Transcripts For CSPAN3 Evicted Author Others Testify On Hou

to washington anytime, anywhere. >> housing advocates and landlords testify before the senate banking, housing and urban affairs committee on the importance of available and affordable housing for low income renters. this is just under two hours. >> senate committee on banking, housing and urban affairs will come to order. before we begin, i will probably embarrass her, but i want to call her out. irene reyes is working her last week as a stenographer in the united states senate. she has been here 27 years and we thank her for her quiet, effective, really crucial work to preserve the hearings even when senator toomey and i don't say much of note. she still has to take it down. we just appreciate your good work for this country. you are an unsung hero as a public servant, contractor, not a public servant, so thank you. thank you. this hearing is in a hybrid format. four of our witnesses are joining us in person, sitting in front of senator toomey and me. miss morey is joining remotely. one or more of our committee colleagues may attend from their offices. yesterday was the first of the month for millions of americans, that means rent was due. for many renters, that rent keeps going up and up and up. two weeks ago in this committee we heard from witnesses about the soaring costs of housing, how it hurts the millions of families priced out of buying their first home and imperils the renters that are one illness, job loss, or car repair from -- away from eviction, as one of our witnesses documented in his book. this problem is squeezing people all across the country, working all kinds of jobs, even jobs that were supposed to be a ticket to the middle class. it's not a new problem. for decades, so many americans have struggled to scrape together there right each month, too many have lived in shoddy housing with rodents or multiple broken appliances. that is why 90 years ago, this country began investing in affordable housing so that everyone would have a safe and affordable place to live. but the funding we put into that effort is never kept up with renters needs. or even the basic maintenance of aging federally assisted housing. for the past decade, about half of renters have been paying more than one third of their incomes just to keep a roof over their heads, and we know renters challenges are only getting worse. we are 3.8 million homes short, 3.8 million homes short of what we need, not a single state in the country has enough housing. for the lowest income renters, there's just 36 units affordable and available for every 100 renters who need them. that means renters can't, as we might say, vote with their feet in the housing market because there is nowhere for them to go. this huge shortage of housing meets renters have to make do with what they've got, even if their house has dangerous lead paint and the walls. or the landlord won't -- fix the heater, or their bathtub has been clogged for weeks. with housing so difficult to find, renters are forced to ask themselves whether it's worth it to push for repairs from the same person who can put in addiction on their record and decide whether they have a place to sleep at night. the shortage of housing also means rents are going up for pretty much everyone. rents are up 15% nationally compared to a year ago, some cities like austin, texas, where the city of newark, rents are up more than 25%. when rent rises, it makes everything in someone's life just a little bit more precarious. more and more families are one emergency away from losing their home. renters see the pain from these rate increases, the missed trips to visit family, the car repair is they are forced to put off, the second job they have to take just to make ends meet. wall street investors just see opportunity, they do not see the pain or they just don't care. more and more investors are buying up single family homes, homes that first time home buyers usually by, and renting them out at sky high rates, 28% of homes sold at the beginning of this year went to investors. think about that. investors, too often from out of town, did not care about the community, and just want to make a quick buck, are buying more than a quarter of homes. not bought by families who want to put down roots, who dream of seeing their kids grow up in that neighborhood and go to that local school. that number is up from 16% just a few years ago. the biggest investors with the deepest pockets, the ones who own more than 100 properties, nearly doubled their share of purchases. miss brunner has seen firsthand in cincinnati where a single company based in texas bought up 29 property on one street, and price hill 29 properties on a single street. and that neighborhood, the cities lead to chase these out of state landlords that are letting the homes fall apart. families need a landlord they can talk to you live in the community -- community. cities need landlords who actually want to take care of their buildings and help families stay in their homes. but the gall street firms promising investors double digit yields, and running up double digit eviction rates are pricing out those who make a community home. good landlords, renters, first time home buyers alike. they are just buying up a single family homes, they are targeting mobile home communities and apartment buildings. we see it across the country. anywhere that adds to their own bottom lines. last week, the house select subcommittee on the coronavirus -- >> -- crisis published a report saying that at the height of the pandemic, four of these massive landlords fired nearly 15,000 evictions. for landlords, 15,000 evictions. when a renter who has fallen behind on rent or cannot get their landlord to fix their heat, we often hear that is her individual problem. we hear it's just between the renter and his landlord. it's true that every eviction, every rent hike, every unlivable home is a personal crisis for an individual family, but all of these individual crises have added up to a big national problem. it costs all of us morton education when kids have to change schools every six months or so. it costs all of us in lost productivity when the workers who support our businesses and schools and first responders cannot find an affordable place to live. it costs all of us more in health care when people cannot store their medicine because they don't have a place to live. it isn't someone else's problem, it affects all of us and we need to work together to solve it. we have to expand the supply of safe affordable housing across the country for renters and homeowners at all income levels. we have to maintain the affordable housing we currently have so we don't fall even further behind. and we have to help renters find and remain in homes they can afford with financial assistance including emergency assistance and support bipartisan prevention efforts like mediation through the bipartisan crisis he diction act. i look forward to hearing from our witnesses today about how we can tackle these challenges facing renters and grow the number of good landlords. it will benefit all of us. senator toomey? >> think you, mister chairman. let me join the chairman in recognizing and thanking miss irene ray for her years of service to the committee. to the senate and to the country. we really do appreciate your good, solid, consistent hard work. thank you. the fact is, across america every month, americans are falling further and further behind because of president biden out of control inflation. paychecks are not keeping up with rising prices. after adjusting for inflation, wages have declined 5% since president biden took office. the fact is working americans are getting poorer every day. and our democrat colleagues wasteful spending, growth killing regulation, and excessive monetary policy or exactly what caused 40 year high inflation and now economic contraction. what is the response we hear from our democratic colleagues? they want to chant through a reckless tax and spending bill that will make this disastrous situation even worse. hiking core protections will slow economic growth and especially when americans manufacturing sector, and spending billions more will fuel inflation. this new wasteful spending will mostly go towards corporate welfare or green energy. subsidies for wealthy people to buy tesla's. and a political handout right before the elections to higher income americans who buy obamacare plants. in addition, the bill includes spending on housing, which is the topic of today's hearing. under the biden administration, the cost of housing has of course skyrocketed. housing prices increased 18% in the last 12 months. rents have jumped 14%. affordable housing is growing further and further out of reach for many. you wouldn't know that from reading the democrats bill. it's housing provision creates a one billion dollar slush fund for subsidized housing. i guess the theory is that at a time of surging housing costs, the solution is to put solar panels on section eight housing. as i have said before, this administration and government is also -- often but the problem and not the solution when it comes to housing. there are countless ways that needless government regulation drives up housing costs. time consuming permitting process is drive of the cost of new housing. overly burdensome impact reviews at cost. tariffs on steel, lumber and other building materials at the same effect. when controllers reduce the supply and quality of rental housing, demand site housing subsidies get capitalized entire house prices and higher rents. loose gs and -- underwriting standards drive those house prices and rent still higher. the gse responded by subsidizing investors and single family hand rental housing, that further drives of house prices and crowds out aspiring homeowners. more recently, the democrats and this administration have taken this government failure to the next level. they've dropped hundreds of billions of dollars of helicopter money to stimulate an already strong economy. 80 million of that went to rental assistance, vouchers, another housing subsidies, further inflaming demand. president even extended the illegal eviction moratorium that has deterred investment into rental housing, excuse me, and lead to some renters not paying rent even though they could afford to. predictably, landlords have responded by increasing rents and requiring larger security deposits. today, the democrats will propose more of the same. they will likely hear them make the case for a new so-called tenant protections, but we will likely hear them arguing for making the covid rental assistance program permanent, but doubling down on failed liberal housing policies is not going to fix our rental housing market. instead, it will tend to make housing more expensive. today, we will also hear from landlords about how government intervention makes it harder and more expensive to be a landlord, and that leads to higher cost for rentals. we're housing affordability for all -- but other renters -- we should increase housing supply and make markets more competitive. a healthy market competes just not price, but also service and product quality. to that end, we should scale back the role of government and increase the role of private capital. we should avoid the temptation to adopt new so-called tenant protections, or permanent rental assistance that will have negative, unintended consequences, including increasing housing costs. we should face out the demand side subsidies that drive housing costs higher. we should end the failed gse model that fosters excessive risk taking and contributes to a boom bust housing cycle. locality should revisit their permanent processes and other obstacles to new house in construction. we should prohibit the gse and other programs during subsidizing rental units in jurisdictions that impose rent controls, and we should get the gses out of the business of subsidizing single family home investors. and, we should keep the gses focused on their affordability mission by keeping them out of social policy. meanwhile, i hope the administration will finally engage on housing reform. treasury has still not met its obligation to deliver a housing reform plan to congress. it is now ten months overdue. instead of pushing a reckless tax and spending bill, the administration should look to opportunities for bipartisan legislation like the housing finance reform that relies on free enterprise, not governments, to make housing more affordable for more americans, whether they own or rent. thank you. >> thanks, senator toomey. i will not introduce the five witnesses, professor matthew desmond is the professor of sociology at princeton and the author of the book, evicted. he's also the director of the eviction lab at princeton. welcome. miss laura bronner is president and chief executive of a court of greater -- development for -- hamilton county, ohio. appointed to court 2011. responder fence 15 years of accounting. mispronounce, welcome. miss rosanna morey is a small property owner living in d.c. for, new york. she is joining us, i believe, for either her home or her office in new york. welcome, miss morey. -- it's a real estate investment and management company in the state of two of our members of this committee, senator ossoff and senator warren off. mr. dunn is also -- a civil engineer. miss diane is the president of the national low income housing coalition. she was once vice president of -- community partner. she served as director of public housing management at hud in washington, and she is almost irregular in this committee. miss yentel, welcome. professor desmond, if you begin. thank you. >> chairman brown, ranking member to meet, members of the committee, thank you for the opportunity to testify before you this morning. my name is matthew desmond. i'm a professor of sociology at princeton university, where i directly eviction laugh, which is a research group dedicated to understanding the causes and consequences of housing instability. i come before you today gravely concerned about millions of american families brutalized by our countries painful and utterly unpredictably predictable housing crisis. since 1985, prices have exceeded income games by 325%. most poor renting families today spent half of their income on housing costs, with one in for spending over 70% of their income on shelter costs alone. last year, rent increased faster than they ever have on record. nationwide, median asking rent increased by 17% in a single year. some cities thought rent increases double. that since last march, runs have risen 30%. in orlando, 29%. in cincinnati, 22%. in dallas, this, it's the inflation crisis on steroids. when the price of gas goes up, we can adjust. when the price of food goes up, we can adjust, eating out. last but when the price of housing shoots up, what can families do? they often are already living in the cheapest departments available. they can't double up with relatives, because of local occupancy loss. they can't move if they want to keep their jobs and family ties and their schools, so all they could do is cut back on other substances like health care, educational enrichment, and food. as a direct result of the housing crisis, the united states is a much higher of action right than other industrialized democracies. the number of eviction filings has increased by 21% since 2000, rising to 3.6 million cases filed in an average year. eviction is incredibly harmful to families and communities. it leads to job loss and homelessness, to depression and suicide. babies born to mothers who experience and eviction while pregnant are significantly more likely to have adverse birth outcomes, which have been shown to have lifelong, or even multi generational effects. the evidence is in, the evidence is clear, eviction is not just a condition of poverty. is the cause of property. why have runs risen so aggressively? one possibility is property owners expenses have gone up, and to maintain a spending income, owners have to pass on rising cost to tenants in the form of higher rents. this is not with the data showed to be happening. rather, in recent years, owners of multi family properties have seen their rental revenues increased at a faster rate than their expenses. this has been especially true for properties located in low income neighborhoods. the owners of these properties saw the rental revenues increased by 47%. this is between 2012 and 2018. they're expensive during that time only increased by 14%. both the private housing market and the federal government have failed to provide american families with enough affordable housing. as a result, property owners have seized the opportunity to increase rents knowing they have a captive tenant base. we need to increase the supply of affordable housing. families need relief now. not ten years from that, when the doors open. but today. congress could provide much needed relief by deepening investments and housing vouchers. i urge this committee to pass the eviction crisis act and the family stability opportunity vouchers act to bipartisan sponsored bills that would help stop the bleeding. you can extend the emergency ripple assistance with so much to prevent an eviction spiked during the pandemic. when we boost incomes for working families, government programs, or economic growth, but don't address rents, income gains are often recouped by the housing market. studies have shown that when states raise minimum wages, landlords respond by raising the rent. the implication is that investing in affordable ousting isn't only necessary to stabilize families and communities, it's also essential because the success of all other economic ability efforts depend on it. now is not the time for inaction. not for in the decisiveness, or for the same old tired debates about spending. we could pay for deeper investments in housing in dozens of ways. simply collecting unpaid federal income tax by the top 1% of households would bring in an estimated 175 billion dollars a year. what we can no longer do is look at renting families in the face, families now living in cars and garages and attics and storage sheds in the richest country on the planet and tell those families, you know, we'd love to help you, but we just can't afford it, because that is a lie. >> thank, you professor. miss bronner, welcome. >> chairman brown, ranking member -- members of the committee, thank you for the opportunity to testify on today on how renters and communities are impacted by today's housing market and how institutional investors are changing the landscape of single family housing in hamilton county. my name is laura brunner, president and ceo of the port of cincinnati development authority. the port is a public, quasi-governmental agency focused on mending broken real estate to promote drop creation, homeownership, and equitable development. our work is guided by the belief that real estate should work for everyone. we focus on the acquisition and rehabilitation of lighted residential and commercial properties and provide housing options across multiple price points, resulting in the revitalization a very. yes the poor operates the hamilton county land bank, whose mission is to return vacant properties back to productive use. since 2012, we have successfully sold more than 1000 properties. since 2015, the ports residential program has created more than 100 new and renovated market rate and affordable homes, investing $24 million to catalyze private investment. housing to fell up mint is not simply a byproduct of economic development. but rather, an engine of economic stability and growth. simply, homes create long term wealth. real estate is one of the fastest ways to shrink the wealth gap and help restore the middle class. in cincinnati, black homeownership is only 33%. nationally, about 42% of black households owned their home, compared to 70% of white households. housing and homeownership are the foundation of everything else in our lives. for too long, redlining and segregation has stifled black residents from this opportunity. this has become increasingly hard today, as institutional investors continue to crowd out the housing market across the country. last summer, we asked the city of cincinnati for the names of the five worst landlords. it took months of rigorous research to uncover that over 4000 single family homes in hamilton county have been purchased by these five landlords. tracking the acquisitions or some arduous task, to the high volume of llcs used. there's a theme out there. out of town investors, hiding behind a cloak of anonymity. as evidenced by the city of cincinnati's lawsuit against -- last year, this type of investor model results and poorly maintained properties and negligent landlord practices. investor landlords are also more likely to evict their clients, their tenants. institutional investors may only own 1% of single family homes, but this may mean 50% of homes on a single street. when the geographical impact is so concentrated, it has a negative game changing effect on what it means to live in the neighborhood. it has an impact on one neighboring homes, surrounded property values, see downward pressure. institutional investors found a very profitable new sector. they have been purchasing large volumes of single family homes in the region's most disinvested neighborhoods and turning them into rental properties. they make all cash offers and box out first time and low income buyers. our low home values and high rental rates make our city attractive. it's a cash cow for investors, but a money pit for renters. in the second quarter of 2021, one in six home sales were purchased by large investors. we know that a significantly higher, at price points below $50,000. just last month, cincinnati had the largest jump in rental prices in the country. so, we feel we had to do something to insulate renters. in december of 2021, the ports placed a bid on 194 single family homes formally owned by california-based firm, the filleted receivership. the receiver reached out to the portman auction of the properties was eminent. we couldn't help but see this opportunity as a partial antidote to the threat. in january 2022, the court close on this acquisition, and launched the care homes initiative. no other institution, to our knowledge, has taken on the project similar in scope and challenge this acquisition. because of our risk, we were able to create and innovative financing model that included zero public subsidy. the court leveraged its non tax revenue to issue bonds to pay 14 and a half million dollars, outbidding more than a dozen investors. the ports intent with the care homes initiative is superior viable pathways to homeownership for current tenants of these homes. working in neighborhoods, a nonprofit with a successful track record provides financial literacy trainer and home education as they take this step to buy their new homes. of course, bold ideas rarely come without risk. it is clear that some of these homes have not been touched or upgraded since they were built in the 19 50s. balancing the financial performance needs of the homes with the human needs of attendance is challenging. this reality reinforces the significance of the ports efforts to interrupt the cycle of predatory investor ownership of these properties. it is our duty to make real estate work for our community, particularly our most vulnerable residents. now, more than ever, bold policies and leaders are needed to ensure that housing markets meet the needs of our communities. thank you for the opportunity to testify. >> thank you, miss brunner. >> miss moore, you are recognized from new york. >> thank you. thank you for the invitation to testify today, and for the opportunity to share my story. my name is rosanna morey. i live on long island in new york, and i am a small landlord of an owner occupied home with a rental unit. i am a single mom, with an incurable cancer. just before the pandemic began. i lease at my home and a month a month lease and to ease the burden on my life. as my health declined, i saw no other option but to speak to tenants and provide notice for her to vacate so that my sister could stay with me and help me with my teenage son, who has many disabilities. the tenant refused, and so began -- filings and proceedings. the pandemic hit, and the eviction moratorium was put in place, which, by the way, it was originally intended only for nonpayment and covid related hardship cases. somehow, those cases were lumped together. it did not take long for the tenant to stop paying rent. and you can thank your governor for that, that was the response that she gave a police officer when he asked why she continued to say. i had to work three jobs will undergoing treatment to begin make and seat. she -- excessively smoked, it made me sick, and it may be violently ill. she violated belief, which clearly -- because my son was asthmatic. she didn't care, and there was nothing i could do. the stress of all of this even contributed to my -- stroke. you hear the cattle stories of deplorable behavior, thanks to governor hochul's federal eviction -- extensions, this has basically given the right to abuse the situation. she was allowed to live rent free for two years, even though gainfully employed. she ignored -- outlined in a binding lease inquiry meant that she signed and agreed to, and the situation allowed her to destroy my property, knowing there would be no recourse. i was one of the very, very lucky people who received money from the landlord rental assistance program. that was new york some urgency rental assistance program for landlords who -- to apply. for emergency rental assistance. however, it was only one ears rent that i had to pay income taxes on, but the tenant was now -- on the forgiving debt. but money from our rent did not come -- nor the $10,000 in legal fields, nor the $25,000 it ended up costing me to rebuild and clean the area that she destroyed, even leaving feces everywhere and rotting food in the kitchen. in the aftermath, any new regulations that landlords to be subjected to will continue to drive them away from renting our properties. policy such as the eviction moratorium led to abuse, as in my case and many others, and i found that to your backlog -- [inaudible] because landlords are still housing, paying tenants. we are waiting for the undue process. i -- also did not really help landlords, because -- expects the government to pay, basically not to pay their own rent. this perpetuate a who cares attitude, and impacts landlords like me. worse yet, permanently creates an emergency rental assistance program that just makes it easier for government officials to reimpose and eviction moratorium and lockdown orders, something we all can agree is bad. eviction moratorium that occurred during covid lead to government interference beyond what -- the government should -- participation [inaudible] and make housing more expensive overall. too many restrictions -- like myself would consider granting going forward. some will just -- leave. some more stringent requirements and put tenant [inaudible] in place. -- we are already starting to see the impact of all of this, as social media videos have begun to circulate, teaching perspective tenants how to create -- bank statements, et cetera, because so many chose not to pay rent, but they now cannot provide the documentation to apply for a new apartment, and this cannot continue. landlords are not in the victim of eviction, but we should be able to, in certain circumstances. today, we are asking policy makers to consider landlords, continually small property landlords and single parent landlords trying to make ends meet. and save lives, like myself, just trying to get by. because after all, we have families to support, to. thank you. i look forward to answering your questions. >> thank you, miss morey. next witness is mr. dunn. >> chairman brown, ranking member toomey, and members, good morning. thank you for the opportunity to testify today and share my story. my name is darion dunn, the managing -- as olympic prophecy, that -- i started with my younger brother. atlantic properties is a real estate investment and developing for with a mission to empower individuals by establishing holistic communities. i was born and raised in atlanta, georgia. my parents taught me that home is more than a place. it is an ideal. i graduated from georgia tech, where i studied civil engineering and economics. i've dedicated my life's work to creating and preserving a floatable housing. after acquiring my first rental property over 20 years ago, i have since participated in the ownership, management, and development of nearly 1000 housing units. i know that expanding affordable housing in our nation's possible, and critical, to solving our housing affordability challenges, but the government at all levels must empower not constrict housing providers from going, and doing what they do best, providing places to call home for our residents at all income levels. my company is able to offer affordable rents, in part, because we have a thoughtful, long term approach to property ownership. we have owned many of our renter properties for over a decade, while nearby properties have traded hands upwards of five times in the same period. unfortunate to have built a successful real estate company that operates on an institutional level. i have never forgotten my humble beginnings was a landlord with very limited resources. i have saved money from my day jobs for the down payment for single family rental homes and apartment properties. it's not surprising that the majority of rental homes and small multi family properties in this country are owned by individuals and small businesses like mine. in fact, over 70% of tenants in the united states live in properties that have 20 units or less, including single family homes. small landlords represent a majority of the rental property industry. the policy makers tend to overlook our contributions and struggles of this group of business owners. my responsibility to our residents includes keeping my business viable, so i can continue to serve those that are most vulnerable to the ever worsening affordability crisis. governments should seek to help you do. that our tenants are our partners, and our business cannot exist without them. the symbiotic relationship between tenants and landlords was put on full display during the height of the covid pandemic. the financial pain felt like attendance was ultimately felt by landlords, and vice versa. fortunately, my company didn't have a large percentage of -- during the pandemic, they're like many honors in my industry. however, we did have tenants unable or unwilling to pay rent for extended periods of time, with the worst-case being a current tenant that hasn't paid rent since october of 2020. while we have fortunately been able to withstand these challenges, the majority of small landlords can't sustain these types of setbacks. emergency rental assistance programs have been a welcome safety net. while many house improvisers experience significant delays in receiving these funds, to two challenges with the local execution of the program. the spike federal resources to help during the pandemic, the inventory of affordable housing eroding, as small landlords are two or are forced to sell their prophesy's, with supply already outstrip demand, we cannot afford to lose these market players. we need more mission driven housing providers. so, i support business practices and public policies that strengthens the tenant landlord bond, as opposed to those measures that take one side against the other. examples of good measures include lease insurance to cover property damage and lost revenue, reform of the section eight program, incentives to encourage housing preservation and conversion of unused commercial property to housing, and access to favorable debts and equity for non -- deals. evictions are a last resort. we must ensure that moratorium stone's courage vulnerable populations from paying their rent and building their credit. for example, our company doubled down on financial tenant, tenant financial literacy training during the pandemic. we educate attendance on the importance of avoiding eviction filings incredibly collecting. we also implemented a program to report positive rent payments to the credit bureaus, which led to 75% of our tenants improving their credit scores. i will close by reiterating that we must increase housing supply and provide incentives to strengthen the tenant landlord racing ship. there is still time to restore the legacy of affordable housing in america, and a promise to continue my efforts to make the ideal of home a reality for generations to come. thank you for the opportunity to be here today. i look forward to answering any questions. >> thank you, mr. dunn. miss yentel, welcome. you are recognized for five minutes. >> thank you, chairman brown, ranking member toomey, and members of the committee, thank you for the opportunity to testify today. pre-pandemic, millions of extremely low income households disproportionately, people of color, struggled to remain housed. more than half 1 million people experienced homelessness. 10 million of the lowest income households paid at least half of their limited income on rent, leaving them without resources to put food on the table, purchase needed medications, or otherwise make ends meet. any financial shock would cause them to fall behind on rent and face eviction, and in the worst-case, become homeless. these same households lost wages, have increased costs, and we're at risk of losing their homes during the pandemic. the federal government responded to the clear and growing need by providing unprecedented resources and protections. congress provided 36 billion dollars in emergency rental assistance. president trump implemented a national eviction moratorium, which was extended by a bipartisan congress and further extended by president biden. these resources and protections kept millions of renters who otherwise would have lost their homes during a global pandemic stably housed. now, as resources are depleted and protections expire, low income renters are faced with rising inflation, skyrocketing rents, eviction filing rates that are reaching or surpassing pre-pandemic averages, and, in many communities, increasing homelessness. every 100-dollar increase in median monthly rent is associated with a non-percent increase and homelessness. last year, monthly rents increased, on average, nationally, by nearly $200. rising rents are driven by increased demand, limited supply, and, a mostly unregulated market that allows landlords to raise rents without regard to the impact on tenants. institutional investors are purchasing homes at an increased rate, and they are raising rents, charging higher fees as a profit making strategy, and filing for eviction at alarming rates. a lack of national renter protections places tenants at risk of unjust treatment, housing instability, and evictions. underlying all of these challenges is a long-standing, pervasive, and severe shortage of 7 million homes, affordable and available to the lowest income people. the private market, on its own, cannot adequately address this. the shortage is a structural feature of the country's housing system, impacting every state and nearly every community. you have congress only funding us housing assistance for one in four eligible households, and has failed to preserve our countries limited supply of public and other deeply affordable housing. vid-19, to address a decades long housing crisis that has only worsened during covid-19, congress must enact long term solutions. such as expanding rental assistance for all eligible households in need, preserving and expanding supply of deeply affordable homes, providing short-term assistance to prevent evictions and homelessness, strengthening and enforcing renter protections, and incentifies in or requiring local governments to eliminate restrictive local zoning. these solutions must be paired with reforms to break down barriers that prevent access to critical resources and deepen racial disparities. all of the best opportunity to advance long term solutions is the reconciliation bill, moving through the senate now, it looks unlikely that the bill will address the housing crisis in any meaningful way. this leaves renters and people experiencing homelessness to suffer from continued inaction. so, as champions like chairman brown and others on the committee continue working towards long term solutions in congress, the biden administration must take immediate action to protect attendance from exorbitant rent hikes and prevents more homelessness. the bottom line is this. the country's lowest income seniors, people with disabilities, and working families are struggling to stay housed in this housing market. without decisive and quick action by the biden administration and congress, to many more renters will fall into homelessness. with all its associated costs, two children, families, communities, and the country. we can prevent this outcome, but only if we act, and act soon. thank you again for the opportunity. >> thank, you miss yentel. this brunner, your story, the care homes initiative, it's quite a story. thank you for sharing that. you suggested, just the arduousness, the difficulty of making that happen. thank you for your commitment to doing that. talk to me, for a moment, while other areas in ohio are seeing similar, i don't expect you to know the details that you know in cincinnati, of course, are seeing big investors come in, and more importantly, what would help the poor and other organizations to be able to fix more homes and keep them affordable for renters, return them to affordable homeownership? talk that through, if you. but >> thank you for the question, chairman. we became aware of this issue about a year ago, and there is an article in wall street journal that featured cleveland, a high. the rapid increase of over ownership by these institutional investors they're made a start to study what was happening here in cincinnati. i think ohio, in general, is typical of a target area, because of our home values relative to the rental market. i don't have any specific information, but i know this is something happening throughout ohio. yes, the llcs, when we got the names of five different investors that have the most significant code violation from the city of cincinnati, and went to figure out how many homes they owned in our county, you can't look up the entity name because it is common in real estate that llcs are used for rural state ownership. but we did find that one particular investor had 91 llcs just in our county. so, that mean there is just lack of transparency, which makes accountability harder, and that is one of the changes that we would recommend, is that there is some kind of registration process that would make it easier for the local jurisdictions to then track and hold accountable these property owners for the condition of the properties. and we also discovered that many of them are still receiving homeownership credits on the property tax bills, so that is something else that should be changed. we certainly don't want to have less costs for them than other businesses, because what they are doing is these are businesses. they should pay higher taxes. i also think that we are looking into to other ideas. we don't know to the extent to which opportunities but zone funding has been used for the investment of these properties. we know that a very significant amount of investment is in low census track areas. it would be concerned, certainly, if opportunities in funding is used for this, which, is i think, not the intent. i think there needs to be some analysis of -- taxation and the implications has for this asset class. >> thanks, miss brunner. her face or desmond, two questions, if you could answer them together. first, address what miss brunner said about llcs and tell us how it has affected your ability to track who is filing evictions around the country, because i know that is a big part of the work you are doing at the eviction lab. then, if you would also speak for a moment, about the eviction crisis act, help us better understand and prevent evictions. >> thank you, chairman brown. the growth of llcs in the rental housing market has expanded, particularly over the years. studies have linked llc ownership to property neglect. this isn't because landlords -- their llc's own older stop, it seems to be the llcs invites moral hazard. what prevents likability also seems to prevent accountability and could invite negligent behavior. studies have also linked llc ownership to property disinvestment, tax abandonment, even completely walking away from properties. one of the landlords i spent time with in milwaukee, i asked, and what happened to this house i spent a lot of time with? she said, i just gave it back to the city. what she meant was she just stopped paying taxes on, atletico to tax foreclosure, tax foreclosure should not be part of the business strategy, but for some landlords who use llcs, it is. it is also the case, and it seems to be the case, that a small number of landlords do outsized numbers of evicted. we can't know who exactly those people are, because we don't know who owns our cities. if we did, we could design policies that would target the root of the eviction crisis. the eviction crisis act would do a lot to get us to a better place when it comes to stemming of actions. first, it allows us to attract eviction data, which is the only way to understand evictions are, for example, violating the fair housing act. the federal government doesn't collect eviction data. the only group that does this micro bath priscilla national level, and i promise, you i will not do this forever. the second thing that eviction crisis act does is look at real legal reform, and inside the courts, to see if we can do a few more humane and rational way to do to get the process. and third, it looks at rental assistance. and if we could figure out a way to make small taller's go a long way, for example, in cincinnati, last year, i believe one in seven evictions were for less and $500. so, for some cases, the line between homelessness and staying in your home doesn't cost that much money. >> thank you, miss yentel, your comments on that. what the eviction crisis act would do, in your view. >> i would point primarily to the last piece that matt mentioned, making emergency rental assistance a permanent program and permanently funding it at three billion dollars annually. the legislation was initially introduced as bipartisan legislation in the senate in 2019. even before the pandemic, there was bipartisan understanding and agreement that short-term rental assistance should help some families who could otherwise make ends meet, absorb unexpected financial shock, and avoid eviction and spiralling into poverty that results. it was initially envision that's a pilot program, and, then of course, 2020 came. the pandemic, 46 billion dollars in emergency rental assistance, we have had our pilot program. emergency rental assistance has been successful. 40 billion of the 46 billion has been spent or obligated. 6 million families have been helped. over 6 million payments have been made. so, now it is time to take all of the lessons we have learned during the pandemic from the 500 programs that were stood up across the country, and put that into authorization and funding for a permanent emergency rental assistance. again, really pleased to see the legislation is bipartisan and does have bipartisan support. >> thank you. , senator toomey. >> thank you, mister chairman. thank you for being with us remotely today. i appreciate your testimony. i read your testimony. i feel badly for the circumstances you are in. i certainly hope your prognosis is good, and you are feeling well. you know, i read your testimony, so i know the story. we did not have a good audio connection for much of your opening comments. so, i just want to clarify a few things for people who might not have been able to understand what you were saying. first of all, my understanding is you own your own home and attached, or is part of that home, there is an apartment. you rent that apartment out on a month to month lease to a tenant, right? >> that is correct. >> right. then, at some point, because of a deterioration in your health, you decided that you really needed to have your sister move into that apartment who could help you. so, you provided the notice to your tenant that you, at some, point would not continue to renew but leaf, and your tendon, nevertheless, refused to leave the apartment. is that right? >> that is correct. >> did i understand you to say that she stayed in the apartment without paying, at least the full run, i don't know if she paid any rent, for two years? >> close to. >> close to two years, she stayed in the apartment, and you couldn't do anything about that, why? >> because housing foreclosed, and even when i tried to open a different case, because of her smoking, so, there was an emergency type of hearing or filing that was going to start the clock over again, meaning that my last filing would go away anthony filing would then take its place. >> with an eviction moratorium in place, would you be able to evict this person? >> yes. if there was no evict a moratorium in place, i would. >> right, if there was no eviction moratorium, then you could. if there is an affectionate moratorium, you wouldn't. this person seems to know you were not in the position to be able to evict her? >> yes. >> and so took advantage of that. so, let me ask. you having gone through this experience, and knowing what you know about the government's willingness, certainly at times, to impose a ban on evictions, do you regret having rented your place out? >> i don't regret it. but a guarantee of no moratorium, there would have to be more than that. i would have to feel supported and protected by my governments. that there would not be protections for -- one time, and in order for me to ever consider renting again. >> right. we've been hearing a lot about the supply of housing. that's true. we have a shortage. this is, to me, a very compelling story of the unintended consequence of what is meant to be helpful to tenants, but actually, becomes very harmful when some people inevitably abuse this. mr. dunn, in your testimony, you said, and i quote, government actions that raise my costs ultimately impact my residents and my ability to provide affordable housing, end quote. i assume that, like any other business, if there are higher costs imposed on you from outside at some point, you have got to pass that on to your customers, the renters, whether it is in higher rent or higher security deposit, or some combination thereof. if you are, if higher costs are imposed on you, are you going to have to impose those costs, ultimately, on renters? >> generally, that is the case. there is a misconception that landlords are mostly a big business, and as we have heard today, over 70% of landlords are small business. >> and i do want to get to a point about that. >> and also, those costs have to be passed on, because they are such relatively small margins, like any business. some businesses have less than 10% of a cash flow margin, and up to 20 or 30%. so, if costs are raised by ten or 20%, that could absolutely wipe out any profit. >> that has to get past. on so, a cost such as, i don't know, how your task or a higher maintenance on your bill, it's an obvious one. there's another kind of cost, which is if the government imposes and eviction oratory him that the effect that some percentage of front is not going to be collected, because people know you have no recourse if they don't pay the rent. so, most people will still continue to pay their rent on time, because saying that was the right thing to do and they will. but there will be some percentage that will choose not to, and so knowing that, if you are living under an eviction moratorium, or the government is imposing that cost in the form of lost revenue, don't most landlords have to pass that on in the form of a higher rent to people who are paying the rent? >> the moratoriums can create, it can threaten the relationship between tenants and landlords. most tenants, as you said, pay the rent. they are responsible. but when you have a system that doesn't protect the other side of the partnership, and you will often hear use that word, partnership. it is not about the tenant, it's not about the landlord, it's about the tenant landlord partnership. when one side of that partnership is not protected, it hurts the entire system. so, when you have a moratorium in place, that doesn't allow one side of the partnership to thrive, that entire system breaks down. >> and the cost is going to have to be borne by people. but last point i want to make, is kind of repeatedly from witnesses and my colleagues have made the point about increasing percentage of single family homes, especially that are owned by private investors. and there is a lot of people who are very concerned about that. i would just underscore that the people who are most able to afford the burden, the costs, of ever more regulations, are large corporations that can spread that out in a big legal department, as opposed to the mom and pop tenant, and by the way, we tolerate the gses subsidizing the financing of private investors in these single family homes. if people would prefer to have local landlords and people owning their own homes, one thing we could do is forbid the gses from engaging in this subsidies. they would urge my della credit colleagues to consider. that thank you, mister chairman. >> thank you, senator hernandez of new jersey is recognized. >> thank you, mister chairman. miss yentel, the national oak income -- out every show in stark details just how hard it is for low income renters to afford even modest housing. in my home state of new jersey, a median income renter is barely able to pay for a one bedroom home. a renter earning minimum wage would need to work 80 hours a week, or to full-time jobs, to afford a one bedroom house. however, the data is actually even worse than that, because affordable housing availability impacts other parts of the family's budget. for example, affordable housing is increasingly located in areas that are far away from job and there's. this forces workers who pay higher transportation costs. given this, how important is it that we build more affordable housing near public transit, so we can connect people to good paying jobs and careers and opportunities? >> thank you for the question, senator hernandez. it is important that congress not only invests in more deeply affordable homes, for the lowest income people, but also to ensure that's low income and extremely low income people, people of color, can live near transportation and the opportunities that that presents for them. we also have to be careful when we work on transit oriented to developments to ensure that it doesn't create displacements or gentrification, and the affordable housing component of t o d is the best way to do that, to ensure that we are preserving existing affordable housing in neighborhoods connected to transportation, and building more so that the lowest income people aren't displaced if new development comes near those transit stations. >> thank. you that's why i -- my low income communities act, which creates a federal grant program to intensify some development of new affordable housing near existing mass transit. we hope to see some of that happen. by the way, my preface to you, the question, you don't dispute any of what i said in terms of the realities of what it is for rental incomes in terms of peoples challenge to meet that? >> absolutely. rents are far out of reach for certainly, for minimum wage workers, other low wage workers, for seniors, for people with disabilities on extremely limited fixed incomes, but we also find that rents are far out of reach even for the average renter, who often earns about five to $6 less an hour than what rent costs in their communities. so, a big part of the housing crisis that we are facing today is stagnant or declining wages for the lowest income people, and skyrocketing rents that they can't afford. >> and when people can't find a home, a place to call home and they are displaced, then society bears the burden. talk about who bears the burden. >> oh, absolutely. inaction is expensive. as a country, we pay to allow for homelessness and housing poverty to persist. we pay for it through increased health care costs for families and parents. we pay for it through lessons educational attainment for kids. families that are on affordably housed or, precariously housed, earn less over their lifetimes. they pay less in taxes. so, the flip of that is also true. when we invest in the four double housing, there are savings to be found in many other areas of our life and throughout the federal government. >> thank you. ll of us, inclprofessor desmonde coronavirus brought on unprecedented challenges to many of us, including renters across america. many of us were struggling prior to the pandemic, however, the cares act efficient moratorium and rental assistance funding provided by the consolidated appropriations -- and the american rescue plan were able to keep millions of people from being evicted. what has the eviction lapse data shown about which of these programs help renters stay in their homes? >> both programs were historic and incredibly successful between the end of the cdc's eviction moratorium in july. roughly 216,000 evictions that would be expected under normal evictions did not happen. the biggest reduction in evictions were seen in low income african american and hispanic communities, areas mostly affected by the eviction crisis. at the same time, during the days, i should say, that the moratorium existed, foreclosures we're down, historically, in the country, to, because the federal government also rolled out forbearance for homes. so, this it's a policy that was one of the most important federal policies in the lives of low income renters since the invection of -- >> and finally, what lessons can we learn from the pandemic, with regards to targeted housing assistance programs and the communities that needed the most to ensure funding is deployed as rapidly and efficiently as possible? >> one of the problems of the emergency system program is a development of channels at every stage to get money in the hands of citizens who need it, in a way to make property owners hole. it will be a waste to let those channels go by the wayside, since we built in for the pandemic. >> thank. you are in a sense senator kramer is with us. >> thank you, mister chairman, ranking member, witnesses for being there. mr. dunn, i think we can pretty much all agree to some degree on the problem. i will tell you in listening to senator toomey's questioning, my mind went on the usual path of, what is the ultimate end to the constant government distortion of markets? the sticks and the carrots that seem to just create be higher price, and very little in regard to providing more supply. the biggest problem with inflation, the cause of inflation is when demand outpaces supply. so we keep upsetting demand, in my view, to incentivize supply. i'm not sure where it will all. and one part of that scenario that we don't talk about enough, is the cost of regulation. there's been a study, i'm sure you are familiar with it. it predicts about 40% of the cost of multi family and single family rent is regulation can you speak a little bit to government regulation? again, i am sincere when i say, i think we struggle to find the balance. when we tried to find a problem, we incentivize one side of the other, all we do is elevate the costs. can you speak a little bit to that imbalance, what is the right balance if you have a sense what that might be? >> yes, senator kramer. you have a sense on the national home village association to the study, looking at all levels of government, regulation at about 40% to the cost of building homes, and the cost of building real estate, developing with the state that is directly passed on. to the very people we are trying to help. so we have to make sure that we are dealing with the root cause of the issue, which is the lack of supply. and everyone, even every witness here today we agree, that this is the problem. we need to focus our efforts, focus our dollars on every level of the government, local, state and federal level and making sure we are creating more housing. when we create more solutions, in many cases i can understand why they are being created, in the short term, to help one side, it does not help the problem, it does not solve the problem, that we need more housing. we need to make sure there is a plan to create more units, and not initiatives that hit one side against the other. we need to make sure the tenant landlord bond, which is sacred, has a place to live in this country. >> and you advocate, i don't think any of us advocate no regulations. obviously, there needs to be protections put in place. i agree, the problem is easier to identify then disillusion, readily. when incentives create a distortion to the point where the cost of rent is going up faster than the rest of the economy, that is not the right solution. but i am kind of with you. i would like to see as focus more on the supply side. i'm not sure that completely does not either, because sometimes you can end up anticipating the abundance of that as well. anyways, with that, thank you all. by the way, i still have a minute and a half if anybody else wants to comment on the same question, either from a different perspective, i would be happy to listen. >> i would be happy to share that, related to regulations, or state and local laws, that one of the biggest challenges to increasing affordable housing supplies is often restrictive to local zoning, it inhibits the supply of any kind of apartments, especially affordable apartments. and this drives up costs for everybody, and it exacerbates segregation and other racial disparities. so states and localities will need to do more to limit or entirely remove those restrictive zoning laws, if we are to be able to build the number of homes that the country needs. and the federal government can use the levers that it has, primarily in creating incentives, or requirements that are tied to federal funding, especially the big plots of funding it through the transportation, the bipartisan transportation infrastructure bill. that can create very compelling incentives for local communities if they are able to receive those funds, only if they do the local level of restrictive zoning. t soundsthe only thing that cone about that is that sounds swell, into the local community, it's not worth the funding. in which case it's not worth the finding. >> that's why we should think bigger than the housing funds, where typically we do look at incentives for restrictive zoning, and we should look to the much bigger pots of money, that all communities want, related to transportation funds, highways, et cetera. >> thank you. thank, you mister chairman. >> ready. thank you, senator cramer, senator reed, for recognizing. >> thank you, chairman. professor desmond, what we have noticed is there have been a lot of institutional investors, et cetera, getting into buying residential homes in significant numbers. and that could disrupt the entire market. i know real estate is typically really a local issue in terms of realtors, in terms of individual sales, in terms of global factors. so, do you have an assessment yet as to why they are getting in, what they might do and what are the downsides? >> thank you, senator reed. we have seen a rise of institutional investors from single family rental markets, after the 2008 foreclosure crisis. there was a market opportunity. the average cost of the home dropped by 27% after the foreclosure. but reince did not decrease during the last recession. that gave institutional investors a chance to buy up single family homes, below market rent and rent at market prices. that's what you see increasing investment in sun belt cities, like atlanta, charlotte, phoenix for example, or institutional investors have had the bigger chunk of the market. nationwide it seems like 2.3% of the single family rental market is known by institutional investors. but even that relatively small footprint is much bigger in places like atlanta where some neighborhoods have a third of the rental family market -- the single family market is owned by institutional investors. why should this concern us? because research has linked institutional investment to higher housing costs, institutional investors raise rents more aggressively than small time landlords. there's also research linking institutional investors to property neglect, more onus on the tenant for upkeep. also, they looked at much higher rates for much lower amount of money. >> thank you very much. and the other issue, recalling my service here in 2008 to 2010, is are we seeing these institutional investors taking the ownership, creating derivatives, or other financial product based on ownership? is that happening? >> i'm not sure how to answer that question at this time. >> okay, very good. and both miss yentel and professor desmond, what kind of housing supply would be the most effective, to ease family housing costs and help renters? any thoughts? the thoughts of professor desmond and yentel. >> the house voucher program has been incredibly effective program. you know, families, they have received housing to better neighborhoods, because you better in schools. the kids literally eat more, become healthier. and less anemic. talk about a less successful way that it would cause the spend housing security, or economical ability for families across the country, simply to take the problem we have, that already works really well, and expand to all the families that need it. >> miss yentel, your comments? >> i agree and would add when it comes to housing supply, how countries newest and most deeply targeted housing supply program is the national housing trust fund, thanks to your leadership, in creating and getting it enacted. the program of its current funding level, 100% of those dollars are to build or preserve apartments affordable to extremely low income households. and many of those apartments are up and running now, housing some of the most marginalized, vulnerable people in our country, including people who were previously chronically homeless, foster care, kids were eating out of foster care, survivors of domestic violence and so on. the only problem with the program is it is woefully underfunded, given the need, this year it was its largest funding level yet and it is still at under a billion dollars for the entire country. so that program needs to be significantly expanded so that we can build the number of homes which are needed and ensure they are affordable to the people with the greatest and the clearest needs, which is extremely low income renters. >> this should come as no surprise, but our challenge is to come up with the funding sources to keep the housing funds very, very active going forward. with that mister chairman, i will thank you >> thanks, senator reed. senator tester of montana is recognized from his office. >> thank you, thank you, thank you chairman brown for hearing me. look, a come from montana, many montanans have had trouble finding available housing, the same way across the country. the price points have gotten too high, gotten worse during the pandemic. because so many people think the entire state likes the show -- is like the show yellowstone. i guess that's okay, but it is really not true. and that process means in montana, some places see medium prices of homes rise, 40% in the last year alone. this is pushing more and more people from potential homeownership, to looking for homes to rent. so this brunner, what impact these challenges have on the ground in states like yours? >> thank you for the question, senator. i think there is a profound impact on local families at home ownership opportunities are taken away from them, and an easing impact on the neighborhoods that are replaced by institutional investors on other properties. and if i can build on the question which was asked earlier about the motivations for these investors, one of the things that has fueled it is, what doctor desmond talks about, with the home prices crashing, going back to the time of 2008 housing crisis. since that time, there has been an amazing amount of institutional money and non recourse yet that has been available so many of these investors have been able to buy properties without any guarantees of the debt. and the polio we purchased for example, it was in receivership not because the portfolio failed but because the owner just walked away, and the judge put the properties into receivership for the protect gym of the investors, and lenders. there's been too much capital out there, chasing places for investment. and then this product has been made, creating out of whole cloth, instead of investing in apartment buildings, office buildings and adjusting, all the sudden single family housing weekend it is horrible sector, and it's been so much money chasing it, and the debt has been too easy to get. and then if they get back to the individual neighborhoods, when you have 4000 houses in a community the size of hamilton county, and in every single neighborhood, it makes a difference. and we are getting calls from jurisdictions throughout the county on a regular basis, asking what we can do to help them fight back. okay. also in my state, i saw a growing number of homes for renters being converted into vacation rentals. in many, many communities, that puts additional stress on but already low housing supply. are their strategies at work to prevent local residents from being displaced or ease the impact, due to tourism, but quite frankly, when these forms are taken off the market, just families can't afford to buy them, because they are used for vacation rentals. that adds to the problem. are there any strategies out there? >> sure. anytime that rental units and especially affordable rental units are taken off the market and used for some other purpose then housing low income people, that exacerbates the existing shortage of homes affordable to them in that community. so, it points back to the real need to in places where there aren't enough homes for the people who lived there or want to live there, we need to build more. to build more market rate apartments, we need local communities to remove restrictive zoning laws and allow the market to build those units and have them affordable to middle or higher income renters. for the lower end especially extreme low income renters, the private market on its own cannot build and operate apartments that are affordable to them, because they can't pay enough in rent. that covers the cost to build and operate the apartments. so, for them, federal subsidies are needed, even in the form of if there are an adequate number of homes and people living in them can afford them, in the form of rental assistance, to be a bridge between what they can afford and what rent costs, or in the form of building apartments and ensuring that they are deeply affordable to extremely low income people, through programs like a national housing trust fund. >> miss yentel, as long as your warmed up, we don't have any immigration policy in this country, quite frankly. and we need. one. it would help with the workforce. it would actually have some positive impacts on reducing inflation. but nonetheless, we are locked up on that issue in washington, d.c., and we have an incredible paralysis. do you have any thoughts on where we can get a workforce to build these houses? >> i'm sorry, i don't fully understand the question. >> the point is, if we are going to increase supply with the workforce, we've got no workforce. we've got no immigration policy. we don't have enough folks to build houses. do you have any thoughts on that? >> that's a really important and good question. i don't have immediate solutions to share, but i would love to follow up with your office afterwards to share some. >> certainly. thank you, miss chairman. >> thank, senator tester. senator warner from virginia is recognized from his office. >> thank, you mister chairman. i appreciate you having this hearing. if you have got the solutions in terms of building more housing, i would like to know as well. we are well overdue on an immigration solution. there are things i've known i've worked with -- as we think about a project i've been involved in, unsuccessfully, that went over a decade in terms of -- reform, the idea of having the senate approximating a 15 to 20 point feet on all of the work that danny and fed ethos on mortgages, to create a dedicated source of funding for not only first-time homeownership, but potentially national -- deal with the mental issue as well. one of the things i've worked on a lot has been home ownership, and i know my question is this. on rental housing, -- along with others on this committee, financial institutions advised on the fact that the center created a number of members on this committee starting to -- caucus in the senate to try to make sure we get more capital into these entities that helped fund lo and moderate income housing. we've seen, and covid, a disproportionate impact on communities of color. but i think we need to do that, and i think there is this virtuous circle, but you have talked about this as well, providing more affordable housing even in the rental market or even in terms of being home, ends up helping communities all across the income spectrum, but i want to go to you -- because your group did a recent study called the gaffe, a shortage of affordable housing. -- commonwealth of virginia, we've got 150,000 shortage of affordable rental housing units. one of the things, we've got certain tax programs, but you and others have pointed out, we just don't have enough capital. going into building affordable rental housing, what can we do as the federal government, beyond some more provisional programs to incentivize more private capital going into this ownership market? >> i would actually bring it back to the public investments that are needed, especially as we talk about where the data shows the clearest and the greatest needs are. the data are very clear that the most severe shortage of homes, affordable, is for the lowest income people. it fac, extremely it low income renters are the only factor of the population for which there is an absolute shortage of homes affordable to them. and this has ripple effects up but income ladder. addressing this shortage can provide relief up the income ladder, too. especially when we are talking about federal resources, it gets very important that we ensure that these limited resources are targeted where the greatest needs are. for the work that you have done on first generation home buyers and assisting more first generation people to become home diners, i think that is extremely important. and for renters, too, i think all housing is on a continuum. when we have a situation like we do today, where potential first time or first generation home buyers are locked out of the market, because a single family home prices so high, that keeps them in the rental market. they tense to have higher incomes and other renters. that can drive up costs, and as i have said before, our housing system is like a game of musical chairs, and when the music stops playing, it's always the lowest income people, or people with no incomes, who are left standing without any homes at all. >> can i just ask you? i understand we need this federal subsidy, but how do we get, unless you are going to do 100 percent federal financing, how do we take those federal incentives to incent private capital beyond some of the tax rate programs to actually get a newer supply of low income rental housing? i just win wondering if there's anything else beyond, this funding tax credit programs or other examples of creative initiatives you have seen and your work that we ought to bring in. >> well, we can do direct grants, as we do through the national trust fund. that is affected for communities who use those funds to preserve apartments. affordable to the lowest income people. tax incentives are also helpful in attracting private capital. the low income housing tax credit is certainly a very successful program. that should be expanded and reformed to ensure that communities who receive those tax credits can do more, again, to build apartments for those lowest income people. >> can i say mister chairman, most of us on the committee support national housing trust fund, but the erratic level of funding to that, while the idea is, we may not fully agree on all of the housing financial form, but at least putting some dedicated fee on those mortgages, they can give the government guaranteed to provide a more stable source of funding for the united national trust fund. i hope we can revisit. thank, you mister chairman. >> thank you, senator warren, senator warren from massachusetts is recognized. >> thank you, mister chairman. americas renters are struggling. and the fed's interest rate hikes are making it both more expensive to build more housing and more expensive to take out mortgage to buy a home. this could look more families into the rental market and push rents even higher. now, wall street firms are watching this with dollar signs in their eyes. private equity really state investment trusts, big corporations have gobbled up more and more of the rental market and no serve as landlords to thousands and thousands of americans. in 2018, non individual investors owned 26% of the rental stock. up from 18% in 2001. on recent earnings call, executives at the private equity firm blackstone read that slowing housing construction, that is less supply, and higher mortgage costs quote, provide a lot of support, and quote, for their bottom line. and says quote, people will still have to live somewhere. so professor desmond, you are the leading expert on predatory housing schemes. let me ask you, as corporate landlords like blackstone by a parental properties, what will be the impact on families who are in those homes? >> senator warren, first those families will pay more, sometimes a lot more. institutional investors will raise rents by double digits, even the single quarter, but families might also experience a reduction in housing quality, as institutional investors died as housing as part of their business model. they settle tenants with extra fines in fees, including tenants who can make their rent the end of the month, just because they don't get paid on a monthly basis. plus those tenants are so outgunned not only politically but in court, or many of those tenants don't have access to a lawyer, but over 90% of landlords do. that leaves families incredibly vulnerable situations. >> right. in fact, thanks to an investigation by the house select subcommittee on coronavirus crisis, we know that during the height of the pandemic, incorporate landlords illegally evicted families by the thousands, of violating federal and state moratoriums that had been put in place to protect tenants. so today, with families struggling with these rapidly rising rents that you talked about, and with the economy at risk of being pushed into recession by the feds overzealous interest rate hikes, it is urgent that we take steps to protect renters from predatory schemes, and ensure that corporate landlords at least follow the rules that are in place. that is one reason why i have proposed creating a new tenant protection bureau, which would allow tenants to easily file complaints against unscrupulous landlords, and to provide officials with the data that they need to enforce tenant protection laws. this yentel, how could a tenant protection bureau protect families rights, and force these wall street landlords to actually follow the rules? >> it could be tremendously helpful, senator warren. as you said, that report only verified what we knew was happening during the pandemic, which was that some of these corporate landlords or flouting the law. we pushed throughout the pandemic for the federal government to hold them accountable, to apply the penalties to them for not following the cdc eviction moratorium. but there was no single agency that was charged with or empowered to do that, so it did not happen. if we had a tenant protection bureau in place during the pandemic, it could have protected untold harm on evictions of some of the most marginalized people. and if we had it today, you can help further enforce tenant protections, prevent egregious rent hikes and let tenants hold their lone lords accountable. >> that is a very powerful answer. i appreciate it. and look to ensure every family has access to safe and affordable places to live, we need a bit more housing. but is the ultimate answer, we need more supply. there's no way around it, these investments are overdue. but it is also urgent that right now we stand up to big, corporate landlords and protect tenants from these predatory schemes that could push them out on the street. and a tenant protection bureau would be a good start. so thank you very much, thank you for your work, thank you for being here. thank you, mister chairman. >> senator warren. senator -- of -- is recognized. >> thank you for your testimony over here today. >> i think there's consensus we need to address to the housing and supply issue. and there may be some federal tools we can use to incentivize local jurisdictions to reduce barriers to housing supply. i think all of us know we will not snap our fingers today, and in the next six months, a year, a couple of years, create the supply we need. so i think we should also be focused on using proven public policy tools to provide more families with affordable housing, and allow families that have been trapped in poverty to move to areas of opportunity. and professor desmond, i want to start with you. you mentioned in your written testimony, a bipartisan bill, but i introduced with senator todd young, called the family stability and opportunity of vouchers act, which would provide families with young kids, the opportunity to move to an affordable home, but also wraparound services, to make transitions to other neighborhoods with higher opportunity. could you first briefly talk about the fact that people have looked at this, the empirical evidence, which shows this is effective? second, what is the impact on that program, which we are trying to expand significantly, because it has been successful. what is the impact of some of the institutional investors buying up properties in some of these areas these families want to move to? >> senator, thank you for the question. the bipartisan bill you helped introduce and sponsored it would be incredibly impactful for families and all sorts of ways. housing is not without opportunity. it's not about how much rent you are paying, but where you are living, where your kids are going to school. the promise of a housing voucher is to expand choice an opportunity to so many americans denied it. so the empirical research on this is very clear. one families have the opportunity to move to neighborhoods with lower rates of poverty, lower rates of crime, higher rates of public safety, their lives are improved in so many different ways. let me give you one data point. children who go to schools with higher levels of integration do far better than their peers who go to segregated schools, even when those segregated schools are flooded with resources. so these programs work. not to mention just giving families a breath of relief so they can pay what they should be paying for housing costs instead of driving them into poverty. the institutional investment in our markets is the opposite of this. it is the view that housing is a commodity, something that only before profit, and it is an opportunity denier and poverty spreader. >> i appreciate that observation, which is why this trend is alarming. the other challenge that we of course have is discrimination based on a source income. where in certain places, the majority of places around the country, landlords can discriminate against people with vouchers because of the source of income. can you talk about that challenge, whether it is made even more difficult if you have an institutional investor with no connection to the neighborhood? >> so the source of income discrimination as you know is, in most counties, there is no law against just saying no to a family just because they have a voucher. the evidence suggests that one source of income laws are put in place, they do help families get housed quicker, and into better neighborhoods. there's a higher success rate for vouchers with those laws intact. with respect to get institutional investors on this question, when you take the landlord and tenant relationship that mr. dunn as so eloquently talked about today, and put distance between folks who are working together, and you make that relationship purely financial, landlords don't have a lot of skin in the game to give tenants a break when the kids get sick, when they need to go to a dentist appointment. it suggests those landlords will not only react in a more kind of in personal way, it suggests they might build in the kind of discrimination that's been beneficial to their profit motive, including income discrimination. >> thank you, there is a whole lot of additional territory to cover. miss yentel, i have remaining time. can you comment briefly on the family stability and opportunity vouchers act, why it would be important to move that forward? >> it will be important for all the reasons professor desmond said, i would just add that the legislation, 500,000 new vouchers, targeted towards families with young children could effectively end family homelessness. and the funds that are included for mobility counseling are especially important. that allows counselors to help these families with finding communities that are the best for them, and helping them obtain and retain housing in those communities. so it is a very important bill. >> thank, you thank you mister chairman. >> thank you, senator van hollen. senator cortez masto is recognized from her office. >> thank you. chairman brown, ranking member toomey, i want to start by thanking irene bright, our stenographer who has served the senate for over 27 years. thank you for your service, and i wish you well. i also want to thank grateful member and the chairman for this important hearing. similar to what i have heard from all my comments, i am also concerned about institutional investors. and the impact that they are having, why we are seeing all of these properties being purchased. in my state, 2021, 29% of the homes purchased in the lost vegas metro area were brought by investors. my challenge is i can't tell how many are institutional. i think this has everything to do with what i heard earlier about too many al sees, not enough transparency in being able to track this. so miss yentel, can i ask you, we are from the negative impacts by these institutional investors, i'm not saying all of them, but the ones we have had in our communities, can you share some examples of communities effectively countering the pressures on home prices brought on by prices from institutional investors? >> i would say the challenges that low income tenants face from institutional and other landlords is primarily based in the fact that we have few tenant protections throughout the country. and there's a tremendous power in balance, that tilts heavily in favor of landlords, especially institutional investors, at the expense of low income renters. so we need to rebalance that power, so that it is more equal, and so that tenants have protections against exorbitant rent hikes, against these kinds of fees for profit strategies, and against the increased evictions. there is a whole set of tenant protections that should be implemented at the federal, state and local level. >> let me ask you this as we talk about finding that balance, i do think it is important. we were talking about vouchers, and the positive impact it does have for stability for tenants. can you talk a little bit about what vouchers also does, when it brings to property managers, any benefits as well? >> sure, it is reliable income for property owners, for landlords. if they have a tenant who has a section eight voucher, then they will get regular rent paid each month. they have the benefit of knowing that rent will be stable and continuous. so it is a benefit for landlords as well. >> it also gives them the ability to prepare for and help them upkeep their property as well, is that right? >> well, the rents are pegged at the fair market rate, which should be enough for landlords to be able to operate and maintain their properties. >> let me jump to professor desmond. because you included manufactured communities in your book, evicted. thank you so much for the work that you provided in evicted. very enlightening. can i ask you this? another area i am concerned about are in fact, homes being purchased by private equity as well. and in the impact that we are seeing that, also on the security stability for tenants. can you talk a little bit about how what you are seeing there as well, with respect to our manufactured home communities? this is the first time i have heard so many in my state right now, losing their stability, losing their homes as private equity companies come and purchase of all of these communities? >> senator, i think that your concern is warranted. what we have seen is institutional investors buying up, manufacturing housing which serves, it is an enormous source of housing for low income americans. and often, evicting entire mobile home parks, displacing entire communities. let me give you an example of how institutional investment is different than just normal landlord activities. so only about 5% of americans are paid on a monthly basis right now, but rent income is due at the beginning of the month. so for that 95% of americans, they often can't make rent during the first of the month. so if you have on institutional investor as your landlord, you get jurisdiction notice by computer, by algorithm. then you pay to stay, you pay the ladies, the invitation funds to say, but that increases your housing funds by 20%, by our estimates. which means the rental housing crisis, as scary as it is on paper is even worse if you are under those kind of conditions. >> thank you. i noticed my time is up, thank you again. >> well thank you, senator cortez masto. senator smith of minnesota is recognized. >> thank you, mister chair. thank you so much to all of our testifies for being here today, it is extremely helpful. so, two weeks ago at the housing subcommittee that i chair, we held a hearing on homelessness, how we can work together to and address this important issue. and as that chair knows, senator rounds, many committee members participating in that, it was very helpful. it is directly connected to this hearing today, right? we know without a safe, affordable place to live, nothing in your life works. and at our subcommittee, all of our witnesses agree that the primary cause of homelessness is again, this deep under supply of affordable housing. i think we are obviously seeing in this committee hearing today, that is housing supply problem affects our problems of the housing continuum. we see all these shortages are affecting the housing market, the home ownership market, and it is a big deal in rural and suburban and urban communities as well. so i want to come first to doctor desmond. thinking about this backdrop, thinking a couple of weeks ago about homelessness, what do you see as the relationship between homelessness and the broader problem of housing and affordability? how do we, how can we talk more about the homelessness issue? >> certainly, senator. as miss yentel offered in her comments, as bryant goes up, so it is homelessness. it's direct action between mental costs rising shelter, shelter capacity, expanding, people moving from home where the pay 50% of their income to, to 70%, maybe to their car, to a shelter, to the streets. so there is a direct link. the reporting at the california on this has been incredibly telling, 60% of people who live on the street in oakland are from oakland, they have lived there, often what homeowners in oakland, and through one reason or another, they come back to the housing crisis, ended up on the streets as citizens, native of that state. >> and there's a misperception that, people become unhoused, homeless because they have an underlying health problem like a substance use disorder, mental health issue. but isn't it true that those are the kind of health issues that develop because you are experiencing homelessness? >> both can be true. the intervention is very clear. we work to revive family homes first no matter their mental health state, their struggles with addiction, they social problems they might be facing. when you intervene in a housing situation, they get healthier, they can take their medication. we can provide a stable and consistent mental health intervention. so you know, it is not rocket science. the solution is housing. >> the solution is housing. it's not like you don't know what to do, it's a question of whether or not we have the will to do it. some would argue that, so we acknowledge that there is a severe supplied challenge with affordable housing. some would argue that the strategies like rental assistance basically have served to fuel demand for housing, thereby driving up housing costs, and it is not a supply side tool. is that accurate? miss yentel did you reply to this? it doesn't make the economics of affordable rentals work better, for developers in rental property owners? >> yes. when it comes to low, extremely low income households, the amount that they can pay in rent without subsidy does not cover the costs to build and operate housing. so federal intervention in the form of subsidy is necessary. and housing choice vouchers are highly effective in communities where there is a sufficient supply of homes, by the people living in them can't afford them. it acts as a bridge between what people can afford, and what rent costs and allows them to stay in stable and affordable housing. >> it seems to me that these kind of strategies, which are necessary to make housing affordable is purely a demand side solution, and not getting at the economics of having more affordable housing, which seems to be the right way of looking at this? >> that is exactly right as long as we have seniors or people with disabilities on extremely fixed incomes, as long as we have families working very low wage jobs which are essential to our communities, we have to acknowledge that federal subsidies are necessary to make homes affordable for them. and we have to find those solutions at scale. >> earlier in the conversation, that we have been having, there was a discussion that i appreciated, about how local zoning restrictions contribute to making affordable housing more effective, my hometown of minneapolis i think has done a model job of creating much more inclusionary zoning. could you just briefly address what we could be doing at the federal level to support that kind of local, or inclusive zoning? >> yes, your state is leading the way for the country to really look at ways to remove restrictive zoning. local zoning, is as its name suggests, a local issue. but there are federal incentives or requirements which could be put on local communities, if we look at the large pots of money that states and localities need to run their communities. we should put incentives or requirements on those funds for local communities to do more, to remove restrictive zoning, until we address all of the restrictive zoning that is inhibiting the supply of any kind of apartment, especially affordable apartments, even if we are successful in getting the level of funding that we need from the federal government, we will not be able to build. the federal government to use the levers it has at hand to incentivize or require communities to do more. >> thank you very much. thank you, mister chair. >> thank you senator smith, senator warren of georgia is recognized. >> thank you, chairman brown. according to the data from the 2020 american community survey, around 45% of georgians spend more than 30% of their income on rent, one in five spend more than half of their income on rent. we may assume that these numbers are from high rent cities, but that's not true, it's not just tyrant cities, in both jenkins county and taylor county, to rural counties in the southeast part of my state, one out of every three households, one out of three spends more than half of their income on rent. georgians are being crushed by rent all over the state. there is no question that we need more housing stock. i support many initiatives that would do just that. but georgians don't have the luxury, they're trying to pay that rent right now they can't wait several years for rent to fall. so even as we put forward a policy that would increase housing stock, we have to address the housing insecurity that the people of georgia are dealing with right now. and miss yentel, how long would you estimate that it would take for a housing supplier to finally catch up to demand? >> it will take years, if not more than a decade. it is a matter of this restrictive, local zoning that needs to be addressed and removed. and the supply chain issues, many more issues, workforce issues, to build that housing it will take many years for us as a country to dig ourselves out of the supply hole that we have created. >> so we can't wave a magic wand, it will not go away next year? >> that is right. >> or the year after that, or the year after that? presumably, france will continue to rise in the meantime? >> they will continue to rise. maybe they will start to come down, but even if they do, when we look back to pre-pandemic times, many of those numbers in georgia were likely the same. so even if rent comes back to where it was before the pandemic, there are 10 million households throughout the country which are paying at least half of their limited incomes on rent. so yes, they look continue to struggle. >> so we had this problem prior to the pandemic, which was exacerbated by the pandemic. do you think that offering tax cuts to rent burdened families, ordinary, hardworking families, what help bridge the gap so we can fully address the housing supply issue? >> absolutely. cash in people's pockets helps them pay their bills. whether it's in the form of continued, extended child tax credits, which did more to help alleviate child poverty in the country than anything in recent time, or whether it is in the form of renters tax credits, that can also support low income renters to afford the rent. they can have a meaningful impact on housing affordability. >> right. i am a big proponent of tax cuts for hardworking, ordinary families. they really could use it. it seems to me we need to provide solutions now, given the housing supply issue, where georgians are feeling squeezed by the rent. that's why i am offering, working on legislation right now to do just that. offering tax cuts to families with runaway rent costs. i want to pivot to another question in a few minutes that i have, but the low income housing credit approval program, also known as lihtc, the most efficient system for supporting affordable housing. since congress created it, the light tech program had finance over 3.6 million affordable rental units. however this affordability is only maintained during the tax credits time period, which is at least 15 years, but could potentially be much longer. one way the affordable period could be reduced though, is if the property owner requests regulatory relief through a qualified contract. miss yentel, if i could ask you again, you say more about what it means for a lihtc property owner to request the qualified contract? what is that? >> it means owners can essentially get out of the length of the affordability requirement under the low income housing tax credit program. it's something of a loophole in the program that used to be closed. >> sorry to interrupt, i will be out of time in a moment. if another entity buys's property, they can raise the right? >> that is right, even after the federal government has expanded resources to build and maintain that property. >> do owners commonly inform the tenants of the buildings that their property might be sold or lose its affordability ornaments? >> they don't. >> they do not? do you think that it would be helpful for hud to collect and publish data on the program, for instance weather owners if we have the right to call about contracts, will be helpful information? >> yes, more transparency in all federal housing programs is a good thing. we have a national housing crisis basis really show where prop are at risk, oh underqualified contracts by their affordability is expiring in the coming years, to give that data and transparency for local communities to come up with solutions. but hud and the department of treasury diminish it more. >> thank you so much, lihtc has been very important around the affordability question. i am working on legislation as well that will allow us to collect and study data from the lihtc properties in order to better the program. thank you so much. >> thank you, senator warnock. i might add that senator warnock's comments about tax cuts, i might add for the benefit of his fellow georgians on the panel, that senator warnock joined us 18 months ago, almost as soon as it came to the senate, joined me and senator bennett on working with the child tax credit, which matt and i have talked about, how about relieved the pressure for so many of your tenants, mr. dunn, for that year it was in effect at the end of the month, when we got 250, three dollar tax credits. it leaves the anxiety they felt to pay the rent. and they did not have to deny their family or their children, or themselves in those last days of the month. thank you senator warnock, thank you. i will close, one of my favorite abraham lincoln stories. as lincoln, lincoln one-time said to his staff, who wanted to keep him in the white house, when you won the, were free the slaves, preserve the union, lincoln said i have to go out and get my public opinion bat. lincoln would do that one presidents could do that more openly than they can today. i urge my colleagues to go out and meet people in the community, who struggle to afford rent. most of us do not interact a whole lot with people who are about to be evicted. they might call our office, but we don't have that personal touch enough. i urge my colleagues, if we are not doing that as much as perhaps we should, to talk to their staff, talk to people who work at the front desk, we drove to work today, who asked what it is like to rent d.c., tennessee, georgia and pennsylvania, ask them how many times we must call the landlords to get a repair it made, whether it is led, a leak that goes on repaired, what the rent increase was, if they had to cross the fingers and hope the rising rent would not force them to move. those are everyday stories, every day people we come into contact with headwinds for an ask them questions. i would hope more of us, including my self would do that. thanks to the witnesses, all five of you, the four of you here. four senators which do some questions, they are due by close, one week today, tuesday, august 9th, to our witnesses, according to our committee rules. we ask you to respond of any questions within 45 days from the day that you receive them. thank you again, the committee is adjourned. c-span is your unfiltered view of government. we are funded by these television companies, and more, including comcast. >> do you think this is just a community center? now. it's way more than. that >> comcast is partnering with 1000 community centers to create wi-fi enabled, so students from low income families can get the tools they need to be ready for anything. >> comcast supports c-span as a public service, along with these other television providers, giving you a front row seat to democracy. >> incorporated in 1884, hazard is a small coal mining town located in the appalachian mountains of eastern kentucky. sunday, on q&a, alan mae men, former reporter for the louisville korean journal, shares his book, twilight in hazard. he discusses the impact of closing of coleman's minds, the opioid academic, and recent flooding have had on the. city >> appalachia, as a region, lags behind the rest of the country when it comes to almost every socioeconomic measurement. eastern kentucky lagged behind the rest of appalachia. so, we are talking about the region of appalachia that from a socioeconomic standpoint has generationally struggled most. >> allen maimon, with his book, twilight in hazard. sunday night, at 8 pm eastern, on c-span's q&a. you can listen to q&a, and all of our podcasts, on our free c-span now app. , >> advocates for the homeless testified about the need for more affordable housing and federal supports to address homelessness across the country. they say the pandemic has made the issue worse. this hearing, held before a senate subcommittee, it's about an hour and a half.

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