Senate committee on banking, housing, and urban order. Before we begin, i will probably embarrass her, but i will call her out, irene gray is working her last week as a stenographer in the United States senate. She has been here for 20 years and we thank her for quiet, effective, crucial work to preserve the hearings. Even when senator toomey and i dont say much of note, she still has to take it down. Just appreciate your good work for this country and your unsung hero as a unsung hero contracted civil servant. Thank you, thank you. This hearing is in a hybrid format. Four of our witnesses are joining us remotely before senator toomey and me. One or more members may attend through their offices. For millions of americans, the rent was due yesterday and for many the rent keeps going up and up and up. Two weeks ago we heard from witnesses about the soaring costs of housing and how it hurts families priced out of purchasing their first home and imperils the renters who are just one illness or job loss car repair away from eviction. As one of our witnesses documented in his book. This problem is squeezing people across the country, even working jobs that were supposed to be a ticket to the middleclass. Its not a new problem. For decades so Many Americans struggle to scrape together the rent each month with mold, rodents, broken appliances. 90 years ago we began investing in Affordable Housing so that everyone would have a safe and affordable lace to live. The funding that we have put into the effort never kept up with the needs of renters or even the basic maintenance of aging federally assisted housing and for the past decade half of renters have been paying more than one third of their incomes just to keep a roof over their heads and we know the challenges of renters are only getting worse. 3. 8 million homes short of what we need. Not a single state in the country has enough housing. For the lowest income renters, there are just 36 units of affordable and available for everyone hundred renters who need them. Meaning that renters cannot put their fate in the Housing Market, there is nowhere for them to go. This means that renters have to make do with what they have got, even if the house has dangerous lead paint in the walls or the landlord wont fix the heat or their bathtub has been clogged for weeks. Housing so difficult to find, renters are forced to ask themselves if it is worth it to push for a repair from the same person who can put an eviction on the record and decide if they have a ace to sleep at night. The shortage of housing means that rent is going up for pretty much everyone, up 15 compared to a year ago nationally. Cities like austin, texas or senator menendez on the committee, newark, rent is up 25 and when rent rises, it makes everything in the life of a person more precarious. More and more families are one emergent away from losing their home. Renters see the pain, the missed trips, the car repairs they put off, the second job they have to take just to make ends meet. Wall Street Investors just see opportunity. They dont see the pain or they just dont care. Investors are purchasing singlefamily homes and renting them out at sky high rate. 28 sold this year went to investors. Think about that, investors too often from out of town who want to make it buck are buying more than a quarter of homes. Not bought by families who want to put down roots and dream of seeing their kids grow up in that neighborhood and go to the local school. The number is up from 16 just a couple of years ago. The biggest investors with the deepest pockets own more than 100 properties, double the share of the purchases. In cincinnati we have seen a Single Company based in Texas Purchasing 29 properties on one street in price hill. 29 properties in a single street and in that neighborhood now half of all homes are rentals and the city is left to chase down outofstate landlords who let these homes far apart that fall apart. Families need landlords in the community. Cities need landlords that want to take care of their buildings and help families stay in their homes. Big wall street firms are promising investors doubledigit yield by running doubledigit eviction rates, pricing out those who make a community home. Good landlords, renters, firsttime homebuyers alike. Not just singlefamily homes, but mobile Home Communities and apartment buildings. We see that across the country, anywhere it adds to their bottom line. Last week the subcommittee on the Coronavirus Crisis published a report showing that at the height of pandemic, four of these massive landlords, four, filed nearly 15,000 evictions. Four landlords, 15,000 evictions. When we cannot get the landlord to fix the heat, we often hear that its your individual problem. Its true, every eviction, every rent hike, every unlivable home is a personal ice is for an individual family but all of these crises have added up to a big National Problem that costs us all more in education costs when kids have to change schools every six months or so. Costs us in lost productivity when the workers who support our businesses and First Responders cannot find an affordable place to live and it costs us more in health care when people cannot store their medicine because they do not have a place to live. It isnt someone elses problem, it affects all of us. We need to Work Together to solve it. We have to expand the supply of safe and affordable rental apartments across the country and maintain the Affordable Housing we currently have so that we do not fall further behind on housing supply and help renters find and remain in homes that they can afford with financial and emergency assistance, supporting bipartisan prevention efforts like mediation through the bipartisan crisis act. I look forward to hearing from our Witnesses Today about how we can tackle the challenges facing renters and grow the good landlords that will benefit all of us. Senator toomey . Sen. Toomey thank you, mr. Chairman. Let me join the chairman in thanking irene gray for her years of service to the committee, the senate, and the country. We really do appreciate your good, solid, consistent hard work. Thank you. The fact is that across america every month americans are falling further and further behind because of the president s outofcontrol inflation. Paychecks are not keeping up with rising prices. After adjusting for inflation, wages have declined 5 since President Biden took office and the fact is that working americans are getting poorer every day and our democratic colleagues wasteful spending and growth killing regulation with excessively accommodative Monetary Policy are what caused fortyyear year high inflation and an economic contraction. What is the response that we hear from colleagues question are jamming through a reckless tax and spending bill that will make the situation worse. Hiking corporate taxes will slow Economic Growth and harm americans in the Manufacturing Sector and sending billions more will fuel inflation, the wasteful spending going towards corporate welfare for green energy and subsidies for the wealthy to purchase teslas with a handout before the elections for americans who purchase obamacare. Including spending on housing, thats the topic of todays hearing. Under the Biden Administration costs of housing has skyrocketed. Going up 18 in the last 12 months. Affordable housing is growing further and further out of reach for many. You wouldnt know that from reading the bill. The housing provision creates a slush fund for green subsidized housing. I guess the theory is that at a time of surging housing costs, the solution is to put solar panels on section eight housing. Government, especially this administration are often the problem, not the solution when it comes to housing. There are countless ways that needless government regulation drives up housing costs. Time permitting permitting processes that drive up the costs of new rental housing, overly burdensome reviews, tariffs on steel, lumber, and other Building Materials have the same effect. Rent control laws reduce the supply and quality of housing. Subsidies capitalizing entire house prices and rents. Loose underwriting standards drive the housing prices and rents still higher and then the gse responds by subsidizing investors in singlefamily rental housing further driving up prices and crowding out aspiring homeowners and more recently the democrats of this administration have taken the government year to the next level, dropping hundreds of billions of helicopter money to stimulate an already strong economy. 80 billion and that went to rental assistance, vouchers, and other subsidies inflaming demand. The president extended the illegal Eviction Moratorium that has deterred investment in new rental housing [coughing] excuse me and led to some renters not paying when they could afford it and predictably landlords are requiring larger security deposits and today the democrats propose more of the same and we will likely hear them a case for socalled tenant protections and argue for making the covid rental Assistance Program permanent, doubling down on failed rental housing policies. It will make housing more expensive. Today we will also hear from landlords about how Government Intervention makes it harder and more expensive to be a landlord leading to higher costs for renters. To improve Housing Affordability for all americans, renters or owners, we should pursue reforms that leverage the power of Free Enterprise to increase housing supply and make markets more edited. A healthy market needs not just price but service and product quality. To that end we should scale back the role of government and increase the role of private capital. Avoid the 10 patient to adopt these socalled 10th tenant protections with unintended consequences including increasing housing costs and we should raise out demandside subsidies that drive housing costs higher and end the failed gse model that fosters excessive risktaking and contributes to a boom bust housing cycle and localities should revisit their obstacles to Housing Construction and we should prohibit the gse and other federal programs from subsidizing rental units in jurisdictions that impose rent controls and we should get them out of the business of subsidizing singlefamily home investors. And we should keep them focused on their affordability mission by keeping them out of social policy. Meanwhile, i hope the administration will finally engage on housing reform. Treasury has still not met obligations to deliver a housing reform plan to congress that is 10 months overdue. [coughing] instead of pushing a reckless tax and spending bill the administration should look to opportunities for Bipartisan Legislation that relies on Free Enterprise and not government to make housing more affordable for more americans, whether they own or rent. Thank you. Sen. Brown i will now introduce the five witnesses. Professor Matthew Desmond, author of the book evicted, welcome. Laura brunner is the president and chief executive officer of the port of Greater CincinnatiDevelopment Authority and prior to joining the port she spent 15 years in accounting. Miss morey is a small Property Owner in seaford, new york. Joining us i think from her home or office in new york. Mr. Darian dunn is the managing partner at atlantica properties. Asset management companies. He is also a civil engineer, i understand. And miss diane is the president of the National Income flow Housing Coalition for Government Affairs and Energy Partners serving as a director of Public Housing management at hud in washington and she is almost a regular in this committee. Welcome. Professor desmond, if you would begin . Thank you. Prof. Desmond chairman brown, Ranking Member to me, thank you for the opportunity to testify before you this morning. My name is Matthew Desmond and im a professor at Princeton University where i direct the eviction lab, Research Group dedicated to understanding the causes of housing instability had i come before you today greatly concerned about billions of American Families brutalized by the countrys painful and utterly predicable rental housing isys. Since 1985, crisis. Since 1985, rental income has exceeded gain by hundred 25 and most families today spend half of their housing costs income on housing costs with one in four on shelter costs alone. Last year rents increased faster than they ever have on record. Nationwide, median asking rent increased by 17 in a single year. Some cities saw double that. Rents have live risen 29 in cincinnati, 22 in dallas. This is the inflation crisis on steroids. When the price of gas goes up, we can adjust, car went to work. When the price of wood goes up, we just, eating out. When the costs of housing shoots up, what can families do . They are often already living in the cheapest apartments available. They cannot double up with relatives because of local occupancy laws. They cannot if they want to keep their jobs, family ties, and schools. All they can cut do is cut back on other necessities like educational enrichment, health care, and food. As a direct result, the United States has a much higher eviction rate than other industrialized democracies. Increasing by 21 since 2000, rising to 3. 6 million cases filed in an average year and eviction is incredibly harmful to families and communities, leading to job loss, homelessness. Depression, suicide. Babies born to mothers who experience eviction but pregnant are experiencing adverse birth outcomes that are shown to have lifelong multigenerational effects. The evidence is in and clear, eviction is not just a conviction of poverty, its a cause condition of poverty, it is the cause of poverty. Property owners expenses have gone up and to maintain steady income they have to pass on housing costs to tenants in the form of how higher rents in theory but this is not with the data shows to be happening. Rather owners of multifamily properties in recent years have seen revenue increase at a faster rate than expenses. This has been especially true for Properties Located in low income neighborhoods. The owners of these Properties Sell rental revenue increase by 47 between 2012 and 2018. Their expenses during that time increased by only 14 . The private Housing Market and the federal government had failed to provide American Families with enough Affordable Housing and as a result, Property Owners have seized the opportunity to rents knowing that they would have captive tenants. We need to increase the supply of Affordable Housing can families need release now. Not 10 years from now when the doors open, but today. Congress could provide muchneeded relief by deepening investments in housing vouchers. I urge the committee to pass the eviction crisis act in family stability opportunity voucher act, bipartisan sponsored bills to stem the bleeding. You can extend the emergency rental assistance which does so much to prevent an eviction spike. When we boost incomes for working families through Government Programs and Economic Growth do not address rent, income gains are often recouped by the Housing Market. Studies show that when states raise minimum wages, landlords responded by raising the rent. He implication is that investing in Affordable Housing is not only necessary to stabilize communities and emilys, it is successful because of as it is necessary because of all of the other economic factors pending on it. Now is not the time for inaction , indecisiveness, or the same old tired debates about spending. We could pay for these investments in dozens of ways. Simply collecting unpaid federal income tax on the top 1 of households would bring in 175 billion a year. What we can no longer do is look renting families in the face, families now living in cars, garages, attics, storage sheds in the richest country on the planet and tell those families you know, we would love to help you, but we just cant afford it , because that is alive. A lie. Sen. Brown thank you, professor. Miss bronner . Ms. Brunner chairman brown, members of the committee, thank you for the opportunity to testify today on how renters and communities are impacted by the Housing Market and how Institutional Investors are changing the landscape of singlefamily housing in Hamilton County. I the president and see oh of the Cincinnati Development authority. Ceo of the port of Cincinnati Development authorit