In an environment that makes it hard for ordinary Americans to attain homeownership, two bills introduced by Democratic lawmakers aim to impose limits on corporate involvement in the single-family housing market.
On Tuesday, Dec. 5, Democrats in Congress introduced a bill called the End Hedge Fund Control of American Homes Act of 2023 in both the U.S. House and Senate, The New York Times reports. The legislation, introduced by Senator Jeff Merkley of Oregon with Representative Adam Smith of Washington, is designed to ban hedge funds from buying and owning homes in the U.S. single-family housing market. If signed into law, the legislation has the potential to result in more single-family homes being available for individual (that is, non-corporate) buyers.
Wall Street entered the single-family rental market in the aftermath of the 2008 housing crisis, plucking up homes in foreclosure. Its influence has been growing ever since. By June 2022, institutional investors owned 3 percent of all single-family rentals nationwide, but in more affordable markets they owned a considerable market share; in Charlotte, they owned 20 percent, according to the Urban Institute. Even as the housing market slows, investors have remained active, buying 26 percent of the single-family homes that sold in June 2023, according to CoreLogic, a data analytics company.