A Nebraska lawmaker whose north Omaha neighborhood has long suffered from a housing shortage is pushing a bill that would make Nebraska the first state in the nation to ban out-of-state hedge funds and other corporations from buying up homes. family property.
Sen. Justin Wayne’s bill mirrors legislative efforts in other states and Congress to curb corporate agglomeration of single-family homes, which critics say could lead to lower home prices, rents and property taxes in recent years. It is argued that this is a contributing factor to the soaring prices of Wayne said the same is true in his district, where Ohio companies have purchased more than 150 single-family homes in recent years, often ousting private homebuyers with all-cash offers. The company then rents out the house.
Experts say the lack of home purchases could be due to a variety of factors, including soaring mortgage rates and a years-long lack of construction of modest homes.
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Wayne’s bill provides few details. This bill consists of one sentence: No corporation, hedge fund, or other business may purchase a single-family home in Nebraska unless it is located in Nebraska and its principal members reside in Nebraska. has been done.
“The purpose of this bill is to preserve Nebraska’s limited existing housing stock for Nebraskans,” Wayne said this week during a hearing of the committee that introduced the bill. “If we do this, we will be the first state in the country to take this issue seriously and address this issue.”
A 14-page bill, called the Hedge Fund Deregulation of American Housing Act, has been introduced in both houses of Congress and would impose a 10-year deadline for hedge funds to sell single-family homes they own. These investment trusts will be subject to high taxes. These tax penalties would then be used to help people put down payments on homes that were sold.
A Nebraska lawmaker has introduced a bill aimed at blocking companies from buying single-family homes. (Amanda Andrade-Rose/The Washington Post via Getty Images)
Democratic lawmakers in a number of other states, including Minnesota, Indiana, North Carolina and Texas, have introduced similar bills, but those bills have stalled or been defeated.
Wayne Mortensen, director of Lincoln-based affordable housing developer NeighborWorks Lincoln, said the housing squeeze from out-of-state corporate interests is not just an Omaha problem.
Mortensen said economic downturns caused by the 2008 recession and more recently the coronavirus pandemic made single-family homes a more attractive business investment than the bond market.
“When that happened, housing became a commodity, akin to stock trading,” he said. “These outside investors are only interested in how much value they can extract from the Lincoln housing market.”
Those companies often don’t invest in home maintenance at all, he said.
“As a result, many neighborhoods are experiencing incredible blight and housing loss due to absentee landlords with no accountability to the community,” Mortensen said.
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Currently, about 13% of Lincoln’s single-family homes are owned by out-of-state companies.
Wayne’s bill is likely to face challenges in deep-red Nebraska, as it has in other states. At Monday’s Banking, Insurance, and Commerce Committee hearing, several Republican senators acknowledged this fact. Statewide housing shortagebut they questioned Wayne’s solution.
“You can set up shell companies, you can set up different tiers of ownership, you can move your headquarters. There are a lot of workarounds,” said Omaha state Sen. Brad von Gillern. “As a pure capitalist myself, I am fundamentally opposed to this idea.”
