Brown Calls Out Big Investors and Private Equity Companies For Harming Renters and Communities
WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, delivered the following opening statement at today’s hearing entitled “‘The Rent Eats First’: How Renters and Communities are Impacted by Today’s Housing Market.”
Sen. Brown’s remarks, as prepared for delivery, follow:
Yesterday was the first of the month. For millions of Americans, that means the rent was due.
And for many renters, that rent keeps going up and up.
Two weeks ago in this Committee, we heard from witnesses about the soaring cost of housing and how it’s hurting the millions of families priced out of buying their first home, and imperiling the renters who are just one illness or job loss or car repair away from eviction.
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.
This isn’t a new problem.
For decades, so many Americans have struggled to scrape together the rent each month. Too many have lived in shoddy housing with rodents, mold, or broken appliances.
That’s why, 90 years ago, this country began investing in affordable housing – so that everyone would have a safe, affordable place to live.
But the funding we put into that effort has 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 1/3 of their incomes just to keep a roof over their heads.
And renters’ challenges are only getting worse.
We’re 3.8 million homes short of what we need. Not a single state in the country has enough housing.
And for the lowest income renters, there are just 36 units affordable and available for every 100 renters who need them.
That means renters can’t vote with their feet in the housing market – because there’s nowhere for them to go.
The huge shortage of housing means that renters have to make do with what they’ve got – even if their house has dangerous lead paint on the walls, or the landlord won’t fix the heat, or their bath tub has been clogged for weeks.
And with housing so tough to find, renters are forced to ask themselves whether it’s worth it to push for a repair from the same person who can put an eviction 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 percent nationally, compared to just a year ago. In some cities, like Austin, Texas, or Newark in Senator Menendez’s state of New Jersey, rents are up more than 25 percent.
When rents rise, it makes everything just a little bit more precarious. More and more families are just one emergency away from losing their home.
Renters see the pain from all these rent increases – the missed trips to visit family, the car repair they’re forced to put off, the second job they have to take – just to make ends meet.
Wall Street investors just see opportunity.
They don’t see the pain…or they just don’t care.
More and more, investors are buying up single-family homes – homes that first-time homebuyers usually buy – and renting them out at sky-high rates.
Twenty-eight percent of homes sold at the beginning of this year went to investors.
Think about that:
Investors, too often from out of town, who don’t care about the community and just want to make a quick buck, are buying more than a quarter of homes – not families who want to put down roots, who dream of seeing their kids grow up there.
That number is up from 16 percent just a couple of years ago. And the biggest investors with the deepest pockets – the ones who own more than 100 properties – nearly doubled their share of these purchases.
Ms. Brunner has seen it first-hand in Cincinnati, where a single company based in Texas bought up 29 properties on one street in Price Hill. 29 properties on a single street.
In that neighborhood, more than half of all homes are now rentals.
And the city is left to chase down these out-of-state landlords who are letting homes fall apart.
Families need a landlord they can talk to, who lives in the community.
Cities need landlords who want to actually take care of their buildings, and help families stay in their homes.
But big Wall 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 homebuyers alike.
And they aren’t just buying up single-family homes. They’re also targeting mobile home communities and apartment buildings – anywhere that adds to their own bottom lines.
Last week, the House Select Subcommittee on the Coronavirus Crisis published a report showing that, at the height of the pandemic, just four of these massive landlords filed nearly 15,000 evictions.
When a renter who has fallen behind on rent or can’t get her landlord to fix their heat, we often hear that it’s her individual problem.
We hear that it’s just between the renter and his landlord, or that his local government is to blame for its bad policies.
And 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 more in education costs when kids have to change schools every six months.
It costs all of us in lost productivity, when the workers supporting our businesses and schools, and our first responders, can’t find an affordable place to live.
It costs all of us more in health care, when people can’t store their medicine because they don’t have a place to live.
This 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 on housing supply.
And we have to help renters find and remain in homes they can afford with financial assistance, including emergency assistance, and support eviction prevention efforts, like mediation – through the Bipartisan Eviction Crisis Act.
I look forward to hearing from our witnesses today about how we can tackle the challenges facing renters and grow the number of good landlords. It will benefit all of us.
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