This article was written by Richa Goel, NAHRO’s Legislative Affairs Intern
With housing prices and rents skyrocketing, homeownership has become out of reach for many Americans, especially low-income and minority populations. On June 28th, the House Financial Services Subcommittee on Oversight and Investigations held a hearing analyzing the impact of institutional investors on individual homeownership and rent prices.
Chairman Rep. Al Green (D-TX) opened the hearing by discussing predatory purchasing practices: “Private equity companies have bought up hundreds of thousands of single family homes and placed them on the rental market…these homes tend to be located in communities with significantly more families of color than the national average.”
Five expert witnesses testified in front of the subcommittee, including:
- Jim Baker, Executive Director, Private Equity Shareholder Project
- Shad Bogany, Agent, Better Homes and Gardens
- Sofia Lopez, Deputy Campaign Director of Housing, Action Center on Race and the Economy
- Elora Lee Raymond, Assistant Professor, Georgia Institute of Technology
- Jenny Schuetz, Senior Fellow, Brookings Institute
Baker, Lopez, and Raymond discussed the relationship between institutional investors acquiring single-family homes and increased rents and eviction filings. Bogany spoke about institutional investors targeting minority communities, charging high rent prices, and diminishing minority chances of homeownership. Schuetz highlighted the increasingly tight housing market, asserting that local zoning policies and regulations have hindered home building and driven high housing costs.
Democrats and Republicans disagreed on the causes and remedies for high housing costs. Ranking Member Rep. Tom Emmer and Rep. William Timmons (R-SC) emphasized inflation, accusing Democrats of using institutional investors as a scapegoat for policy and spending mistakes. In contrast, Rep. Nikema Williams (D-GA) and Rep. Emmanuel Cleaver (D-MO) emphasized the impact of institutional investment on minority communities. They advocated for closing the gap between investors and individuals in the homebuying process.
On June 29th, the full House Financial Services Committee held a related hearing discussing inequality in the housing market. Chairwoman Maxine Waters (D-CA) began the hearing by emphasizing the importance of homeownership: “It’s a source of stability and opportunity for families…however, not everyone has been able to realize the dream of homeownership.” She also advocated for passing the Downpayment Towards Equity Act.
Five expert witnesses provided testimony, including:
- Michael Calhoun, President, Center for Responsible Lending
- Sam Chandan, Professor of Finance & Director of Stern School of Business, New York University
- Jung Hyun Choi, Senior Research Associate for Housing Finance Policy Center, Urban Institute
- Lydia Pope, President, National Association of Real Estate Brokers
- Norbert Michel, Vice President and Director of the Center for Monetary and Financial Alternatives, Cato Institute
Pope and Choi discussed the housing crisis’ disproportionate impact on minority and low-income populations. Calhoun and Chandan discussed the need for more affordable housing and policies that address structural causes of homeownership disparities. Michel largely disagreed with the other witnesses, asserting that reducing demand would increase housing affordability.
Disagreement was clear among Democrats and Republicans about the drivers and solutions for high housing costs. Ranking member Rep. Patrick McHenry (R-NC) and Rep. Ann Wagner (R-MO) blamed government spending for worsening the housing crisis, asserting that increased spending through programs such as downpayment assistance would further damage the housing market. Conversely, Rep. Dean (D-PA) Rep. Lawson (D-FL) emphasized the importance of providing federal assistance to first time and low-income buyers, whether through downpayment assistance or incentivizing sellers to conduct business with FHA buyers.
The hearings also covered rising gas prices, landlord accountability, and supply shortages. The recorded hearing and witness statements are available on the House Financial Services Committee website.