Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming.

Democrats in the U.S. Senate and House have sponsored legislation that would force large owners of single-family homes to sell houses to family buyers. A Republican’s bill in the Ohio state legislature aims to drive out institutional owners through heavy taxation.
Lawmakers in Nebraska, California, New York, Minnesota and North Carolina are among those proposing similar laws.

While homeowner associations for years have sought to stop investors from buying and renting out houses in their neighborhoods, the legislative proposals represent a new effort by elected officials to regulate Wall Street’s appetite for single-family homes.
These lawmakers say that investors that have scooped up hundreds of thousands of houses to rent out are contributing to the dearth of homes for sale and driving up home prices. They argue that investor buying has made it harder for first-time buyers to compete with Wall Street-backed investment firms and their all-cash offers.

Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter. Two of the largest home-buying firms, Invitation Homes and AMH, are publicly traded companies, while a number of other companies, backed by private equity, hold portfolios of tens of thousands of homes nationwide.
Companies that buy single-family homes say their businesses provide renters the opportunity to live in desirable neighborhoods where they otherwise couldn’t afford to buy.

With home prices and rents near record highs around the U.S., legislators and officials at all levels of government have become more active on housing issues. States have passed new measures to fund more affordable housing, to allow builders to bypass local zoning laws and to make the eviction process more favorable to tenants.
Most calls to block large companies from snapping up homes come from liberals, but some conservatives also show an inclination to crack down.

This “corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home,” Republican Gov. Greg Abbott wrote on X last month. “This must be added to the legislative agenda to protect Texas families.”
Close to equal numbers of voting-age Republicans and Democrats said they would support a measure to block Wall Street firms from buying homes, according to a new study funded by the University of California, Santa Barbara, and the Manhattan Institute, a conservative think tank. The study gauged opinion from 5,000 renters and homeowners in urban and suburban ZIP Codes.

Proposals to curb investors might be popular with voters, but so far they haven’t gained much traction in legislatures. None of the bills in Congress or in any of the state houses has reached a floor vote.

Advocates for the single-family rental industry, such as the National Rental Home Council, oppose such legislation and blame rising prices on an undersupply of new-construction homes. They also point to the relatively low number of homes owned by institutional investors, defined as those companies with portfolios of 1,000 homes or more. Some research estimates these companies own 3% to 5% of American rental homes.

In some American cities, institutional investors hold a much larger share of homes than they hold nationally. In Atlanta, nearly 11% of all rental homes in the five-county area are now owned by three real-estate companies, a recent study by researchers at Georgia State University found. A 2022 analysis by the U.S. Department of Housing and Urban Development said 21% of Atlanta rental homes were owned by some large institution.

Rep. Nikema Williams (D., Ga.), from the Atlanta area, in December co-sponsored the End Hedge Fund Control of American Homes Act in the U.S. House. The act “won’t solve all of the problems, but it will definitely make an impact,” she said in an interview.

Critics of regulation note that many of the largest investors have bought very few or no homes in the past year. “The great trade is done,” said John Burns, founder of the eponymous housing research and consulting firm. “So what are you trying to stop?”
Smaller investors that own between 10 and 99 homes have stepped up their share of home buying this year, Burns said. Some of the proposed legislation would also target these smaller investors.

The bills in the House and Senate would cap rental-home ownership at no more than 50 homes for many companies, requiring them to sell off any more they already own. A bill in Minnesota, meanwhile, would limit ownership to 20 homes.

Bills to block landlords in the Ohio and Nebraska state legislatures were written in response to a small number of investors buying up hundreds of homes in a handful of Cincinnati and Omaha neighborhoods.

Louis Blessing III, a Republican representing suburbs of Cincinnati in the Ohio Senate, introduced a bill to tax large landlords so heavily that they would likely feel compelled to sell their properties. Blessing said he is concerned about real-estate companies developing monopoly power in some neighborhoods, while putting starter homes further out of reach for home buyers.

“It’s an antitrust in spirit bill,” he said.

Good.

mixed.

I am opposed to foreign entities owning residential, farm land, etc. though.

Good.
I'm glad the government is getting involved in free Commerce.
I shouldn't be able to sell land I own in Hawaii either I'm glad the government solved that problem

Good....I am all for free markets until Big Mega Corps turn free markets into private markets by buying up all the inventory.

In this case, the big investment banks and other entities have been manipulating the market. They also have been colluding and price setting the rental market also. Plenty of evidence behind this

If you own land in Hawaii, you can sell it, you aren't a giant corp

Their hearts are in the right place but it's government so they will fuck us.

Unfortunately they are going to figure out how to fuck it up

This 100%.

It is a slippery slope. I'm not saying you can't have rental properties or something but there has to be a balance between Joe Arfcommer with a handful of properties that creates some income/investment vs China and Blackrock buying up $400B worth of property and artificially fucking the market.

As a private homeowner. Don't try to control the sale of my land.
Simple.
I can't think of a single thing the government has gotten involved with that has been successful or done anything for the average citizen

yup.

A cornered/monopolized market is not a free market.

This will help the middle class.

Yet lawmakers turn their heads when Joey and Hunter steal millions from taxpayers.

This.

I'm against it until I'm for it. I want to own a couple of rental properties one day, but don't think mega Corp should buy up an entire town and drive up the price of everything.

This. Private Equity is the pretty face of Crony Capitalism.

Just another investment strategy.

Owning inflated paper tied to houses didn’t work out, so they moved to the next level.

Don’t care. If they have money to spend, let them .

You can't be that dense that you trust the government to actually fix this problem through more rule making without creating multiple other unintended (or some would argue, intended) consequences.

How about the government actually address some of the causes of this problem? Things like artificially keeping interest rates low for years while continuing huge deficit spending until they could not keep rates and inflation back anymore.

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You didn't want X to buy some house or another?

Then don't sell it to them.

Oh, you don't really own the house you're complaining about?

Then how is it any of your business?

what the hell are you talking about. they mention nothing about private homeowners

lol

Private Equity is what's wrong with the world....they add nothing of value...their whole business model if a giant steaming pile of shit.

Private Credit actually contributes to the market and society. They are in it for the long haul and need to see value be created for the long term. PE is just a bunch of fucking vultures that pounce on businesses and suck the marrow out of their bones until they are dry

What if I want to sell to Blackrock?

And 5-8 years from now all those rentals will be hollowed out shacks of former nice homes due to renters and investors not reinvesting to maintain them.  It will become a blight on once nice areas that will become ghettos.  

My son is in VA on a 6 month Army assignment for school. He’s renting one of these corporate houses.  
No water at outside spigots
Light switches wired backwards. On is down
Absolutely filthy when he moved in.
Contract requires renter to “clean gutters and trim shrubs along with standard yard maintenance“.  
Do you know when to trim what type of shrubs?  If Joe renter falls off a ladder cleaning the gutters, you gonna pay up sucker!
He owns a rental home here in SC.  He has ALL maintenance done by contractors to keep idiots from breaking shit or hurting themselves.

You do realize that you are typing this on the internet only because of government intervention with anti trust lawsuit against Microsoft and MSN correct?

Pepperdige Farm remembers when MS and MSN wanted to have ultimate control of the internet.

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The whole thing reeks of “you will own nothing” so offhand I feel fine with this.

Unless there’s some nefarious angle, which there always is.

I've worked with two companies that have been owned or bought out by PE firms and it's been fucking horrible. I cannot stress how much I will never fucking ever work for a company owned under a PE firm again.

Good .

Need to be very careful to avoid loopholes using subsidiaries.

Something like this.

Hypothetical law caps rentals owned by one company at 500.

Bastard Rental Corp sets up a bunch of subsidiaries, Baby Bastard Corps A through Z, incorporated in various states and countries to muddy things up.

A lower of operating companies is established, Micro Bastard Corps 1 through 1000. Each Baby Bastard owns a tiny part of each Micro Bastard.

Each Micro Bastard owns ten homes.

Set up a similar tree of shells for the property management companies.

Government prints trillions of dollars

Dollar is devalued rendering the "cost" of real assets 20+%

Investors see this and run to real assets, further increasing the asset cost

Government steps in and says investors will be punished for fleeing to safe harbors

Got it.

In your example... it sounds like the megacorp is already not maintaining the home.

Similar. It wasn’t fun for the time I was there.

I'm not a fan of gov involvement.  They fuck everything up.

I also don't like my home's value plummeting.

This is how I see it ending up, unfortunately. It’ll be the same thing, just extra steps.

Good, these huge investment firms should not be allowed to buy up a bunch of single family homes to reduce inventory and inflate the market.

Market intervention should always be an option of last resort, but in this case, they brought it on themselves.

I think they don’t really need to go to deep. Just no single family homes owned by investment corps. They can have their duplexes on up. Keep doing what they have been doing. Buy your mortgage from the banks.

I think this and other shady stuff goes back to getting rid of Glass Stiegal. Thank you Orrin Hatch….

Yawn... why can't the government just stop trying to manipulate the market. The reason these institutions are buying houses is because of interest rate manipulation. If they would let it all operate naturally, these distortions in the market would work themselves out.

Legislating like this just ducks up the market even more.

Wouldn't it be easier to stop subsidizing the housing of illegals?

Good. Asset managers and private equity firms should not be purchasing single-family homes and manipulating the housing market.

Because this is an issue of political stability. Consumers will typically bite the ball gag and let companies dick them down all day, but when it comes to losing a basic need, it's a different story. When people miss rent or mortgage payments and end up homeless en masse, things have a tendency to get violent.

LOL, the government isn't going to do shit.  This is just how a politician puts his hand out for a bride/campaign contribution.  Some lobbying firm will be paying him off soon.


We wouldn't have all of these illegals/H1B visas here if it weren't for the Corporations making the government open the border.

"The great trade is done....what are you trying to stop ?"

Once again too little, too late...

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My guess is that it will simply create an entry barrier for smaller real estate firms to enter the property market.

Nothing gets done in D.C. without Blackrock's blessing and so if this bill passes it is because Blackrock wants it to pass.  If Blackrock wants it to pass then it's probably because it will make things more difficult for their competition that have fewer resources at hand to deal with the regulatory barriers being put in place.

Fuck Larry Fink.  

fink /fĭngk/
noun
A contemptible person

Corporations should be capped on the amount of residential property they can own, same as radio / tv stations.

Owning / building a building with a few thousand apartments in it is much different than buying up / owning several thousand houses in the same area. With mega corporations buying up hundreds of thousands or even a million homes to turn into rentals a far, far worse thing, especially when combined with importing 40 million + illegals, it really fucks the inventory and cranks prices for home owners / wanna be home owners.

Good.