Bipartisan Bill Targets Big Investors Buying Single-Family Homes
A new bipartisan initiative aims to tackle the rising issue of large investment firms acquiring single-family homes. Spearheaded by Republican Senator Josh Hawley and Democratic Senator Jeff Merkley, this legislation addresses the nation’s ongoing housing affordability crisis.
Bipartisan Legislation Introduction
The bill is set to be introduced this Thursday, following President Trump’s recent State of the Union address that called for restrictions on institutional investors in the housing market. This marks the first formal legislative effort to address this issue since the President’s remarks.
The Homes for American Families Act
Known as the Homes for American Families Act, the proposed legislation seeks to amend the Sherman Antitrust Act of 1890. It will prohibit investment funds with assets exceeding $150 million from purchasing single-family homes, townhouses, or condominiums. However, homebuilders constructing units for sale will be exempt from this ban.
The enforcement of this law would be assigned to the Justice Department’s antitrust division, which is responsible for combatting anticompetitive practices.
Impact on Homebuyers
Senator Hawley emphasized the importance of allowing families to pursue homeownership without competition from large investment firms, which drive up housing prices. He stated, “Families deserve to be able to buy their own homes and achieve the American dream.”
Senator Merkley also stressed the need for immediate action to safeguard homeownership opportunities for hardworking Americans. He remarked that bipartisan support provides the momentum needed to restrict corporate investments in the housing market.
Current Housing Market Conditions
The push for this legislation comes amid alarming statistics regarding home affordability. According to Federal Reserve data, prospective homebuyers now need to earn 43% more than the median worker’s income to afford a typical home.
- 83% of Americans believe buying a house is more challenging now than in previous generations.
- Large institutional investors currently own 3.8% of single-family rental homes nationwide.
- In Atlanta, over 28% of single-family rentals are owned by large investors.
- Approximately 20% of rentals in Charlotte are similarly owned.
Underlying Causes and Future Prospects
Experts attribute the affordability crisis to a nationwide housing shortage. A significant drop in new home construction prior to the 2008 financial crisis has hindered recovery efforts. Goldman Sachs projects that the U.S. needs to build an additional four million homes to meet the demand.
The recent legislative efforts coincide with existing federal actions. In a prior executive order, President Trump instructed federal agencies to limit the sale of single-family homes to large institutional investors. During his State of the Union, he spotlighted individual stories, such as that of Raysall Wiggins, who has faced challenges securing a home against larger investment firms.
Additional Legislative Measures
In conjunction with the Homes for American Families Act, Senator Merkley and Senator Elizabeth Warren have also proposed measures to prevent property owners with 50 or more homes from benefiting from tax deductions related to depreciation and mortgage interest.
As both parties seek to address the challenges posed by large institutional investors in the housing market, the support for this bipartisan bill could pave the way for significant changes in American homeownership policies.
