[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 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]