Chair Hill, Ranking Member Waters, and other distinguished members of the U.S. House Committee on Financial Services, thank you for the opportunity to testify during today’s hearing. I am Nikitra Bailey, Executive Vice President of the National Fair Housing Alliance® (NFHA). NFHA leads the fair housing movement by working to eliminate housing discrimination and ensure equitable housing opportunities for all people and communities. NFHA also represents over 200 community-based non-profit fair housing agencies throughout the nation.

Our nation is in the throes of a fair and affordable housing crisis impacting millions of people. The actions of the Trump Administration have caused chaos, fear, insecurity, dysfunction, and rising prices around the country. Instead of providing everyday people with practical solutions to the housing crisis, the administration is removing rungs on the ladders of opportunity for essential workers, including police, teachers, firefighters; and others who dedicate their lives to serving their communities. The Trump Administration’s haphazard executive actions are causing serious economic and personal injuries that will undermine our already fragile housing market, and, ultimately, our nation.

Housing is fundamental to the American Dream, and voters want elected leaders to quickly implement solutions to ensure they can fairly access opportunity and share in the nation’s prosperity. People are seeking solutions that will drive down the skyrocketing cost of housing and provide fair market rents, expand fair access to mortgage credit in underserved communities, reduce homeowners’ insurance costs, and produce the development of millions of desperately needed affordable housing units.

Rather, the Trump Administration’s actions are leaving people seeking housing free of discrimination unprotected, including disabled veterans, seniors, people with disabilities, families with children, survivors of domestic violence, and more.

Congress established fair housing as a national policy of the U.S. with the passage of the Fair Housing Act of 1968 after the horrific assassination of Dr. Martin Luther King, Jr. Yet, the Trump Administration is dismantling our nation’s fair housing and fair lending infrastructure and making it costlier for everyday people to afford the American Dream despite demands for affordability.

The administration has failed to live up to its pledge to make housing cheaper and increase access to homeownership. Prior to the start of the administration, homeownership was on an upward trajectory for all communities.

• The Black homeownership rate grew 14.29 percent;
• The Asian American and Pacific Islander homeownership rate climbed 8.67 percent;
• The Latino homeownership rate increased 4.72 percent; and
• The White homeownership rate rose 1.78 percent.
  

This momentum is being reversed. The U.S. Department of Housing and Urban Development (HUD) rolled back critical fair housing rules, eviscerated the Office of Fair Housing and Equal Opportunity, closed field offices, and fired whistleblowers. It is leaving renters everywhere vulnerable to discrimination at a time when renters already face soaring rents and have nowhere to go. The Federal Housing Finance Agency abandoned Special Purpose Credit Programs that provided $82 million in reduced costs to 57,282 borrowers of all races from 2022 to 2024 and helped lenders circumvent systemic barriers that limit fair credit access for People of Color. The Consumer Financial Protection Bureau issued a proposal to gut a 50-year-old fair lending rule that ensures women can get a loan without requiring their husband’s or another male relative’s signature.

These actions are injecting unnecessary risk, locking out the people that the health of the housing system depends on. Over the next ten years, all future net household growth will be from households of color. If they are locked out of the housing finance system, the system will fail.

The Fair Housing Act provides the blueprint to increasing our nation’s supply of affordable housing. It is key to reforming exclusionary zoning that locks out renters, low-income people, and people of color from certain neighborhoods. It can drive inclusionary practices that permit entry-level homeownership opportunities and missing middle housing, including condominiums in triplexes, quadplexes, and accessory dwelling units.

Fair housing laws improve our communities block by block. These vital protections also strengthen our economy and make the nation more prosperous.

Now is the time for Congress to increase its oversight of the administration’s actions so that more people in America do not end up homeless. Congress must also pass comprehensive legislation with supply-side and demand-side solutions like Ranking Member Waters’ Housing Crisis Response Act to ensure that the housing needs of people living in rural, urban, and suburban communities are met. Only an all-of-the above strategy can truly tackle the crisis.

Thank you, and I look forward to answering your questions.

Chair Davidson, Ranking Member Cleaver, and members of the Subcommittee, thank you for the opportunity to testify today. I am Nikitra Bailey, Executive Vice President of the National Fair Housing Alliance® (“NFHA”). NFHA leads the fair housing movement and represents over 170 local fair housing enforcement agencies throughout the United States. NFHA’s members serve on the front lines, combatting millions of incidents of housing discrimination.

The nation is faced with a fair and affordable housing crisis that is squeezing the budgets of everyday people, particularly consumers of color. Low housing inventory, record competition from corporate investors, exclusionary zoning ordinances, high interest rates, and more are all driving prices higher. The Federal Reserve Board does not have the tools to address these housing challenges. While the Federal Reserve attempted several deflationary efforts, housing costs continued to skyrocket. And Federal Reserve Chair Powell recently stated progress on lowering inflation is “not assured.” Further, data shows housing will continue to be a major driver of inflation and its impact will not subside until the end of 2024 and beyond. Thus, Congress and the Biden Administration must act quickly to make equitable housing investments that promote financial inclusion and stimulate economic growth for everyone.

Homeownership is the primary way that most families build wealth and achieve economic stability. However, thousands of race conscious housing, banking, and other policies created systems and structures that were highly inequitable and mostly to the benefit of White Americans. Even after passage of the Fair Housing Act in 1968 and Equal Credit Opportunity Act in 1974, policies of the federal government and private actors continued to perpetuate segregation and discrimination. Explicitly race-based policies were replaced by subtler “race-neutral” methods of excluding people of color. These policies and practices created today’s persistent and growing racial homeownership and wealth gaps where the White homeownership rate is nearly 67 percent higher than the Black homeownership rate, 45 percent higher than the Latino homeownership rate, and 20 percent higher than the rate for the Asian American community.

Mortgage discrimination is not a relic of the past. The Department of Justice’s recent record settlements totaling more than $100 million in redlining cases in Black and Latino neighborhoods nationwide is a stark reminder that redlining persists and underscores the importance of using all the tools at our disposal to root it out.

Even technological homeownership decisions perpetuate bias. Researchers at UC Berkely found that algorithmic systems overcharge Black and Latino mortgage borrowers $765M more annually, and Automated Valuation Models perpetuate discrimination against homeowners of color.

People of color continue to share stories of having to “whitewash” their homes to receive a fair and accurate appraisal. Can you imagine having to remove your personhood from your home, which is also often a family’s largest asset? In 2021, homes in White neighborhoods were appraised at values nearly 250 percent higher than similar homes in similar Black neighborhoods and at values nearly 278 percent higher than similar homes in similar Latino neighborhoods within the same metropolitan areas, depriving households of color of opportunities to build wealth. Overall, White communities have access to over $15 trillion more in capital because of racialized appraisal practices.

There are solutions that are already working in forward thinking states like Minnesota, Maine, Vermont, Rhode Island, New Jersey, and North Carolina. Congress can follow their lead and remove barriers that stymie progress and center housing as the path to restorative justice and inclusive growth.

The Homeowner Assistance Fund (HAF) is an example of Congress doing just that by helping nearly 400,000 hardest hit homeowners remain housed during the COVID pandemic. HAF along with sensible mortgage servicing reforms supported broadly by the housing sector were instrumental in thwarting another foreclosure crisis like the one that occurred in 2008. Further, the addition of inclusive policies like the Equal Credit Opportunity Act’s Special Purpose Credit Programs helped to increase Black homeownership by 13 percent and Latino homeownership by seven percent between 2019-2023. NFHA partnered with MBA to create a Special Purpose Credit Program Toolkit to assist lenders with properly developing the programs.

All future net household growth will be from households of color and White homeownership is set to decline. With housing accounting for nearly 20 percent of the United State’s GDP, Congress must advance inclusive policies so that the housing market and economy are not jeopardized.

My written testimony details other solutions, and I look forward to discussing them with you. Thank you.

Introduction
I am Lisa Rice, President and CEO of the National Fair Housing Alliance (NFHA), the country’s only national civil rights organization dedicated to eliminating all forms of housing discrimination and fostering well-resourced, vibrant, resilient communities. With 200 organizational members, NFHA is the trade association for fair housing groups that work at the local, state, regional, and/or national levels to advance fair housing and equitable opportunities.

Throughout this document, I will use the terms Artificial Intelligence (AI) and Automated Systems (AS) interchangeably with the understanding that AI or AS is driven by business logic, data, model or policy implementation.

NFHA has addressed harms associated with AI or automated systems since its inception in 1988. We first concentrated our efforts on prohibiting or restricting the use of discriminatory automated systems such as credit and insurance scoring, underwriting, and pricing models, in housing and financial services.

Early settlements with entities like Prudential, State Farm, Nationwide, and Allstate addressed these discriminatory systems. Several years ago while litigating a major case against then-Facebook, it became even more clear that technology, including AI or Automated Systems are the new civil and human rights frontier and, as a civil rights agency, we had to be a leader in this sector. Thus, we established our Responsible AI division with an initial focus on Tech Equity. The division is comprised of researchers and engineers committed to civil and human rights principles and is headed by one of the world’s premier AI Research Scientists, Dr. Michael Akinwumi. NFHA’s Responsible AI division has five workstreams founded on each of the following technical and policy research pillars:

• Tech Equity: We focus on developing and advocating for methodologies that ensure automated systems offer equitable access to housing opportunities.
• Data Privacy: We strive to test and promote technologies that balance consumer privacy with the need for data access to eliminate bias in automated systems.
• Explainability: We advocate for consumers’ right to explanations for automated decisions and work to test and promote methodologies that clarify the reasoning or design behind automated systems.
• Reliability: We focus on testing and advancing techniques to ensure only safe and valid automated systems are used in housing applications.
• Human Alternative Systems: We work on advancing technical and policy solutions to determine when human-centered alternatives should take precedence over automated systems in housing decisions, particularly when data quality is poor, infrastructure is inadequate, or there is a lack of social awareness about harms of automated systems.

Since launching our Responsible AI work, NFHA has contributed to, advocated for, and created technical and policy solutions that advance responsible use of technologies in housing, including the White House’s AI Bill of Rights, the National Institute of Science and Technology’s Risk Management Framework, the development of a state-of-the-art framework for auditing algorithmic systems, and other policies.

Automated systems impact every area and aspect of our lives. They can provide access to key services that can open the doors of opportunity, or block our ability to take advantage of critical amenities that we need to survive and live successful lives. Automated systems can determine whether consumers will have access to housing, get a living-wage job, access quality credit, get an accurate and fair value for their home, obtain life-saving healthcare, receive compensation from their insurance company for a loss, get released on bail after an arrest, or serve a prison sentence.

Whereas the math behind automated systems is not good, bad, or neutral, it is imperative that we rapidly work to eliminate bias from these systems.

Studies reveal that structural inequality, including the harms perpetuated by unethical tech, are not only having a deleterious impact on individuals and communities, but it is stifling the nation’s economic progress. Many innovations have been made in the math of automated systems. For example, it can be used to avoid, mitigate, or manage biases innate in these systems. Much as scientists used the coronavirus, a deadly germ that has killed millions of people in the world, to develop life-saving vaccines, we can intentionally use math to detect, diagnose, and cure technologies that are extremely harmful to people and communities.

Read The Full Testimony Here