Earlier this month, in response to the growing U.S. housing affordability crisis, Democratic lawmakers from both houses of Congress introduced bills that, if passed, would ban hedge funds from purchasing single-family housing market, reports Chris Clow of HousingWire. They would also be required to sell off all single family homes they own over a decade.
Sen. Jeff Merkley of Oregon introduced the “End Hedge Fund Control of American Homes Act of 2023” to the Senate. Rep. Adam Smith of Washington introduced the House version.
Clow’s article also cites a piece from the New York Times that reported that Democratic Reps. Jeff Jackson and Alma Adams of North Carolina introduced a separate bill, the “American Neighborhoods Protection Act,” which would require corporations owning more than 75 single family homes to pay a yearly fee of $10,000 per home into a housing trust fund to be used for down payment assistance.
According to the Urban Institute, as of June 22 institutional investors owned 3 percent of all single-family rentals nationwide, but in more affordable markets, their market shares are considerably higher; the top three are Atlanta (28.6 percent), Jacksonville (24.2 percent), and Charlotte (20.1 percent). More recently, data analytics company CoreLogic reported that despite the anemic housing market, investors have been busy, buying nearly 26 percent of single-family homes that sold in June 2023.
“You have created a situation where ordinary Americans aren’t bidding against other families, they’re bidding against the billionaires of America for these houses,” Sen. Merkley told the New York Times. “And it’s driving up rents and it’s driving up the home prices.”
The lawmakers acknowledge the legislation is unlikely to pass given the current climate in Congress. Still, Congress must start the conversation on this issue,” Rep. Smith said in an interview with the Times.
