rail about inflation, they do not have any answers. They simply try to say it is because of inflation. This president is working hard to do everything he possibly can to ensure that we tackle the problems that cause inflation. We know there is a supply chain problem that has been going on ever since the pandemic started. So thank you for focusing on housing. Thank you for focusing on the fact that we have the Institutional Investors as it has been called. Who go into these communities and they buy large numbers of homes. So thank you for what you are doing today, mr. Green. You are on the right track. I yield back. The chair recognizes the vice chair of the subcommittee. The gentlewoman from georgia. Thank you. In todays hearing, we will hear from the rental Housing Market. New challenges arise in protecting those most marginalized. To illustrate this, lets start today by taking an imaginary journey to a housing complex in atlanta that is home to hundreds of people. Imagine you are walking the grounds and you see a building boarded up. There is trash everywhere. You walk inside and part of the floor is collapsing. You can tell rodents live there. You wonder how the problems you see when unsolved for years. Things got so bad that residents had to be moved out of their homes. Across the country we must hold large landlords accountable. Thank you mr. Chairman and i yield back. The gentlelady yields. Members and friends, today we welcome the testimony of our distinguished witnesses. First we have jim baker, he is the executive director at private equity shareholder project. Next we have the Real Estate Agent with better homes and gardens real estate. Sophia lopez, a researcher with the Action Center are on race and equality. Dr. Raymond, she is an assistant professor. And finally, we have a senior fellow at the brookings institute. When this reminded that they their testimony will be limited to five minutes. You should be able to see a timer that will indicate how much time you have left. When you have encroached upon more than your five minutes, i will probably tap lightly. I would ask that you be mindful of the timer so that we can be respectful of witnesses and Committee Members time. Without objection, your written statements will be made a part of the record. Mr. Baker, you are now recognized for five minutes to get an oral presentation of your testimony. Good afternoon, chairman green, Ranking Member. My name is jim baker with the private equity stakeholder project. Since the Global Financial projects of 2008, Property Private equity groups have purchased singlefamily homes. Rents for rental homes have grown more than 13 in the past year. Just over a decade ago, no single landlord owned more than 1000 homes. Now the top five together operate almost 300,000. In 2016, buyer is unable to hold mortgages became renters. Private equity firms have drunk capital from global investors. The wall street journal reported they invested billions of dollars in u. S. Singlefamily homes. An investigation by the Washington Post should poor and wanting to rental homes. The investigation showed how they were able to grab the lion share. Investors made up of 28 of singlefamily home purchases. Investors with large portfolios drove much of the growth. The wall street journal reported large investors had deployed one quarter of 89 billion in capital to require acquire rental homes. We tracked the filings during the pandemic and found dozens of counties, large singlefamily rental landlords were among the most frequent eviction filers we saw of all landlords. They filed to evict residents in the majority of black counties in significant higher rates than white counties. We believe lawmakers should take steps to protect tenants and homebuyers from predatory behavior in the Housing Market. Thank you. Thank you mr. Baker. The chair now recognizes mr. Berg and me. Thank you mr. Green for affording me this opportunity. My name ive over 40 years of experience helping buyers purchase their first home. I have served as chairman of the texas realtors, chairman of the Houston Association of realtors. Board member of housing and community affairs. My radio show that i started 32 years ago focuses on educating would be homebuyers on the availability of financial mortgage products, housing opportunities. My message is you can be a homeowner. The conversation has changed. Institutional investors are buying up houses and competing with firsttime homebuyers. They are targeted minority communities since historically bear lower valued and lowerpriced. Homebuyers are having to compete with investors that are paying cash over the list price. In houston, 40 of the buyers are investors. In dallas, 52 . Creating a generation of buyers that will miss out on the benefit of homeownership and the ability to create wealth. This trend started when congress incentivized investors that made homeownership ship equal. Homeownership among black americans has been declining in recent years. By increasing the percentage of renters in the black community, Institutional Investors are creating a modern day sharecropping. In 1968, the Supreme Court established. Investors are requiring higher Credit Scores in rental. In denton texas homeowners passed by laws that landlords from renting. Not only do black communities miss out on opportunities from homeownership, they are being pushed out of the rental market. Congress, we need you to act. You can mandate they offer first time home buyers before they sell them to investors. You can create tax incentives from sellers. This would allow firsttime homebuyers and better financial terms. We are now using vouchers not only for leasing but also moving buyers into home purchasing. I have had tremendous success in helping families move to Home Ownership alone section eight in a high opportunity neighborhood. This needs to be expanded. We cannot tell sellers who they can sell their property to, but we can encourage them to sell to firsttime homebuyers. I appreciate this opportunity to shine the light. Thank you for your testimony. The chair now recognizes our next witness. Good afternoon, chairman green. Thank you for the opportunity to testify today. My name is sophia lopez. We are a National Organization working at the intersection of Racial Justice and wall street accountability. We talked about a mother of small children whose basement flooded. When she called her landlord, she was told to shut up her electricity herself. I have heard about tenants who faced right increases of 200 per month and pressure to sign renewals quickly. The National Rental council are professionalizing the singlefamily housing industry. In studying the private equity in housing, profit maximization has no place in our home. Their profits increased 33 in 2021. One ceo called the failure to capture revenue. Inadequate maintenance. Eviction filings. [indiscernible] the tenants rights are generally more favorable to the landlord. We need a comprehensive landlord registry so we know who owns what. The Housing Market is rapidly changing. Our communities and neighbors will feel the consequences. Thank you. Thank you, ms. Lopez. Dr. Raymond, you are now recognized for five minutes. Thank you, chairman green. I am an assistant professor in the city of school and Regional Planning at georgia tech. I have researched links to gentrification. We have learned a lot about the impact of Institutional Investors on households. These firms have high infection rates and profit from gentrification. During the pandemic, Institutional Investors dominated Housing Markets across the country and outbid homeowners trying to buy singlefamily homes. The eviction practices of the Institutional Investors are concerning. We saw they had an eviction filing rate of 20 in atlanta. That is two eviction filings for every two 10 homes they own. This rate was due to the landlords not to other factors. Even with controls for tenants, printed from an Institutional Investor was the biggest predictor of an eviction. They use evictions to boost profits. Firms leverage the threat of an eviction to increase rent collection or to evict tenants in order to replace them with higher income tenants. These profits, a heavy cost. High eviction rates are devastating for tenants, neighborhoods and schools. In addition to displacement three eviction, they profit from gentrification. We found neighborhoods in atlanta with an Institutional Investor lost 166 more black residents than adjacent neighborhoods. These purchases lead to longterm gentrification of black communities out of atlanta. Many researchers found Institutional Investors crowd out Home Ownership at the neighborhood level. We see this act atlanta where Home Ownership has fallen 6 . We can attribute 1. 4 of the decline specifically to large Institutional Investors. Particularly during the pandemic, they outbid homeowners trying to buy singlefamily homes. In a recent study, we found that Institutional Investors bought one in six of all singlefamily rentals last summer. In atlanta, investors bought over half of the singlefamily rentals and 17 of all singlefamily homes. The prices of these firms paid rose by 20 every quarter. That is an increase from an average price of 130,000 in 2019 to 270 5,000 in 2021. By contract contrast, homeownership rose by 9 . Institutional investors continue to target in our study, we look to the average demographic the average neighborhood was 62 owner occupied. These high market shares and submarkets are further meaningful measure of market power than natural incentives. Economists dont define markets natural nationally, we look at regional, local definitions. The increased market power of is a growing concern. Not only do we have a great effect for household, but it is problematic that Institutional Investors have no market power to in the neighborhoods where they have existing assets that they are using as collateral for their financial instruments. Because of the use of corporate vehicles, it is impossible to identify all of the homes that these purchase. Researchers like myself can only provide estimates. We need rental property registries to confirm these. With accurate data and meaningful they should undo market power. In the rental market. Policy measures should examine ways to strengthen tenant Legal Protections so that it is not used to support the aggressive use of fees. Thank you mr. Chairman. Thank you dr. Dr. Raymond. The chair recognizes ms. Schulz. You are recognized or giving five minutes of your testimony. Afternoon. Ranking members of the subcommittee. It is good to have testified today on the issue of institutional escher it is an honor to be here before you this afternoon. I am a broader context of how affordability and availability in the u. S. The growth of institutional and pastors is a symptom rather than a cause of the and extremely tight Housing Market. Until housing has been trapped as a financial option for investors of all types because of market fundamentals. Demand for both rental and an occupied housing has grown during the past decade. Due to job growth and rising incomes. Since the Great Recession, the u. S. Has not built enough housing. They have historically low they get rates and rapidly high rising costs. Other Institutional Investors benefit from tight housing supply but they did not create the problem. Local governments across the u. S. Have adopted policies that make it difficult to build more homes where people want to live. Zoning rules that limit the construction of small, moderately priced homes are clinically popular with existing homeowners and local elected officials. The burden of high housing cost is not shared equally across all households. Rising housing costs have the greatest hardship for low and moderate income households. The lowest 20 in households in the u. S. Been more than half their income on rent. Leaving them too little cash to pay for mood and other necessity area. Necessities. For food and other necessities. Black and latino households continue to face higher failures of Home Ownership reflecting ongoing disparities in access to credit. You are then half of black and tino households own their homes compared with three fourths of white households. Firsttime white home buyers receive family assistance with downpayments. Black and latino households have been shut out of this generational building which puts them at a disadvantage when competing with Institutional Investors. Housing quality and tenant Legal Protections are important to renter households wellbeing regardless of who owns the property. Policymakers should be equally concerned about housing and clear fear sheet meant of tenant fair treatment of tenants. Or nonprofit organization. Reports have raised concerns about the quality Quality Customer service by these firms. The existing data made it difficult whether to determine where between private firms and other commitments. Better data and more transparency are essential to ensure better policy responses. Singlefamily rentals are an important part of the house ecosystem. Homeownership is not the preferred choice for all americans. Or at all points in any persons life. Having a diverse set of 10 year choices and structured types in diverse neighborhoods is important for economic opportunity. Families that want to live in communities where they cannot afford monthly rent but cannot afford to purchase a home. Congress can approve renters and homebuyers all being first work with local and state governments to expand the supply of housing particularly moderately priced until and for sale homes. Homes along these lines have bipartisan support in congress and improve the Biden Administration housing supply plan. Relieve Financial Stress on moderate income households. Increase county funding for household vouchers or expanding house Child Tax Credit have congressional support. Third, provide more resources to sustain local governments to assist their efforts in ensuring Housing Quality and tenant actions. Fourth, better Data Collection from federal agencies could injuries increased transparency of rental properties. There are no Silver Bullets to making housing cheaper. Upping renter homebuyers from federal state and local governments. Thank you again for the opportunity to testify and i look forward to your questions. Thank you for your testimony. I will now recognize members for questions and members are reminded five minutes for questions and at the end of the five minutes, there will be a light to indicate that they are exceeding their time. Also, we do ask members to try to ask these questions so that they may be answered within the time that you have been allotted. I am honored now to recognize the chairwoman of the committee my friend ms. Waters for five minutes. Thank you very much. Congressman, i appreciate that. I would like to direct my question to miss lopez. Renters who live in singlefamily rental units owned by private Equity Investors pay higher rent compared to other renters and are more likely to see steeper rent hikes each year. Nationwide, rent have increased at the fastest rate in decades with year over u. S. Singlefamily rent. Raised by 14 percent in april 2022. More than doubled compared to a year earlier. Ms. Lopez, in addition to the aggressive rent hikes, the Committee Survey of the largest singlefamily rental companies concluded that these rental leases increased by approximately 40 from march 2018 to september 2021. In the total number of renters were late fees and rent had doubled in that time. Have you observed singlefamily rental Companies Taking advantage of renters through increased rent and please can you explain how the securitization of rental income creates unique pressures to increase rent at these each year . Yes thank you so much for the question chairwoman waters. I mentioned coble examples in my testimony of the ways in which these companies are taking advantage of tenants who are otherwise shot down from the homeownership market. To increase rent. For example, homes as one company who is increased rent by 30 in its market. 29 in the long thought las vegas market. And that is just a short overview. I also mention finding visas an important story for these companies. So, i gave the example of homeowners and their profit increased by that they were able to bring in 640 per home for month in revenue. And anticipate growing this summer taking 152 950 dollars per month. To think about that in context for myself, i could not imagine my housing cost increasing right 30 from one year to the next. I cannot imagine being made to pay fines and fees for things like a smart phone. Or a pet fee. Or having utilities registered in my name. Which is one of the examples that i mentioned of stories that i had heard from tenets. And having those fees add up to 850 to 950 per month. And i think the survey data also shows that tenants are struggling to keep up with these fees as well. I am struck by just how many people are behind on rental and fee costs. Thank you, do you believe that this incredible increase in rent is going to spare efforts by neighborhoods for rent control . Do i think that rent control could help cut some of these incredible rent increases . I think absolutely. I think we have to consider every single tool potentially available to us. And i agree with what miss shoots said, a lot of these dynamics are adept across the different kinds of inventory. But the level of the greatest writ increases we are seeing in singlefamily rental properties means that we absolutely need to find a way to cap rent increases and i want to thank you very much. I yield back. Thank you. The gentle gate lady yields back. The chair now recognizes the Ranking Member of the committee. Subcommittee mr. Imre. The gentleman from minnesota. My friend, you are recognized for five minutes. Thank you mr. Chair. Again, as i mentioned in my opening statement, inflation is at 8. 6 percent. And americans actually need solutions right now. But again, we are here to discuss the institutional homeowners role in the singlefamily home market. A market where made up of only 2 . My colleagues across the aisle have insinuated the intuitional investors take opportunities for homeownership away from americans everywhere. But they failed to acknowledge that not everyone is able to purchase a home at a Mortgage Rate of six sent for a 30 year fixed loan. An institutional homeowners give americans quality, affordable rental housing. Thanks to the hidden tax, we call inflation, which is definitely is not hidden anymore, many Prospective Home Buyers cannot afford to pay for a monthly mortgage and the kid costs piled on top like maintenance and repairs. These institutional homeowners remove the additional barriers and costs that coincide with homeownership. They provide Maintenance Services and many even offer their tenets Financial Readiness classes. Here is the reality. Prices are through the roof. Gas is up, groceries are up, housing is up, inflation is it punching americans in the face and actually americans are being sucker punch when you add on climbing or get rates that make homes more expensive. Yet here we are. My democrat colleagues did not seem to recognize that congress is careless bending has made it hard for americans to save up for a home. After shoots, can you explain how inflation impacts the lives of renters . It can speak more specifically to the roles of housing costs and the way that housing costs lace into inflation. We know in fact, the cost of housing has been rising faster than how Household Incomes for roughly the past 10 years. This is not just a shortterm problem that we are seeing with the pandemic although it is certainly gotten worse with supply Chain Shortages that effected construction and housing. But it is important to remember this is a longterm problem. Because fundamentally by the fact that we are not building enough homes and that the housing supply is not kept up with demand. Me ask you have singlefamily rental homes addressed the increase in demand for suburban Community Living at least during the pandemic . We do see an increase in the demand for basically all types of rental homes. In the past several years, we particularly see increase in the number of high income renters. People who would be homeowners in other generations when housing prices were cheaper so that the growth of high income renters also the growth of older renter households are two of the factors that drive demand for singlefamily rentals. We also see very high demand for theres demand for more housing acrosstheboard. Listen, over the past few months, my democrat colleagues continue to find a scapegoat for inflation. They determined that institutions buying entrylevel housing are leaving americans without opportunities to buy. Yet according to the National Realtors Association Maine united aces behind the queue pointed out, dr. Shoots, dr. Schuetz we are behind by 6. 8 million Housing Units. Is it true that regulatory barriers at a local level are impeding or part to blame for the problem of the housing supply across the country . Absolutely. But the noumenal reason we are not building enough homes in high demand locations is that our Housing Production system makes it difficult. So a combination of rules zoning rules like handson apartments and lot sizes in a discretionary process where existing homeowners get to weigh in on new developments. And essentially have said they do not want additional housing to be built. This pushes the demand into neighborhoods that are unbuilt areas that are infringe, or in places where the existing residents were friendly and less able to push back against new development. Inc. You. I would also add that the idea that rent controls are somehow going to solve the problem it is just another local regulation that is going to frustrate the incentive for people to build more housing when we are already behind. I want to think the chairman and thank the chairman and all of you for being here today. I urge my colleagues across the aisle to consider the trillions of dollars we spent over the last two years alone. And then decide who has the American Dream of affording the home . I yield back. The gentleman yields back. The chair now recognizes the gentleman from missouri. The subcommittee on housing and chairperson. My friend mr. Cleaver you are recognized for five minutes. Thank you. Before i get into my questioning, i would like to express my appreciation for your willingness to bring this issue up to the subcommittee. I think it is a critically important issue and i do not think it has been discussed enough. Around the country. And if it has, it hasnt been listened to. Let me start, ms. Lopez, thank you for being here today. Have you ever heard of a coup capitalism . You probably have not because i made it up. My own self. When i talk about coup capitalism it is because there is an overthrow of the homeownership in the urban core and there is a regime change that comes in. I have here, miss chairman, an article from the kansas star the local loop newspaper in kansas city. Its a pretty extensive story that they wrote last december and it talks about the land grab on the east side of kansas city. And frankly the west side. The west side, has probably been historically over 100 years a hispanic area. In the Near East Side has been fully africanamerican. And they go through and they point out all of the issues that have arisen and i begin to call it coup capitalism because the people have been overthrown. They are living in the west side and they are probably already lost. So, ms. Lopez, one of my questions is, do you think that federal governments i dont think the municipal government can do it, can pass some kind of legislation that would require these vulture capitalists before they come in and do the work there has to be opportunities for local homeownership and then local participation in purchasing of the houses and land and historically poor areas. In historically poor areas. I think that is very important thank you for asking that. It is very critical you touch on key things. Policy at the national level. We all know we have a patchwork of policies that protect homeowners and protect tenants. And it comes down to the luck of the draw. Of where you happen to live and where you happen to be born. I agree, one the most broad answer would be federal policy. You are absolutely right, there is no mistake about it, equity survey, as of 2013 everyone dollar of white wealth along to white americans black americans have . 17. These Companies Make the all caps worse because they buy homes in communities like yours and instead transfer it to shareholders. It is the exact same thing that happens during for closure prices. I think youre absolutely right. We need to do everything we can to make sure the wealth stays locally and continues to support the community that is experiencing the same dynamics you described. The dynamics weve seen in every city ive ever lived in. Thank you very much. I might add, right here, that the institutional purchases of homes in missouri is 16 which means that those areas are pushed out. We have 500 unit townhouses but one of the first coops in the country. And it is about to go under after all these years. My greatest fear and the fear of the few residents whose ill are in that area who are still in that area, they will wake up one day and sell the property after it eventually goes into default and so forth. We cannot find a developer. Them, we wake up one morning, and the International Bank People Corporation i am just getting started. Thank you very much. Thank you mr. Chairman. The gentleman yields back. The chair will now now recognizes the gentleman from South Carolina. My friend mr. Timmons for five minutes. Think you missed her chairman. Thank you to our witnesses for being here today. Another day, another new excuse from our friends across the aisle trying to explain their role on causing recordbreaking inflation. First, as you recall, inflation was transitory. Then it was a highclass problem. Then it was just use cars and energy. Then it was prudence fault. Now it isnt able corporations it is People Corporations and they are trying out a new bogeyman wall street Institutional Investors. None of these attempts to explain why inflation worked and with the midterms quickly approaching and the president Approval Ratings in the gutter, and they are throwing mud at the wall with the hope that something sticks. The American People are too smart for this it will not work. They know exactly who is responsible for the 40 year high levels of inflation we are seeing to blame merrily lies with the Biden Administration and Congressional Democrats who poured trillions of dollars of fiscal stimulus on the economy that was exploding out of the pandemic shutdowns. That my friends on the left in force on the country. There was so much, pent up demand that americans had record levels of savings even before the American Rescue plan was passed. In this committee, republican bidders liberating on are in. So did democrats like larry summers. But they did not listen. They wanted to expand their social to unprecedented levels and increase americans dependence on the federal government. Instead, we got record of those of inflation. Which my friend mr. Stiles said in the market last week, is punching americans in the face. I would say more apt description would be a sucker punch. But i guess minds can differ on that. Anyway, todays hearing is about how equity is buying up all the single heckler singlefamily homes and preventing families from purchasing homes. And forcing up costs. This is the latest scapegoat i looked up the data on institutional on singlefamily homes in my state of South Carolina. The numbers tell a different story. The one that the majority is trying to tell. Theres over 5100 singlefamily home owned by private equities in South Carolina. Theres over 300,000 singlefamily until units in my state and over 2. 3 5 million household units in South Carolina. So, the percentage of Housing Units, owned by Institutional Investors in South Carolina is less one quarter of 1 . One quarter of 1 . But yet, we are supposed to believe this is why housing costs arise . Im not buying it and i dont think the American People are either. There is no doubt that the inflation across the board in the Housing Market needs Serious Policy Solutions that will bring down prices for our constituents. With that in mind, ms. Lopez, your organization, the American Center of rates in the economy states on its website we envision a u. S. Where land and housing are publicly owned and used for the overall public good. So my question is, yes or no, do you agree with that statement . Yes. Can i get a show of hands from the rest of the panel . Does everyone else believe that all private property should be owned and operated by the government . I mean it is i find it pretty outlandish. I guess warmer followup, ms. Lopez, during the pandemic. Your organization attempted to organize a nationwide rift and Mortgage Strike including a pledge that participants would withhold rent payments from Property Owners or lenders whether they could actually pay rent or not. Whether they even had their lost bear jobs or not. So, ms. Lopez, yes or no, are you involved in organizing this strike . Yes. And you think if its appropriate that if someone did not lose their job that they should stop paying their rent or mortgage . Our focus was on people who had lost their jobs and the ability to pay. But i think in solidarity with people who have lost their jobs, we were absolutely open to people who were interested in investing and bedding for them. I dont know the American People would agree with that sentiment. If you do not lose your job you did not stop paying rent. But let me ask you a good the impact be on your business if the government took control on all private property and homes . It would have a huge impact. And i dont think i remember realtors would be in favor with that. At all. Ok. I appreciate that answer. Mr. Chairman think you for having this hearing and witnesses i yield back. The gentleman yields back. The chair now recognizes the gentlelady, my friend, miss adams from north carolina. Thank you mr. Chairman. And i want to thank you you in the Ranking Members for hosting the hearing today. Thank you for your service. Chairman, i want to thank the staff of the subcommittee for working to put together let me just remind you. Your voice was elevated for a moment and then it went down. Is there something that you can do to raise the level of your voice . What about now . A little better. A little bitter, but it is not what it was at one point. I am at 100 now, is that better . That is better. Thank you. I represent. I want to thank this of the committee for putting the information together for this meeting. But i represent shaw and Mecklenburg County in north carolina. We say a lot that weve got a lot in charlotte. A lot of great opportunities are here and a lot of great people but weve got a lot of things we need to do. Affordable housing is cheap among chief among them, he have a shortage of more than 30,000 Housing Units in the city right now. But according to the Research Done by the shaw urban institute singlefamily conglomerates have built folios heavily concentrated in the starter home market. According to their research, 93. 5 of the 11,500 homes is that these property equity firms have purchased where under 300,000 and most of those houses have been in what we call the crescent where more black and brown families call home. Mr. Chairman, without objection, i would like to submit that article for the record. X without objection. It is submitted and received. Thank you, mr. Lopez ms. Lopez, can you speak to how this trend exacerbates the Affordable Housing crisis and hurts people of color and low income individuals . Gladly congresswoman, thank you for the question. I am not at all surprised to hear the finance study that you mentioned fort researchers across the country have found that institutional singlefamily rental landlords focus on communities where black and brown families live. And because of the markets where many of these institutional landlords focus their purchases, have billions of dollars at their fingertips in sophisticated algorithms that tell them its ackley what they should pay for a property. People of color and low income families did cannot compete to buy those homes. A families want to live in a singlefamily home, there is a likelihood that they have to rent from one of institutional landlord. Where as of our institutional landlords so i heard from some tenets that theres a feeling that if youre stuck with one rent, one landlord, rather is raising your rent 100 or two to 200 every single month and you want to find a place to live, you turn around and many of the options available to you are also singlefamily rental institutional landlords who have the exact same business actresses that are very clearly documented in their own fcc platforms and things they say to investors. It leads tenants in any cases feeling like they are stuck without options without wheels to go. Thank you. So, ms. Schuetz and your testimony, we discussed how Equity Private equity is benefiting from a tight Housing Market. And how they can lead to lower rental cost. We would like to dress agree we agree on the need to address housing supply. Can you discuss how increasing the housing supply be at the rePublic Housing or more funded housing can immediately blend the negative impacts that we have observed . Sure. Thank you for the question. So, it is important that we increase the supply of housing on both of the market rate side to absorb higher in how income households and his and designate low income housing. We know that 20 of households do not earn enough to pay for market rate housing. So the question is how can we most effectively help those households build new housing. It take time takes time. Even an fast building places like charlotte. One option is to use the Affordable Housing trust fund to apply for existing older apartment buildings and put them under reform and restrictions. There are two advantages of doing acquisition and reconstruction. It brings the housing online much faster and it is generally cheaper. We have been talking about the singlefamily rental market but we also know the Institutional Investors are buying multifamily rental building that are older often doing a rehab and then raising the rental name and instead of moving them up from a class b or c to a class a apartment building. If properties were to acquire these buildings and put them on longterm affordability would increase the affordable stock very quickly. Inc. You very much. Easter chairman, i yield back. The gentle lady yelled yields back yields back. The chair now recognizes the gentleman from South Carolina. Thank you. Chairman green. Like mr. Timmons has set here and listened to some of this dialogue, and really it astounds me that we are here blaming everybody from Institutional Investors to greedy landlords to you know new mr. Chairman. I did not see you represented on the screen. Mr. Norman, you have you are no longer on the screen. Can you please turn on your camera. Oh im sorry. The outlet see. Oh im sorry, lets see. Ok what about now . Not quite. We do not see you just yet. Ok. How about now . We still do not see you, your. Ok, i am sorry. Let us. Lets see. Ok, i dont know what i tell you what, would you mind if we give you an opportunity to see if you can make an adjustment and i will go to one additional person and then come back. That would be great. Thank you a lot. You know what, now i have a picture of what appears to be something that you might have in your home. They are. There you are. You are up now. Class ok. Yeah i am already. As i sit here and listen, it astounds me that everybody is blaming different mons. I have not heard his name and i have not heard santa claus yet, but i guess given enough time housing is what i made a living doing. Do yall realize how many trades are affected by one thing and one thing alone . Gas prices. It is over 137 different trades. Now, multiply the increase in doubling the gas, no wonder people cannot afford it. Now, i think mission schuetz you mentioned there is no Silver Bullet. But there is one Silver Bullet that could happen overnight which is this administration is opening up the gas from the Keystone Pipeline from canada and alaska and not buying from other countries that do not like us. That would affect the housing industry more than anything. Something with those so goes the housing, so goes the economy. And it astounds me that i think that dr. Raymond deduct you say, did i hear you right . That these intuitional investors use evictions to boost profits . Was that did i hear that right customer that is correct. Where did you get that nation . There has been a fair amount of research looking at how landlords can use the threat of an eviction to pressure tenants to accept even higher rents. You think about it being a basic need. It is like water, air, food, you cannot go out with without it. If somebody says im going to take your tv away or your luxury good away, you will say that is fine i can live without it. That if somebody says im going to take your house away unless you pay before hundred dollars excuse me maam. The realize what it takes to evict somebody . It is pretty easy and jordan. It is very easy. No maam. I am reclaiming my time. Have you ever evicted anybody . That is the last thing you want to do. You have this thing called leases where you sign people up for 12 months. Typically, or six months or different. And to pit that is a cost to the investor. I have never heard this before. Her telling me something investors do not leave vacancies. We heard in the pandemic i am reserving my time. Ms. Lopez, did you say that you objecting to the different fees, pet fees, other fees did i hear you right on that . I said yes can you hear me. I said those fees can be concerning when they are required of tenants. To object if they are required. Ok, you know that up front for you sign attendance. The reason you have pet fees is sometimes animals caused in. Or in a home. Sometimes it takes a tremendous amount of money to go back and remediate the things that come with owning animals. So, you can either have a pet or not. Now ms. Lopez, i think i understood you right to say that rent control would probably be a good thing . In an environment where people are facing 30 or even 10 rent increases from one year to the next, i think we need to find ways to mitigate people facing the impact that is that dramatic. Ok let me say this, ms. Lopez, if you want to construction and stop people from investing, you try rent control. Would you be in favor of government having a rent tax control as well . Because we have seen in most cases, to buy property, to develop the infrastructure the regulations have gone up some as high as 35 of your total price. Are you in a bar of many government from that . Raising their regulation and regulatory costs is to mark x in not sure i understand the mechanism of what youre describing . If you put rate controls on those that build and build housing and rent then would you be in favor of adding controls on government and raising taxes to mark that increase regulation. In still not sure. I do not understand the mechanism youre mentioning. I guess it is the goose is not good for the gander. You are limiting any investor. Putting limits on the i think i heard you say that the investors that make france go up 100 a month did i hear you say that . I have talked to tenants who have struggled to cover 200 100 to 200 per month increases. Increases. Ive never heard of that. Ive never heard of an investor saying you so signed a six month fixed income. I have never heard of that maybe im just in the wrong part of the country. We are in a severe problem with traction. Because this administration lets gas the gentleman times has expired. We ask that you submit your questions in writing. The chair now recognizes the gentlewoman from michigan my friend ms. Tilly. Thank you so much. Thank you mr. Lopez for pointing that out. It is happening in my community. We are one country one nation. I know that when some of our families are struggling to pay rent and increases we see it over and over again because of life. You will representing them in the court and some of the challenges with folks now following through on their leases or agreements. The housing and reese is second after house prior gas prices. You cannot talk about inflation without addressing the housing prices. They existed prior to what we are dealing with now after inflation. After raymond, isnt that true . That the housing crisis impacted families with the cost of living prior to the rhetoric coming out of many of my colleagues today . Absolutely during the Trump Administration we had enough ability crisis. And it is exasperated by the pandemic which is responsible for a lot of the inflation we talk about. But we are talking about Institutional Investors not inflation. And i saw you nodding your head. You are an agent. This is been a crisis in our country. Not really in the manner to ration and we have not been able to address it because we have lacked corporations to come before the needs of our American People. We have a lack of inventory. That is the bottom line. This is economics 101. What is happening, the reason these people are renting is because investors are buying properties and do not give them an opportunity to buy it. Nothing comes out of investors buying property. It does not increase the economy you are enriching enriching the rich. When you sell a property, you will include expanding the economy because everybody now has an opportunity to grow and get money. Go ahead sir. 53 to 55,000 on average go back into the economy. For every new home that is sold, when 13,000 goes back into the economy. When somebody rents something or an investor buys a house, money into the economy. Very few benefit from that. I completely agree. We are not trying to stop that we are just trying to stop what happened is, people benefit the suffering of our families during this Great Recession. The aftermath, only on loan in my community, we have hundreds of thousand about 100,000 properties that were closed down virtually click property taxes because of the crisis. Mimi were overtaxed by 600 million. As well as ever have the inventory in my community right now is valued at less than 100,000. My residents are struggling to get these to obtain mortgages. Really struggling to it is not profitable for them. Let alone fighting the need for them. And living conditions. We have i partnered with chairwoman waters to produce and part of ash proposed the revitalization fund which was included in president bynums agenda. In build back better. It wouldve provided president bidens agenda. And build back better. It wouldve provided i knew that the sum of the corporate friendly folks at my friends on the other side of the aisle support but these are communitybased organizations that help families redevelop properties into affordable rental housing. There is nothing wrong with being able to invest into 501 c 3 s that are doing work in providing housing for so many of our families. Mr. Baker, would investing in our neighborhoods with Nonprofit Community partners be effective alternative to allowing his whole private equity scheme to continue to buy of our Housing Stock . Thank you, representative. What we have seen from the private Equity Investment in housing, we have seen the outcome. In terms of sharply rising rent. In terms of dramatic and in some cases, maintenance issues that lead to life safety issues frankly for residents. We have seen those firms being the quickest to evict residents or file an eviction of residence during the pandemic. So, certainly an alternative that avoids this incentive to do high returns, for new i know it is all about making money even when it is such an exorbitant discussing amount of profit versus what they couldve done they just do not care. I have a number of questions chairman i will send those to the witnesses. I cannot thank you enough for having this very hearing. Thank you very much. And the gentlelady yield back. The chair now recognizes my friend, ms. Garcia, the gentlelady from the state of texas. Inc. You mr. Chairman, i too want to thank you for putting together such a fine group of witnesses to discuss this very important topic. This is not an excuse. This is not makebelieve. It is real and it is happening across america. I know in my district which is 77 latino, it is a very critical topic this housing shortage. In particular, what is happening in this arena. I can tell you that throughout Harris County in houston, my district, the Housing Market and particularly the rental market has been volatile. Specifically for renters, the cost burden has gotten worse. And it does not show any signs of improvement. The cost burden has now become the majority of houston and Harris County. As rent has increased faster than wages. And it appears it is becoming more and more difficult for houstonians particularly like to and black histone inns to get out of the rental market and purchase a home. And i want to start with ms. Lopez. And ms. Lopez, almost every instance an example that you use i have heard of it. Unlike my colleague who has never heard of it, i have heard of it. Not just as a member of congress, now listening to constituents, listening to town hall meetings, but more importantly, during my days in the housing landlord section. Tenet section. I was with Legal Services and some of this is not new. Some of this was happening when i was practicing law back then. And that is the sad part. That these things are still happening. The dollars of what is at stake is even greater. As urban areas have gained population, we have not really also gained in the Housing Market. So, my question to you is you said in your testimony is what we need true, Affordable Housing. You use the word true. Can you just tell me in a minute or so, what do you mean by true . Affordable housing . Last thank you so much for the question, congress moment. I am one who have also worked in the housing in the community in san antonio, texas. There are so many people who have lived in but they tell you that they pay over 30 of their income rent. And maybe even half of their income or maybe more. I think that there is a National Standard of 30 . I think that if you hear of somebody who has 20,000 a year, many of the Public Housing residents that i have spent time talking to, that is still a massive share of your income to end on rent every single month area so i make 30 or lower when possible. Thank you. And mr. Bodie, i cannot help but ask you a question as a fellow houstonian. Given your direct experience in the houston market in major urban metropolitan area, from your perspective, how do you see the impact of this whole equity firms and these Institutional Investors buying homes how is that impacting our houston market . And are you seeing have you seen a growth in that . I know i have heard of investors buying home specifically for the purpose of putting them on airbnb and in these networks. Particularly around laces that are like Tourist Attractions or destination points like around the Medical Center here in houston or around the tech center. So are you seeing that here in houston . Yes, congress woman. I am seeing it all over houston. Youre right, the airbnb deal, anytime it is anywhere a tourist or traction you are seeing it. The bottom line to me is that, these homeowners cannot buy these houses because they are being outfitted. And you have an Affordable House come up, and you have 20 bids on that house, 20 consumers trying to buy a house, and the investor comes in and writes a check for it, and he bid out bids the other 19 people. It is a huge problem in the houston area. And we do not have a lack of people not wanting to buy, they cannot buy. They are forced to rent because they cannot i these homes because of the past situations in our economy. The past situation with a rent it is cheaper to own in houston home in euston than to rent. And that is the thing. I think that is across the country to a certain extent. It is cheaper to own but they are not given that opportunity. Thank you. And mr. Chairman, i still have seven seconds. I have tumor questions. One for ms. Mayer one for dr. Rayman. I will submit those in writing for the record and hope to hear their responses. It was, just so you know, i wanted to focus on the eviction rate because i think that is just terrific. That i think mr. Baker said it was more in the white neighborhoods where evictions were higher and we need to explore that. With that i yield back. The lady yields back and the chairman now recognizes my friend, from georgia, the gentlelady miss rhodes. Thank you mr. Chairman. I want to thank all the witnesses for joining us today especially mike enjoyed dr. Raymond from atlanta. As i mentioned in my opening statement, one of the biggest problems of increasing rent control in large landlords in singlefamily and multifamily housing is how difficult it is for them to hold their landlords accountable. It leads to full deteriorated housing. And as dr. Rayman highlights, it can also mean port regular maintenance. High eviction rates, high hit fees, and aggressive rent increases and investor wrote owned rentals. Dr. Raymond, what would be the value of the federal government providing more avenues and resources to help hold landlords accountable for predatory behavior towards their tenets . I think it is part of the reason that these firms are able to expand so massively in cities like atlanta and because the amount of leverage they have over tenets to raise rent and apply hidden fees. So balancing that between tenants and landlords of little bits of it tenets have a balanced set of rates and obligations would be really helpful. And i think we need to think about home and how homeownership is being routed. Homeownership is important to build household wealth. It is been an important way for people to build access to their equity to support college funds. Retirement funds, we are seeing homeownership rate in places like Metro Atlanta declined by 6 . And i agreed that we need more construction but i dont think of atlanta as being a supply constraint. This is not boston or san francisco. This is atlanta, georgia. We are relaxed about building new housing. I am all for new construction, but i think we need to do things to shore up homeownership in our city. And we are seeing the decline because of Institutional Investors and i also think we need to do something to reduce these eviction rates because they are way too high. For people to operate and live their lives. Dr. Roman to go down the eviction rate a little more, your research is exploring how evictions are more likely to be pursued by Institutional Investors and larger corporations who own singlefamily rents. What effect has this had on the broader trends in places like atlanta. We are seeing it every day here. The mayor has been vocal about it. What effects are you seeing . I would say we have an overall extremely high eviction rate in a state like georgia. South carolina has among the highest eviction rates in the country. But georgia is up there as well. In my county, we see around 20 every year in terms of eviction filing rate. And then around 6 of completed evictions. Said there is a difference between starting the conviction process and actually evicting from their home. It has been pretty consistent over time. And it is too high. When we look at elementary schools, a lot of the schoolteachers are saying we cannot teach when a third of our students are disappearing every couple of months. And then another third are coming in. It is completely disruptive. It impacts the next generation. So i think it is a great way to squeeze as much rent out of your tenants as possible. I understand it from a prophet sinking perspective. But Institutional Investors, they are there to make a profit and it is a great tool for that but the hard harm it is doing to our communities is unsustainable. And we have an unsustainably high eviction rate in georgia it needs to be lower much lower. Thank you dr. Raymond. One of my points is closing the gap which atlanta leads the nation in in unfortunately. And that is homeownership. You mentioned that an Institutional Investment in buying singlefamily homes, can crowd singlefamily ownership. What can we do to put them on equal foodie footing footing and what impact on enclosing the racial walls gap . I think, if we waive the 90 day sip role, we incentivize sellers to sell to firsttime home owners with tax emphasis to be a tax credit of some sort. And if we increase the housing voucher money to enable people to buy a home with their housing voucher. Some of the landlords we are talking about, they will not take housing cultures because those people are having a hard time looking for a house. At those are the few things that i would say, working to try to increase homeownership and increase landlords to take housing vouchers. They will not take housing vouchers. I have shared that with you before. Thank you so much, mr. Chairman i am out of time. I will ask for the other witnesses to answer that final question for me so we can get solutions and help people we are in congress to serve. Thank you. Would ask that the witnesses submit their answers in writing. The chair will now recognize any other members who desire to be heard on the committee before the chair poses its questions. Are there any other members available and desiring to be heard with questions before the chair . Before the chair proposes questions . All right, the hearing now recognizes himself for five minutes. For questions. I remember, during the Great Recession what it was like and we had a testimony before this committee indicating that people of color more specifically African Americans lost a generation of wealth. A generation. This is why it was called to a certain extent a predatory lending process that was taking place. We now have what i call predatory purchasing taking place. Would you tell us why you agree that this is predatory purchasing behavior that is being exhibited . Well, a lot has to deal with the purchasing of these homes. Weve got lenders. If you look at where all the negative, the predatory lending is its all on african and brown neighborhoods. It is nowhere else. It is all there. What is happening is that, and our people are so far behind, based on past issues, we never really dealt with the housing discrimination issue. We talk about it but we havent really dealt with it. We have records on the books right now, congressman, that have not been enforced and we are trying to enforce it. Look at what is happening right now ive been in tim, texas with those families that are being evicted because they own housing vouchers. Not because they did not keep their yard up, not because they did not they destroyed the neighborhood. It is because of where their income comes from to do their vouchers. So, we have to do a better job with making moneys available with more credits and Certificate Programs and down payment assistance programs. We have to we seem to think that we need Affordable Housing for single families. It could be a condo. It could be a townhouse. There are things that we do not always have to say everything has to be singlefamily. We have got to start trying to raise income. And currently, right now, low income is wrong. Thank you. The chair would ask ms. Lopez to respond to the question. Is this predatory purchasing, ms. Lopez, the way these equity funds are behaving and moving into certain areas and excluding other areas . Yes, thank you for the question. It is uncredited it is credit predatory purchasing. As the chairman noted, there are multiple instances where the heads of these companies in their Public Offerings are or else says there is an Incredible Opportunity from a business standpoint resented by people being locked out of Home Ownership. These companies seized on that opportunity, boz bought these homes, and will capitalize on often in black and brown communities. So yes 100 . If you look at the rent that they are charging the rent that they charge, they are banking on really high rent and fee revenue being generated through rent and fees because they owned these assets. Lets talk a minute about the wealth gap. It is important that we do all we can to try to close it. Lets move to you miss schuetz this gap, is what we are doing or seeing a car with these predatory purchases, and is that going to close the wealth gap . Thank you for the question. So, we know that homeownership is actually the single biggest contributor to the racial wealth gap. That lack and latino families have been asked alluded him being homeowners in prior generations they were not able to build up money to pass on to their kids and grandkids. It makes it harder for them to get into homeownership now. One thing that is important remember is that you build wealth Home Ownership over time. It is not the bio home and are suddenly wealthy it is that you pay down the mortgage and develop wealth over time. If i may, let me ask this question. If you cannot buy a home because the homes that firsttime homebuyers might acquire are being acquired by large corporations, and concentrated areas, does that help a firsttime homebuyer who might be a person of color . The difficulty of getting into at first hometime homebuyer into homeownership is not a factor of private equity, you have bidding wars were 20 people are bidding on the same house. If you even if you took out the private equity on that you still have 19 homebuyers that do not win that house. So we will ultimately not be able to get enough people into homeownership. I regret to tell you, my time has expired. I assure you that i would like nothing more to hear from you but my time has expired. And i will mr. Chair. A town member seeking recognition. For what purpose please . There are couple letters that i would like to introduce for the record. If the chair will allow it and i would like to point out for the chair and the rest of the folks on the hearing, ralph norman, our colleagues from South Carolina. Excuse me sir, your time forgiving your statements has left. If you would like to enter something into the record, the chair will entertain this, but not an additional statement. I was only welcoming ralph to the committee and your subcommittee. You may consider him welcome. I would like to mention in queue, i would like to mention two letters that would be received the first is from a National Rental home council regarding the question posed by the title in todays hearing which is where all the houses have gone . The letter says the answer is simple they were never built in the first place in it describes the drive between supply and demand and it drives up home prices. You entered additional. Excuse me, the chair is speakings, sir. Sorry. You may enter your info with out objection but we will do it without the additional commentary. Chair except the except the without we would like to thank our witnesses for our testimony today. Without objection, all members will have five days to submit additional written questions for witnesses to the chair which will be forwarded to the witnesses for their response. I asked that the witnesses please be responsive and please respond as quickly as