In a wide-ranging interview on Cavuto: Coast to Coast, Corcoran Group founder and Shark Tank star Barbara Corcoran discusses real estate market trends and challenges.
Wall Street went on a buying spree. Now, more and more lawmakers want to prevent something like this from happening again.
Democrats in the U.S. Senate and House of Representatives are backing legislation that would force large owners of single-family homes to sell their homes to family buyers. A Republican bill in the Ohio House aims to force out facility operators through heavy taxes.
Lawmakers in Nebraska, California, New York, Minnesota and North Carolina have proposed similar bills.
Lawmakers across the country are aiming to limit the number of homes investors can own. (David Ryder/Bloomberg via Getty Images/Getty Images)
Homeowners groups have long sought to prevent investors from buying or renting homes in their neighborhoods, but the latest bill is an attempt to curb Wall Street’s demand for single-family homes. This represents a new initiative by government officials.
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These lawmakers argue that investors who have scooped up hundreds of thousands of homes for rent are contributing to a shortage of homes for sale and soaring home prices. They argue that the investor purchases made it difficult for first-time buyers to compete with Wall Street-backed investment firms and their all-cash offers.
Investors of all sizes spent billions on home purchases during the pandemic. At its peak in 2022, it was buying more than one in four single-family homes sold, but that activity has slowed recently as interest rates have risen and supply has tightened. Two of the largest home-buying companies, Invitation Homes and AMH, are publicly traded companies, but many others are backed by private equity and own portfolios of tens of thousands of homes across the United States.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| INVH | Invitation Homes Co., Ltd. | 34.59 | -0.12 | -0.35% |
| AMH | American Homes 4 Rent | 36.12 | -0.27 | -0.73% |
Companies that buy single-family homes say their operations offer renters the opportunity to live in desirable neighborhoods they otherwise wouldn’t be able to afford.
and house price and rent Lawmakers and officials at all levels of government are actively addressing housing issues as the housing crisis nears an all-time high in many parts of the United States. States have passed new measures to fund more affordable housing, allow builders to circumvent local zoning laws and make the eviction process more favorable to tenants.
Most of the calls to stop big corporations from buying homes have come from liberals, but some conservatives have also shown a tendency to crack down.
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“Big corporate home purchases appear to be distorting the market and making it harder for average Texans to buy a home,” Republican Gov. Greg Abbott said last month. I wrote this. “We must add this to our legislative agenda to protect Texas families.”
A new study funded by the University of California, Santa Barbara and the Manhattan Institute, a conservative think tank, finds that roughly equal numbers of voting-age Republicans and Democrats are willing to take steps to block Wall Street companies from buying their homes. I answered that I support it. . The study evaluated the opinions of 5,000 renters and homeowners living in urban and suburban zip codes.
Democratic and Republican lawmakers alike are cracking down on Wall Street owners of single-family homes. (Photographer: David Paul Morris/Bloomberg via Getty Images/Getty Images)
Proposals to rein in investors may be popular with voters, but so far they have not gained much traction in Congress. None of the bills have reached a vote in Congress or state legislatures.
Advocates for the single-family rental industry, including the National Rental Housing Council, oppose these bills, arguing that rising prices are due to a lack of supply of new homes. They also point out that the number of homes owned by institutional investors, defined as companies with portfolios of 1,000 homes or more, is relatively small. Some studies estimate that these companies own 3% to 5% of the rental homes in the United States.
In some American cities, institutional investors own a much larger share of housing than they do nationally. in atlantaA recent study by researchers at Georgia State University found that nearly 11% of all rental housing in the five-county area is currently owned by three real estate companies. A 2022 analysis by the U.S. Department of Housing and Urban Development found that 21% of Atlanta’s rental homes are owned by some major institution.
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In December, Atlanta-area Rep. Nikema Williams (D-Ga.) co-sponsored a bill in the U.S. House of Representatives to eliminate hedge fund regulation of U.S. housing. The act “won’t solve all the problems, but it will definitely have an impact,” she said in an interview.
Critics of the regulations note that many large investors have made few or no home purchases in the past year. “A great deal is over,” said John Burns, founder of the housing research and consulting firm of the same name. “So what are you trying to stop?”
Burns said small investors owning 10 to 99 homes are making up a growing share of home purchases this year. Some of the proposed legislation also targets these small investors.
Some lawmakers blame Wall Street’s housing investments for today’s soaring home prices. (Photographer: Nathan Howard/Bloomberg via Getty Images / Getty Images)
The House and Senate bills would limit most companies to fewer than 50 rental homes and require them to sell the homes they already own. Meanwhile, a bill in Minnesota would limit ownership to 20 units.
Bills to block landlords in the Ohio and Nebraska legislatures were written in response to small investors buying up hundreds of homes in a handful of neighborhoods in Cincinnati and Omaha.
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Louis Blessing III, a Republican representing the Cincinnati suburbs in the Ohio Senate, has introduced a bill that would tax large landowners so heavily that they would be forced to sell their properties.Mr Blessing said he was concerned about real-estate company Monopoly power has developed in some areas, while starter homes are out of reach for homebuyers.
“This is an antitrust bill of the soul,” he said.
