House Dems blame business owners for rising rental costs
House Democrats have singled out business owners for raising rental costs during a housing hearing on Tuesday, leading Republicans to accuse the majority of trying to deflect blame from l record inflation.
Democratic lawmakers from a House financial services subgroup on Tuesday accused private equity firms of “predatory buying” of single-family homes in bulk and driving up the prices of rents and utilities. fresh, exacerbating a housing crisis they say predates the pandemic.
“These predatory purchases contribute to the shortage of affordable housing in our country and exacerbate the racial wealth gap,” Rep. Al Green (D-Tex.) said during the hearing.
Government data shows rents in May were up 5.2 per cent on a year ago, and a committee study found tenants of business owners often faced increases in rent and even higher costs.
Republicans framed the hearing as an attempt to distract from the effects of nationwide inflation, which they blamed on reckless congressional spending.
“Another day, another new excuse from my friends across the aisle trying to explain [away] their role in causing record inflation,” said Rep. William Timmons (RS.C.). “None of these attempts to explain inflation have worked.”
Rep. Maxine Waters (D-California) responded to those claims by saying the GOP “opposes” inflation but its members “don’t have answers.”
The subcommittee found that private companies expanded their portfolio of single-family homes by more than 75,000 properties between 2018 and 2021, and that companies tended to buy homes in neighborhoods with a significantly larger black population than the national average.
By outbidding individual buyers and paying for homes in cash, Democrats and pundits at the hearing said private equity firms were responsible for unexpectedly rising rental prices and foreclosing people from the housing market.
Elora Raymond, an assistant professor at Georgia Tech’s School of City and Regional Planning, said businesses are also bad owners.
“These businesses have exceptionally high eviction rates and profit from gentrification,” she said.
GOP lawmakers have pointed out that business owners represent a small fraction of total home ownership. But experts have pointed out that company-owned homes are too concentrated in specific metropolitan areas, causing rents to spike in some areas.
“Their portfolios are heavily focused on specific markets across the Sunbelt and the Midwest, where tenant rights are generally more favorable to the landlord,” said Sofia Lopez, deputy housing campaign director for the Action Center. on race and economics. “This focus is not racially neutral…(it) overlaps with black communities in particular.”
Experts have argued for federal housing investments to minimize the gap between housing demand and available units and federal rent control.
“Profit maximization has no place in our homes,” Lopez said. “We need a massive federal investment in truly affordable housing, free from the harmful practices of private equity owners.”