Lawmakers Hope to Stop Wall Street from Buying U.S. Homes

New York, NY, April 29, 2024-"Wall Street went on a home-buying spree. Now, more lawmakers want to stop it from ever happening again,” reports the Wall Street Journal.

“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.’”