[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]





 
                    THE RENT IS STILL DUE: AMERICA'S

                       RENTERS, COVID-19, AND AN

                     UNPRECEDENTED EVICTION CRISIS

=======================================================================

                            VIRTUAL HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON HOUSING,
                         COMMUNITY DEVELOPMENT,
                             AND INSURANCE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 10, 2020

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-94
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                




                           ______                       


             U.S. GOVERNMENT PUBLISHING OFFICE 
 42-894 PDF             WASHINGTON : 2021 
                           
                           

                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             ANN WAGNER, Missouri
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            SCOTT TIPTON, Colorado
BILL FOSTER, Illinois                ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio                   FRENCH HILL, Arkansas
DENNY HECK, Washington               TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
RASHIDA TLAIB, Michigan              DAVID KUSTOFF, Tennessee
KATIE PORTER, California             TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa                     ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois                JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts       BRYAN STEIL, Wisconsin
BEN McADAMS, Utah                    LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia            WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts      VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
                  Subcommittee on Housing, Community 
                       Development, and Insurance

                   WM. LACY CLAY, Missouri, Chairman

NYDIA M. VELAZQUEZ, New York         STEVE STIVERS, Ohio, Ranking 
EMANUEL CLEAVER, Missouri                Member
BRAD SHERMAN, California             BILL POSEY, Florida
JOYCE BEATTY, Ohio                   BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
VICENTE GONZALEZ, Texas              SCOTT TIPTON, Colorado
CAROLYN B. MALONEY, New York         LEE M. ZELDIN, New York
DENNY HECK, Washington               DAVID KUSTOFF, Tennessee
JUAN VARGAS, California              JOHN ROSE, Tennessee
AL LAWSON, Florida                   BRYAN STEIL, Wisconsin
RASHIDA TLAIB, Michigan              LANCE GOODEN, Texas, Vice Ranking 
CINDY AXNE, Iowa                         Member
MICHAEL SAN NICOLAS, Guam

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 10, 2020................................................     1
Appendix:
    June 10, 2020................................................    37

                               WITNESSES
                        Wednesday, June 10, 2020

Hill, Cashauna, Executive Director, Louisiana Fair Housing Action 
  Center (LaFHAC)................................................     4
Kingsella, Mike, Executive Director, Up for Growth Action........     6
Oliva, Ann, Visiting Senior Fellow, Center on Budget and Policy 
  Priorities.....................................................     8
Schuetz, Jenny, Fellow, Brookings Institution....................    10

                                APPENDIX

Prepared statements:
    Hill, Cashauna...............................................    38
    Kingsella, Mike..............................................    45
    Oliva, Ann...................................................    59
    Schuetz, Jenny...............................................    71

              Additional Material Submitted for the Record

Clay, Hon. Wm. Lacy:
    Written statement of the Credit Union National Association...    77
    Written statement of the National Association of REALTORS....    79
    Written statement of the Private Equity Stakeholder Project..    81
    Real Estate Coalition Letter.................................   124
    Written statement of the Real Estate Roundtable..............   128
Heck, Hon. Denny:
    Letter from various undersigned organizations................   137
Stivers, Hon. Steve:
    Written statement of the International Council of Shopping 
      Centers....................................................   154
    Written statement of the National Multifamily Housing Council 
      and the National Apartment Association.....................   156


                    THE RENT IS STILL DUE: AMERICA'S

                       RENTERS, COVID-19, AND AN

                     UNPRECEDENTED EVICTION CRISIS

                              ----------                              


                        Wednesday, June 10, 2020

             U.S. House of Representatives,
                           Subcommittee on Housing,
                             Community Development,
                                     and Insurance,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 12:01 p.m., 
via Webex, Hon. William Lacy Clay, Jr., [chairman of the 
subcommittee] presiding.
    Members present: Representatives Clay, Velazquez, Cleaver, 
Beatty, Green, Heck, Vargas, Larson, Tlaib, Axne, San Nicolas; 
Stivers, Posey, Huizenga, Tipton, Zelden, Kustoff, Rose, and 
Steil.
    Ex officio present: Representative Waters.
    Chairman Clay. The Subcommittee on Housing, Community 
Development, and Insurance will come to order. Without 
objection, the Chair is authorized to declare a recess of the 
subcommittee at any time.
    Also, without objection, members of the full Financial 
Services Committee who are not members of this subcommittee are 
authorized to participate in today's hearing.
    Members are reminded to keep their video function on at all 
times, even when they are not being recognized by the Chair. 
Members are also reminded that they are responsible for muting 
and unmuting themselves, and to mute themselves after they are 
finished speaking.
    Consistent with regulations accompanying H. Res 965, staff 
will fully mute Members and witnesses as appropriate when not 
recognized to avoid inadvertent background noise, like I am 
hearing now.
    Members are also reminded that all House rules relating to 
order and decorum apply to this remote hearing.
    Today's hearing is entitled, ``The Rent is Still Due: 
America's Renters, COVID-19, and an Unprecedented Eviction 
Crisis.'' I now recognize myself for 5 minutes for an opening 
statement.
    I want to welcome all of you to our first virtual hearing 
of this subcommittee, which deals with enduring this very 
challenging and difficult time for renters, homeowners, 
landlords, and for our housing market as a whole.
    At today's hearing, we will focus our attention on how the 
COVID-19 pandemic is impacting our rental market. The harmful 
effects of this pandemic on physical and mental health, 
financial stability, and overall way of being can be even more 
devastating when you are unable to pay your rent. When everyone 
is being told to stay inside to avoid getting sick, now is one 
of the worst times for families to lose their homes to 
eviction.
    Families who experience evictions are likely to experience 
greater poverty and a host of other negative outcomes that make 
it harder for their family to get back on their feet, 
especially during a time when our country faces a growing 
economic crisis. In the worst cases, these families may fall 
into homelessness.
    But let's be clear, many low-income families were already 
struggling to pay their housing costs pre-pandemic. As Ms. 
Oliva points out in her testimony, even before the pandemic, 23 
million people and 10.7 million low-income households paid more 
than half of their income in rent, and rents across the country 
had become increasingly unaffordable.
    Many of these people work in jobs that do not allow them 
the flexibility to save and stash reserves away for a rainy day 
because, as many can attest, it always seems to be raining down 
on them, and COVID-19 has become an unrelenting storm.
    We also know that the economic effects of the COVID-19 
pandemic are being disproportionately felt by people of color. 
In the month of April, Latinx unemployment was over 18 percent, 
and Black unemployment was over 16 percent, while the Census 
Bureau reports that Latinx and Black households are struggling 
to pay rent at higher rates than white households.
    Congress acted quickly in March to pass the Coronavirus 
Aid, Relief, and Economic Security (CARES) Act, which included 
language from a bill that I introduced, which provided mortgage 
forbearance, including for multi-family and single-family 
rental property owners, but there is much more that needs to be 
done.
    The Urban Institute estimates that as this pandemic goes 
on, up to 17.6 million renter households could need rental 
assistance, at a cost of $96 billion for 6 months, to be able 
to remain in their homes.
    To further respond to the crisis, the House passed the 
Health and Economic Recovery Omnibus Emergency Solutions 
(HEROES) Act, which includes $100 billion for emergency rental 
assistance, increased protection against evictions, and other 
housing resources to support HUD and USDA programs.
    The House has acted and now the Senate must get to work. I 
call on my Senate colleagues to pass this bill to bring much-
needed relief to families across the country, including 
struggling renters. Thank you, and I look forward to hearing 
the testimony of our witnesses today.
    I now recognize the ranking member of the subcommittee, Mr. 
Stivers, for 4 minutes for an opening statement.
    Mr. Stivers. Thank you, Chairman Clay. I appreciate you 
holding this hearing. I apologize for the video, but I am in 
the rural part of my district on a cell phone today. But I am 
still able to be in on the hearing, and I appreciate that.
    Obviously, today's hearing will evaluate the impact of 
COVID-19 on America's housing security, which is an extremely 
important topic and it is important to focus on it. Time and 
time again, our subcommittee has highlighted the link between 
housing security and outcomes of health, education, and career 
prospects.
    So at a time of such economic volatility, it is right to 
focus on this topic. And as I mentioned during a recent virtual 
roundtable, Congress has taken extraordinary steps to deal with 
the unprecedented public health crisis and its impact on our 
economy.
    The $2 trillion spending in the CARES Act, combined with 
trillions from the Federal Reserve, would have been unthinkable 
sums at the start of 2020, but there has been bipartisan 
consensus on those items because of the severity of the 
problem.
    The CARES Act and its implementation have not been perfect, 
but with respect to housing security, it is clear that the 
law's forbearance provisions, combined with extended 
unemployment insurance programs, have helped sustain 
individuals through the last few very difficult months.
    Now, all 50 States have begun to reopen their economies, 
and the Bureau of Labor Statistics reported that in May, the 
economy added 2.5 million jobs, but unemployment remains 
unacceptably high. So, we find ourselves in a rapidly evolving 
situation, and Congress and the Administration must evolve our 
response to meet those demands.
    I am keeping an open mind about what that response should 
look like, but it is clear we should focus on the formula that 
worked in the CARES Act. Namely, we need to: first, focus on 
real problems that are demonstrated by the best and most 
appropriate data; second, it should not be previous policy 
goals by Republicans or Democrats that pre-date the pandemic, 
but should be a response; third, it should truly help the 
housing and rental markets, not harm them through unintended 
consequences; and fourth, it should be bipartisan.
    I know that the Democrat's memo points to an alarming 
statistic from apartmentlist.com on payments of rents from 
renters, but the National Multifamily Housing Council data 
suggests significantly higher payment rates.
    And so, I think we need to keep all that in mind and try to 
sort out the facts. New forbearance requests have slowed. That 
is good news, and I am grateful to hear from our witnesses 
today, and I look forward to working together on underlying 
problems.
    Finally, I have enjoyed the discussions with Chairman Clay 
on the need to address racial disparities in home ownership. I 
think that is something we should be looking at, which is in 
the jurisdiction of our subcommittee.
    But there have been items that are outside the jurisdiction 
of our committee, mostly in the Judiciary Committee, that we 
can't turn a blind eye to, including the injustice that 
occurred in Minneapolis. George Floyd should still be alive 
today, and so should countless other African Americans, and I 
think we need to work together, regardless of the fact that 
this is mostly in the jurisdiction of the Judiciary Committee, 
to root out injustice wherever we find it.
    Thank you. I look forward to working with Republicans and 
Democrats on these important issues, and I look forward to 
hearing from our witnesses today.
    Thanks for holding this hearing, Mr. Chairman.
    Chairman Clay. Thank you, Mr. Stivers. And thank you for 
your encouraging words. I look forward to working with you also 
to tackle these issues as they come before this subcommittee, 
and before Congress.
    At this time, I recognize the Chair of the full Financial 
Services Committee, the gentlewoman from California, Chairwoman 
Waters, for 1 minute,
    Chairwoman Waters. Good afternoon, and thank you, Chairman 
Clay. We were already dealing with the rental crisis long 
before the pandemic, and this pandemic has only made matters 
worse, with Black and Latinx renters bearing the brunt of the 
pain. According to the Turner Center, Black and Latinx renters 
are overrepresented among the rental population expected to be 
financially impacted by COVID-19, making up 28 percent, and 18 
percent, respectively, even though they only comprise 18 
percent, and 12 percent, respectively, of the U.S. population.
    While the CARES Act included an eviction moratorium that 
covers some renters, it provided no rental assistance for 
people struggling to pay their rent during the pandemic. So, I 
am pleased that the HEROES Act includes a proposal by Mr. Heck 
and myself to provide $100 billion for emergency rental 
assistance.
    And I am looking forward to hearing from our witnesses 
today about the dire need for rent relief and the importance of 
keeping everyone stably housed during and after this crisis. 
Thank you so very much.
    And I yield back.
    Chairman Clay. Thank you, Madam Chairwoman, for your 
steadfast leadership on the issue in this area on housing and 
how we make people secure in their housing, and I appreciate 
the working relationship that we have.
    Today, we welcome the testimony of Cashauna Hill, executive 
director, Louisiana Fair Housing Action Center; Mike Kingsella, 
executive director, Up for Growth; Ann Oliva, visiting senior 
fellow, Center on Budget and Policy Priorities; and Jenny 
Schuetz, fellow, the Brookings Institution.
    Witnesses are reminded that your oral testimony will be 
limited to 5 minutes. A chime will go off at the end of your 
time, and I ask that you respect the Members' and other 
witnesses' time by wrapping up your testimony.
    And without objection, your written statements will be made 
a part of the record.
    And now, Ms. Hill, you are recognized for 5 minutes to give 
an oral presentation of your testimony.

STATEMENT OF CASHAUNA HILL, EXECUTIVE DIRECTOR, LOUISIANA FAIR 
                 HOUSING ACTION CENTER (LaFHAC)

    Ms. Hill. Thank you, and good afternoon to you all.
    My name is Cashauna Hill and I serve as executive director 
of the Louisiana Fair Housing Action Center (LaFHAC). I want to 
thank Committee Chair Waters and Subcommittee Chair Clay for 
the opportunity to address the subcommittee today. I would also 
like to thank Committee Ranking Member McHenry, Subcommittee 
Ranking Member Stivers, and all of the members of the 
subcommittee for welcoming all of the witnesses here.
    The Louisiana Fair Housing Action Center was established in 
1995 to eradicate housing discrimination and segregation. We 
are based in New Orleans and serve all of Louisiana as the only 
full-service fair housing advocacy group in the State. Our work 
includes work across four programmatic areas: education and 
outreach services; foreclosure prevention counseling; free 
legal representation to people who have experienced housing 
discrimination; and policy advocacy at the State and local 
levels.
    Fifty-two years after the passage of the Federal Fair 
Housing Act, we know that housing discrimination in the United 
States remains a divisive force that perpetuates poverty and 
segregation and limits access to opportunity. The work of the 
Louisiana Fair Housing Action Center is dedicated to 
eradicating this scourge and to addressing the legacy of 
discriminatory housing policies that continues to feed unjust 
outcomes across the country.
    In Louisiana, we, unfortunately, have a lot of experience 
recovering from disasters. Whether from Hurricanes Katrina and 
Rita that devastated South Louisiana in 2005, the subsequent 
levee breaches, or the great flood of 2016 in the Baton Rouge 
area, we know that in all of their destruction and tragedy, 
disasters are often an opportunity to imagine a different 
future.
    It is imperative that we take the chance now to deploy the 
resources needed to right past wrongs that made so many members 
of our community vulnerable to COVID-19 in the first place.
    I want to illustrate the challenges that we currently face 
through the story of Danielle Seymour. Ms. Seymour was working 
three jobs when the pandemic hit in March. Her jobs at a local 
basketball arena, waiting tables on Bourbon Street, and helping 
to run a Tulane University cafeteria all disappeared within the 
same week as New Orleanians sheltered in place to slow the 
coronavirus.
    At the time, Ms. Seymour was staying in an extended stay 
hotel as she waited for an inspection on a rental home. Despite 
a local eviction moratorium, the proprietor hired a security 
guard to cut off door locks and barge into rooms with a gun 
drawn. It was likely only the swift work of local legal aid 
attorneys that kept the situation from deteriorating further.
    I wish Ms. Seymour's story was an outlier, but nearly half 
of all renters in Louisiana were paying more than they could 
afford on rent and utilities before COVID-19. As is true across 
the country, the effects of COVID-19 have fallen 
disproportionately on Louisiana's low-income and Black 
households. In New Orleans, many of the Census Tracts with the 
highest COVID-19 per capita rates correlate with Black-majority 
neighborhoods that have seen also the highest eviction rates.
    Without additional Federal assistance, we expect the 
reopening of eviction courts throughout the State to only 
deepen this disparity. Short of rent and mortgage cancellation, 
Louisiana renters and landlords desperately need a massive 
rental assistance program like the $100 billion set-aside for 
rental assistance in the HEROES Act.
    Another crucial element of the HEROES Act is the extension 
of the CARES Act eviction moratorium to cover all renters. The 
CARES Act moratorium was an important step in the right 
direction, but has proven incredibly difficult to implement at 
the local level, and it leaves far too many renters out. 
Because the last four digits of the landlord's Social Security 
number are often required to look up a mortgage, most renters 
in Louisiana won't have any way to determine whether they are 
covered under the CARES Act, and it has already proven very 
difficult to plan for enforcement of the Act and to educate the 
public about it.
    If courts decide to do the right thing and not require 
tenants to provide information that those tenants will likely 
not have access to, we are left with the courts themselves 
doing research on each property where an eviction is filed to 
ensure that the property is not federally-subsidized or subject 
to a federally-backed mortgage.
    In Louisiana, however, most jurisdictions handle evictions 
in Justice of the Peace Courts, which are woefully unprepared 
to handle this level of engagement. Justices of the Peace are 
often non-lawyers. They have few, if any, staff, and in some 
communities, it is common for court to be held in the Justice 
of the Peace's garage, living room, or kitchen.
    I return now to a point I opened with, that if we do not 
address racial and other disparities early in our disaster 
recovery efforts, we are destined to amplify them. Black home 
ownership in New Orleans, previously on the rise, has declined 
since Katrina. Segregation in the City has increased since the 
storm, and African Americans have been displaced from 
communities on high ground that are less susceptible to 
flooding, to communities that are farther away from jobs and 
social support systems.
    As we continue a long-overdue national conversation about 
racism in America, I offer that we sit at the similar decision 
point in history as we did just before the Fair Housing Act was 
passed in 1968. Fair housing advocates across the country 
understand that providing a just path forward is necessary. I 
thank you for the opportunity to testify--
    [The prepared statement of Ms. Hill can be found on page 38 
of the appendix.]
    Chairman Clay. Thank you for your testimony.
    I now recognize Mr. Kingsella for 5 minutes.

STATEMENT OF MIKE KINGSELLA, EXECUTIVE DIRECTOR, UP FOR GROWTH 
                             ACTION

    Mr. Kingsella. Chairman Clay, Ranking Member Stivers, and 
esteemed members of the subcommittee, thank you for inviting me 
to provide testimony at this important hearing.
    By way of background, Up for Growth Action is a national 
legislative advocacy campaign focused on eliminating structural 
barriers to housing.
    The COVID-19 crisis has rapidly exposed the fragility of 
critical systems in infrastructure in our country, and the 
housing ecosystem is no exception. Failure to address the 
looming rent crisis will have dire consequences for millions of 
Americans, and for the housing ecosystem that underpins our 
economy, which was already under strain from a severe shortage 
of homes.
    We believe emergency rental assistance is the most 
important and urgent action Congress can take. It is essential 
to ensuring housing stability for the millions of Americans 
impacted by COVID-19 and essential for the housing providers 
who rely on these payments. We commend the committee for its 
work thus far, in particular, in ensuring that emergency rental 
assistance is included in the House-passed HEROES Act.
    I hope my testimony will provide perspective as to why 
these measures and others are needed now more than ever. To 
fully understand the rent-associated challenges on the 
immediate horizon, we need to understand the severity of the 
existing housing crisis. The numbers are grim. The country is 
at least 7.3 million homes short of where we need to be, with 
deficits in every region, and the need spans all demographics 
and geographies.
    Nearly half of American renter households are cost-
burdened, spending 30 percent or more of their income on rent. 
Extremely-low-income renters fare worse, with 71 percent of 
those folks making below 30 percent of AMI paying more than 
half of their gross income on rent.
    IAfrican-American and Hispanic renter households are much 
more likely to be cost-burdened than their white neighbors. 
Decades of flawed housing policy led to more land being used 
for less housing, and the people in those homes having to 
travel longer distances to find gainful employment. Spatial 
mismatch in housing is a $1.6 trillion drag on the economy, 
causing the Federal Government to forego hundreds of billions 
of dollars in tax revenue.
    And COVID-19 has further destabilized an already-struggling 
housing market. Fifty million people are living in renter 
households where at least one person works in an industry most 
likely to be affected by COVID-19-related layoffs, and many of 
these households were already cost-burdened and cannot absorb 
any sudden loss of income.
    It is vital that these families continue to stay in their 
homes. Rent is the cornerstone of the housing ecosystem, 
buttressing property investors both large and small. The 
housing sector contributes upwards of 18 percent of U.S. GDP. 
Seventeen million jobs are tied to the rental housing industry. 
Stable and durable rent payments sustain the financial system, 
and if this system is interrupted, it will virtually eliminate 
the capital necessary for more housing to be built. State and 
local coffers are nearing their breaking point and cannot 
sustain a drop in tax revenue resulting from a drop in rent 
payments.
    Emergency rental assistance is vital for millions of 
Americans struggling to pay rent. While expanded unemployment 
insurance benefits, one-time stimulus payments, and limited 
rent moratoria were necessary first steps, they are, by design, 
not equipped to address the longer-term problem.
    And that is why Up for Growth Action supports the Emergency 
Rental Assistance and Rental Market Stabilization Act 
introduced by Chairwoman Waters and Representative Heck. And we 
were pleased that this legislation and it's $100 billion 
appropriation was included in the HEROES Act. The bill broadly 
meets the principles set forth by a broad coalition of 
advocates, industry, and consumer groups, and the focus of 
today's hearing is on the immediate rent crisis. I urge the 
subcommittee to use this opportunity to advance solutions 
needed to solve the underlying housing crisis, driven in large 
part by a severe shortage of homes.
    I outline several proposals in my written testimony, 
including Chairwoman Waters' Housing is Infrastructure Act, and 
Representative Heck's bipartisan, Yes in My Backyard Act, both 
of which have been reported favorably by this committee.
    COVID-19 exposes weaknesses across every system, and I hope 
policymakers will act now so that we can create a more just and 
equitable housing ecosystem.
    Thank you for hosting this important hearing and for your 
work on housing affordability. I look forward to answering your 
questions.
    [The prepared statement of Mr. Kingsella can be found on 
page 45 of the appendix.]
    Chairman Clay. Thank you, Mr. Kingsella.
    Ms. Oliva, you are now recognized for 5 minutes.

   STATEMENT OF ANN OLIVA, VISITING SENIOR FELLOW, CENTER ON 
                  BUDGET AND POLICY PRIORITIES

    Ms. Oliva. Chairwoman Waters, Chairman Clay, Ranking Member 
Stivers, and members of the subcommittee, my name is Ann Oliva. 
I am a visiting senior fellow at the Center on Budget and 
Policy Priorities. Thank you for the opportunity to testify 
today on this important topic.
    I want to begin by acknowledging the events of recent weeks 
and the systemic racism that led to the deaths of George Floyd, 
Breonna Taylor, Ahmaud Arbery, and many other Black Americans, 
because it relates to the topic that we are discussing today.
    As a nation, we must pursue racial justice inequity, and 
housing justice must be part of the discussion because systemic 
racism also results in homelessness, housing instability, and 
the disproportionate impact of COVID-19 on communities of 
color.
    The data is clear. Black people are dying of COVID-19 at 
2.4 times the rate of white people. Unemployment in May was 
still very high overall, but fell among white workers and kept 
rising among Black and Latinx workers. Black people account for 
40 percent of those experiencing homelessness, but only 13 
percent of the overall population, and Latinx people account 
for 22 percent of those experiencing homelessness, but only 18 
percent of the population.
    If our response to the current health and economic crisis 
follows the same policy script of the past, we will do too 
little to stop a spike in evictions and homelessness, and 
Black, Latinx, and American Indian/Alaska Native communities 
will suffer the most.
    First, let's talk about the public health impact. COVID-19 
shows that housing is a form of healthcare. People in doubled-
up or congregate situations, people released from jail without 
a place to go, and people living on the street cannot socially 
distance or follow other public health guidance. Many of them 
are older or have disabilities or underlying health conditions 
that make them more susceptible to getting sick.
    From a public health perspective, emergency rental 
assistance will be key in helping people in particularly 
vulnerable situations get into safe housing.
    Now, let's talk about the economic impact. Even before the 
pandemic, too many households were paying too much of their 
income in rent, making it harder for them to bounce back after 
a job loss or a cut in income, and experts expect that the 
economic downturn will haunt us for some time. The 
Congressional Budget Office (CBO) estimates that unemployment 
will be 8.6 percent at the end of 2021, which is far more than 
double the pre-crisis level, and history shows us that the 
labor market can remain weak far longer for Black workers than 
white workers, so, many Black households will struggle longer 
with low or no earnings.
    If additional rental assistance isn't made available, 
communities across the country will struggle to address the 
impact of COVID-19. The heroic efforts to safely shelter 
thousands of vulnerable people at risk of COVID-19 will be 
squandered if people wind up back on the street because they 
can't get rental assistance to transition to more permanent 
solutions.
    Large numbers of unsheltered people who want to come inside 
will continue to be criminalized and underserved. If growing 
numbers of households can't pay rent, we might see a wave of 
evictions once the moratoriums on evictions end. And some 
households will pay rent, but stop paying other bills like 
utilities, which will put them at high risk of losing their 
housing in the future.
    These indicators of what might come highlight an important 
point. COVID-19 has created a perfect storm of problems that 
will weaken communities and widen disparities with long-lasting 
effects unless flexible rental assistance is available.
    The HEROES Act includes short-, medium-, and longer-term 
rental assistance options that communities need to form a 
comprehensive COVID-19 response to a variety of demands, and 
that benefit both households and landlords who own rental 
stock.
    In 2009, I led the design and implementation of the 
Homelessness Prevention and Rapid Re-Housing Program (HPRP) 
that served over 1.3 million people during the Great Recession, 
and is the closest model we have to what we need now.
    Given what we have learned since HPRP's implementation, a 
new emergency rental assistance program should incorporate 
several key elements. Communities must use a racial justice and 
equity approach in their programs to end homelessness for as 
many people as possible. Communities should focus on 
homelessness prevention and remove barriers that prevent 
historically marginalized populations and other people from 
accessing these funds. They should work with nontraditional 
partners that can reach into highly affected neighborhoods and 
areas, and recipients should work closely with landlords in 
implementing their programs.
    HPRP showed us that funding for emergency purposes can have 
both immediate benefits in addressing the crisis and long-term 
benefits by leveraging funding and innovation to achieve 
systemic change.
    Thank you, again, for the opportunity to testify. I am 
happy to answer any questions.
    [The prepared statement of Ms. Oliva can be found on page 
59 of the appendix.]
    Chairman Clay. Thank you so much for your testimony, Ms. 
Oliva.
    And Ms. Schuetz is now recognized for 5 minutes.

   STATEMENT OF JENNY SCHUETZ, FELLOW, BROOKINGS INSTITUTION

    Ms. Schuetz. Good afternoon, Chairwoman Waters, Chairman 
Clay, Ranking Member Stivers, and members of the subcommittee. 
Thank you for the opportunity to testify today. It is an honor 
to be here virtually before you. I am grateful for your 
continued leadership and attention to the critical issue of 
housing insecurity.
    My comments today will focus on the broader context of the 
current rental housing crisis, and policy tools available to 
Congress. It is vital to understand that housing insecurity was 
a widespread problem among low-income renters well before the 
COVID-19 pandemic. Even before the current crisis, more than 10 
million households spent over half of their income on rent.
    When families devote too much of their budget to housing, 
they may not be able to pay for food, healthcare, or other 
necessities. Any loss of income will leave them unable to pay 
rent, increasing the risk of displacement. Low-income Black and 
Latinx workers have been hit particularly hard by the current 
recession. Households earning less than $40,000 per year have 
experienced higher rates of job loss. Black and Latinx workers 
are more likely to hold essential workforce jobs that cannot be 
carried out remotely.
    Further, the precarious situation of low-income renters 
today reflects past policy choices by Federal, State, and local 
governments. Federal rental assistance is not an entitlement, 
unlike food stamps or Medicaid. Roughly one in four eligible 
renters receives any Federal housing subsidy.
    Overly strict State and local regulations, such as zoning 
bans on apartments, contribute to the high cost and limited 
availability of rental housing. Compared to its role in 
overseeing mortgage markets, the Federal Government plays a 
relatively small role in regulating rental housing.
    State Governments set most of the parameters for landlord/
tenant laws, leading to wide variations across States in renter 
protections. The currentpatch work of temporary eviction 
moratoriums is a predictable outcome of rental market 
regulations adopted at the State and local level.
    Additionally, it is important to underscore that temporary 
eviction moratoriums are not a long-term solution to housing 
insecurity. Allowing renters to suspend rent payments for a few 
months can relieve financial pressure in the short-term, 
however, families who cannot afford one month of rent now will 
face even greater difficulty paying several months of overdue 
rent when the moratorium ends.
    Halting rent payments can have harmful ripple effects 
throughout local economies. Landlords rely on rent checks to 
pay their mortgages, insurance, utilities, and property taxes 
to local governments. Rent checks pay the wages of other 
workers, such as maintenance and housekeeping staff. 
Interrupting cash flows will inflict the most harm on small-
scale, non-professional property owners. Many of these 
landlords operate on thin margins, so the delay or loss of rent 
payments may force them to sell their properties.
    Congress can address renters' housing stability in the 
short run through three channels. First and most importantly, 
renters with lost income due to the pandemic need direct 
financial assistance. The most recent jobs reports suggests 
that the economic recovery may be uneven. Workers in heavily 
affected industries or geographic areas may require ongoing 
support even as the overall labor market improves.
    Second, local governments will have to process an unusually 
high volume of evictions once temporary moratoria end. 
Additional resources would allow them to manage these cases 
more equitably.
    Third, targeted grants or low-interest loans to property 
owners would help preserve the physical condition and financial 
viability of existing affordable housing.
    These three channels can help renters and property owners 
survive the immediate crisis. Reducing long-term housing 
insecurity among low-income renters will require either 
increased funding or restructuring existing housing subsidy 
programs.
    The Federal Government should also work with State and 
local governments to reform land use regulations that make it 
difficult and expensive to build rental housing.
    Thank you for the opportunity to testify virtually today, 
and for your continued leadership on this important issue. I 
look forward to answering your questions.
    [The prepared statement of Ms. Schuetz can be found on page 
71 of the appendix.]
    Chairman Clay. Thank you so much, Ms. Schuetz, and all of 
the witnesses for your testimony. I now recognize myself for 
questions.
    I will start with Ms. Hill. Many renters who have lost 
income due to the COVID-19 crisis have turned to credit cards 
to pay for their rent. Even among renters who have made their 
rent payments on time, there has been a concerning trend of 
being increasingly reliant on credit cards to do so.
    Zego, a digital rent payment platform, reported a 30-
percent increase in tenants using credit cards to pay rent in 
April compared to the month prior. While paying rent with a 
credit card may help renters avoid eviction in the short-term, 
it could lead to them facing high interest rates and deeper 
debt that could impact their credit in the long-term.
    Research has shown that people of color are more likely to 
struggle with credit invisibility and lower credit scores. What 
other adverse financial effects might tenants face if they 
resort to paying for their rent with credit cards, and can you 
speak to the additional interest and associated costs renters 
might incur while doing so?
    Ms. Hill. Yes. Thank you for that question. In Louisiana, 
we deal with a very large population of our community that is 
significantly underbanked. Oftentimes, folks may not have 
access to traditional lines of credit or to a bank account, and 
all of these issues are further exacerbating the impact of 
COVID-19 on their ability to pay rent.
    We are working in communities with many people who have 
lost jobs and income because they stayed home--as we were all 
directed to do--in order to protect themselves and everyone 
else. So, we do have some concerns about this scenario that you 
have raised. When that option is available for people, we know 
that oftentimes for people who are very-low-income or for our 
African-American and Latinx community members, they are 
subjected to some of these predatory interest rates when it 
comes to credit cards or credit in order to pay rent.
    The concern that we have is really that these effects would 
snowball, that they would use these alternative methods to pay 
rent and then that high-interest vehicle just becomes a vehicle 
to incur more debt. At that point, people are then more likely 
to lose their homes. We actually, through our foreclosure 
prevention work, work with homeowners who are having difficulty 
paying their mortgages.
    And I would say that the number-one threat that we see 
amongst those folks who come to us for those foreclosure 
prevention counseling services is some sort of high-interest 
debt that they took on in order to help them, in the short-
term, make those mortgage payments, and then what we know is 
that those payments lead to the debt spiraling out of control.
    So, there is a very real risk of people being forced into 
homelessness because they are having to find alternative 
methods to cover their rent costs.
    Chairman Clay. It just sounds like a spiraling effect of 
getting deeper and deeper into debt. Thank you for that.
    Let me go to Ms. Oliva. My hometown of St. Louis, Missouri, 
and across America was already experiencing a rental 
affordability crisis before the pandemic, with a national 
shortage of 7 million apartments that are affordable and 
available to extremely-low-income renters. Some of the hardest-
hit renter households were low-income and likely had little 
savings, even before the pandemic, since rental costs ate up 
most of their paychecks. Low-income households are also more 
likely to work in industries where job losses related to the 
pandemic have been particularly severe.
    Considering this crisis, what will the long-term impact be 
for renters, Ms. Oliva?
    Ms. Oliva. Thank you so much, sir, for that question. In my 
written testimony, you will see that we provide quite a bit of 
data around housing instability and homelessness and what we 
really are concerned about is a large inflow of people into the 
homeless services system that is already overburdened and can't 
serve all the people who already need housing and services 
through that system.
    We know that most people who are experiencing homelessness 
are at that extremely-low-income level, at zero to 30 percent 
of the area median income.
    So you can see that, through my testimony, we are 
suggesting that we are quite deliberate, and you all were 
actually also quite deliberate in the design of the Emergency 
Rental Assistance Program for good reason, because we wanted to 
make sure that people in the worst situations or who are most 
likely to become homeless are prioritized for assistance, and 
that we are stopping evictions for all the people for whom we 
can stop evictions.
    Because even if those families don't become homeless, you 
can see through Matthew Desmond and other peoples' research 
that eviction leads to long-term housing instability and, like 
you said, a sort of spiraling effect over the long-term.
    So if we do nothing now, we will see increased homelessness 
and increased housing instability that we will have to deal 
with down the road.
    Chairman Clay. Thank you so much for that response. My time 
has expired, and I now recognize the distinguished ranking 
member of the subcommittee, Mr. Stivers, for 5 minutes.
    Mr. Stivers. Thank you, Mr. Chairman. Again, I appreciate 
you holding this hearing.
    My first question is for Dr. Schuetz. Can you explain what 
the current data is saying about how renters have been impacted 
by COVID-19?
    Ms. Schuetz. Yes, thank you. We have partial data on how 
renters are responding to this. The most widely-cited survey is 
by the National Multifamily Housing Council. They have been 
reporting information that is provided from relatively large 
apartment owners through the software companies that process 
their rent.
    For the set of apartments that fall into their sample, 80 
percent of households were able to make at least a partial rent 
payment as of the beginning of June. So, we have seen pretty 
consistently, 70 to 80 percent of households making some 
payment. There are a couple of things to keep in mind with 
that. The smaller properties that are run by nonprofessional 
owners are not represented in that because they don't use these 
software companies to report.
    The other thing that we have noticed is that more people 
are making payments over the course of the month. Often, people 
can't pay at the beginning of the month, and they are paying 
maybe a month or two late. In particular, we saw this in the 
first month because people were waiting to get their stimulus 
checks and the expanded unemployment insurance, but most 
renters are still making payments.
    Mr. Stivers. Thank you, Dr. Schuetz.
    Given our admitted blind spots on that policy, how 
effective do you believe HUD would be in administering a 
national rental assistance program?
    Ms. Schuetz. I think the question is whether rental 
assistance is going to be provided through existing mechanisms. 
In the short run, it is easier to put more funding into an 
existing program that already has an administrative 
infrastructure, continuing to send out checks to people who get 
it. The harder thing is likely to be to start up something new, 
to the extent that we have to reach out to landlords who 
haven't worked with HUD, or provide it through some sort of 
different mechanism. Getting a new program up and running in a 
crisis situation is harder, so using existing mechanisms is 
easiest. And economists always say if we can give people cash, 
we prefer to, because cash is fungible, so replacing income 
lost by direct payments to households is likely to be the most 
effective.
    Mr. Stivers. Thank you. That leads into my next question, 
Dr. Schuetz. First, is there anything in the CARES Act which 
allowed renters to help make their payments and what was most 
effective?
    And second, are there any troubling signs out there that 
might cause the rental crisis to become more serious in any of 
the data you have seen?
    Ms. Schuetz. We have only kind of indirect evidence on how 
households are able to continue making payments, but this trend 
of people picking up their payments as the stimulus checks and 
unemployment insurance rolled out suggested those have actually 
been very effective ways of helping people stay current.
    So, households receiving financial assistance has really 
helped stabilize them to a greater extent than we expected. I 
would say the worry is when that money runs out, since the 
stimulus was a one-time check. The expanded unemployment 
insurance has a timeline. There is a concern that when those 
run out, households are likely to be in trouble if they have 
not gone back to work. Of course, the uncertainty is that when 
the larger labor market recovers, how many of those people will 
be able to go back to work, will be able to resume their full 
number of hours?
    Obviously, the point of this is to provide enough 
assistance to bridge people until the larger economy recovers. 
We simply don't know when that is going to happen.
    Mr. Stivers. Thank you.
    One last question, because you talked about land use 
policy. Are there things that you would recommend on land use 
policy that Congress could do that would make apartments more 
affordable, because those things are driving up rents?
    Ms. Schuetz. This is a longer-term issue, but yes. The 
Federal Government should be thinking about how it can 
incentivize local governments to allow more housing, 
particularly close to jobs and transportation centers and, in 
particular, local land use is heavily prejudiced against 
apartments, multi-family buildings, through the majority of 
rental housing. Encouraging local governments to make it easier 
to build rental housing will bring down the cost and make it 
possible for more people to find places to live.
    That is not necessarily a quick fix, but as Mr. Kingsella 
said, if we want to have a more functioning housing market in 
the long run, at some point we have to deal with these supply 
constraints.
    Mr. Stivers. Thank you. I think it is important to say that 
we are all committed, on both sides of the aisle, to racial 
justice and equality. I know we have a lot of work to do in 
housing and housing policy. I look forward to working with 
Chairman Clay going forward, and both Democrats and Republicans 
on those issues.
    I yield back, Mr. Chairman.
    Chairman Clay. Thank you. The gentleman from Ohio yields 
back.
    I now recognize the Chair of the full Financial Services 
Committee, Chairwoman Waters, for 5 minutes.
    Chairwoman Waters. Thank you very much, Mr. Clay. I would 
like to direct a question to Jennifer Schuetz. I am really 
pleased that you testified today extensively about smaller 
landlords. I have been worried about these landlords who are 
basically mom and pop, and you testified that they own nearly 
half of all rental units, 22.7 million units and then you 
contrasted that, and you estimated that fewer than 1 million 
business entity landlords own a little over half of the rental 
units in the United States.
    So these smaller landlords, you say, are more likely to 
have renters who are unable to pay the rent due to the 
pandemic. I am worried that even with the HEROES Act, if we are 
successful, and I think we can be, in getting the $100 billion 
that we have been working on, I don't know how long it is going 
to take to get the system up by which we could get that rental 
assistance to the landlords to benefit those renters.
    What do you think will happen if it takes 3 months to get 
the systems going, particularly in some of the States that may 
have more difficulty identifying which entity of government 
will be responsible for doing the implementation of the 
landlord of the assistance that we are directing toward the 
landlords?
    And what will these small mom and pops do if they have to 
wait another 3 or 4 months before they can get their rental 
payments?
    Ms. Schuetz. Thank you for that question.
    Small mom-and-pop landlords are unquestionably going to be 
the most impacted. Many of them own small properties, a single-
family house, or a two- to four-family house, and so having 
even one tenant in, say, a two-family house who can't pay rent 
means that half of the income for that property is gone. That 
obviously makes it very difficult to pay all of the other 
payments down the line.
    We know that a lot of the small mom-and-pop landlords do 
have mortgages. Some of them may be federally-backed mortgages 
in which case they have up to a year to forbear on the mortgage 
payment, but many of the owners of the small rental properties 
do not have federally-backed mortgages and so the mortgage 
payment is still due.
    In addition to that, property taxes are often a fairly 
substantial expense as well, as local governments are facing 
very difficult budget constraints at the moment. So any 
fallback in property taxes would hurt local governments' 
ability to pay for essential public services.
    We don't know entirely what is likely to happen, but we 
suspect that many of the smaller landlords may be forced to 
sell their property if they don't have income coming in. Three 
months to forego your mortgage payments is enough to get you in 
trouble and so there may actually be a number of these smaller 
properties that wind up going on the market. That is 
potentially a threat to the existing affordable housing stock. 
Many of these are relatively low-rent properties.
    If they get bought either by homeowners who take them out 
of the rental stock or by investors who choose to raise the 
rent, this could be a permanent loss for long-term affordable 
housing.
    Chairwoman Waters. Do you think that perhaps even with 3 to 
4 months waiting to rent to get back rental payments that there 
would be a lot of evictions where the small landlords could get 
desperate and say, ``I can't go along with this any longer. I 
know you people are saying that you are going to get the 
assistance to us, but I just can't wait any longer. It hasn't 
happened.''
    Do you think there will be a whole rash of evictions?
    Ms. Schuetz. My understanding is that local governments are 
expecting to have a lot of eviction filings when the moratorium 
ends. Many of those are delayed at the moment, in part because 
court systems are shut down and they are simply not processing 
cases that have been filed, but it is quite possible that a 
number of landlords have started eviction proceedings.
    The other threat is if the landlord has to sell the 
building because they can't make the payments, then the new 
owner of the building may also move forward. So, it is 
definitely a possibility.
    Chairwoman Waters. I am really worried about the small 
landlords, and we are working very hard to try and ensure that 
we have the kind of implementation of the $100 billion so that 
the landlords and the renters don't have to wait too long, 
because I am worried that if they all have to wait too long, 
not only will we have landlords who will evict them or, as you 
said, have to sell their properties, but we think that it will 
cause a lot of action on the street, with a lot of unhappy 
people out there who are not able to keep their rental units 
and are being evicted.
    Ms. Schuetz. Yes. There is certainly a potential.
    Chairwoman Waters. Thank you.
    And I yield back the balance of my time.
    Chairman Clay. The chairwoman yields back.
    I now recognize the gentleman from Florida, Mr. Posey, for 
5 minutes.
    Mr. Posey. Thank you very much, Mr. Chairman, and Mr. 
Ranking Member. I appreciate both of you bringing out the 
challenges our renters face in the midst of this pandemic that 
we are enduring now.
    As we move forward, I think we should consider the best way 
to address this hardship and to do it consistent with 
principles and approaches that we have been providing 
assistance in other areas successfully.
    The Paycheck Protection Program is a good model that if 
used [inaudible] Existing program to provide temporary relief 
in a timely way to respond to the crisis.
    We should refrain from the temptation to enact broad 
expansions of existing problems or even new programs to respond 
to the crisis. General program extensions and new programs 
should be subject to regular order, I believe, and not 
emergency legislation. I believe that this kind of economic 
crisis calls for us to be compassionate about the ability of 
families to meet their rent.
    And with those principles in mind, I believe we might work 
together to provide timely rental assistance through the 
Section 8 program, a limited and temporary program expansion 
that is means-tested on the basis of an individual or a 
family's ability to pay within the window of the COVID-19 
crisis.
    This allows a direct grant to the disadvantaged renter to 
pay his rent in place within the home he currently occupies. 
Such assistance should be limited, obviously, to the time 
period of the crisis and be subject to an expedited application 
and approval process.
    My question to the panelists is, do you think the idea I 
just described would address the challenges that renters face 
in the current pandemic?
    Ms. Oliva. I am happy to start, and my fellow panelists can 
come in behind me. I would say, as I mentioned in my testimony, 
we think that it is really important to have a comprehensive 
approach here to address short-, medium-, and longer-term 
needs. Depending on the specific circumstances of various 
households and families, we know that some folks, as was 
mentioned earlier, will be continuing to pay the rent by using 
credit cards or by not paying utilities.
    We have folks who are in domestic violence situations. 
There are a lot of different situations that we need to 
contemplate, so I would suggest that we look at this as a 
package that includes a substantial emergency rental assistance 
component in addition to additional vouchers for folks who need 
longer-term assistance and can't stabilize with only short- or 
medium-term assistance.
    Mr. Kingsella. I would also add that in terms of the 
individuals who require rental assistance, we make a connection 
with the pandemic and pandemic containment efforts, and 
economic impacts, we are looking at a number of individuals who 
are called the missing middle of affordability, the 80 percent 
AMI to 120 percent AMI range. And I believe that we have seen 
that individuals in that bucket have been impacted directly by 
COVID and have been either put on furlough or have been 
terminated as a result of layoffs.
    One of the elements that the emergency rental assistance 
structure provides States is the ability to scale that resource 
up to individuals who aren't typically covered under the 
current Section 8 Program.
    Congressman Posey, I would point you to a May 4, 2020, 
letter signed by 43 industry organizations, consumer groups, 
and housing advocates that lays out the principles of a 
successful rental assistance program in response to COVID.
    And I would venture to say that the Emergency Rental 
Assistance Act is a vehicle that is moving, that is included in 
the HEROES Act, that leverages existing programs, but to the 
extent that expansion of Section 8 or HOME or other programs 
get to the same outcome, I think you would find that a number 
of stakeholders would support that approach.
    I think the essence of the advocacy is to ensure that this 
money gets out to folks.
    Thank you.
    Mr. Posey. Mr. Chairman, I yield back.
    I am out of time.
    Chairman Clay. The gentleman from Florida yields back.
    I now recognize the gentleman from Missouri, Mr. Cleaver, 
for 5 minutes.
    Mr. Cleaver. Thank you, Mr. Chairman. I want to thank you, 
Ranking Member Stivers, and the Chair of the Full Committee, 
Chairwoman Waters, for allowing this hearing to take place, 
because it is taking place in the backdrop of social justice 
and civil rights becoming a part of what happens on the front 
burner of the American system.
    We are seeing Americans evolve, with all races and all 
creeds demanding an end to systemic institutionalized racism. I 
addressed the protesters here, about 5,000. I walked out, Mr. 
Chairman, to address them and almost went into tears because 
having been in my first civil rights march at the age of 15, 
down in Texas, this was the first time I had seen a crowd like 
this. About 55, maybe 60 percent of the participants were 
white. The rest were Black and Brown.
    In the old civil rights movement, you would have, for 
example, the president of Notre Dame, a priest, walking with 
Martin Luther King, or Ralph Abernathy, or Joe Lowery, or C.K. 
Steele, or Fred Shuttlesworth, but it was for protection. These 
people were there saying they want change and, frankly, I think 
that our committee, your chairmanship in this committee, deals 
with change perhaps more than any other committee, including 
the Judiciary Committee, because housing is right at the core 
of change and is also one of the principal causes of the pain.
    One of the things that I would like our panel to address 
is, we have $100 million in the HEROES Act, and I am wondering 
if you believe that there are--I don't know if you read the 
bill or know much about it, but if there are better ways of 
dealing with that $100 billion in terms of rental assistance 
than what we might have recorded in the HEROES Act?
    Any or all of you?
    Ms. Hill. From our perspective, and as someone who has 
served in communities that are multiracial and with some pretty 
high poverty levels across the State of Louisiana, it is clear 
to us that this rental assistance is going to be critical in 
order for people to be able to recover and fully participate in 
the thrust of their communities after this pandemic ends. We 
know that people are struggling to pay their rent and that they 
need this cash assistance in order to be able to do so.
    Coming from a place, Louisiana, that also has very few 
tenant protections, we see this as an opportunity to actually 
tie that assistance to some tenant protections because it is 
likely proposed that the rental assistance is really landlord 
assistance, right? It goes to landlords to help them cover the 
cost of the rents that they are missing. And so, if they are 
going to make a massive investment in supporting landlords, 
then I would like to see participating landlords ask to sign 
lease addendums with provisions that provide some protections 
to tenants, protections that are missing in Louisiana's 
landlord/tenant laws, things like a 14-day right to cure any 
lease breaches, anti-retaliation protections, other than the 
State of Louisiana, where it is still perfectly lawful for 
landlords to retaliate against their tenants and to kick 
tenants out who request things like repairs. And so, having 
some protections tied to the money would be especially helpful 
for Louisianians.
    Mr. Cleaver. I am glad to hear you say that, because I 
intend to speak with Chairwoman Waters and Chairman Clay about 
some other changes along the lines of what you are saying, 
because we have a senior citizen facility in Kansas City where 
HUD guaranteed the loan to the Missouri Housing Development 
Corporation (MHDC), and the owners live out-of-State. The 
temperature is now hovering every day here in the mid-90s, with 
no air conditioning; the air conditioning went out. There are 
all kinds of problems. We need to do something along the lines 
of what you were saying, but maybe they ought to be a part of 
HUD regulations. HUD is guaranteeing bad ownership of a senior 
housing project.
    And my time is up. I had a lot to say. Thank you, sir. 
Thank you, Mr. Chairman.
    Chairman Clay. I'm sorry. Thank you, Mr. Cleaver.
    And let me remind Members to keep their cameras on so that 
we can see you on the main screen and be able to recognize you.
    At this time, I would like to--okay. Is Mr. Huizenga there? 
You are recognized for 5 minutes.
    Mr. Huizenga. Thank you. I appreciate that, Mr. Chairman. 
Hopefully, I think you can see me as well.
    I really just wanted to make a statement more than 
anything, and then yield back. I do appreciate the 
accommodation. This is something that is critical to so many 
communities in rural areas, suburban areas, and urban areas. 
And we do need to make sure there is adequate housing stock. 
Having been involved in the business of construction for 3 
generations now, we also know the effects that oftentimes, 
local ordinances and requirements, and things like that, what 
kind of costs might be added to the construction side of 
things. And obviously, that impacts affordability.
    So I hope in this conversation we are loking not just at a 
government program to help with dollars getting sent to either 
the renter or the provider of the housing and those kinds of 
things, but we also have that discussion about, how do we make 
sure that affordable housing is truly affordable on the 
construction side and on the availability side as well.
    With that, I am going to yield back. I appreciate the 
opportunity to be on today.
    Chairman Clay. I thank the gentleman for yielding back and 
for your brevity.
    I now recognize the gentlewoman from Ohio, Mrs. Beatty, for 
5 minutes.
    Mrs. Beatty. Thank you so much to our chairman and to our 
ranking member and to all of those who are participating in our 
new format of testifying. I have certainly enjoyed hearing your 
testimony.
    And as we talk about housing, it is very clear that we are 
on a cliff. Evictions are on a cliff. And when you look at who 
is on the ledge of that cliff, we are looking at individuals 
who look like me. We are looking at those individuals who might 
be homeless. When we think about where we are in the midst of 
this nation, whether it is COVID-19, as our chairman talked 
about in his opening statements, and when we look at the death 
rates in proportion to what African Americans in particular 
represent in this nation, and certainly those disparities are 
also here in my district. So when I think about who is at risk, 
the least of us are at risk. When I think about minority 
populations, I think about those who are at risk because we are 
at an inflection point in this country with regard to diversity 
and inclusion with racial biases and racism.
    I just introduced a resolution which says that racism is a 
national crisis. And housing was one of the first things, Mr. 
Chairman, that I listed in it.
    Let me make a quick statement, and then I have two 
questions I would like to address to the panel. The questions 
will be centered around, how are these long-existing gaps 
affected by COVID-19, and how does Congress ensure that they do 
not widen the gap even further, and how do we close them as it 
relates to housing?
    And before you start to answer that, let me just remind you 
of something that my staff shared with me in an article that 
was written in 1966 in The Nation Magazine, where Martin Luther 
King, Jr., said, ``Slums with hundreds of thousands of living 
units are not eradicated as easily as lunch counters or buses 
are integrated or jobs, and jobs are harder to create than 
voting.''
    When you think of chattel, slavery was abolished, but a 
program to transform slaves into citizens was omitted. So, he 
is talking about economic justice. He is talking about it as we 
look at wealth creation or the lack of it and mainly talking 
about housing.
    So, where do we go from here? I will start with you, Ms. 
Hill.
    Ms. Hill. Thank you so much for the question, and it 
resonates very deeply with me. I think what is most important 
is that we have to seize this opportunity to go somewhere, 
right? We know that this conversation is not new. We know that 
it has happened, it has been happening, and it is continuing to 
happen now. So, we have to seize the opportunity.
    We knew from the current commission report, around the same 
time that you are mentioning, Representative Beatty, that we 
needed, as a country, to do something, and those changes were 
not made. It is time now to act upon those promises and really 
to honor the legacy of Dr. King and all of those who worked 
with him for this kind of justice to which you are referring.
    In Louisiana, as across the country, Black and Brown 
households were already disproportionately impacted by the 
affordable housing crisis prior to COVID-19. We know now that 
Black women are disproportionately impacted by eviction rates 
across the country as well as in New Orleans. And Matthew 
Desmond's research has helped to highlight that problem. In New 
Orleans, the same Black-majority neighborhoods with eviction 
rates that are much higher than the national average are now 
the same areas that have been hit hardest by COVID-19 in our 
City.
    There has to be a comprehensive package that seeks to 
redress these ongoing disparities. The cash rental assistance 
is incredibly important. And rental assistance that is tied to 
protections for tenants is also important, and increased 
support for homelessness prevention programs, especially 
eviction defense. We know that having a right to counsel in 
eviction court would cut evictions in New Orleans, for example, 
by half.
    There really is a variety of options available. And we are 
so thankful for your leadership, this subcommittee's leadership 
on these issues and in moving this conversation forward.
    Mrs. Beatty. Thank you. And I have a few seconds left, for 
anyone who wants to answer, as we know, the CARES Act eviction 
moratorium and prohibition on late fees for nonpayment will 
expire next month, on July the 25th. With the record high 
unemployment numbers, which we learned are going to be even 
higher, where do we go from here, when renters are looking at 
an eviction, on that eviction cliff on July 31st? What do we do 
to protect those renters when the CARES Act expires and the 
rent becomes due?
    Would anybody else like to comment on that?
    Ms. Oliva. Yes, I would be happy to comment quickly on 
that. That is why it is so important for us to get emergency 
rental assistance to be able to do homelessness and eviction 
prevention for those renters that are on that cliff that you 
are describing. But it is also why we need to take new 
approaches to this emergency rental assistance program, and we 
have to use a racial justice and equity approach. We need to 
ensure that we are targeting highly-impacted neighborhoods and 
communities. So, there are lots of things that folks can do. 
Thank you so much for that question because it is incredibly 
important.
    Mrs. Beatty. Thank you. My time is up, and I yield back, 
Mr. Chairman.
    Chairman Clay. The gentlewoman yields back.
    At this time, I recognize the gentleman from Colorado, Mr. 
Tipton.
    Mr. Tipton. Thank you, Mr. Chairman. And I also thank the 
ranking member for his support.
    I would like to associate myself with the comments that Mr. 
Huizenga made. We do need to be looking at some of the 
regulatory hurdles that we are impeding by increasing the costs 
of affordable housing, and also the full recognition that a lot 
of this is impacted at the local level, in terms of where they 
will allow the affordable housing to be built.
    I would like to start with Dr. Schuetz, and thank you for 
being before our panel again today. I wanted to follow up, 
during our last panel, you had noted that there are debt 
obligations, maintenance obligations continued during this 
crisis. Is it still your view that property owners are required 
to be able to carry forward with those obligations during the 
crisis?
    Ms. Schuetz. Thank you for that question. Yes. Property 
owners still have to maintain their properties. The temporary 
forbearance on mortgages applies to maybe half of rental 
property owners. So, that will help landlords who have a 
mortgage that is federally-backed; they will have some extra 
time to pay that off. And that allows them to pass along 
savings to their tenants. But the mortgage is not the only 
thing they owe. In particular, we worry about them not being 
able to pay their property taxes to local governments. We are 
seeing a shortfall in a number of their revenue sources in some 
things like sales and hospitality taxes. One of the other 
concerns is just basically paying utilities. Water and sewer 
have to keep running, and utilities for the property overall.
    There are things that landlords have to pay whether the 
rent is coming in or not. And if they are not getting enough 
cash in order to do that, some of them may need to put their 
buildings up for sale. So, that is definitely a concern.
    Mr. Tipton. In addition to that, obviously, being noted by 
other questioners, if air conditioning and heating goes out, it 
is pretty much the obligation of the landlord to fix that. So, 
it is important that they receive as much rent as possible.
    Ms. Schuetz. Yes. And, again, thinking about the scale of 
buildings that are most vulnerable, if there is a 200-unit 
building and a few tenants can't pay rent, the landlord is 
still getting income from most of the building. We are 
particularly worried about smaller buildings, the one- to four-
unit properties that are in fact half of the rental units in 
the United States. Those are really dependent on all of the 
tenants having continuing cash flow and being able to pay rent.
    We do know that landlords are often making negotiations 
with tenants. If tenants have, for instance, lost some hours, 
and they can make a partial payment but not a full payment, 
most landlords would rather have someone in the unit who is 
able to pay some cash rather than having to flip the unit. If 
you evict and then the unit sits empty, that doesn't help. So, 
landlords are trying to work with tenants where they can, 
providing both--replacing the income to renters through either 
unemployment insurance or some other method that allows them to 
keep making payments. For some landlords, it may also be 
helpful to some have small grants perhaps administered through 
the local government to help them maintain the property and 
viability.
    Mr. Tipton. Ms. Schuetz, during your testimony, you noted 
that temporary eviction moratoria can be helpful in the short 
term, but these moratoria could increase a household's long-
term financial insecurity. Could you speak to that a little bit 
more?
    Ms. Schuetz. Sure. We worry that if households are not 
paying rent, but that the balance of their rent is accruing, at 
some point that has to be paid off or renegotiated with the 
landlord. Most renters are in very thin financial margins. So 
if they are out of work for a month or 2 months, even when they 
get their job back, they can start getting current on their 
payments, but there is a past-due balance. That is similar to 
the issue of putting your rent on a credit card; it postpones 
it until the future, but at some point, those bills come due. 
And most people don't have the assets to pay that off.
    Mr. Tipton. I appreciate the answer to that. And I also 
appreciate the rent in terms of smaller landlords that are out 
and the impacts it is having on them. I think we all join in 
wanting to make sure that people have a roof over their head, 
and also recognizing that people have made investments that 
need to be able to be serviced as well.
    I would like to jump, with the little time that I have 
left, to during the last appropriations cycle, we appropriated 
$290 million to the Homeless Emergency Solutions Grants (ESG) 
Program. Under the CARES Act, that increased by about $4 
billion in spending. Under the HEROES Act, it is proposed to 
spend an additional $111.5 billion on the ESG program.
    Does ESG currently have the capacity and the efficacy to be 
able to absorb the 299 percent increase, particularly given the 
time?
    Ms. Schuetz. I am not familiar enough with the 
administration of the program to know how the increase in 
funding would work. I cannot speak to that.
    Ms. Oliva. I would be happy to take that, given that that 
was my office when I was at the Department of Housing and Urban 
Development. Can I do that, Mr. Clay?
    Chairman Clay. Yes. Yes, you may. Please provide us with 
that information.
    Ms. Oliva. I think we are always right, as members of the 
government, to pay attention to capacity. And you are right; 
the $290 million is the normal ESG allocation in any given 
year.
    But we need to make sure that ESG recipients have the 
guidance and support that they need to effectively design and 
effectively implement these types of programs. So, I would 
first encourage HUD to get the ESG COVID funding that was under 
the CARES Act guidance out the door as quickly as possible.
    I would also say that we can provide technical assistance 
resources through these funds that can support communities to 
really focus on the strategies that work and ensure that they 
have the capacity they need to administer these funds. We need 
to make sure that HUD is appropriately staffed to monitor these 
programs.
    I know that when I ran HPRP, which took a 200--it was $160 
million at the time to $1.5 billion. We hired term employees to 
do monitoring, and that was incredibly important.
    I think the most important thing that I want to say on this 
particular issue is that ESG grantees have always risen to the 
challenge. And I hope that that is not--while we need to pay 
attention to it, I would not want that to be a barrier to 
providing really important emergency rental assistance to 
communities.
    Chairman Clay. The gentleman from Colorado yields back.
    I now recognize the gentleman from Texas, Mr. Green, for 5 
minutes.
    And please unmute, Mr. Green.
    Mr. Green. Thank you for the reminder, Mr. Chairman. And 
thank you for the hearing as well. I also thank the ranking 
member of the subcommittee, and the Chair of the Full 
Committee. And I thank all persons who had any hand in 
perfecting this important hearing.
    Mr. Chairman, as you and I know, the Fair Housing Act of 
1968 passed Congress within weeks of the assassination--in 
fact, within days of the assassination of Dr. Martin Luther 
King. It did not end invidious discrimination in housing.
    Just as having laws that indicate what the speed limit is, 
does not prevent people from speeding. You have to have 
enforcement. And enforcement still is much needed, even today, 
because invidious discrimination still exists.
    Ms. Hill, I think you have made some salient points on 
this, as well as others, about the invidious discrimination in 
housing.
    We know that, during this time of the pandemic, the 
President has done some things that were unkind. He has made 
statements about the, ``China virus.'' And this has caused 
persons who are of Asian ancestry to be discriminated against.
    I did a speech on the Floor of the House where I talked 
about this level of discrimination, persons trying to seek 
lodging being discriminated against. But we also know that over 
60 percent of the people experiencing homelessness in America 
today are Black and Latinx and that over 4 million fair housing 
violations are estimated to occur each year against members of 
protected classes.
    So, during this time of pandemic, it is exceedingly 
important that we have enforcement, enforcement in terms of 
intake, education, and investigation as it relates to the 
complaints that are going to be called to our attention with 
reference to invidious discrimination in housing. It does 
happen, and we need to make sure that we protect people.
    I am honored to say that the Chair of the Full Committee, 
the Honorable Maxine Waters, is an original cosponsor of the 
Fair Housing Further Enforcement Emergency Act. These are funds 
that are being allocated to deal with the invidious 
discrimination that emanates as a result of the coronavirus.
    I would ask you, Ms. Hill, do you believe that it is 
necessary for us to have this emergency enforcement power and 
the ability to investigate and take action against those who 
still deal in hate, some of it emanating from the highest 
office in the land as a result of comments that are being made 
by the President of the United States of America? Your 
thoughts, Ms. Hill, please?
    Ms. Hill. Thank you so much for that question, 
Representative Green.
    And, absolutely, yes, these programs and the resources that 
you mentioned are incredibly important, and perhaps now more so 
than ever. Unfortunately, and it may be counterintuitive, but 
we know from experience that complaints often go up during 
emergencies. When families have lost income and are at risk of 
losing their homes, they are really at their most vulnerable. 
And that is even more true now when homelessness might mean 
increased exposure to the potentially deadly coronavirus. 
Unfortunately, there are housing providers that we know will 
take advantage of this precarious situation that many tenants 
are in.
    We saw rampant discrimination against Black New Orleanians 
and families with children after Hurricane Katrina, and we 
needed to really engage in some large-scale litigation to right 
some of those wrongs.
    We are very concerned about increasing sexual harassment 
cases during the pandemic. There are reports of some landlords 
looking to capitalize on the lack of ability of some of their 
tenants to pay rent. And so, we are hearing reports of 
landlords seeking to exchange sexual favors for rent with some 
of their vulnerable tenants who are having difficulty making 
those payments. We are hearing reports from domestic violence 
survivors in Louisiana who are being victimized further by 
landlords not following the law.
    For instance, we are working with a woman who had survived 
domestic violence, and went to her landlord and asked to be 
moved to a different unit per the Louisiana State Violence 
Against Women Act, and was told, in direct contradiction to 
that law, that she would have to pay out the remaining months 
of her lease before she could be granted the permission to 
move.
    So, we know that an increase in fair housing funds will be 
essential to ensure that we can continue to investigate these 
cases and ensure that families are protected under the Fair 
Housing Act.
    Mr. Green. Thank you, Mr. Chairman. I yield back the time I 
do not have.
    Chairman Clay. Thank you so much, Mr. Green.
    And, at this time, I will recognize the gentleman from 
Tennessee, Mr. Rose.
    Mr. Rose. Thank you, Chairman Clay, and Ranking Member 
Stivers.
    And to our panelists testifying today, we appreciate you 
being available to talk about this important issue.
    We are currently navigating uncertain times and folks are 
having to make difficult decisions regarding their finances. 
With job losses stemming from the economic downturn related to 
COVID-19, there are concerns that renters have had trouble 
meeting their monthly rent payments.
    This is building on Mr. Tipton's question about the 
negative effects of the failure of tenants to make their rent 
payments. Can you talk about the overall ripple effects and 
negative externalities to communities, especially rural 
communities, such as supplying local jobs and paying local 
property taxes? Dr. Schuetz?
    Ms. Schuetz. Thank you for that. We are concerned about 
where rent payments go further down the line and when those are 
not available. So, for many landlords, they will still have to 
pay a mortgage, and if they don't, there are consequences to 
that. Property taxes are obviously one of the high items on the 
list that landlords have to pay. Local governments are having a 
really difficult time at the moment. They have lost money from 
sales taxes, and hospitality taxes. Incomes have dropped. They 
are facing a squeeze on the budget side at the same time that 
they are being asked to provide extra services to constituents. 
So, failure to pay property taxes--the inability to pay 
property taxes will hurt.
    There are also jobs related to this. Larger properties tend 
to employ more onsite staff: building superintendents; 
maintenance staff; housekeeping staff. Those are typically not 
high-wage jobs, but people rely on them for their income. Most 
of those smaller landlords don't have in-house staff, but they 
hire outside contractors, particularly for maintenance, the 
plumbers and electricians. These are all downstream payments 
that could be threatened if a few months dry up.
    I have not seen information on how rural communities are 
doing relative to urban areas with repayment. But we do know 
that some of the rural areas, particularly those with food 
processing plants, are seeing higher rates of infection, and 
that is likely to put stress on their public health systems as 
well as their local public amounts.
    Mr. Rose. Thank you. I know I have said it before, but we 
have a responsibility in Congress to ensure that dollars spent 
by the Federal Government are spent wisely, efficiently, and 
for the intended purposes. And falling from that, I am hesitant 
to say that $100 billion in new spending that would more than 
double HUD's annual budget achieves that. It is our role to 
ensure that are were being prudent. And it does no good to the 
American people to make a bloated false promise of assistance 
that never actually comes. We need smarter, more innovative, 
localized solutions than the ones we are largely discussing 
today.
    Dr. Schuetz, you stated in your testimony that excessively 
strict State and local regulations have made it extremely 
difficult for localities around the country to build apartment 
buildings, contributing to the high costs and limited 
availability of rental housing.
    Where do you find these local regulations are the strictest 
and prohibit the growth of affordable housing the most?
    Ms. Schuetz. The short answer is everywhere. Almost every 
local government in the country has zoning that preferences 
single-family detached houses relative to multi-family 
buildings. Multi-family buildings provide most of the purpose-
built rental housing. And so effectively, every local 
government in the country is biased against building rental 
housing. And we find this consistently across the country. This 
is true for suburbs. This is true for rural communities.
    We find that higher level of overall regulations in many of 
the coastal metropolitan areas. But the suburbs in Dallas and 
Detroit are every bit as restrictive of apartment buildings as 
San Francisco. So really, this is a national problem, that we 
have made it hard to build. Local communities have different 
kinds of barriers, but almost every community has some sort of 
barrier, particularly, to rental housing, low-income housing. 
Rural areas, in particular, their restrictions on manufactured 
housing, which is generally one of the lowest cost ways to 
create housing in smaller communities.
    Mr. Rose. Isn't it true, though, if we provide more than 
double the funds for HUD, most of these funds are going to go 
to renters in the high-cost cities? Is that a fair statement?
    Ms. Schuetz. The per-household subsidy is much higher in 
high-cost cities because of the way the formula works. HUD's 
rental assistance is going mostly to people in large populated 
places where there are larger populations and also where the 
cost of housing is higher.
    Mr. Rose. Thank you, Chairman Clay. I yield back.
    Chairman Clay. The gentleman from Tennessee yields back.
    I now recognize the gentleman from Washington State, Mr. 
Heck, for 5 minutes.
    Mr. Heck. Thank you, Mr. Chairman, Mr. Ranking Member, and 
Madam Chairwoman. Thank you so very, very much for holding the 
hearing on this important topic.
    As many of you have heard me describe before, I tend to 
have a perspective of framework about the issue of shelter, 
especially in the context of the COVID crisis, that is a three-
legged stool. I am going to outline that and then ask a couple 
of panelists to respond: to affirm; to disabuse; or to amplify.
    The first leg of the stool is support for homeowners. Home 
ownership is still far and away a hugely held aspiration of the 
American public. But just as importantly, it is the number-one 
net worth building tool of the average American, and a critical 
component of their retirement security. We recognized this when 
we provided mortgage forbearance for those whose mortgages are 
ultimately held by one of the Government-Sponsored Enterprises, 
and well we should.
    The second leg of the stool is support for renters. We 
talked a lot about that. The panelists--you have terrific data 
about the crying need for this. You have all heard me say my 
mantra is: pillow; blanket; roof. If someone doesn't have a 
pillow to lay their head on, a blanket to keep them warm, and a 
roof over their head, any other issue in their life is not 
going to be dealt with, whether it is unemployment or mental 
health or substance abuse; you don't successfully deal with 
those things while you are sleeping under a bridge. That is why 
I am so passionate about the $100 billion that was in our 
legislation and then included in the HEROES Act. And it is not 
just me.
    Mr. Chairman, with your permission, I ask unanimous consent 
to submit a letter for the record that has 640 signatures to 
it. And might I add, this is not a petition. Those signatures 
represent 640 different organizations nationally who have come 
together and united in a very diverse coalition in support of 
our $100 billion rental relief.
    Chairman Clay. Without objection, the letter will be 
submitted into the record of the hearing.
    Mr. Heck. Finally, of course, is the issue of the missing 
millions of homes that Mr. Huizenga so eloquently alluded to--
7.3 to 7.5 million. Let us remember this, that when you have a 
supply restriction, you have increased occupancy, which leads 
to increased rents, which leads to increased cost burdens, 
which of course we are experiencing at historic levels, which 
increases homelessness. We simply have to build more housing 
units, especially affordable housing units in this country. And 
it is not just for the benefit of the individuals who need it; 
it is for the benefit of this entire country. Because I want to 
remind you that every recession in modern history, save the 
last one, has been led out of by housing construction activity. 
And we are not doing it. And we are not doing it at a rate that 
continues to accumulate our housing unit deficit on an annual 
basis. We need more housing units, especially affordable 
housing units.
    I guess I would like to start with Ms. Oliva, with whom I 
haven't had the opportunity to interact before, and ask you, 
those are my three legs: support for homeowners; support for 
renters; and support for increased housing unit construction. 
Can you affirm it or disabuse me or amplify any component of it 
that you think bears highlighting?
    Ms. Oliva. Sure. Thank you so much for that question. I 
actually spend a lot of time in your State, working in King 
County, so I know quite a bit about some of the work that is 
being done throughout the State.
    I would say that my expertise is not in home ownership. It 
is really around rental housing for people who are extremely-
low-income and low-income and experiencing homelessness.
    And so, I wouldn't disabuse you of any of the three legs of 
your stool, but what I would say, and that I talk a little bit 
about in my testimony, is that we really need to target the 
most in-need families and households first to ensure we are not 
creating a worse situation, especially within the homeless 
shelter system.
    And specifically to COVID-19, we are seeing so vividly that 
housing is healthcare. And to the extent that we are 
prioritizing folks without housing and folks potentially going 
to lose their housing, I think that is an incredibly important 
component of the emergency rental assistance, and for full 
housing sort of complements the short-, medium-, and long-term 
options that are included in the HEROES Act.
    Mr. Heck. A quick follow-up question, if I may. One of the 
earlier speakers alluded to $100 billion as ``bloated.'' 
Frankly, I find that sad. I think a perfectly legitimate 
question to be raised is, can we effectively and efficiently 
get that amount of money out because it is large? But is it 
bloated compared to the need?
    Ms. Oliva. I don't think so. I believe that we need to 
fully respond to this crisis so that we don't have lasting 
long-term impacts in the way that we are starting to see now.
    Mr. Heck. Thank you. I yield back, Mr. Chairman.
    Chairman Clay. The gentleman from Washington yields back.
    I now recognize the gentleman from Wisconsin, Mr. Steil, 
for 5 minutes.
    Mr. Steil. Thank you very much, Chairman Clay, Ranking 
Member Stivers, and Chairwoman Waters for pulling together 
today's hearing, which I think is on a really important topic. 
The events of the past few weeks, I think really refocused our 
attention on some of the structural barriers to opportunity. 
Today's hearing, in particular, is about how COVID-19 is 
impacting people's housing, in particular those of low- and 
moderate-income, as well as underrepresented minority groups.
    I want to dive in on this. I would like to ask a question 
of you, Ms. Schuetz, regarding the proposed extension of the 
temporary moratorium on evictions. You talked about this a 
little bit, and I have read your testimony that was put 
forward. But I would like you just to dive in a little further. 
You have noted, I think very well, the impact of the potential 
extension as set forth by the HEROES Act that passed the House, 
what that would be in real terms on mom-and-pop landlords. But 
could you also comment on what role that may play at city and 
State municipal level resources and how that would play out in 
State and local budgets if the proposal that has ultimately 
passed the House in the HEROES Act was fully implemented?
    Ms. Schuetz. Sure. Yes, it is definitely a concern for 
local governments which are really where the evictions are 
likely to be processed. And communities across the country have 
a variety of different ways of dealing with evictions. New York 
City has an entire housing court which does nothing but handle 
landlord/tenant issues and evictions. But for many other 
places, particularly smaller communities, this runs through the 
general court system. Many of the court systems have been 
closed down or operated--
    Mr. Steil. If I can, let me just refocus the question maybe 
a little bit more tailored here. In your commentary, 
particularly on some of the mom-and-mop landlords where they 
may be uniquely financially impacted, would they have 
challenges in paying their property taxes which would 
ultimately impact State and municipal governments?
    Ms. Schuetz. Many of them will have difficulty with that. 
Property taxes are a very substantial component for smaller 
properties, and those are going to be due depending on the 
local budget cycle. But if they don't have income coming in, 
they might not be able to pay that, which then directly impacts 
the local budget.
    Mr. Steil. Thank you. And let me shift gears slightly. One 
of the things we saw Congress do really out of the gate was 
kind of come in with a sledgehammer, and flood the market with 
liquidity. There are reasons to do that at the beginning of the 
crisis.
    As we look now, I think there is a real opportunity to 
shift from the sledgehammer to the scalpel to make sure we are 
getting relief to those who need it most while preventing 
relief from being just blanketed across all individuals in the 
United States.
    In particular, as you reviewed the potential expansion of 
the moratorium put forth in the HEROES Act, can you comment on 
the impact that would have? It appears that it would obviously 
be a benefit to low- and moderate-income individuals who truly 
are impacted by the coronavirus through no fault of their own. 
But would it also be available to higher-income individuals or 
those who have not had the same negative impact in their 
financial situation due to the coronavirus?
    Ms. Schuetz. I don't know exactly how this would play out 
with different incomes. In part, what we have seen is that the 
ability to continue paying rent has been dependent on the 
extended unemployment insurance and the stimulus checks which 
are going to run out.
    One of the difficulties of sort of targeting with a scalpel 
at the moment is the uncertainty about how quickly the labor 
market will recover across different geographies in different 
industries. So, I don't think we know yet which workers are 
going to be going back to work, the companies that are still 
going to be hiring, and the kind of hours that are replaced.
    I fully agree that it is ideal to tailor the stimulus. We 
are guessing a little bit, because we are still in the dark 
about where the recovery is going to come back soonest. So, it 
may not be possible to tailor it as much as we would like.
    Mr. Steil. I appreciate your commentary today. And I 
appreciate everyone's work on this important topic.
    And, with that, I yield back, Mr. Chairman. Thank you.
    Chairman Clay. Thank you so much. And the gentleman yields 
back.
    I now recognize Mr. Vargas of California for 5 minutes.
    Mr. Vargas. Thank you very much, Mr. Chairman.
    It is great to see you, great to see my colleagues, and 
great to have these wonderful panelists. Again, thank you very 
much for holding this hearing.
    First of all, as you know, here in San Diego we have been 
hit hard because of COVID-19. So much of our industry relies on 
tourism, and tourism, of course, has been one of the industries 
that has been hit very, very hard. So, again, we have a lot of 
people who have been relying on these stimulus checks and 
unemployment insurance, and that is going to run out, as we 
said earlier. So I think that there is going to be a coming 
crisis here in San Diego. And as was stated earlier, I think it 
depends on how quickly the economy will recover. I think the 
economy will not recover as quickly as some people think, 
especially in the tourist industry, because of the fear of 
COVID-19.
    I do have to say one thing, though, and it sticks in my 
craw every time. I keep hearing about these high-cost areas and 
how some people from some States say, why do we spend so much 
on a high-cost area? So I would like to remind everyone that 
California gives more money to the Federal Government than any 
other State, and that doesn't come back to us; we are a donor 
State, not a receiving State. Some of these people from the 
receiving States love to throw rocks. But I look at how much 
money they receive compared to California, and I say, ``Take a 
look at the facts next time before you start throwing rocks, 
please.''
    I do want to talk a little bit about corporate landlords 
versus mom-and-pop landlords and just go for that for a second 
because the reality is that corporate landlords, I think, are 
better capitalized to be able to withstand some of these 
problems, I think, that are coming, that are already here and 
going to be coming as a tsunami, versus mom and pop. What can 
mom-and-pop landlords do when a lot of their tenants are not 
going to be able pay the rent? Would someone like to comment on 
that, please?
    Mr. Kingsella. Yes, sure. I am happy to start. Congressman 
Vargas, I think you bring up a very excellent point with regard 
to our landlords because, as Ms. Schuetz said in her testimony, 
smaller landlords, smaller property owners disproportionately 
provide housing to those on the front lines who are most at 
risk of being impacted by COVID. You also have the least 
wherewithal that withstands shocks, such as many landlords are 
experiencing.
    We spoke to a small landlord in Washington State, the first 
in the county, who takes naturally occurring affordable housing 
and preserves it as affordable. And she reported that 
delinquency of rent as of April 9th was 4 percent across her 
portfolio, 12 percent as of May 9th across her portfolio, and 
32 percent as of June 9th across her portfolio.
    So anecdotal data points are suggesting that the smaller 
landlords not only have the least wherewithal to withstand this 
challenge but are also disproportionately experiencing the 
brunt of the crisis of nonpayment of rent.
    I would also just add that, from a municipal perspective, I 
know that there have been a number of questions about the 
ability for the $100 billion of emergency rental assistance to 
move through the ESG system. I think it is actually quite 
exciting to see the number of cities, including San Diego, that 
have established local rental assistance programs to respond to 
the need. The challenge is, as many of us know, that the 
resource isn't there to serve the need. We spoke to the City of 
Tacoma, Washington, and they reported that they received over 
700 applications the day that they opened up their rental 
assistance program. And it has become a lottery system. The 
communities, municipalities, even States, don't have adequate 
resources to provide funding for those folks impacted by COVID-
19.
    And I just say that to say that, yes, we fully agree with 
your point with regard to smaller landlords bearing the brunt 
and want to amplify the fact that there are limited, scarce 
resources available to insure and protect those landlords from 
potential financial challenges here in the coming months.
    Mr. Vargas. Again, I would like to--if someone else wants 
to comment on that. Because the truth of the matter is--I know 
in my own district, we have a number of people who have worked 
very, very hard to create a few units, and that is what they 
rely on for their retirement. And they are not well-prepared to 
weather this storm if it continues to go on. As I said, a lot 
of people have been able to pay their rent because of 
unemployment insurance, because of the stimulus checks, but 
they are going to run out.
    If we don't have the assistance, then what are these small 
landlords going to do? And they rely on this money for 
retirement. How can we help them? Would anyone else on the 
panel like to comment on that?
    Ms. Schuetz. Sure. I will just say quickly that I think it 
is worth considering some funds that landlords can apply for to 
help supplement their expenses and cover the cost of this. And 
particularly for mom-and-pop landlords, we want the hurdle for 
applying to be relatively low. Complicated programs are a 
deterrent even to requesting health. The big corporate 
landlords have attorneys and have accountants, so they can fill 
out applications for things. But for mom-and-pops, if we want 
to get funding to them, we need to make this pretty accessible.
    Ms. Oliva. I would totally agree with that, and I would 
also just add that we need to make sure communities who receive 
these funds are doing outreach specifically to these small 
landlords so that they can make sure that anybody who is one of 
their tenants who is behind in rent is accessing this resource 
to get them whole.
    Chairman Clay. The gentleman from California's time has 
expired.
    I now recognize the gentleman from Florida, Mr. Lawson.
    Mr. Lawson. This question is to Ms. Oliva. Concerns have 
been raised that the Emergency Rental Assistance and Rental 
Market Stabilization Act that was included in the HEROES Act 
would not provide rental assistance to the higher-income people 
who lost their job due to the COVID-19 pandemic. It says their 
former income would be too high to qualify for the program. 
Could you please explain how these people would be qualified 
under the program?
    Ms. Oliva. I would be happy to. Thank you for that 
question, because I think it is an important one. The program 
as passed in the HEROES Act actually contemplates exactly that 
scenario in a couple of different ways. It does target a 
certain amount of the funding to people who are extremely-low-
income and very-low-income. And then, it actually allows 
communities the flexibility to go up to about 120 percent of 
area median income with 30 percent of the funds, if I remember 
correctly. But it also makes a change and makes a very specific 
change to how eligibility is determined at the point of 
application per assistance. And that means that really it is 
taking into account only the income that is happening right now 
for a household to make them eligible for assistance. So 
households who have lost income that might have been higher 
income in the past and have lost income as a result of the 
economic impact of COVID-19 would--as long as they meet one of 
those income requirements 30 percent, 50 percent, or up to 80 
to 120 percent, then they would be eligible for these 
resources.
    So, it is actually specifically contemplated and addressed 
in the HEROES Act.
    Mr. Lawson. Okay. I am trying to wrap my head around that. 
I am trying to understand it a little bit better. But the 
individuals that I am talking to really feel like when they 
read the program, they were left out. And so I am trying--I 
have to give them some assurance based on what you are telling 
me. And maybe I need to read some more, that according to what 
you are saying is that it is going to be up.
    And maybe the chairwoman might want to comment on that 
because that is a big concern that I have in an area--in two 
areas, in Tallahassee and in Jacksonville--they are not 
systematically left out of the HEROES plan. Am I correct?
    Ms. Oliva. If they are at income levels between zero up to, 
in some cases, 120 percent of area median income, they can be 
served through the Emergency Rental Assistance Program in the 
HEROES Act, but with the caveat that there are specific types 
of targeting that are also worked into the Act to ensure that 
people with the highest need are prioritized.
    Mr. Lawson. So you are saying a hundred and some percent--
let's say $150,000 for a family or for an individual?
    Ms. Oliva. Area median income is for the household.
    Mr. Lawson. Okay. So, in most cases, many don't fall into 
that category.
    Ms. Oliva. If they lost income due to the effects of COVID-
19, they very well could fall into that category. Because the 
way that eligibility is determined based on the way that the 
law is written, it is based on their income at the time that 
they are applying for assistance. It looks like maybe Mr. 
Kingsella also has some thoughts on this.
    Mr. Lawson. Okay.
    Mr. Kingsella. Absolutely. Thank you, Congressman Lawson, 
and Ann, thank you. That is absolutely right. That was a major 
point of discussion with a number of stakeholders on the 
conversations around this policy. And we were very pleased to 
give confirmation from the authors that the testing is as of 
the time of application, not some trailing period of months. So 
if you are a household that, let's say, 150 percent of area 
median income, you lose 50 percent of your income, you are now 
cost-burdened, you have the opportunity to apply for and 
receive an emergency rental assistance voucher.
    Mr. Lawson. Okay. I am hoping I can get this in. I have a 
lot of student housing here. And many of the owners of these 
complexes are saying that they are pretty much left out because 
with the loans and stuff that they have, that they are not 
allowed to seek other resources in order to provide for the 
management of their loans because it is the type of loan they 
signed up for. And that becomes a problem because you have a 
lot of complexes here that house students, and these students 
are not in these complexes. So, they are suffering from paying 
their mortgages.
    Have you done anything in that regard, that anyone can 
comment on?
    Ms. Oliva. I would just note that the Emergency Rental 
Assistance Programs and the other programs that are included in 
the HEROES Act are really about supporting the individual 
household. I could be wrong, but I don't think that the 
underlying financial sort of setup for the building as a whole 
would make any of those people or households ineligible for 
funding as long as they meet the requirements.
    Chairman Clay. The gentleman from Florida's time has 
expired.
    I now recognize the gentlewoman from Michigan, Ms. Tlaib, 
for 5 minutes.
    Ms. Tlaib. Thank you, Mr. Chairman. It is always so good to 
see you. And thank you so much for this hearing on an 
incredibly important issue. As someone who represents a very 
much front-line community in the third ward district, I have 
seen my folks really enduring this pandemic.
    Talking about what is in the HEROES Act, I do want to 
uplift something that I think is really critically important. 
The moratorium for--in the State of Michigan, we have a 
separate moratorium that is actually over on Friday. And one of 
the things I have been really stressing about, just for the 
panel to know is, I know the moratoriums are just Band-Aids, 
and that after they are done, all of it, from the student loans 
to the mortgages to the water payments, all of those things 
that were moratoriums are now going to be due.
    My issue is, we are always specifically saying, okay, we 
are going to do something about utility shutoffs, like water 
shutoffs in my district. We are going to specifically do 
something about renters' help. Why aren't we looking at the 
fact that most of our neighbors across the country are not as 
blessed as many of my colleagues and I. They are very much 
living paycheck-to-paycheck. Why aren't we talking about 
recurring payments? Meaning, I have the Automatic BOOST to 
Communities Act where we say: Look, we are going to have 
precharged debit cards given out to people during this pandemic 
because again, many of them were in survivor mode before the 
pandemic.
    And now we are asking them: Hey, hold off, you don't have 
to pay rent now. But, yes, in a few months, all of the rent 
will be due at the same time.
    So I want to hear from you, especially Dr. Jenny Schuetz, 
you had mentioned about the stimulus. And I want to hear from 
you as you work with advocates on the ground, does a recurring 
payment, do stimulus payments help address the issue around 
rent?
    Ms. Schuetz. Thanks for that question. A number of my 
colleagues at Brookings have actually written a year ago--it is 
very prescient now--an argument that we should have automatic 
stabilizers that are tied to things like the national 
unemployment rate. So that, rather than Congress having to 
decide on these on a case-by-case basis, that assistance 
directly to households, or potentially to local governments, 
that those are tied to these national markers of economic 
assistance. And you could do that. You could even do something 
that is tied to sort of local rates. The local unemployment 
rate, when that goes above some level, that payments to 
households directly kick in until the unemployment rate goes 
lower. So, there are some very strong arguments to doing that. 
Then, the number of payments that have to be made would be 
determined by how quickly the economy recovers.
    Ms. Tlaib. Do you have any insight, Ms. Oliva or Ms. Hill 
or Mr. Kingsella, when you talk to advocates, are they pushing 
this idea around, recurring payments as addressing some of 
these social needs that existed prior to the pandemic, but 
obviously has been heightened due to it?
    Ms. Hill. I would say, absolutely. Working in communities 
throughout the State of Louisiana, one of the things that is 
very clear to me is that Louisiana is going to continue to feel 
the effects of the COVID-19 pandemic for years to come.
    We know that, in the New Orleans area, in particular, our 
economy really heavily depends on tourism and hospitality jobs. 
And so, the concern that we have and that our clients have is 
that while stimulus and the unemployment insurance has been 
helpful, we know that folks are now being asked to return to 
work in what is traditionally the slowest time for those 
industries. And so, they are now going back to work, and our 
moratorium here ends on June 15th. So we are concerned that 
people are going to have to catch up on the rent that they 
missed during the moratorium.
    Ms. Tlaib. Ms. Hill, do you think recurring payments is 
something that needs to be really leading this conversation 
about how we address some of these issues?
    Ms. Hill. Absolutely, because the nature of our lives means 
that we don't just incur one-time costs. Rent, bills, those 
things occur on an ongoing basis. The stimulus and the 
unemployment money has been very helpful. But in order to help 
people to continue to recover from this, ongoing payments are 
certainly incredibly important.
    Ms. Tlaib. Any other panelists who would like to chime in?
    Mr. Kingsella. I think the Emergency Rental Assistance Act 
clearly provides--one of the bright spots of it is, it provides 
both the catching up on rent arrearages as well as future 
rental payment needs.
    Ms. Tlaib. Thank you so much. Thank you to the chairman. I 
just want you all to know, it is not only rent; it is 
utilities, it is water. That is why you have to give people 
human dignity, and give them the resources that they need and 
let them choose what is the priority for their families so they 
can be able to live with the quality of life and humanely.
    Thank you so much, Mr. Chairman.
    Chairman Clay. Thank you, Ms. Tlaib.
    And the gentlewoman from Michigan yields back.
    I now recognize the gentlewoman from Iowa, Mrs. Axne, for 5 
minutes.
    Mrs. Axne. Thank you, Mr. Chairman. It is great to see your 
face, and I would like to thank the witnesses for being here. 
I'm glad we could make this happen.
    I want to get right to it. In the most recent survey from 
the Census Bureau, more than 30 percent of Americans had very 
little confidence that they would be able to pay their next 
month's rent. Those, of course, are folks with overwhelmingly 
lower incomes and, in fact, in my State of Iowa, every one of 
these renters makes less than $50,000.
    We worked on the CARES Act and we did create the eviction 
moratorium to protect those renters in federally-backed 
properties, and I know that most States have put in broader 
prohibitions on evictions to keep people in their homes over 
the last couple of months, but as Representative Tlaib just 
mentioned, and in States like Iowa, people still owe their 
rent, and some of these moratoriums have expired. Mine here in 
Iowa expired 2 weeks ago.
    Ms. Oliva. I know that 70 percent of homeowners with 
mortgages backed by Fannie Mae or Freddie Mac have been 
provided financial assistance by giving forbearance and 
allowing them to delay payments until the end of their 
mortgage. I know we have covered this a bit so far today, but 
just to confirm, have we done anything similarly broad to help 
renters stay in their homes during this crisis?
    Ms. Oliva. No. We don't have a specific package for renters 
in this crisis in the same way yet, which is why we are so 
excited about what is included in the HEROES Act, because it 
provides short-term, medium-term, and long-term options that 
can really be used together at the local level to address needs 
for people who are experiencing homelessness all the way 
through eviction prevention.
    So, that is why we are so excited about this law.
    Mrs. Axne. Very good. Thank you and, of course, I want to 
thank Mr. Heck and Chairwoman Waters for their leadership in 
introducing the bill to provide the hundred billion dollars of 
emergency rental assistance. I am very proud to cosponsor that.
    But given that homeowners typically have higher incomes and 
more ability to absorb hits during downturns like this, do you 
worry that leaving renters, who are most likely to have lost 
income during this crisis, much more so than probably 
homeowners--do you worry that leaving them out of assistance 
could worsen the income and wealth inequity during this crisis?
    Ms. Oliva?
    Ms. Oliva. Oh, my apologies. I'm sorry. I wasn't sure that 
was for me.
    Yes, of course, we are, because we know that people at zero 
to 30 percent of area median income are the people who 
experience homelessness the most. We know that folks who are 
extremely-low-income and very-low-income will have trouble 
paying their rent. And that we have this potential cliff 
coming, as you have mentioned and others have mentioned, where 
there are arrears that have to be paid, and a one-time stimulus 
check is not enough to pay those arrears.
    So, emergency rental assistance and some long-term options 
for folks who need that is really important so that we are not 
increasing the gap that already exists, and it is also why we 
need to take a racial justice and equity approach as we design 
these programs at the State and local levels so that we are 
paying attention to how race and ethnicity plays into those 
gaps. And you can see some of the details on that in my written 
testimony.
    Mrs. Axne. Thank you, and thank you for bringing that up, 
because I was going to say I would be remiss if I didn't 
mention the impact that the current policy would have on the 
racial wealth gap that we are currently seeing, and we 
certainly need to address that structural inequity.
    Last thing, the history of redlining and discrimination in 
this country has led directly to 74 percent of white households 
being homeowners, compared to only 44 percent of Black 
households. Ms. Hill, or anyone else, do you think targeting 
assistance only to homeowners is likely to further exacerbate 
that gap?
    Ms. Hill. Absolutely. And we know from our experience here 
in Louisiana with disaster recovery work, that that is what has 
happened. When we target resources to homeowners, who tend to 
be overwhelmingly white, and we leave out renters, who are 
disproportionately people of color, then really what we are 
doing is just working to perpetuate segregation and inequity.
    Mrs. Axne. Thank you for that. We have a long way to go, 
and I am so grateful that we are having this conversation as we 
look to addressing these systemic issues across this country. I 
appreciate all of your support and work on this to everybody 
who is here today, so thank you so much.
    And I yield back.
    Chairman Clay. The gentlewoman from Iowa yields back, and 
it's so good to see you too, Cindy.
    That is the end of the list of Members to ask questions. I 
want to recognize the ranking member for 1 minute for closing 
remarks.
    Mr. Stivers. Thank you, Chairman Clay, for holding this 
hearing. It has been very informative, and even as we are 
seeing our economies open up in most States, it is clear that 
there are millions of Americans going through very difficult 
times.
    Our witnesses have provided some very helpful insights that 
should inform our thinking moving forward and, as I said 
earlier, I have an open mind and I look forward to working 
together with both Republicans and Democrats to find solutions 
as we move forward.
    We may have some disagreements on some specific form or 
substance of the policy response, but I stand ready to partner 
with the chairman and with Democrats and Republicans to try to 
make sure we can keep people in their homes and give people 
stable housing as we move forward.
    Thank you, and I yield back. Thanks for doing this hearing, 
Mr. Chairman.
    Chairman Clay. Thank you so much, Mr. Stivers. And I look 
forward to working with you and all of the members of the 
subcommittee in a bipartisan fashion to address some of the 
most basic needs that our constituents' and the citizens of 
this country face, and one of them is housing, and a roof over 
their head. So, we will move expeditiously in that manner.
    I would like to thank our witnesses for your testimony 
today, too. I found your insights to be invaluable and we will 
certainly use them as guidance as we move forward and consider 
legislation.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing is now adjourned. Thank you.
    Mr. Stivers. Mr. Chairman, have a great day.
    Chairman Clay. You, too. Take care, Steve.
    [Whereupon, at 2:06 p.m., the hearing was adjourned.]

                            A P P E N D I X



                             June 10, 2020
                             
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