Wall Street companies have spent billions in recent years aggressively buying up single-family homes for cash, but a growing number of U.S. lawmakers and state officials want to end the controversial practice. .
Democrats in the U.S. Senate and House of Representatives are sponsoring a bill called the American Housing Hedge Fund Deregulation Act that would force large owners of single-family homes to sell their blocks of homes to family buyers. . The Wall Street Journal reported.
If the rule passes, companies would have to sell all of their single-family homes within 10 years, at which point they would no longer be able to own those types of properties outright.
Separately, a Republican-backed bill in the Ohio House aims to force out facility owners through heavy taxes.
Lawmakers in Nebraska, California, New York, Minnesota and North Carolina have proposed similar bills, the paper said, adding that investors leading hundreds of thousands of rental homes would help lower family housing prices across the country. It is claimed that it is pushing up the
Despite high mortgage rates and low inventory making the housing market increasingly unaffordable, first-time homebuyers are choosing between Wall Street-backed investment firms and their all-cash offers. It also faces the challenge of competition, the Journal reported.
Investors ramped up spending on single-family homes during the peak of the pandemic in 2022, with more than one in four such properties sold to wealthy corporations.
In the second half of 2022, The Real Deal reported Institutional investors have set aside a staggering $110 billion to buy or build single-family rental properties.
According to The Real Deal, $30 billion of that money was earmarked for new development, enough to build about 400,000 new homes. According to the newspaper, the market revealed that investment giants Blackstone and KKR are participating in the $4.4 trillion single-family rental business.
According to The Real Deal, at the time, listed home buying companies Invitation Homes and Tricon Residential, as well as asset management companies and pension funds such as Calpers and Invesco, were preparing for a real estate spree.
In response to lawmakers who have criticized corporate home ownership, companies argued that renting out single-family homes allows renters to live in desirable areas where they could not afford to buy a home, the newspaper reported.
And while most of the calls to stop large corporations from buying up homes have come from Democratic officials, some Republicans, including Texas Governor Greg Abbott, are also joining in the crackdown.
“This company’s large-scale home purchases appear to be distorting the market and making it harder for average Texans to buy a home,” Abbott wrote in X magazine last month.
“We must add this to our legislative agenda to protect Texas families.”
Surveys reviewed by this newspaper show that roughly equal numbers of voting-age Democrats and Republicans support passing laws that would block Wall Street companies from buying homes, yet Congress and state legislatures are Neither bill was passed. — reached a floor vote.
Bills currently being considered in the House and Senate would limit most companies to owning no more than 50 rental homes, according to the Journal.
The law would also require companies to sell what they already own.
Meanwhile, a bill in Minnesota would limit ownership to 20 units.
Louis Blessing III, a Republican representing the Cincinnati suburbs in the Ohio Senate and a proponent of imposing heavy taxes on large landowners who tend to sell their properties, called the idea “a spiritual antitrust bill.” ”, the Journal reported.
