House Democrats pin blame on corporate landlords for rising rental costs

House Democrats pointed the finger at corporate landlords for climbing rental costs during a hearing about housing on Tuesday, leading Republicans to accuse the majority of trying to deflect blame for record inflation.

Democratic lawmakers at a House Financial Services subpanel Tuesday blamed private equity firms for the “predatory purchasing” of single-family homes in bulk and jacking up rent and fee prices, exacerbating a housing crisis they argued predates the pandemic.

“This predatory purchasing contributes to our nation’s shortage of affordable housing and exacerbates the racial wealth gap,” said Rep. Al Green (D-Texas) at the hearing.

Government data shows that rents in May were up 5.2 percent over last year, and a committee study found the tenants of corporate landlords frequently faced even higher rent and fee increases.

Republicans framed the hearing as an attempt to distract from the effects of inflation around the country, which they blamed on reckless spending from Congress.

“Another day, another new excuse from my friends across the aisle trying to explain [away] their role in causing record-breaking inflation,” said Rep. William Timmons (R-S.C.). “None of these attempts to explain away inflation have worked.”

Rep. Maxine Waters (D-Calif.) responded to those claims by saying the GOP “rails” against inflation, but its members “don’t have any 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 the companies tended to purchase homes in neighborhoods with a significantly larger Black population than the national average.

By outbidding individual buyers and paying for the homes in cash, Democrats and experts at the hearing said the private equity firms were responsible for unexpectedly raising rent prices and pricing people out of the housing market.

Elora Raymond, an assistant professor in the School of City and Regional Planning at Georgia Tech, said the firms were also bad landlords. 

“These firms have exceptionally high eviction rates and profit from gentrification,” she said. 

GOP lawmakers pointed out that corporate landlords account for a small fraction of total home ownership. But experts emphasized the homes owned by the firms are over-concentrated in specific metropolitan areas, causing rents to soar in some areas.

“Their portfolios are heavily concentrated in specific markets across the sun belt and Midwest, where tenant’s rights are generally more favorable to the landlord,” said Sofia Lopez, the deputy campaign director of housing for the Action Center on Race and the Economy. “This concentration isn’t race neutral … [it] overlaps with Black communities in particular.”

Experts advocated for federal investments in housing to minimize the gap between the housing demand and units available and federal rent controls.

“Profit maximization has no place in our homes,” said Lopez. “We need massive federal investment in truly affordable housing, free from the harmful practices of private equity landlords.”