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Testimony Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

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testimony

Testimony Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

October 21, 2021
Urban PolicyHousing

Michael Hendrix testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs in hearing entitled, "How Private Equity Landlords are Changing the Housing Market"

Click here to watch the full hearing

Chairman Brown, Ranking Member Toomey, and Members of the Committee, thank you for inviting me to participate in today’s hearing. My name is Michael Hendrix, and I serve as a senior fellow and director of state and local policy at the Manhattan Institute. Along with my colleagues, we seek to advance freedom and opportunity across America’s communities.

Today’s hearing topic seems misguided. Large investment firms, including those in private equity, buy just one to two percent of homes sold nationally today. And they own less than one-tenth of one percent of the housing market in America. Big finance is still a tiny player in housing.

But housing’s a hot market today, and investors both large and small are seeing opportunities to invest, so I’m open to discussing how these private dollars can go to expanding access and affordability for Americans looking for a place to call home. But it’s difficult to be optimistic when many here are embracing this Administration’s plans to regulate and legislate their way to a bigger government role in housing.

For instance, the reconciliation bill being considered in Congress doubles-down on failed public housing and throws more subsidy money at a limited supply of homes, a recipe for prices to keep rising. These are not answers to America’s housing crisis. And make no mistake: it is a crisis. Housing demand is far outpacing housing supply. We have a shortage of nearly four million homes nationwide. But the roots of this crisis lie not in financial speculation but in government regulation.

Localities have made it practically illegal to build enough housing to meet demand, leading to inflated home prices. America is building homes at its slowest rate in 60 years, worsening a supply problem that has been decades in the making. Investors are snapping up homes because of supply restrictions, not in spite of them. The only answer to a housing shortage is to build more housing.

Click here to read the full testimony

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Michael Hendrix is a senior fellow and the director of state & local policy at the Manhattan Institute.

Photo by Rajesh Pandit/iStock

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