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Wall Street has spent billions buying homes. A crackdown is looming. (www.wsj.com)

submitted 2 years ago by MicroWave@lemmy.world to c/news@lemmy.world

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Lawmakers say investors that scooped up hundreds of thousands of houses to rent out are driving up home prices

Wall Street went on a home-buying spree. Now, more lawmakers want to stop it from ever happening again.

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.

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[-] blazera@lemmy.world 103 points 2 years ago

I hate modern journalism

here's the senate bill they're talking about https://www.congress.gov/bill/118th-congress/senate-bill/2224?s=1&r=92

It's a very weak bill, only kicks in at over 50 homes purchased, is not retroactive so existing damage to the market is unaffected, and only affects taxes on interest. Plus a lot of other restrictions to make sure this doesnt affect rental properties at all. Frankly I think this bill is meant to make more affordable property for landlords than anything.

[-] Brunbrun6766@lemmy.world 41 points 2 years ago

They'll just spin up shell companies to bypass that 50 limit

[-] Dark_Arc@social.packetloss.gg 26 points 2 years ago* (last edited 2 years ago)

It's the WSJ, it's the Fox News of print. It's going to have that "mostly true, but also any regulation is bigger than life" vibe.

NYTimes reported on different forms of this bill way back in December when things were still in infancy https://www.nytimes.com/2023/12/06/realestate/wall-street-housing-market.html

If signed into law, the legislation, called the End Hedge Fund Control of American Homes Act of 2023, could upend a growing sector of the housing market, and potentially increase the supply of single-family homes available for individual buyers. Homeownership, long a cornerstone of generational wealth in the United States, is increasingly out of reach for Americans as home prices and interest rates soar.

In separate legislation, Representatives Jeff Jackson and Alma Adams of North Carolina, both Democrats, introduced the American Neighborhoods Protection Act on Wednesday. That bill would require corporate owners of more than 75 single-family homes to pay an annual fee of $10,000 per home into a housing trust fund to be used as down payment assistance for families.

The bills were introduced three months after The New York Times published a story examining the impact of corporate-backed investment on Charlotte, N.C., where, in 2022, investors purchased 17 percent of the city’s homes in cash, often outcompeting first-time buyers who rely heavily on mortgages.

Investors buying up 17% of a city with nearly a population of 900,000 people is just nuts. If you say 4 people per household, that's roughly 38,250 homes.

[-] Fedizen@lemmy.world 4 points 2 years ago

mixed with like converting a large percentage from regular rentals to short term rentals.

[-] Thann@lemmy.ml 17 points 2 years ago

The legislators would not propose it if it wasn't great for institutional investors

this post was submitted on 10 May 2024

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