[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                   WHERE HAVE ALL THE HOUSES GONE?
                    PRIVATE EQUITY, SINGLE FAMILY
               RENTALS, AND AMERICA'S NEIGHBORHOODS

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

                            VIRTUAL HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 28, 2022

                               __________

       Printed for the use of the Committee on Financial Services
       
                         
                           Serial No. 117-90
                           
                           
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]      
                  
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
48-334 PDF               WASHINGTON : 2022                     
                  

                 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             FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York           BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            ANN WAGNER, Missouri
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            ROGER WILLIAMS, Texas
BILL FOSTER, Illinois                FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio                   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
CINDY AXNE, Iowa                     TREY HOLLINGSWORTH, Indiana
SEAN CASTEN, Illinois                ANTHONY GONZALEZ, Ohio
AYANNA PRESSLEY, Massachusetts       JOHN ROSE, Tennessee
RITCHIE TORRES, New York             BRYAN STEIL, Wisconsin
STEPHEN F. LYNCH, Massachusetts      LANCE GOODEN, Texas
ALMA ADAMS, North Carolina           WILLIAM TIMMONS, South Carolina
RASHIDA TLAIB, Michigan              VAN TAYLOR, Texas
MADELEINE DEAN, Pennsylvania         PETE SESSIONS, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   RALPH NORMAN, South Carolina
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts

                   Charla Ouertatani, Staff Director
              Subcommittee on Oversight and Investigations

                        AL GREEN, Texas Chairman

EMANUEL CLEAVER, Missouri            TOM EMMER, Minnesota, Ranking 
ALMA ADAMS, North Carolina               Member
RASHIDA TLAIB, Michigan              BARRY LOUDERMILK, Georgia
JESUS ``CHUY'' GARCIA, Illinois      ALEXANDER X. MOONEY, West Virginia
SYLVIA GARCIA, Texas                 WILLIAM TIMMONS, South Carolina, 
NIKEMA WILLIAMS, Georgia, Vice           Vice Ranking Member
    Chair                            RALPH NORMAN, South Carolina


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 28, 2022................................................     1
Appendix:
    June 28, 2022................................................    33

                               WITNESSES
                         Tuesday, June 28, 2022

Baker, Jim, Executive Director, Private Equity Stakeholder 
  Project........................................................     5
Bogany, Shad, Agent, Better Homes and Gardens....................     7
Lopez, Sofia, Deputy Campaign Director for Housing, Action Center 
  on Race & the Economy (ACRE)...................................     8
Raymond, Elora Lee, Assistant Professor, School of City and 
  Regional Planning, Georgia Institute of Technology.............    10
Schuetz, Jenny, Senior Fellow, Brookings Institution.............    12

                                APPENDIX

Prepared statements:
    Baker, Jim...................................................    34
    Bogany, Shad.................................................    85
    Lopez, Sofia.................................................    90
    Raymond, Elora Lee...........................................   101
    Schuetz, Jenny...............................................   110

              Additional Material Submitted for the Record

Adams, Hon. Alma:
    ``Local Leaders are Worried about Corporate Landlords, but 
      Find Their `Hands Tied'''..................................   116
    ``Wall Street-backed Landlords Now Own More than 11,000 
      Single-Family Homes in Charlotte''.........................   122
Emmer, Hon. Tom:
    Letter from The Amherst Group................................   130
Timmons, Hon. William:
    Written responses to questions submitted to Shad Bogany......   142

 
                       WHERE HAVE ALL THE HOUSES GONE?
		       PRIVATE EQUITY, SINGLE FAMILY
                   RENTALS, AND AMERICA'S NEIGHBORHOODS

                              ----------                              


                         Tuesday, June 28, 2022

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 12:01 p.m., 
via Cisco WebEx, Hon. Al Green [chairman of the subcommittee] 
presiding.
    Members present: Representatives Green, Cleaver, Adams, 
Tlaib, Garcia of Texas, Williams of Georgia; Emmer, Timmons, 
and Norman.
    Ex officio present: Representative Waters.
    Chairman Green. Thank you very much, Franklin, and 
greetings to all. The Subcommittee on Oversight and 
Investigations 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.
    Today's hearing is entitled, ``Where Have All the Houses 
Gone? Private Equity, Single Family Rentals, and America's 
Neighborhoods.''
    I now recognize myself for 3 minutes to give an opening 
statement.
    Today's hearing will examine troubling issues regarding the 
mass predatory purchasing of single-family homes by private 
equity firms, including the adverse impact predatory purchasing 
has had on first-time homebuyers, the working class, and people 
of color.
    After an extensive investigation into this practice, we 
have found that private equity companies have bought up 
hundreds of thousands of single-family homes and placed them on 
the rental market, which removes from the housing market homes 
that might otherwise have been purchased by individual 
homeowners. These corporate buyers have tended to target lower-
priced starter homes requiring limited renovation.
    These homes would likely have been bought by first-time 
buyers, low- to middle-income homebuyers, or both. These homes 
tend to be located in communities with significantly more 
families of color than the national average. They also tend to 
be located in neighborhoods with more working people and single 
mothers than average.
    These private equity firms have the advantage of being able 
to purchase these homes with cash. Therefore, they easily 
outcompete individual buyers who may require loans.
    This all has the troubling effect of displacing residents 
of color and leading to gentrification of these communities.
    Further, private equity firms have demonstrated themselves 
to be very poor landlords. Evidence shows that these companies 
implement significant increases in rent and fees on these 
homes. Evidence also indicates that they evict tenants at a 
higher rate and account for a higher percentage of evictions in 
areas where this practice is concentrated.
    Statistics show that evictions by corporate landlords 
proceeded throughout the COVID-19 pandemic. This was despite 
Federal, State, and local protections against such evictions, 
and these evictions were disproportionately of renters of 
color. This is simply shameful.
    Corporate landlords are also more difficult to contact. 
Therefore, their tenants find themselves unable to amicably 
resolve issues involving rent or maintenance.
    Our investigation also shows that once these homes have 
been purchased by a private entity firm, they tend to be sold 
in bulk to other such entities. This can permanently remove 
these homes from the market for individual homebuyers.
    This predatory purchasing contributes to our nation's 
shortage of affordable housing and exacerbates the racial 
wealth gap. Because predatory lending contributed to a housing 
bubble, we must concern ourselves with predatory purchasing.
    I look forward to hearing from our witnesses on this deeply 
concerning matter.
    I now recognize my friend, the ranking member of the 
subcommittee, Mr. Emmer, for 5 minutes for an opening 
statement.
    Mr. Emmer, you may be on mute.
    Mr. Emmer. I am on mute. Now, I am off mute.
    Thank you, Mr. Chairman.
    Can you hear me now?
    Chairman Green. I hear you well, and you sound much better 
when you are off mute.
    [laughter]
    Mr. Emmer. Thank you, sir, and thanks to our witnesses for 
appearing before the subcommittee today. I look forward to your 
testimony.
    Today, Americans are being punched in the face with 8.6 
percent inflation. When our constituents go to the grocery 
store or the gas pump or when they look for housing, the stark 
failure of Congress' spend-your-way-to-prosperity policies 
starts to sink in.
    While many Americans can't afford a full tank of gas or to 
buy meat at the grocery store, our subcommittee is focusing on 
institutional homeownership in the home rental market.
    In today's hearing, my Democrat colleagues may claim that 
private equity firms have strong-armed a majority of the 
single-family home rental market. But make no mistake. These 
entities capture only 2 percent of the nation's single-family 
home rental market. It is clear that today's hearing is nothing 
more than the Majority's attempt to use institutional investors 
as a scapegoat for the poor housing policy that they are 
responsible for, and as an excuse to avoid the real problem at 
hand: inflation.
    Generally speaking, there are three types of individuals 
who choose to rent: those saving for a future down payment on a 
home; those wishing to retain the flexibility to move; and 
those who cannot own a home for any number of reasons, 
including affordability issues.
    Single-family rental homes offer Americans an attractive 
alternative to other housing options they might consider. As 
prices increase across-the-board, especially for housing, and 
wages decrease, homeownership is a dream further out of reach 
than ever before for many Americans.
    Americans are facing the largest cost differential in 20 
years to own versus to rent a home. Sixty-seven percent of 
renters say they will rent their next home because they cannot 
afford to own. The costs of all home construction materials 
have increased more than 10 percent, while the average 
homeowner sinks $6,300 into home maintenance a year. 
Institutional homeowners invest an average of $30,000 in every 
home purchased before it is ever even rented, giving tenants 
quality shelter.
    As we examine the role of institutional investors in the 
single-family home rental market, we must not forget that 
single-family rental homes fill a gap for a large population of 
our country who either prefer or need to rent. It offers 
parents an affordable way to give their kids a yard to play in, 
access to a good school district, or simply just a safe 
community in which to live.
    We cannot demonize institutions for facilitating this 
supply of quality housing that otherwise would be out of the 
realm of possibility for many Americans due to the economic 
consequences of inflation. While it may seem like institutional 
home rentals are pervasive and problematic because we are 
dedicating an entire hearing to this topic, of the 5 million 
homes purchased in 2021, 71 percent went to an individual 
owner, 28 percent went to an individual investor, and just 1 
percent went to an institutional owner.
    Let us contrast that with the very pervasive and 
problematic economic realities Americans are dealing with 
today: 8.6 percent inflation; the energy index rose 34.6 
percent; the food index increased 10.1 percent; and shelter 
increased 5.5 percent, the highest since 1991.
    For far too long, the White House and the Federal Reserve 
have maintained that inflation was transitory, when all 
Americans know that is nonsense. By the time they acknowledged 
that this inflation isn't going anywhere and, in fact, it is 
only going to get worse, they had to rush to raise interest 
rates, which deeply impacts mortgage rates, making 
homeownership even less accessible.
    This hearing is misdirected. Our committee must wake up and 
focus on solutions to the problems Americans have today, 
because no American should have to cut back on essential 
expenses like groceries or gas to make ends meet.
    I yield back.
    Chairman Green. The gentleman yields back.
    I now recognize the Chair of the full Financial Services 
Committee, my friend, the gentlewoman from California, 
Chairwoman Waters.
    Chairwoman Waters. Thank you so very much for holding this 
most important hearing today, Mr. Green, and while the 
Republicans rail about inflation, they don't have any answers, 
so they simply try and say that we cause inflation. Everybody 
knows that does not make good sense. Nobody wants inflation. 
This President is working hard to do everything that he 
possibly can to ensure that we tackle some of the problems that 
cause inflation.
    We know that there is a supply chain problem that has been 
going on ever since this pandemic started, and so, thank you 
for focusing on housing. Thank you for focusing on the fact 
that we have institutional investors who simply go into these 
communities and they buy up large numbers of homes, some of 
which could be owned by individual homeowners if the financial 
institutions gave homeowners the loans that were needed to 
purchase them.
    And so, thank you for what you are doing today, Mr. Green. 
You are on the right track.
    And I yield back the balance of my time.
    Chairman Green. The gentlelady yields back.
    The Chair now recognizes the Vice Chair of the 
subcommittee, the gentlewoman from Georgia, my friend, Ms. 
Williams, for one minute.
    Ms. Williams of Georgia. Thank you, Mr. Chairman.
    In today's hearing, we will hear about rising corporate 
ownership in the rental housing market, and as in any market 
changes, new challenges arise in protecting those most 
marginalized.
    To illustrate this in the rental housing market, let us 
start today by taking an imaginary journey to Forest Cove, a 
housing complex in Atlanta that is home to hundreds of people. 
Imagine you are walking the grounds. Straight ahead, you see a 
building that is burned-out and boarded-up. There is trash 
everywhere. You walk inside into one of the units. But be 
careful where you step. Part of the floor is collapsing.
    Over to the right, you can still tell that bugs and rodents 
live there. You wonder how hundreds of problems that you see 
right before your very eyes went unsolved for years until they 
turned into millions of dollars in damages.
    The residents of Forest Cove, under large landlords, were 
neglected until things got so bad that residents had to be 
moved out of their homes.
    Across the country, we must hold large landlords 
accountable to the tenants that they serve.
    Thank you, Mr. Chairman, and I yield back the balance of my 
time.
    Chairman Green. The gentlelady yields back.
    Members and friends, we will now welcome the testimony of 
our distinguished witnesses: Jim Baker, the executive director 
at the Private Equity Stakeholder Project; Shad Bogany, a real 
estate agent with Better Homes and Gardens Real Estate; Sofia 
Lopez, a researcher and deputy campaign director for housing 
with the Action Center on Race & the Economy; Dr. Elora Lee 
Raymond, an assistant professor at the Georgia Institute of 
Technology; and Jenny Schuetz, a senior fellow at the Brookings 
Institution.
    Witnesses are reminded that their oral testimony will be 
limited to 5 minutes. You should be able to see a timer that 
will indicate how much time you have left, and when you have 
encroached upon more than your 5 minutes, I will probably tap 
lightly so that you will know to wrap up your statement. I 
would ask that you would be mindful of the timer so that we can 
be respectful of both the witnesses' and the committee members' 
time.
    And without objection, your written statements will be made 
a part of the record.
    Mr. Baker, you are now recognized for 5 minutes to give an 
oral presentation of your testimony.

  STATEMENT OF JIM BAKER, EXECUTIVE DIRECTOR, PRIVATE EQUITY 
                      STAKEHOLDER PROJECT

    Mr. Baker. Good afternoon, Chairman Green, Ranking Member 
Emmer, and members of the subcommittee.
    My name is Jim Baker, and I'm with the Private Equity 
Stakeholder Project, a nonprofit focused on impacts of private 
equity firms and similar Wall Street firms on ordinary people, 
including residents of apartments, rental homes, and mobile 
homes.
    Since the global financial crisis of 2008, private equity 
firms have acquired growing portions of U.S. housing, helping 
to drive up rents and home prices to unprecedented levels. The 
impact has been sharpest in the single-family rental industry 
which was created by private equity firms. Rents for rental 
homes have grown more than 13 percent over the past year, and 
even more sharply in some areas, for example, 39 percent in 
Miami, and 19 percent in Phoenix.
    Just over a decade ago, no single landlord owned more than 
a thousand homes. Now, the top five--Invitation Homes, Pretium 
Partners, American Homes 4 Rent, Amherst Holdings, and Cerberus 
Capital or FirstKey Homes--together own or operate almost 
300,000.
    In 2016, Pretium Partners pitched investors that, 
``Households that have been unable to obtain mortgages have 
become renters, thus driving high occupancy rates and robust 
rent growth.''
    As these same firms have in recent years aggressively 
competed with homebuyers for houses, in some areas this 
prediction has increasingly become a self-fulfilling prophecy. 
Private equity-backed rental home companies' acquisitions have 
accelerated during the pandemic. For example, Pretium Partners-
owned Progress Residential went from 40,000 homes in January 
2021 to 80,000 homes in March 2022.
    Private equity firms have drawn capital from global 
investors. For example, last April, The Wall Street Journal 
reported that Singapore's sovereign wealth fund GIC, Canada's 
PSP Investment Board, and German insurer Allianz SE were 
investing hundreds of millions or billions of dollars in U.S. 
single-family homes.
    A December 2021 investigation by The Washington Post and 
the International Consortium of Investigative Journalists, 
drawing on the Pandora Papers leak of offshore financial 
records, showed Pretium pouring money into rental homes, part 
of an unprecedented flow of global finance into U.S. suburbs 
that has left stressed tenants in its wake. The investigation 
also pinpointed how Pretium Partners was able to grab the 
lion's share of home inventory away from ordinary families by 
quickly making all-cash offers.
    In the first quarter of 2022, investors made up a record 28 
percent of single-family home purchases, up from 19 percent in 
2021, and 16 percent, on average, between 2017 and 2019.
    According to a recent report by the Harvard Joint Center 
for Housing Studies, investors with large portfolios of at 
least a hundred properties drove much of that growth.
    In April, The Wall Street Journal reported that large 
investors had only deployed about one-quarter of the $89 
billion in capital they have amassed to acquire rental homes. 
Some have projected that the share of rental homes owned by 
large investors will hit several million homes, or 40 to 50 
percent of market share, by 2030.
    We tracked eviction filings during the pandemic across 
dozens of counties in Georgia, Florida, Tennessee, Texas, 
Arizona, and Nevada. Large single-family rental landlords like 
Pretium Partners, Invitation Homes, and Amherst Holdings were 
among the most frequent eviction filers we saw out of all 
landlords, including when the CDC eviction moratorium was in 
effect. For example, Pretium Partners rental home companies 
filed to evict more than 3,000 residents, Invitation Homes, 
more than 2,100 residents, and Amherst Holdings, more than 
1,200 residents.
    We also found that Pretium Partners' rental home companies 
filed to evict residents in majority Black counties in Georgia 
at significantly higher rates than they did residents in 
majority White counties in Florida.
    Katrina Chisholm, a Pretium Partners tenant from Georgia, 
provided testimony to a July 2021 House hearing, saying, ``I 
felt expendable and they showed me I was. I was not given any 
consideration as a long-term tenant with no evictions on my 
record ever. I felt as if I had broken the law somehow while we 
were in the middle of the pandemic. There was no concern for my 
life or my son's life, as they focused on their profit margin. 
I was not profitable so I was booted out with almost no 
notice.''
    If the COVID-19 pandemic was a test of how landlords would 
deal with renters in challenging times, then some of the 
largest single-family rental landlords failed that test 
miserably.
    We believe lawmakers should take steps to protect tenants 
and homebuyers from predatory behavior in the housing market 
and limit the private equity buy-up of our homes by requiring 
corporate landlords to disclose beneficial ownership of homes 
and to provide regular disclosures of eviction filings, and 
evictions, as well as rent increases, creating a corporate 
landlord-consumer complaint database to track landlords' 
practices, and provide residents a forum to get responses to 
complaints, as well as enacting broad tenant protections such 
as just cause eviction legislation, and right to counsel laws 
so that tenants facing eviction have legal representation, and 
limits on annual rent increases by corporate landlords, 
including mandatory fees.
    Thank you.
    [The prepared statement of Mr. Baker can be found on page 
34 of the appendix.]
    Chairman Green. Thank you, Mr. Baker.
    The Chair now recognizes Mr. Bogany for 5 minutes to give 
an oral presentation of your testimony.

   STATEMENT OF SHAD BOGANY, AGENT, BETTER HOMES AND GARDENS

    Mr. Bogany. Thank you, Chairman Green, for affording me 
this opportunity to speak before the Financial Services 
Committee on the impact that investors are having on the 
affordable housing market.
    My name is Shad Bogany. I have over 40 years of experience 
helping families purchase their first home. I have been an 
advocate for crusading for families through community 
involvement.
    I have served as chairman of the Texas REALTORS, chairman 
of the Houston Association of REALTORS, chairman of the Houston 
Urban League Community Development Corporation, and a board 
member of the Texas Department of Housing and Community 
Affairs.
    Currently, I am the president of the Fort Bend Housing 
Finance Corporation. My radio show that I started 32 years ago 
focuses on educating and encouraging would-be homebuyers on the 
availability of financial mortgage products, housing 
opportunities, and the benefits of being a first-time 
homeowner. My message is, you can be a homeowner. Recently, the 
conversation has changed. The discussion there is about 
institutional investors buying up houses, competing with first-
time homebuyers for limited housing inventory.
    More alarming, the investors are targeting minority 
communities since, historically, they are undervalued and 
lower-priced, and driving up the prices for residents, making 
the Houston dream of homeownership for the population 
unachievable.
    Homebuyers are having to compete with investors that are 
paying cash over the list price, resulting in an increase in 
investor purchases. In Houston alone, 40 percent of the buyers 
are investors. In Dallas, 52 percent of the investors are 
buyers, creating a generation of renters who will miss out on 
the benefits of homeownership, the ability to create wealth, 
and stabilize communities.
    The risks today, should investors liquidate their massive 
real estate holdings, would be a decrease in property value, 
causing subdivisions to decline, an increase in crime, and a 
loss of a tax base for municipalities, and lastly, developing 
new ghettos by creating for-rent-only subdivisions.
    This trend started when Congress incentivized investors in 
the rental market and made homeownership equal to renting by 
lowering the tax benefits of homeownership. Homeownership among 
Black Americans has been declining in recent years, the lowest 
of the ethnic groups. By increasing the percentage of renters 
in the Black community, the institutional investors are 
creating a modern-day sharecropping colony governed by 21st 
Century Jim Crow laws.
    In 1968, the Supreme Court established that housing 
discrimination is a badge of slavery. It reminds me of my 
ancestors' history over 100 years ago. You live on the land, 
you have a place to stay, but all of your hard work and money 
goes to benefit someone else.
    Connecting with our past, and learning from policies that 
are suppressive, paves the way for a future free from housing 
discrimination. That future is not here yet.
    Now, investors are requiring higher credit scores in 
rentals than what lenders require for home mortgages. 
Minorities typically have more nontraditional credit, which the 
FICO score system doesn't consider--the latest Jim Crow.
    Recently, in Denton, Texas, a homeowners association passed 
bylaws that landlords are banned from renting to families on 
housing vouchers, a modern-day redlining. Not only do Black 
communities and other minorities miss out on the opportunity to 
benefit from the intergenerational wealth that homeownership 
offers, they are being pushed out of the rental market, and 
driven to less desirable areas with high poverty and crime, or 
worse, becoming homeless.
    Congress, we need you to act. Let me tell you what you 
could do. You could mandate that all foreclosures--Fannie Mae, 
Freddie Mac, Ginnie Mae--be stipulated that they offer to 
first-time homebuyers before they sell them to investors.
    The other thing you could do is you could create tax 
incentives for sellers when the property is sold to a first-
time homebuyer. Waive the FHA 90-day flipping rule. This would 
allow first-time homebuyers access to more inventory and better 
financial terms.
    HUD managed the largest rental assistance program, Housing 
Choice vouchers. We are now using Housing Choice vouchers not 
only for leasing but also for moving buyers into home 
purchasing.
    I, personally, have had tremendous success in helping 
families move to homeownership who are on Section 8 in high-
opportunity neighborhoods. This needs to be expanded on a 
national scale.
    The bottom line is, we can't tell sellers who they can sell 
their property to, but we can encourage them and incentivize 
them to sell to first-time homebuyers.
    I appreciate this opportunity to shine a light where the 
tire meets the road in your districts.
    [The prepared statement of Mr. Bogany can be found on page 
85 of the appendix.]
    Chairman Green. Thank you, Mr. Bogany, for your testimony.
    The Chair now recognizes Ms. Lopez for 5 minutes to give an 
oral presentation of your testimony.

STATEMENT OF SOFIA LOPEZ, DEPUTY CAMPAIGN DIRECTOR FOR HOUSING, 
           ACTION CENTER ON RACE & THE ECONOMY (ACRE)

    Ms. Lopez. Thank you. Good afternoon, Chairman Green, and 
Ranking Member Emmer. Thank you for the opportunity to testify 
today on private equity ownership of single-family rentals.
    My name is Sofia Lopez. I am the deputy campaign director 
for housing at the Action Center on Race & the Economy (ACRE). 
We are a national organization working at the intersection of 
racial justice and Wall Street accountability.
    I had the opportunity to testify last fall in a Senate 
Banking Committee hearing on private equity landlords and I 
shared stories tenants had told me about conditions in their 
homes. I talked about one tenant facing eviction because he was 
facing thousands of dollars in fees for charges he didn't 
understand and fines for landlord requirements with which he 
had already complied.
    I talked about a mother of small children who lived with 
mold, broken stairs, and whose basement flooded, covering an 
electrical outlet. When she called her landlord to shut off her 
electricity, she was told to turn it off herself, which would 
have required her to wade through electrified water.
    More recently, I have heard about tenants in North Carolina 
and Las Vegas who faced rent increases of $100 or $200 per 
month, and were pressured to sign renewals quickly or face 
month-to-month leases with doubled monthly rent.
    The National Rental Home Council, the institutional single-
family rental trade group, insists institutional landlords are 
professionalizing the single-family rental industry. Yet, this 
so-called professionalization often squeezes tenants while 
reaping record-breaking profits.
    In studying private equity in housing, I am struck by how 
consistent tenants' experiences are across geographies and 
landlords. Tenants' stories make it crystal clear that profit 
maximization has no place in our homes.
    Research shows that the institutional single-family 
landlord business model follows five core practices. First, 
large rent increases. For example, on a 2021 earnings call, 
Invitation Homes noted it had raised rents by 30 percent in 
Phoenix, 29 percent in Las Vegas, and 20 percent in Atlanta. 
Their profits increased 33 percent in 2021 from the year prior.
    Second, fees are so central to the private equity landlord 
model that one CEO called the failure to capture fee revenue, 
``revenue leakage.'' As an example, Tricon Residential, whose 
profits tripled between 2020 and 2021, reported taking in $640 
per home, per month, in fee and other revenue and anticipates 
increasing this figure to between $850 to $950.
    Third, inadequate maintenance. In 2021, Minneapolis tenants 
living in properties owned by HavenBrook Homes, now managed by 
Progress Residential, reported waiting up to a year for 
necessary and urgent repairs, including holes in roofs and 
ceilings, broken stairways, lead paint, flooding, faulty 
electrical systems, broken and inoperable appliances, pest 
infestations, and black mold. The following year, the City of 
Columbia Heights, a Minneapolis suburb, revoked HavenBrook's 
license based on conditions they deemed to, ``put residents' 
lives at risk.''
    Fourth, eviction filings. Many of these landlords obtain 
low-cost debt through rent-backed securities. In 2017, 
Invitation Homes' rent-backed securities were underwritten 
based on 94 percent paying occupancy. To maintain cash flow to 
repay debt, and a favorable rating to get more cheap financing, 
landlords must address nonpaying tenants quickly.
    Last, convoluted ownership and use of LLCs leaves tenants 
unsure who really owns their home and who to appeal to when 
problems arise. Despite institutional landlords' insistence 
that they make up a mere 2 percent of the nation's single-
family rental market, their portfolios are heavily concentrated 
in specific markets across the Sun Belt and the Midwest, where 
tenants rights are generally more favorable to the landlord.
    Of course, this concentration isn't race-neutral and, as 
this committee's survey data show, overlaps with Black 
communities in particular. For example, Memphis has a 64 
percent Black population and has the lowest rate of Black 
homeownership in the 50 largest cities, yet the highest share 
of investor ownership of homes.
    Research found similar relationships in Los Angeles County, 
Fulton County, Georgia, and the City of Atlanta, where a higher 
concentration of institutional SFR ownership was correlated 
with higher concentrations of Black residents.
    Because of these companies' purchasing criteria, tenants 
have expressed feeling as if they had few options but to rent 
from institutional landlords to live in certain communities 
close to jobs, family, and quality schools.
    Let us be clear. Private equity and Wall Street-backed 
landlords are in every sector of the housing market, and 
residents in these sectors often face the same practices that 
yield immense profits for investors.
    The most straightforward fix for the worst conditions that 
private equity tenants face are national tenant protections, 
including protection from excessive rent increases and 
excessive fines and fees, just-cause protections requiring 
landlords to provide a reasonable justification for ending a 
tenancy, and a right to counsel and a right to organize to give 
tenants a fair chance to defend against evictions and unsafe 
living conditions.
    We also need a comprehensive landlord registry so we know 
who owns what and tenants know exactly who their landlord is.
    Lastly, we need massive Federal investment in truly 
affordable housing free from the harmful practices of private 
equity landlords and dedicated to fulfilling a fundamental 
right to housing.
    Our housing market is rapidly changing as the largest 
landlords, builders, and financiers increasingly partner with 
one another. Our communities and neighbors will feel the 
consequences until we follow the lead of tenants and housing 
justice organizers to create a more just housing system.
    Thank you. I look forward to your questions.
    [The prepared statement of Ms. Lopez can be found on page 
90 of the appendix.]
    Chairman Green. Thank you, Ms. Lopez.
    Dr. Raymond, you are now recognized for 5 minutes to give 
an oral presentation of your testimony.

STATEMENT OF ELORA LEE RAYMOND, ASSISTANT PROFESSOR, SCHOOL OF 
  CITY AND REGIONAL PLANNING, GEORGIA INSTITUTE OF TECHNOLOGY

    Ms. Raymond. Thank you, Chairman Green, Ranking Member 
Emmer, and members of the subcommittee for the opportunity to 
testify today. My name is Elora Raymond. I am an assistant 
professor in the School of City and Regional Planning at 
Georgia Tech.
    Since 2015, I have researched institutional landlords' 
eviction practices, links to gentrification, and growing market 
share. In the 15 years since the foreclosure crisis, we have 
learned a lot about the impact of institutional investors on 
households and neighborhoods.
    Far from being good landlords, these firms have 
exceptionally high eviction rates, and they profit from 
gentrification. More recently, during the pandemic, 
institutional investors dominated housing markets in 
metropolitan areas across the country and outbid homeowners 
trying to buy single-family homes.
    The eviction practices of institutional investors are 
concerning. In a study in 2015, my co-authors and I found that 
institutional investors had an eviction filing rate of 20 
percent in Atlanta; that is 2 eviction filings for every 10 
homes that they owned.
    We confirmed that this exceedingly high eviction rate was 
due to the landlord, not to other factors, by using statistical 
modeling. Even with controls for tenant and property 
characteristics, renting from an institutional investor was the 
biggest predictor of an eviction.
    Institutional landlords use eviction to boost profits. 
Firms leverage the threat of an eviction to enhance rent 
collection, rental increases, or to evict tenants in order to 
replace them with higher-income households paying higher rents. 
But these profits come at a heavy cost. High eviction rates are 
devastating for tenants, neighborhoods, and schools.
    In addition to displacement through eviction, institutional 
investors profit from gentrification. In a study of 
institutional investors' multifamily purchases, we found that 
neighborhoods in Atlanta with an institutional investor 
purchase of rental housing lost 166 more Black residents than 
adjacent neighborhoods. These purchases led to long-term 
gentrification of Black communities out of Atlanta.
    Many researchers have found that institutional investors 
crowd out homeownership at the neighborhood level. We see this 
in Atlanta, where homeownership has fallen by 6 percent since 
the mid-2000s.
    My colleague at Georgia Tech, Dr. Brian An, estimates that 
we can attribute 1.4 percent of the decline in homeownership 
specifically to large institutional investors. Particularly 
during the pandemic, institutional investors have outbid 
homeowners and mom-and-pop landlords trying to buy single-
family homes.
    In a recent study of Tampa, Miami, and Atlanta, my co-
authors and I found that institutional investors bought one in 
six of all single-family rentals last summer. In Atlanta alone, 
institutional investors bought over half of the single-family 
rentals and 17 percent of all single-family homes.
    The prices these firms paid rose by 28 percent every 
quarter. That is an increase from an average price of $130,000 
in 2019, to $275,000 in 2021. By contrast, household purchase 
prices rose by just 9 percent every quarter.
    Institutional investors' ability to outbid would-be 
homebuyers and charge exceedingly high rents is particularly 
concerning for racial and ethnic inequality, although this 
affects all communities. That is because institutional 
investors continue to target moderate-income Black and Hispanic 
neighborhoods.
    In our study, we looked at the average neighborhood 
demographics of a home that an institutional investor 
purchased. The average neighborhood was 84 percent non-White 
and 62 percent owner-occupied.
    These high market shares in urban submarkets are a far more 
meaningful measure of market power than national percentages. 
Economists and antitrust lawyers don't define markets 
nationally. We look at meaningful regional and local market 
definitions.
    The increased market power of institutional investors to 
affect home prices and set rents is a growing concern. Not only 
are there grave effects for households being priced out, but it 
is problematic if institutional investors have the market power 
to set sale prices of homes in neighborhoods where they have 
existing assets that they are using as collateral for their 
financial instruments.
    Because of the use of corporate vehicles like LLCs and 
trusts, it is impossible to identify all of the homes that 
these firms purchase. Researchers like myself can only provide 
conservative estimates.
    We need rental property registries to accurately understand 
these firms' growing market share. With accurate data and 
meaningful market definitions, policymakers should probe for 
anti-competitive practices and undue market power in the home 
purchase market and the rental market.
    Policy measures should examine ways to strengthen tenant 
legal protections so that the threat of eviction is not used to 
support the aggressive use of fees and increasing rents.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Raymond can be found on page 
101 of the appendix.]
    Chairman Green. Thank you, Dr. Raymond.
    The Chair now recognizes Ms. Schuetz for 5 minutes to give 
an oral presentation of your testimony.

     STATEMENT OF JENNY SCHUETZ, SENIOR FELLOW, BROOKINGS 
                          INSTITUTION

    Ms. Schuetz. Good afternoon, Chairman Green, Ranking Member 
Emmer, and members of the subcommittee.
    Thank you for the opportunity to testify today on this 
important issue of institutional investors and access to 
homeownership. It is an honor to be here before you this 
afternoon.
    My name is Jenny Schuetz, and I am a senior fellow at 
Brookings Metro. My comments today will provide some broader 
context on housing affordability and availability in the United 
States.
    The growth of institutional investors is a symptom rather 
than the cause of extremely tight housing markets. Rental 
housing is an attractive financial option for investors of all 
types because of market fundamentals.
    Demand for both rental and owner-occupied housing has grown 
during the past decade due to job growth and rising incomes. 
Since the Great Recession, the U.S. has not built enough 
housing, leading to historically low vacancy rates and rapidly 
rising costs.
    Private equity firms and other institutional investors 
benefit from tight housing supply but they did not create the 
problem. Local governments across the U.S. have adopted 
policies that make it difficult to build more homes where 
people want to live. Zoning rules that limit the construction 
of small, moderately-priced homes are politically popular with 
existing homeowners and local elected officials.
    The burden of high housing costs is not shared equally 
across all households. Rising housing costs create the greatest 
hardship for low- and moderate-income households. The poorest 
20 percent of households everywhere in the U.S. spend more than 
half of their income on rent, leaving them too little cash to 
pay for food and other necessities. Housing cost burdens have 
been rising among low- and moderate-income households for 
several decades, well before the growth of institutional 
investors.
    Black and Latino households continue to face higher 
barriers to homeownership, reflecting historic and ongoing 
disparities in access to credit. Fewer than half of Black and 
Latino households own their homes, compared with nearly three-
fourths of White households.
    First-time White homebuyers often receive family assistance 
with down payments. Black and Latino households have been 
systematically shut out of this means of intergenerational 
wealth building, which puts them at a greater disadvantage when 
competing with institutional investors.
    Housing quality and tenant legal protections are important 
to renter households' well-being regardless of who owns the 
property. Policymakers should be equally concerned about poor 
quality housing and fair treatment of tenants regardless of 
whether a rental property is owned by a private equity firm, a 
mom-and-pop landlord, a public agency, or a nonprofit 
organization.
    Media reports have raised concerns about housing quality 
and customer service in properties owned by private equity 
firms. But the existing data make it difficult to determine 
whether there are systemic quality differences between private 
equity firms and other types of landlords. Better data and more 
transparency are essential to inform better policy responses.
    Single-family rentals are an important part of the housing 
ecosystem. Homeownership is not the preferred choice for all 
Americans or at all points in any person's life. Having a 
diverse set of tenure choices and structure types in diverse 
neighborhoods is important for economic opportunity. Families 
may want to live in communities where they can afford monthly 
rent but cannot afford to purchase a home.
    Congress can improve renters' and homebuyers' well-being 
through four channels. First, work with State and local 
governments to expand the supply of housing, particularly 
moderately-priced rental and for-sale homes. Several existing 
proposals along these lines have bipartisan support in Congress 
and are included in the Biden Administration's Housing Supply 
Action Plan.
    Second, relieve financial stress on low- and moderate-
income households. Increased funding for housing vouchers or 
renewing the expanded child tax credit are highly effective 
tools and also have bipartisan congressional support.
    Third, provide more resources to State and local 
governments to assist their efforts in ensuring housing quality 
and tenant protections.
    Fourth, better data collection from Federal agencies could 
increase transparency of rental property ownership.
    There are no silver bullets to make housing cheaper and 
more abundant overnight. Helping renters and homebuyers will 
require sustained and coordinated policy efforts from Federal, 
State, and local governments.
    Thank you again for the opportunity to testify, and I look 
forward to your questions.
    [The prepared statement of Ms. Schuetz can be found on page 
110 of the appendix.]
    Chairman Green. Thank you for your testimony.
    I will now recognize Members for questions, and Members are 
reminded that they will have 5 minutes for questions, and that 
at the end of their 5 minutes, there will be a light to 
indicate that they are exceeding their time.
    Also, we do ask Members to try to ask their questions such 
that they may be answered within the time that they have been 
allotted.
    I am honored now to recognize the Chair of the Full 
Committee, my friend, Chairwoman Waters, for 5 minutes.
    Chairwoman Waters. Thank you very much, Congressman Green. 
I appreciate this hearing.
    I would like to direct my question to Ms. Lopez.
    Renters who live in single-family rental units owned by 
private equity investors pay higher rents compared to other 
renters and are more likely to see steeper rent hikes each 
year.
    Nationwide, rents have increased at the fastest rate in 
decades with year over, U.S. single-family rents raising by 14 
percent in April 2022, more than double compared to a year 
earlier.
    Ms. Lopez, in addition to the aggressive rent hikes, the 
committee's survey of the 5 largest single-family rental 
companies concluded that fees per rental lease increased by 
approximately 40 percent from March 2018 to September 2021, and 
that the total number of renters who were falling behind on 
late fees and rent have doubled in that time.
    Have you observed single-family rental companies taking 
advantage of renters through increased rent and fees? Can you 
explain how the securitization of rental income creates unique 
pressures to increase rent and fees each year?
    Ms. Lopez. Yes. Thank you so much for the question, 
Chairwoman Waters.
    I mentioned a couple of examples in my testimony of the 
ways in which some of these companies are taking advantage of 
tenants who are otherwise shut out of the homeownership market 
by increasing rents.
    For example, I named Invitation Homes as one company that 
has increased rents by 30 percent in the Phoenix market, 29 
percent in the Las Vegas market, and 20 percent in the Atlanta 
market, and that is just a short overview. American Homes 4 
Rent has also done the same thing.
    I also mentioned fines and fees as an important source of 
revenue for these companies. I gave the example of Tricon 
Residential who said that their profits increased by--or that 
they were able to bring in $640 per home, per month, in fee 
revenue and anticipate growing this number to $850 to $950 per 
home, per month.
    To think about that in context for myself, I could not 
imagine my housing costs increasing by 30 percent from one year 
to the next. I could not imagine being made to pay fines and 
fees for things like a smart home system or a pet fee or having 
utilities registered in my name, which is one of the examples 
that I mentioned of stories I had heard from tenants, and 
having those fees add up to $850 to $950 per month.
    And I think the survey data also shows that tenants are 
struggling to keep up with these fees, too. I was struck by 
just how many people are behind on rental and fee costs.
    Chairwoman Waters. Thank you.
    Do you believe that this incredible increase in rent is 
going to spur efforts by neighborhoods for rent control?
    Ms. Lopez. Do I think that rent control could help cut some 
of these incredible rent increases? I think, absolutely, we 
have to consider every single tool potentially available to us.
    And I agree with Ms. Schuetz that a lot of these dynamics 
are true across many different kinds of rental inventory.
    But I think just the level of egregious rent increases that 
we are seeing in institutional single-family rental properties 
means that we absolutely need to find ways to cap both rent 
increases and financing increases.
    Chairwoman Waters. I want to thank you very much.
    And I yield back, Mr. Green. Thank you.
    Chairman Green. The gentlelady yields back.
    The Chair now recognizes the ranking member of the 
subcommittee, the gentleman from Minnesota, my friend, Mr. 
Emmer.
    Mr. Emmer, you are recognized for 5 minutes.
    Mr. Emmer. Thank you, Mr. Chairman.
    Again, as I mentioned in my opening statement, inflation is 
at 8.6 percent and Americans actually need solutions right now. 
Again, we are here to discuss the institutional homeowners' 
role in the single-family rental home market, a market where 
they make up only 2 percent.
    My colleagues across the aisle have insinuated that 
institutional investors take opportunities for homeownership 
away from Americans everywhere. What they fail to acknowledge 
is that not everyone is able to purchase a home at a mortgage 
rate of 6 percent for a 30-year fixed loan, and institutional 
homeowners actually give Americans quality, affordable rental 
housing.
    Thanks to the hidden tax we call inflation, which 
definitely isn't hidden anymore, many prospective homebuyers 
simply cannot afford to pay for a monthly mortgage and the 
hidden costs piled on top like maintenance and repairs.
    These institutional homeowners remove the additional 
barriers and costs that coincide with homeownership. They 
provide maintenance services and many even offer their tenants 
financial readiness classes.
    Here is the reality. Prices are through the roof. Gas is 
up. Groceries are up. Housing is up. Inflation is punching 
Americans in the face and, actually, Americans are being sucker 
punched when you add on climbing mortgage rates that make homes 
more expensive.
    Yet, here we are. My Democrat colleagues don't seem to 
recognize that Congress' careless spending without regard for 
real solutions has made it harder for Americans to save up for 
a home.
    Ms. Schuetz, can you explain how inflation impacts the 
everyday lives of renters?
    Ms. Schuetz. I can speak more specifically to the role of 
housing costs and the way that housing costs play into 
inflation. We know, in fact, that the cost of housing has been 
rising faster than household incomes for, roughly, the past 10 
years.
    So, this is not just a short-term problem that we have seen 
with the pandemic, although it has certainly gotten worse with 
supply chain shortages that have affected the construction of 
new housing.
    But I think it is important to remember that this is a 
long-term problem caused, fundamentally, by the fact that we 
are not building enough homes and that the housing supply has 
not kept up with demand. Within the last--
    Mr. Emmer. Have single-family rental homes addressed the 
increase in demand for suburban and community living, at least 
during the pandemic?
    Ms. Schuetz. We do see an increase in the demand for, 
basically, all types of rental homes. In the past several 
years, we have particularly seen an increase in the number of 
higher-income renters, people who probably would have been 
homeowners in other generations when housing prices were 
cheaper.
    The growth of high-income renters, and also the growth of 
older-renter households, are two of the factors that drive the 
demand for single-family rentals.
    That said, we also see very high demand for multifamily 
rentals and for owner occupancy. Basically, there is demand for 
more housing across-the-board.
    Mr. Emmer. Right.
    Listen, over the past few months my Democrat colleagues 
continue to find a scapegoat for inflation. They have 
determined that institutions buying entry-level housing are 
leaving Americans without opportunities to buy.
    Yet, according to the National Association of REALTORS, the 
United States is behind, like you pointed out, Ms. Schuetz, in 
actual available housing. In fact, we are behind, according to 
the REALTORS, by 6.8 million housing units.
    Is it true that regulatory barriers at a local level are 
impeding or are partly to blame for the problem with the 
housing supply across the country?
    Ms. Schuetz. Absolutely. The fundamental reason we are not 
building enough homes, particularly in high-demand locations, 
is that our housing production system makes it very difficult.
    A combination of rules, zoning rules like bans on 
apartments, large minimum lot sizes, and a discretionary 
process where existing homeowners get to weigh in on new 
developments and, essentially, have said that they don't want 
additional housing to be built. This pushes a lot of the demand 
into neighborhoods that either are unbuilt--areas on the urban 
fringe--or in places where the existing residents are more 
friendly or less able to push back against new development.
    Mr. Emmer. Thank you.
    And I would also add that the idea that rent controls are 
somehow going to solve the problem, that is just another local 
regulation that, quite frankly, is going to frustrate the 
incentive for people to build more housing when we are already 
behind.
    I want to thank, again, the chairman and all of you for 
being here today, and I urge my colleagues across the aisle to 
consider the trillions of dollars we have spent over the last 2 
years alone and then decide who has stolen the American Dream 
of affording a home.
    I yield back.
    Chairman Green. The gentleman yields back.
    The Chair now recognizes the gentleman from Missouri, who 
is also the Chair of our Subcommittee on Housing, Community 
Development, and Insurance, my friend, Mr. Cleaver. You are now 
recognized for 5 minutes.
    Mr. Cleaver. Thank you, Mr. Chairman, and before I even get 
into my questioning, I really would like to express my 
appreciation for your willingness to bring this issue up to the 
subcommittee.
    I think it is a critically important issue, and I don't 
think that it has been discussed enough around the country, or 
if it has, it hasn't been listened to enough.
    Let me start. Ms. Lopez, thank you for being here today. 
Have you ever heard of, ``coup capitalism?'' You probably 
haven't, because I made it up. When I talk about coup 
capitalism it is a coup d'etat because there is an overthrow of 
the homeownership in the urban core and there is a regime 
change that comes in.
    I have here, Mr. Chairman, an article from the Kansas City 
Star, our local newspaper here in Kansas City, and it was a 
pretty extensive story that they wrote last December and it 
talks about the land grab on the east side of Kansas City and, 
frankly, on the west side, the west side because probably then, 
historically, maybe over 100 years, it has been an Hispanic 
area, and the near east side has been fully African American.
    And they go through and they point out all of the issues 
that have arisen, and I began to call it coup capitalism 
because the people have been overthrown. They are leaving the 
west side. It is probably already lost.
    Ms. Lopez, one of my questions is, do you think that the 
Federal Government--I don't think the municipal government can 
do it--should pass some kind of legislation that would require 
these vulture capitalists, before they could come in and do 
work, there has to be opportunities for local homeownership and 
then local participation in the purchasing of houses and land 
in historically poor areas?
    Ms. Lopez. Thanks so much for the question, Congressman. I 
think that is critical, and you are touching on several very 
key things.
    One, you mentioned policy at the national level. I think we 
all know that right now we have a complete patchwork of 
policies that protect homeowners, that protect tenants, that 
all come down to the luck of the draw of where you happen to 
live, where you happen to have been born, what place you call 
your community.
    I agree that the most broad-reaching thing would be a 
Federal policy, and I think you are absolutely right, make no 
mistake about it, these companies engage in equity stripping.
    As of 2019, for every $1 of wealth belonging to White 
Americans, Black Americans had 17 cents, and these companies 
make that wealth gap worse because they buy homes in 
communities like yours and, instead, transfer it to 
shareholders. It is the exact same thing that happened during 
the foreclosure crisis.
    So, I think you are absolutely right. We need to do 
everything we can to make sure that wealth stays locally and 
continues to support a community that is experiencing the same 
dynamics you describe, dynamics I have seen in every city I 
have ever lived in.
    Mr. Cleaver. Thank you very much. I might add right here 
that institutional purchases of homes in the State of Missouri 
is at 16 percent, which means that those areas are pushed out.
    We have 500-unit townhouses that, in terms of the way they 
look, but it was one of the first co-ops in the country, and it 
is about to go under after all these years.
    My greatest fear and the fear of the few residents who are 
still in that area is that they are going to wake up one day, 
and HUD may sell the property after it eventually goes into 
default and so forth if we can't find a developer, and then 
would wake up one morning and the international bad people's 
corporation--I am just getting started.
    Okay. Thank you very much, Ms. Lopez.
    And thank you, Mr. Chairman.
    Chairman Green. The gentleman yields back.
    The Chair now recognizes the gentleman from South Carolina, 
my friend, Mr. Timmons, for 5 minutes.
    Mr. Timmons. Thank you, Mr. Chairman, and thank you to our 
witnesses for being here today.
    Another day, another new excuse from my friends across the 
aisle trying to explain their role in causing record-breaking 
inflation.
    First, as you recall, it was that inflation was transitory. 
Then, it was a high-class problem, according to the President's 
chief of staff. Then, it was just used cars and energy. Then, 
it was Putin's fault. Next, it was evil corporations price 
gouging, and now they are trying out a new boogeyman, Wall 
Street and institutional investors.
    None of these attempts to explain inflation have worked, 
and with the midterms quickly approaching, and the President's 
approval ratings in the gutter, my friends are throwing mud at 
the wall in the hope that something sticks.
    But the American people are too smart for this. It will not 
work. They know exactly who is responsible for the 40-year high 
levels of inflation we are seeing. The blame primarily lies 
with the Biden Administration and congressional Democrats who 
poured trillions of dollars of fiscal stimulus on an economy 
that was exploding out of the pandemic shutdowns that my 
friends on the left have forced upon the country.
    There was so much pent-up demand and Americans had record 
levels of savings even before the so-called American Rescue 
Plan was passed.
    On this committee, Republican Members all raised the alarm 
on inflation last spring while this body was deliberating on 
the American Rescue Plan Act (ARPA), and so did notable 
Democrats like Larry Summers.
    But they did not listen. They wanted to expand their social 
welfare state to unprecedented levels and to increase every 
American's dependence on the Federal Government.
    Instead, we got record levels of inflation, which, as my 
friend, Mr. Steil, said at our markup last week, is punching 
Americans in the face. I would say a more apt description would 
be a sucker punch, but I guess reasonable minds can differ on 
that.
    Anyway, today's hearing is supposedly about how private 
equity is buying up all of the single-family homes across the 
country and preventing families from purchasing homes, and, 
instead, forcing up rental costs. This is just the latest 
scapegoat for the broad-based inflation that has spread 
throughout our entire economy, including in the housing market.
    I actually looked up the data on single-family homes in my 
State of South Carolina, and the numbers tell a different story 
than the one that the Majority is trying to tell. There are 
just over 5,100 single-family homes owned by private equity in 
South Carolina. There are over 300,000 single-family rental 
units in my State and over 2.35 million housing units in South 
Carolina. The percentage of housing units owned by 
institutional investors in South Carolina is less than one 
quarter of 1 percent. Yet, we are supposed to believe that this 
is why housing costs are on the rise.
    I am not buying it and I don't think the American people 
are either. There is no doubt that inflation across-the-board 
and, definitely, in the housing market needs serious policy 
solutions that will bring down prices for our constituents.
    With that in mind, Ms. Lopez, your organization, the 
American Center on Race & the Economy, states on its website, 
``We envision a U.S. where land and housing are publicly owned 
and used for the overall public good.''
    I guess my question is, yes or no, do you agree with that 
statement?
    Ms. Lopez. Yes.
    Mr. Timmons. Can I get a show of hands from the rest of the 
panel? Does anyone else believe that all private property and 
homes should be owned and operated by the government?
    [No response.]
    Mr. Timmons. I find it pretty outlandish. I guess I have 
one more follow-up.
    Ms. Lopez, during the pandemic, your organization attempted 
to organize a nationwide rent and mortgage strike, including a 
pledge that participants would withhold rent payments from 
property owners or lenders whether or not they could actually 
pay rent, or whether or not they had even lost their jobs.
    Ms. Lopez, yes or no, were you involved in organizing this, 
``rent strike?''
    Ms. Lopez. Yes.
    Mr. Timmons. And you think that it is appropriate if 
somebody didn't lose their job, that they should stop paying 
their rent or their mortgage?
    Ms. Lopez. My recollection is our focus was on people who 
had lost their jobs and had lost the ability to pay. But I 
think, in solidarity with people who had lost their jobs, we 
were absolutely open to people who were interested in engaging 
also.
    Mr. Timmons. Okay. I don't know if the American people 
would agree with that sentiment. If you don't lose your job, 
you shouldn't stop paying rent.
    Mr. Bogany, what would be the impact on your business if 
the government took control of all private property and homes?
    Mr. Bogany. It would have a huge impact, and I don't think 
our membership and REALTORS would be in favor of that at all.
    Mr. Timmons. Okay. I appreciate that answer.
    Mr. Chairman, thank you for having this hearing.
    Witnesses, thank you for being here.
    I yield back.
    Chairman Green. The gentleman yields back.
    The Chair now recognizes my friend, the gentlelady from 
North Carolina, Ms. Adams.
    Ms. Adams. Thank you, Mr. Chairman, and I want to thank 
Chairwoman Waters, and thank you and the ranking member for 
hosting the hearing today. As well, thanks for your testimony 
and, in particular, Mr. Chairman, I want to thank the staff of 
the subcommittee for working to put together--
    Chairman Green. Ms. Adams, your voice was elevated for a 
moment, and then it went down. Is there something that you can 
do to raise the level of your voice?
    Ms. Adams. Okay. What about now?
    Chairman Green. A little better, but it is not what it was 
at one point.
    Ms. Adams. Okay. I am at 100 now. Is that better?
    Chairman Green. That is better. Thank you.
    Ms. Adams. Okay. Thank you.
    I did want to thank the subcommittee for putting the 
information together for the study.
    But I represent Charlotte and Mecklenburg County in North 
Carolina, and we say a lot that we have a lot in Charlotte, and 
a lot of great opportunities are here, and a lot of great 
people. But we have a lot of things that we need to do, and 
affordable housing is chief among them.
    We have a shortage of more than 30,000 housing units in the 
city right now. But according to the research done by the UNC 
Charlotte Urban Institute, single-family rental conglomerates 
have built portfolios of homes heavily concentrated in the 
starter home market.
    Now, according to their research, 93.5 percent of the 
11,500 homes that these private equity firms have purchased 
were under $300,000, and most of those houses have been in what 
we call the crescent, where more Black and Brown families call 
home.
    Mr. Chairman, without objection, I would like to submit 
that article for the record.
    Chairman Green. Without objection, it is submitted and 
received.
    Ms. Adams. Thank you.
    Ms. Lopez, can you speak to how this trend exacerbates the 
affordable housing crisis and hurts people of color and low-
income individuals?
    Ms. Lopez. Certainly, Congresswoman. Thank you for the 
question.
    I am not at all surprised to hear the findings of the study 
that you mentioned. They are consistent with what researchers 
all across the country have found, that institutional single-
family rental landlords focus on communities where Black and 
Brown families live, and because of the market segment where 
many of these institutional landlords focus their purchases, 
they have billions of dollars at their fingertips and 
sophisticated algorithms that tell them exactly what they 
should pay for a property.
    People of color and low-income folks simply can't compete 
to buy those homes. If families want to live in a single-family 
home, of course, there is a high likelihood that they have to 
rent from one of these institutional landlords, particularly in 
Mecklenburg County, where SFR institutional landlords own as 
much as one in four single-family rentals.
    I have heard from some tenants the feeling that if you are 
stuck with one landlord who is raising your rent $100, or $200 
every single month and you want to try to find a different 
place to live, you turn around and many of the options 
available to you are also single-family rental institutional 
landlords who have the exact same business practices that are 
very clearly documented in their own SEC filings or things that 
they say to their investors. It leaves tenants, in many cases, 
feeling like they are stuck without options for where else to 
go.
    Ms. Adams. Okay. Thank you.
    Ms. Schuetz, in your testimony you discuss how private 
equity is benefiting from a tight housing market and how 
private equity concentrations in a local market can lead to 
higher local rental costs, and we might disagree that targeting 
this subset of landlords could improve renters' well-being but 
we agree on the need to increase the housing supply.
    Can you discuss how increasing the housing supply, be it 
through public housing or more like the funded housing could 
immediately blunt the negative impacts to renters that we have 
observed?
    Ms. Schuetz. Sure. Thank you for the question.
    It is important that we increase the supply of housing both 
on the market rate side to absorb higher-income households, and 
designated low-income housing.
    We know that the poorest 20 percent of households just 
don't earn enough to pay for market rate housing without a 
subsidy. The question is, how can we most effectively help 
those households?
    Building new housing takes time, even in relatively fast 
building markets like Charlotte. One option is to use things 
like the affordable housing trust funds to acquire existing 
older apartment buildings and put them under long-term 
affordability restrictions.
    There are two advantages to doing acquisition over new 
construction. One is that it brings the housing online much 
faster, and the other is that it is generally cheaper.
    We have been talking today about the single-family rental 
market but we also know that institutional investors are buying 
multifamily rental buildings that are older, often doing a 
rehab, and then raising the rents on them and, essentially, 
moving them up from a class B or class C to a class A apartment 
building.
    If public entities or nonprofits were to acquire those 
apartment buildings and put them under long-term affordability, 
that would increase the affordable stock and do it very 
quickly.
    Ms. Adams. Right. Thank you very much.
    Mr. Chairman, I yield back.
    Chairman Green. The gentlelady yields back.
    The Chair now recognizes the gentleman from South Carolina, 
my friend, Mr. Norman.
    Mr. Norman. Thank you, Chairman Green.
    I, like Mr. Timmons, sat here and listened to some of this 
dialogue and it really astounds me that we are blaming 
everybody from institutional investors to greedy landlords to--
I guess Putin has something to do--
    Ms. Garcia of Texas. Mr. Chairman? I don't see the 
Representative on the screen.
    Chairman Green. Mr. Norman, you are no longer on the 
screen. Can you please turn on your camera?
    Mr. Norman. Oh, I'm sorry. How about now?
    Chairman Green. Not quite. No, I don't see you just yet.
    Mr. Norman. Okay. How about now?
    Chairman Green. I still don't see you, sir.
    Mr. Norman. Okay. I'm sorry.
    [Pause.]
    Mr. Norman. Okay. I don't know what--
    Chairman Green. Would you mind if we give you an 
opportunity to see if you can make an adjustment? I will go to 
one additional person and then come back to you.
    Mr. Norman. Sure. That would be great. Thank you.
    Chairman Green. Well, you know what? Now, I have a picture 
of what appears to be something that you might have in your 
home.
    There you are. You are up now.
    Mr. Norman. Okay. Thank you. I'm sorry. We had technical 
difficulties.
    Chairman Green. Go for it.
    Mr. Norman. As I sit here and listen, it astounds me that 
everybody is blaming different ones. I haven't heard Putin's 
name and I haven't heard Santa Claus yet. But I guess, given 
enough time--
    Housing is what I made a living doing. Do you all realize 
how many trades are affected by one thing and one thing alone: 
gas prices? It is over 137 different trades. Now, multiply the 
increase in doubling the gas. No wonder people can't afford it.
    Ms. Schuetz, you mentioned that there is no silver bullet. 
There is one silver bullet that could happen overnight, which 
is this Administration opening up the gas from the Keystone 
Pipeline from Canada, from Alaska, and not buying it from rogue 
countries that do not like us.
    That would affect the housing industry more than anything. 
As housing goes, so goes the economy, and it astounds me that, 
I think Dr. Raymond, did I hear you right that these 
institutional investors are using evictions to boost profits? 
Did I hear that right?
    Ms. Raymond. That is correct.
    Mr. Norman. Where did you get that information?
    Ms. Raymond. There has been a fair amount of research 
looking at how landlords can use the threat of eviction to 
pressure tenants to accept even higher rents.
    You think about housing as a basic need. It is like water, 
air, and food. You can't go without it. If somebody says, hey, 
I am going to take your TV away or your luxury good away, you 
will say, that is fine, I can live without it.
    But if somebody says, I am going to take your house away 
unless you pay me $400 more next month--
    Mr. Norman. Excuse me. My time. Dr. Raymond, do you realize 
what it takes to evict somebody?
    Ms. Raymond. In Georgia, it is pretty easy. In Georgia, it 
is very easy.
    Mr. Norman. No, ma'am. The moratorium of this--
    Ms. Raymond. Some States like North Carolina and New York--
    Mr. Norman. No, ma'am. I am reclaiming my time. Have you 
ever owned property and had to evict anybody? That is the last 
thing you want to do.
    You have this thing called leases where you sign people up 
for 12 months, typically, or 6 months, or different times, and 
to evict is a cost to the investor. I have never heard this 
before. You are telling me something--of course, now, you are 
talking about your work--
    Ms. Raymond. Investors don't like vacancies. Actually, 
during the pandemic we saw that--
    Mr. Norman. Reclaiming my time. Ms. Lopez, did you say that 
you are objecting to the different fees--pet fees, smart home 
fees? Did I hear you right on that?
    Ms. Lopez. I said those--
    Mr. Norman. Ms. Lopez?
    Ms. Lopez. Yes. Can you hear me?
    Mr. Norman. Okay. Yes, ma'am.
    Ms. Lopez. I said those fees can be concerning when they 
are required of tenants. Absolutely, I would object if they 
were required.
    Mr. Norman. Okay. Well, you know that up front before you 
sign a tenant up. The reason you have pet fees is that 
sometimes animals cause problems in an apartment or in a home. 
Sometimes, it takes a tremendous amount of money to go back and 
remediate the things that come with owning animals. So, you can 
either have a pet or not.
    Now, Ms. Lopez, I think I understood you to say that rent 
controls probably would be a good thing?
    Ms. Lopez. In an environment where people are facing 30 
percent, even 10 percent, rent increases from one year to the 
next, I think we need to find ways to mitigate people facing 
the impacts of those dramatic rental cost increases.
    Mr. Norman. Okay. Let me just say this, Ms. Lopez. If you 
want to stop construction and stop people from investing, you 
try rent controls.
    Would you be in favor of the government having a tax 
control as well? Because we have seen in most cases to buy 
property, to develop, to put the infrastructure in, to build 
structures, the regulations have gone up, some as high as 35 
percent of your total project.
    Are you in favor of limiting the government from that, from 
raising their regulatory cost?
    Ms. Lopez. I am not sure I understand exactly what the 
mechanism you are describing is. But I can--
    Mr. Norman. If you are in favor of putting rent controls on 
those who build apartments and build housing and rent it, would 
you be in favor of putting controls on the government from 
raising taxes that increase the regulation?
    Ms. Lopez. I am still not sure I understand the mechanism 
you are describing.
    Mr. Norman. Okay. What is good for the goose is not good 
for the gander. You are in favor of limiting any investor--put 
limits on the--and I think I heard you say that the investors 
make rents go up $100 a month. Did I hear you say that?
    Ms. Lopez. I have talked to tenants who have struggled to 
cover $100 to $200 per month rent increases.
    Mr. Norman. Rental increases. Okay. I have never heard 
that.
    Typically, you have a lease. I have never heard of an 
investor that could--you sign a 6-month fixed income. I have 
never heard of that. Maybe I am just in the wrong part of the 
country.
    We are having a severe problem with construction because of 
this Administration stopping the decline of gas and oil.
    Chairman Green. The gentleman's time has expired.
    I will ask you to submit your question in writing.
    The Chair now recognizes the gentlewoman from Michigan, my 
friend, Ms. Tlaib.
    Ms. Tlaib. Thank you so much.
    Thank you so much, Ms. Lopez, for pointing that out, 
because it is happening in my community and we are one country, 
one nation, and I know that when some of our families are 
struggling to pay rent and especially increases, we have seen 
it over and over again because the threat of evicting people if 
they do not comply and changes are done constantly to many of 
our families who are renting.
    It is the reality. These are not things that--many of the 
folks, the housing groups that I work with are representing 
them in court with some of these challenges with folks not 
following through on their leases or agreements.
    The housing increases are second after gas prices. So, you 
can't really address inflation without taking on the housing 
crisis. And by the way, the housing crisis existed prior to 
what we are dealing with right now with inflation.
    Dr. Raymond, isn't that true? Isn't it true that the 
housing crisis has really impacted the cost of living for 
families prior to everything that my--the rhetoric coming out 
of many of my colleagues today?
    Ms. Raymond. Absolutely. During the Trump Administration, 
we had an affordability crisis that extends to this day and is 
exacerbated by the pandemic, which is responsible for a lot of 
the inflation that we are talking about, although I really 
think that what we are talking about here is institutional 
investors, not inflation. This is not a hearing about 
inflation.
    Ms. Tlaib. Yes.
    And, Mr. Bogany, I saw you nodding your head. You are an 
agent. You see this. This has been a crisis in our country no 
matter, really, the Administration, and we haven't been able to 
address it because we allow corporations and corporate greed to 
come before the needs of our American people.
    Mr. Bogany. We have a lack of inventory and that is just 
the bottom line. This is straight Economics 101, and what is 
happening, the reason these people are renting, is because the 
investors are buying the properties and don't give them an 
opportunity to buy it.
    And nothing comes out of investors buying property. It 
doesn't increase the economy. You are enriching the rich, where 
if you are selling a piece of property you are going to expand 
the economy because everybody now has an opportunity to grow 
and get more money.
    For every house that is sold, $53,000 to $55,000 on average 
goes back into the economy. For every new home that is sold, 
$113,000 goes back into the economy. When somebody rents 
something or an investor buys a house, no money comes into the 
economy.
    Ms. Tlaib. Yes. Very few benefit from that. I completely 
agree.
    We are not trying to stop that. We are just trying to 
stop--because what happened is people benefited from the 
suffering of our families during this recession--the Great 
Recession.
    In the aftermath, in my community alone, 100,000 properties 
were foreclosed on for just delinquent property taxes because 
of the crisis. Many were overtaxed by $600 million.
    We are dealing with that crisis, as well as over half of 
the inventory in my community right now is valued at less than 
$100,000 and my residents are struggling to obtain mortgages, 
just are really struggling to get these traditional banks--
because it is not profitable for them, let alone financing the 
need to repair our aging single-family housing stock and living 
conditions.
    I have partnered with Representative Kaptur and, of course, 
Chairwoman Waters, to propose the Community Restoration and 
Revitalization Fund, which was included in President Biden's 
agenda and Build Back Better.
    It would have provided Federal funds to land banks, 
community land trusts, and non-profit housing partners. I know 
these are not the corporate-friendly folks that my colleagues 
on the other side of the aisle support.
    But these are community-based organizations that help 
families redevelop vacant properties into affordable rental 
housing, starter homes, and shared equity homes. There is 
nothing wrong in being able to invest again into 501(c)(3)s 
that are doing the work and providing housing for so many of 
our families.
    Mr. Baker, would investing in our neighborhoods with 
nonprofit community partners be an effective alternative to 
allowing this whole private equity scheme to continue to buy up 
our housing stock?
    Mr. Baker. Thank you, Representative.
    What we have seen from the private equity investment in 
housing, sort of this is--we have kind of seen the outcome in 
terms of sharply rising rents, in terms of dramatic, in some 
cases, maintenance issues that lead to life safety issues, 
frankly, for residents.
    We have seen these firms, really, being the quickest to 
evict residents or to file to evict residents during the 
pandemic and so, certainly, an alternative that avoids this 
incentive to generate high returns or--
    Ms. Tlaib. I know. It is all about making money no matter 
what, even when it is such an exorbitant, disgusting amount of 
profit versus what they could have been. They just don't care 
because it is an opening.
    I have a number of questions, Mr. Chairman. I will send 
those to the witnesses. I cannot thank you enough for having 
this very important hearing.
    Chairman Green. Thank you very much, and the gentlelady 
yields back.
    The Chair now recognizes my friend, Ms. Garcia, the 
gentlelady from the State of Texas.
    Ms. Garcia of Texas. Thank you, Mr. Chairman, and I, too, 
want to thank you for putting together such a fine group of 
witnesses to discuss this very, very important topic.
    And this is not an excuse. This is not make believe. This 
is real and it is happening across America, and I know in my 
district, which is 77 percent Latino, it is a very critical 
topic, this housing shortage, and particularly what is 
happening in this arena.
    I can tell you that throughout Harris County and Houston--
my district--the housing market and particularly the rental 
market has been volatile. Specifically for renters, the cost 
burden has gotten worse and does not show any signs of 
improving.
    The share of renters who are cost-burdened has now become 
the majority of both Houston and Harris County as rent has 
increased faster than wages, and it appears it is becoming more 
and more difficult for Houstonians, particularly Latino and 
Black Houstonians, to get out of the rental market and purchase 
a home.
    And I just want to, first, start with Ms. Lopez and just 
tell me, Ms. Lopez, almost every incident and example that you 
use I have heard of it.
    Unlike my colleague who has never heard of it, I can tell 
you I have heard of it, not just as a Member of Congress now 
listening to constituents, listening to town hall meetings, 
but, more importantly, during my days in the housing landlord/
tenant section with legal services.
    And some of this is not new. Some of this was happening 
when I was practicing law back then, and that is the sad part 
that these things are still happening. It is just that the 
dollars and what is at stake is even greater because as urban 
areas have gained population, we have not really also gained in 
the housing market.
    My question to you is, you said in your testimony that what 
we needed was true, affordable housing. You used the word, 
``true.'' Can you just tell me in a minute or so what you mean 
by true, affordable housing?
    Ms. Lopez. Sure. I would be happy to. Thank you so much for 
the question, Congresswoman.
    As someone who also has worked in housing in my local 
community--I live in San Antonio, Texas--there are so many 
people who live in what is termed affordable housing yet who 
tell me that they pay well over 30 percent of their income on 
rent. Maybe they pay half of their income on rent. Maybe they 
pay more.
    I think that there is a national standard of 30 percent. I 
think even that, if you are somebody who makes $20,000 a year 
like many of the public housing residents that I have spent 
time talking to, that is still a massive share of your income 
to spend on rent every single month.
    So, 30 percent or lower when possible.
    Ms. Garcia of Texas. Okay. Thank you.
    And, Mr. Bogany, I cannot help but ask you a question as a 
fellow Houstonian, given your direct experience here in the 
Houston market, a major urban metropolitan area, from your 
perspective, how do you see the impact of these home equity 
firms and these institutional investors buying homes--how has 
that impacted our Houston market, and have you seen a growth in 
that?
    I know I have heard of investors buying homes specifically 
for the purpose of putting them on Airbnb and these networks 
particularly around places that are tourist attractions or 
destination points like around the Medical Center here in 
Houston or around the Tech Center.
    Are you seeing that here in Houston?
    Mr. Bogany. Yes. I am seeing it all over Houston and you 
are right, the Airbnb deal, any time it is anywhere where there 
may be a tourist attraction you are seeing it.
    The bottom line, to me, is that these homeowners can't buy 
these houses because they are being outbid. When you have an 
affordable house come up and you have 20 bids on that house--20 
consumers trying to buy that house--and the investor comes in 
and just writes a check for it and he outbids the other 19 
people, it is a huge problem in the Houston area.
    And we don't have a lack of people wanting to buy. They 
can't buy. They are being forced to rent because they can't buy 
these homes because of the past situations in our economy, past 
situations with rent.
    It is cheaper to own a home in Houston than rent, and that 
is the thing, and I think that is across the country, to a 
certain extent. It is cheaper to own. But they are not getting 
that opportunity.
    Ms. Garcia of Texas. Okay. Thank you, Mr. Bogany.
    And, Mr. Chairman, I see I only have 7 seconds left. I have 
two more questions. I had one for Mr. Baker, and one for Dr. 
Raymond, so I will submit those in writing for the record and 
hope to hear their responses.
    But I really wanted to focus on the eviction rate because I 
think that is just horrific that it is--I think Mr. Baker said 
that it was more in the non-White neighborhoods where evictions 
were higher than other neighborhoods and we really need to 
explore that.
    Thank you. With that, I yield back.
    Chairman Green. The gentlelady yields back.
    And the Chair now recognizes my friend from Georgia, the 
gentlelady, Ms. Williams.
    Ms. Williams of Georgia. Thank you, Mr. Chairman, and I 
want to thank all of the witnesses for joining us today, 
especially my constituent, Dr. Raymond from Atlanta.
    As I mentioned in my opening statement, one of the biggest 
problems with the increasing control of large landlords over 
single-family and multifamily housing is how difficult it is 
for tenants to hold their landlords accountable.
    Sometimes, that results in fully deteriorated housing like 
Forest Cove here in Atlanta, and as Dr. Raymond highlights, it 
can also mean poor regular maintenance, high eviction rates, 
high hidden fees, and aggressive rent increases in investor-
owned rentals.
    Dr. Raymond, what would be the value of the Federal 
Government providing more avenues and resources to help hold 
large landlords accountable for predatory behavior toward their 
tenants?
    Ms. Raymond. I think that it is part of the reason that 
these firms are able to expand so massively in cities like 
Atlanta and in the Sun Belt is because of the amount of 
leverage that they have over tenants to increase rents, to 
apply hidden fees.
    So, balancing that playing field between landlords and 
tenants a little bit so that tenants have a balanced set of 
rights and obligations would be really helpful, and I think 
also that we need to think about homeownership and how 
homeownership is being eroded.
    Homeownership is a very important way to build household 
wealth. It is a very important way for people to be able to 
access their equity to support college funds, and retirement 
funds, and we are seeing the homeownership rate in places like 
metro Atlanta decline by 6 percent.
    And I agree that we need more construction, but I also 
don't think of Atlanta as being particularly supply-
constrained. This is not Boston or San Francisco. This is 
Atlanta, Georgia. We are pretty relaxed about building new 
housing.
    I am all for new construction but I also think that we need 
to do things to shore up homeownership in our City, which we 
are seeing decline because of institutional investors, and I 
also think that we need to do something to reduce these 
eviction rates because they are just way too high for schools 
to operate, for people to live their lives.
    Ms. Williams of Georgia. Dr. Raymond, just to go down the 
eviction rate a little more, your research has explored how 
evictions are more likely to be pursued by institutional 
investors and larger corporations who own single-family 
rentals.
    What effects has this had on the broader housing insecurity 
trends in places like Atlanta and, we are seeing it every day 
here. The mayor has been very vocal about it, and what effects 
are you seeing?
    Ms. Raymond. I would say that overall, we have an extremely 
high eviction rate in a State like Georgia. I think South 
Carolina has among the highest eviction rates in the country 
but Georgia is up there as well.
    In Fulton County, we see around 20 percent every year in 
terms of the eviction filing rate and then around 6 percent of 
completed evictions. There is a difference between starting the 
eviction process and then actually evicting someone from their 
home and that has been pretty consistent over time, and it is 
just too high.
    When we look at elementary schools like the elementary 
school served by Forest Cove, a lot of the school teachers were 
saying, we can't teach when a third of our students are 
disappearing every couple of months and then another third are 
coming in. It is completely disruptive and that impacts the 
next generation.
    So, it is a great way to squeeze as much rent out of your 
tenants as possible. I understand it from a profit-seeking 
perspective. Institutional investors are there to make a profit 
and it is a great tool for that. But the harm that it is doing 
to our communities is unsustainable and we have an 
unsustainably high eviction rate in Georgia. It needs to be 
lower, much lower.
    Ms. Williams of Georgia. Thank you, Dr. Raymond.
    In Congress, one of my main focuses is closing the racial 
wealth gap, which we know Atlanta leads the nation in, 
unfortunately, and that means promoting homeownership.
    In your testimony, you mentioned that institutional 
investors purchasing single-family homes can crowd out 
individual homeownership.
    What policy should Congress pursue to help put individual 
homeowners on a more equal footing with institutional investors 
in purchasing single-family homes, and what impact would 
successful policymaking in this area have on closing the racial 
wealth gap?
    Mr. Bogany. I think if we waive the 90-day flip rule, we 
incentivize sellers to sell to first-time homebuyers with tax 
benefits, maybe a tax credit of some sort, and I think if we 
increase the housing voucher money where people are able to buy 
homes with their housing voucher, and some of these landlords 
that we have been talking about won't even take housing 
vouchers. So, those people are still having a hard time looking 
for a house.
    I think those are the three things that I would say working 
in to try to increase homeownership and increase landlords to 
take housing vouchers. They will not take housing vouchers. I 
am sharing with you what is happening out here in the field.
    Ms. Williams of Georgia. Thank you so much.
    And, Mr. Chairman, I am out of time, but I will ask for the 
other witnesses to answer that final question in writing for me 
so that we can actually get solutions and help the people that 
we are in Congress to serve.
    Thank you, Mr. Chairman.
    Chairman Green. Thank you.
    The Chair would ask that the witnesses please submit their 
answers in writing.
    And the Chair will now recognize any other Members who 
desire to be heard before the Chair poses questions. Are there 
any other Members available and desiring to be heard with 
questions before the Chair poses questions?
    [No response.]
    Chairman Green. Okay. Hearing none, the Chair now 
recognizes himself for 5 minutes for questions.
    I remember what it was like during the Great Recession, and 
we had testimony before this committee indicating that people 
of color, and more specifically African Americans, lost a 
generation of wealth--a generation. This is why it was called, 
to a certain extent, a predatory lending process that was 
taking place. We now have what I call predatory purchasing 
taking place.
    Mr. Bogany, would you tell us why you would agree that this 
is predatory purchasing, the behavior that is being exhibited?
    Mr. Bogany. A lot has to do with the purchasing of these 
homes. If you look at where all of the negative--the predatory 
lending is all in African-American and Brown neighborhoods. It 
is nowhere else. It is all there, and what is happening is that 
when our people are so far behind based on past issues we have 
never really dealt with the housing discrimination issue.
    We talk about it, but we haven't really dealt with it. We 
have rules on the books right now, Congressman, that are not 
being enforced, and we are trying to enforce it.
    If you just look at what is happening right now up in 
Denton, Texas, with those 81 families who are being evicted 
because they own housing vouchers--not that they didn't keep 
their yard up, not that they destroyed the neighborhood; it is 
because of where their income comes from to do their vouchers.
    So, we have to do a better job with making monies available 
with mortgage credit certificate programs, down payment 
assistance programs.
    And we all seem to think that we need affordable housing 
for single families. It could be a condo. It could be a 
townhouse. There are things that we don't always have to say 
everything has to be single family. We have to start trying to 
grow income, and currently, in my community, there is no income 
being grown.
    Chairman Green. Thank you, Mr. Bogany.
    The Chair would ask Ms. Lopez to respond to the question. 
Is this predatory purchasing, Ms. Lopez, the way these equity 
funds are behaving, moving into certain areas, excluding other 
areas?
    Ms. Lopez. Yes. Thank you for the question, Mr. Chairman.
    It is, unquestionably, predatory purchasing. I think, as 
Mr. Baker's testimony noted, there are multiple instances where 
many of the heads of these companies have said whether in their 
initial public offerings or elsewhere that there is an 
incredible opportunity from a business standpoint presented by 
people being locked out of homeownership.
    These companies seized on that opportunity, bought these 
homes, and are counting on people not being able to buy homes 
but still wanting single-family rentals, often in Black and 
Brown communities.
    So yes, 100 percent, and you look at the rent increases 
that they are charging, the rents that they charge. They are 
banking on really high revenues and fee revenue being generated 
through both rents and fees because they own these assets.
    Chairman Green. Let us talk for a minute about the wealth 
gap. It is important that we do all that we can to try to close 
it. Ms. Schuetz, is what we are doing or seeing occur with 
these predatory purchases going to close the wealth gap?
    Ms. Schuetz. Thank you for the question.
    We know that homeownership is actually the single biggest 
contributor to the racial wealth gap, that Black and Latino 
families have been excluded from being homeowners and prior 
generations were not able to build up money to pass along to 
their kids and grandkids, which makes it that much harder to 
get into homeownership now.
    But one thing that is important to remember is that you 
build wealth and homeownership over time, and so it is not that 
you buy a home and suddenly are wealthy. You pay down the 
mortgage and develop wealth over time, which means that even if 
you got rid of all of the discrimination--
    Chairman Green. If I may, let me just ask this question. If 
you cannot buy a home because the homes that first-time 
homebuyers might acquire are being acquired by large 
corporations in concentrated areas, does that help a first-time 
homebuyer who might be a person of color?
    Ms. Schuetz. The difficulty of getting into into first-time 
homeownership is not just a factor of private equity.
    As Mr. Bogany pointed out, you have bidding wars where 20 
people are bidding on the same house. Even if you took out the 
private equity firm that won, you would still have 19 
individual homebuyers who don't win that house.
    Ultimately, we are not going to be able to get enough 
people into homeownership unless there are enough homes for 
them to buy.
    Chairman Green. The time of the Chair has expired.
    I regret to tell you that my time has expired. I assure you 
that I would love to hear more from you, but my time has 
expired.
    And I will now--
    Mr. Emmer. Mr. Chairman?
    Chairman Green. Yes?
    Mr. Emmer. Mr. Chairman, Tom Emmer seeking recognition.
    Chairman Green. For what purpose, please?
    Mr. Emmer. There are a couple of letters that I would like 
to introduce for the record if the Chair will allow, and I also 
wanted to point out for the Chair and the rest of the folks on 
the hearing, Ralph Norman, our colleague from South Carolina--
    Chairman Green. Excuse me, sir. Your time for giving your 
statements has lapsed. If you would like to introduce something 
into the record, the Chair will entertain this, but not an 
additional statement.
    Mr. Emmer. I was only welcoming Ralph Norman to the 
committee and to your subcommittee, sir.
    Chairman Green. Okay. Well, you may consider him welcomed, 
and thank you.
    Mr. Emmer. Thank you. I would like to mention two letters 
that we received in advance of the hearing. The first is from 
the National Rental Home Council regarding the question posed 
by the title of today's hearing, which is, ``Where Have All the 
Houses Gone?'' The letter says the answer is simple. They were 
never built in the first place, and it describes the gap 
between supply and demand and how it drives up home prices.
    Chairman Green. Excuse me. If you desire to enter any 
additional--
    Mr. Emmer. And the second one is from The Amherst Group.
    Chairman Green. Excuse me. The Chair is speaking, sir.
    Mr. Emmer. Sorry, Mr. Chairman.
    Chairman Green. You may enter your exhibits, without 
objection.
    Mr. Emmer. Thank you.
    Chairman Green. But we will do it without the additional 
commentary.
    Mr. Emmer. Thank you, sir.
    Chairman Green. Okay. The Chair accepts the exhibits 
without objection.
    And now, the Chair would like to thank our witnesses for 
their testimony today.
    The Chair notes that some Members may have additional 
questions for these witnesses, 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.
    [Whereupon, at 1:37 p.m., the hearing was adjourned.]

                            A P P E N D I X

                             June 28, 2022
                             
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