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