Archived link of Vice article.
House Bill 6608
Senate Bill 3402
Hedge Funds Have Invaded the Housing Market. A New Bill Would Ban Them.
A sweeping new bill introduced in Congress would essentially ban hedge funds and private equity firms from buying single-family homes.
Hedge funds, private equity firms, and investment trusts have been snatching up single-family homes all around the country for years, creating concern that homeowners themselves would be pushed even further out of the market. But a sweeping new bill introduced by U.S. Senator Jeff Merkley and Washington Rep. Adam Smith would, if enacted as written, essentially ban such corporate investors from the practice moving forward.
The bill, which was introduced in both the U.S. Senate and the U.S. House of Representatives on Thursday, would over a ten-year period require hedge funds and large institutional investors to completely divest from single-family home ownership. Called the End Hedge Fund Control of American Homes Act, the bill would require large funds to sell off 10 percent of their homes each year over a decade.
“We shouldn’t allow private equity firms to buy up vast quantities of American homes and create a generation of lifelong renters. Congress needs to act fast and help promote access to safe, affordable housing and homeownership for American families, not Wall Street,” Smith said in a press release.
The bill would require the Internal Revenue Service to tax large funds that fail to sell off their single family homes over that timeframe. It already has some support in the house, where it is co-sponsored by the U.S. Representatives Nikema Williams and Linda Sánchez, as well as in the Senate, where it is cosponsored by Senator Tina Smith. Advocacy groups Private Equity Stakeholder Project, Consumer Action, and National Consumer Law Center have offered additional support.
The bill defines a hedge fund as partnerships, corporations, or real estate investment trusts that pool funds from investors and have $50 million or more in net value or assets under management, with exemptions for nonprofits and companies primarily focused on construction. Hedge funds failing to report single-family home purchases would face a $20,000 fine that would go toward a housing down payment trust fund. Funds that fail to sell off their housing stock in the timeframe required would face a tax of 50 percent of the fair market value for each property, with funds also going to the housing trust fund.
Merkley and Smith cite data from an Urban Institute report that said in 2011, no single entity owned more than 1,000 single-family rental homes, whereas by June 2022 hedge funds and institutional investors owned a cumulative 574,000 single-family homes. This includes large corporate owners like Invitation Homes, which owns more than 80,000 homes across the country. While corporate investors only own 5 percent of the nation’s single-family housing stock, the ownership is often concentrated in majority Black and Latino neighborhoods and in some neighborhoods, entire blocks have been purchased by investors.
The practice has ramped up since the beginning of the pandemic, with 28 percent of all homes sold in 2022 going to institutional investors according to Pew Charitable Trust. In 2021, a venture-funded company backed by Jeff Bezos and other billionaires also got in on the act.
Institutional investors have also been buying up multifamily apartments, and tenants across the country have been fighting back by forming unions to demand maintenance and push for stronger regulations.
Now do foreign governments..or foreigners period.
kek yea that'd be nice... I was just encouraged seeing that this is being looked at. Whether it amounts to anything or not, who knows.
Anyone who votes no is a traitor.
And the dual citizen congressslimes
Yes, particularly the foreign owned farmland and other real estate tracts.
Still blows my mind that illegals are allowed to hold title to property here. Heck there are even mortgages available for them. Sure, they need 20% down... but that's often very doable as many of them have huge cash stashes due to not paying any taxes.
Here is hoping that we can encourage them to retroactively put this in place, ie compel them to sell withing "X" time or it is forced auction with only local citizens (reside in the same town) starting at $0.01
I wish they'd stopped this 10 years ago. Pushed prices so high in many areas and now no one can afford to buy.
No more Chinese owned USA property
and keep lobby money out of elections
That creates its own set of problems.
Where the problem arises is donations from anyone but American citizen and larger amount than $1000.
Why can corporations, foreign govts, NGOs give money to campaigns.
I can see paying lobbyists, someone to go fight for your cause, but it should stop there and not fund any candidate or event
I guess, but isn't it basically just as bad if it doesn't go to a candidate at all and instead goes to a Super PAC that runs negative ads against one candidate over and over?
Seriously--whatever these funds touch goes down the toilet. They suck all the money out and after the first bit of investment, rarely put it back in. They have screwed up forest lands, farmlands, businesses, etc. But everyone wants to see their portfolios increase, so it has to come from somewhere.
I saw the number this year has been 44%
https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701
Yay!!!
I'd rather see a an outright ban on all non-owner occupied housing. They destroy community and concentrate crime. I realize there would be certain challenges involving Universities, dense urban cities, and certain highly desirable areas (oceanfront, lake front, Central Park, etc) to deal with.
Dumbest take I've ever heard. Renting doesn't destroy community or concentrate crime. "Low income housing", AKA, government subsidized housing does. There IS a difference.
Besides, what you're describing would basically destroy the number one path to wealth. Literally 90% of Millionaires and/or Billionaires (AKA wealthy people), made the majority of their wealth in Real Estate.
https://www.linkedin.com/pulse/what-real-estate-creates-90-millionaires-ben-lovro
Since I know a source will be asked for, there's one, but a quick google search will provide hundreds of other such examples.
So what you're describing would destroy the absolute number one path that normal people have for creating wealth for themselves and their children. I agree, institutional investors should be banned from owning single family homes, but a blanket ban on "non-owner occupied housing" is the literal dumbest take I've ever heard. It's the exact same crap you hear on literal communist subreddits like r/antiwork.
And before anyone says "just don't invest in housing", newsflash, commerical properties (Retail, office, Hospitality, etc.) are an entirely different animal and require millions of dollars for a down payment on a "low end" property.
On the flip side, in a decent economy, like what we had under Trump, a normal person with a decent job can go out and put down $50K they saved over a few years on a single family rental.
That's how literally 90% of people build wealth for themselves. I agree institutional buyers need to be banned, but a blanket ban is the stupidest thing I've ever heard of. You can't gradually shift into "bigger" things if you cut people off from starting at the small things.
What you're suggesting would literally be playing into the WEF's hands by cutting off the number one way people drag themselves out of poverty or the middle class into the bare minimum of "being wealthy". In other words, that'd be killing the American dream.
It absolutely concentrates crime, if for no other reason than because it concentrates people (ie: if a housing unit cases 0.1 crime per year, a block with 30 residential units has 3 crimes a year, but an apartment complex with 90 units would create 9 crimes a year). But, it's actually worse than that, because violent crime RATES are higher in high density residential areas, regardless of socioeconomic status.
https://newsinfo.iu.edu/news/page/normal/13030.html
Also, you're telling me on the one hand real estate is the number one path to wealth at the same time you're telling me getting rid of non-owner occupied housing a a dumb idea. The reason the guy who owns the apartment building gets rich is because everyone that lives in that building is paying him more than the housing is actually costing him. Meaning they could have lower housing costs or at the very least be building their own equity if they weren't renting. I'd much rather have a world where all the tenants in a building owned their own homes and were building wealth rather than having zero equity and having just one guy/group/company getting rich off the renters.
Nice necro posting three days after a post was basically dead and no one is here to respond to you but me. But you didn't refute a single one of my points.
First of all, you're conflating apartment buildings (specifically low income apartment buildings) with all non-owner occupied housing. That's like taking a statistic about pitbulls and saying "see, all dogs eat babies!" It's inaccurate to the whole picture and dishonest to try and paint the situation in that manner.
Even in the 50s and 60s, when the economy was in it's prime, young people still typically rented for the first few years after college/leaving their parents house. Furthermore, the reason it's the number one path to wealth is because ANYONE can do it moron.
Anyone can go out and buy a house if they have enough money. It's not a groundbreaking idea. It doesn't require anything other than basic financial knowledge. Most people who own a rental, don't own an apartment building, they own a few actual houses, a lot of which are vacation rentals (Cabins, lakeside, ocean front, etc.). which are in gated communities. Further disproving you're apparent "point".
Finally, let's ASSUME you actually manage to pass such a law how do you enforce it or deal with the fallout? You seem to have a gripe with apartments specifically, so let's address that.
Apartment buildings, typically are self metered, meaning every individual unit does NOT have it's own meter to read power consumption, water consumption, etc. etc. The owner just assumes a standard rate based on average consumption and adds it into the rent.
So if every single apartment building in the country suddenly had to be converted into single unit condos, meaning the entire building would need to be overhauled to allow for such upgrades, who would pay for it? The current owner certainly wouldn't, and you're entire defense is that people don't have money to own a home, so the people wanting to buy certainly don't.
Who pays for those upgrades? You're talking hundreds of billions of dollars in upgrades. And that's just for metering. Multifamily is zoned different because building standards are different. You'd also have to upgrade the fire systems, electrical systems, etc. etc.
Who pays for that?
And I can almost guarantee you'll just say to tear them down and build single family homes. In which case I ask you, do you hate farmland and forests? Let's use NYC for example. If every single apartment building in NYC was demolished and replaced with single family homes, the urban sprawl required to replace all those housing units would take up the entirety of New York State, New Jersey, Delaware, Connecticut, and part of Pennsylvania. And that's not accounting for the other major cities in the NY Metro that have their own multi family housing buildings. Just NYC.
At that point you also run into problems like having a house that's literally 5 hours away from where you work because of traffic.
So yeah, you're grand design of having no more multi family housing and having nothing but single family homes and/or condos is a fantasy that is neither feasible, nor possible.
I'm self-employed, I don't always have the time to post daily.
I'm not conflating apartment buildings of any sort with all non-owner occupied housing.
AirBNB rentals also drive up violent crime: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8279333/
If you want a much more in depth that controls for factors like section 8 housing and size of the units and proximity of the landlord, the results section here behaves exactly as you'd expect (more section 8 housing = more crime, bigger units = more crime, the further away the landlord is = more crime, the lower the amount of owner occupied properties in the neighborhood = more crime).
https://www.researchgate.net/publication/23949141_Rental_Housing_and_Crime_The_Role_of_Property_Ownership_and_Management
So again I'll ask if its the number one path to wealth AND alone can do it, why rent? Just do it and build wealth, and more stable communities, sooner.
And does that prevent landlords from renting out apartments? No, so obviously they have a mechanism for cost recovery here. Why does that same cost recovery mechanism not work on condos? Just like your condo pays a portion of the cost of the pool and lawn maintenance the utility cost can also be split out in the monthly fees. Or if a unit owner feels they use substantially less than other units they can pay for their own meter.
If we put 330 million Americans into single family homes on 1/2 acre lots with an average of two people in them we'd need about 130,000 square miles of land for houses, which is a bit less than 2.4 New York States. I have several thoughts:
.......Alright, you're an actual idiot. You ignored half of what I said, changed your target argument because I called you on your crap, and apparently want everyone alive to live in half acre lots while also spouting bull crap about pollution and calling for depopulation to 1950s level.
You're either actually stupid, or a troll. So I'm ending this argument chain. No sense in arguing with someone who ignores everything they're told because it doesn't fit their world view and just outright lies about things while calling for depopulation.
Assuming I'm wrong, might want to do a bit of introspection, since you sound eerily like a WEF stooge calling for everyone to be required to live in half acre houses with no choice over where they actually get to live and also calling for us to depopulate to the tune of 171 Million people (the difference between todays population and the population in 1950), "in the name of pollution and resource demand."
You literally sound like klaus schwab at this point, so if you're being serious, then I have no choice bit to label you a troll/glowie.
This would mean if you didn't own a home you wouldn't be allowed to rent.
Obviously just live on the streets with all your cash or live with your parents until you're 50 and can afford a house in a post-Biden world!
This is the way!
Multi-generation households are a great choice and quite common in other parts of the World.
Also, the government has exacerbated the housing crisis
I disagree. I see nothing wrong with people owning homes to rent. People - not multi million dollar companies. That would kick Black Rock out the housing market too 😁 The thought just breaks my heart, can ya tell? Lol
This may be possible, but it would have to be done by zoning at the local level. I live in a highly transient community (state university and military base), so the rental market is sizable. Recently there were a few neighborhoods near the campus were down-zoned from multi-unit to single family. Caused quite a stir because the currentrental property owners were concerned that they wouldn't be able to recoup their investments. Eventually a deal was reached that would allow current owners to continue what they were doing, but a transfer of ownership would move the property to single family only. Some of the property owners moved their properties into LLCs or S-corps before the law came into effect, so it will be interesting to see how that plays out.
How high are you?
"Adam Smith." Ain't that somethin'.
Do the same with Gates and farmland!
Can we add all foreign countries to that list? And maybe non citizens also. Housing here should be for Americans. Sorry, not sorry
I know about this piece of legislation what it is is he's proposing a 20% tax on investors buying up real estate basically. In other words it's not going to do jackdiddly squat except Jack up the cost of housing wherever it's implemented by about 20% because The big investment firms can literally afford to buy these houses with cash even with the 20% tax, and all they're going to do is pass the cost of the tax off to the consumer in other words me and you
Not to be rude, but there's multiple problems with that. As pointed out in the post, they want a 50%, not 20% tax.
That is neither sustainable, nor legal, in many places. Quite a few of the biggest markets in the country (California and New York for example), have rent control that prevent landlords from raising rents more than the inflation rate+2-5% a year.
So a 50% cut would be bankrupting once you account for all the costs involved with owning and upkeeping a rental.
Likewise, yes, quite often these properties are purchased with cash. But then they immediately go out and put a massive 80/20 mortgage on them by doing what's called a cash out refinance (where you get a mortgage on a property you own to free up cash for further investment).
Which means that 50% tax would make literally every one of these investments less that worthless, since they'd have vastly more debt than income.
Believe me, I LOATHE agreeing with any liberal, but for once, I actually do agree with this, and I do believe it would work.
Now having said that, I also believe it won't go anywhere, since this is exactly what the deep state wants.
But I do believe these bills, or something similar SHOULD be done at some point to prevent hedge funds from commercializing people's homes. This isn't how it's meant to be. Normal people are supposed to own their own home, buy a handful of rental houses themselves that they rent out to students, young people, vacation goers, etc. And then gradually sell and move up until they're into commercial real estate territory.
That's how literally 90% of wealthy people made their money. It's a slow, gradual process, where you buy and/or sell properties every few years, thus keeping supply and demand in relative equilibrium, which keeps prices down overall.
Institutionalizing the basic building block, single family homes, messes with the entire process and pushes normal people out of both home ownership, and wealth building.
Yeah the problem with your whole argument is that the people who can buy the houses are also the people who print the fucking money they use to buy the houses.
......That is....I don't actually know how I should put it, but it's just wrong. Not EVERYONE who owns a rental property is a cabal stooge. You do realize that right? A lot of people's grandparents or parents have a small property portfolio of 10-20 houses that they rent out for extra retirement income.
Is every well off boomer now a member of the rothschild family? Because that's what you're implying with you're bizarre logic.
I don't even know what to say, since your rebuttal was actually retarded. And I'm not trying to be mean, I just legit don't know how else to describe such a one dimensional, childish response.
"Everyone who owns a rental property is part of the cabal!"
Do you realize how insane that sounds?
Didnt you just answer your own question? Do you think this law will be evenly enforced? Who buys up the majority of the housing? Blackrock and affiliates. Black Rock is a direct subsidiary of the Fed, in other words the central bank, in other words the private owned company that prints out our money for us under contract with the US government. Do you really think that Black Rock will get in trouble if they just I don't know ignore this law? Do you really think BlackRock won't get a concession in there so that they won't be prosecuted and it's only used to consolidate property? This legislation as you describe its effects Will dramatically affect boomers in retirees and people who had been accumulating wealth the way it's always been done. Mom and pop landlords will have to go out of business while the big boys will be able to stay afloat and eat the cost or bribe their way into not having to pay it. You're assuming that we live in a non-corrupt society, but if we were living in a non-corrupt society we wouldn't even be having this discussion. Why in the fuck would a guy who's getting kickbacks from these major investment firms proposed legislation that would harm his largest donors?
Alright, you're an idiot or a troll. I'm not sure which, but you obviously read neither the original post, nor the bills, nor my own comments, and are just spouting random bull crap to get a reaction.
This is the last time I'm responding, as I have a "final post" rule when it comes to an identified troll/dumbass, but I'll break down one last time why you're wrong on basically every point.
First of all, blackrock is NOT a subsidiary of the federal reserve. Blackrock is an investment fund/wealth management company. They're publicly traded, and you can literally see a list of who owns more than 5% of blackrocks stock. The federal reserve is nowhere on that list.
Second of all, blackrock gets fined all the time, and they pay those fines. A quick google search would tell you that much, but apparently that's asking too much of you to just look something up before spouting your inane nonsense.
Blackrock, like most large companies, considered fines a part of life. There is not a single large business on planet earth that doesn't account for fines in their expenses budget every year. But a 50% of MARKET VALUE fine, is bankrupting for any business.
Third of all, as the original post pointed out, this only applies to hedge funds and other large, institutional investors. The literal, legal definition of an institutional investor is an organization that invests on behalf of a group of people (Some definitions put a dollar amount limit requiring they manage at least $50-100 Million of investor money on the behalf of others as well). Ergo, a retired couple who owns their own portfolio of 10-20 houses (Which at the US average of $400K would only be worth $4-8 Million and not be owned on behalf of another) with no middle man, would not be have this applied to them. Nullifying your supposed "point" about retired boomers.
So no, the Ma and Pop landlords aren't going anywhere....Especially when you consider 70% of "small rental units", meaning single family to quadraplex, are owned and managed by ma and pop landlords
https://www.nar.realtor/blogs/economists-outlook/mom-and-pop-business-owners-day-landlords-of-small-rental-properties#:~:text=Among%2049.5%20million%20rental%20housing,mom-and-pop%20landlords.
Likewise, Blackrock, does NOT, repeat after me, NOT, own the majority of single family rentals, Heck, institutional investors in general only own 0.7% of all single family homes in the united states.
Let's do some math real quick.
https://www.statista.com/topics/5144/single-family-homes-in-the-us/#topicOverview
There are 82 Million single family homes in the United States.
https://nationalmortgageprofessional.com/news/democratic-legislation-aims-curb-hedge-fund-ownership-single-family-homes
Every single institutional investor combined owns a collective 574,000 Single family homes. (Blackrock themselves own 24,600 for the record as their own website states they own .03% of all single family homes in the US.)
https://www.blackstone.com/housing/our-track-record-in-housing/#:~:text=Blackstone%20owns%20approximately%200.03%25%20of,family%20homes%20in%20the%20US.
Now then, what is 574,000 / 82,000,000?
.007 or when converted to percent 0.7% of all single family homes. Compare that with the 15,939,000 single family rental homes owned by Mom and Pop Landlords. (You can achieve this number by using the nar.realtor link above, but the math is 49.5 Million *0.7= 22.77 Million which you then multiply by 0.7 again for 15.939 Million. For context, there are 49.5 Million rental units in the US, of which 70% are 1-4 units, of which 70% are owned and managed by Mom and Pop Landlords).
So let's see here Mom and Pop landlord own 27.77 times more houses than Blackrock and every other institutional investor combined. So let's see, for your bizarre fantasy of blackrock buying out every single one of those Mom and Pop land Lords, at the US average of $400K per single family home, they'd need $6,375,600,000,000. That's over $6 Trillion for the record, if you can't see all the commas. They have just over $10 Trillion in total assets, meaning they'd have to liquidate over 60% of their total assets in order to achieve this outlandish goal, and they'd have to shutter countless funds, which would bring all the wrong kinds of attention. But most importantly, it's literally impossible to do.
Blackrock invests in EVERYTHING. Stocks, derivatives, bonds, real estate, private equity, venture capital. If it makes money, they'll try it. The only thing in that list that can be easily, and quickly liquidated would be stocks, bonds, and some types of derivatives. And if you tried to liquidate over $6 Trillion in assets over.....well any amount of time really, you'd tank whatever markets you're selling in. For comparison, the Lehman Brothers (the big bank that went under in 2008), had $600 BILLION in total assets, they're STILL being liquidated in bankruptcy court to this day, 15 years late because doing it any faster would tank multiple markets.
And I know exactly what you're going to say. "Oh they'll just print it, they won't sell anything, dur hur!"
Well let me burst that bubble for you. There are currently $2.26 Trillion actual total USD in circulation
https://www.statista.com/statistics/456754/value-of-currency-in-circulation-usa/#:~:text=The%20total%20value%20of%20currency,particularly%20sharp%20increase%20in%202020.
So they would have print nearly triple, the total dollar amount currently in existence, to achieve this magical plan.
Remember what happened in 2020 when they printed something like 80% of all dollars in circulation currently? Now imagine the hyper inflation that would occur if instead of an 80% increase in dollar supply, the dollar supply suddenly tripled on top of that 80% increase.
Venezuela? Nah, Weimar Germany would probably be closer. They had a literal 100 Trillion Mark (Their currency). For comparison, the exchange rate for dollars at this point in time (1923) was $1USD for 4,210,500,000,000 Marks. So hyperinflation doesn't even begin to cover what would happen if they "printed" the money needed to buy up all the single family rental homes.
Here's two links for the information about Weimar Marks.
https://en.wikipedia.org/wiki/Papiermark
https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
And we haven't even covered the other 40+ Million NON rental single family homes in the United States.
So as you can see, every single argument you're attempting to make falls flat in the face of actual facts.
I'm not saying black rock isn't evil, they are. But you have literally no idea what you're talking about when it comes to this specific topic.
Assuming I'm wrong and you're not a troll trying to bait people, then please, for the love of all that is Holy. Just do a freaking google search or two before you make baseless claims that anyone on the internet can debunk and disprove in five minutes with less than 10 google searches of their own.
This bill was proposed by Democrats.
It would be going after private investment trusts and "institutional investors".......like the Trump Corporation.
It’s ok, someone in the firm will buy the houses for them, convert into multi family homes then sell to the investors.
But, but that's major pillar in the NWO enslavement of humanity.
My wife is desperate to get our own house before she hits retirement age, and every year the prices go up so much that what we've saved is dwarfed by it. Its thanks to these jackasses that are driving up costs. Spend a bunch of money on real-estate, inflate the bubble, sell at inflated price to families who get stuck footing the extra payments and you get a nice 100% profit after just a few years. Fuck that shit.
100% support this bill.
Geometric series has entered the chat.
Year 1 90% remain
Year 2 81% remain
Year 3 73% remain
Year 4 66% remain
Year 5 59% remain
Year 6 53% remain
Year 7 48% remain
Year 8 43% remain
Year 9 39% remain
Year 10 35% remain
I haven't read the bills, but this is what my cynical nature thought of when reading this.
I read that assuming they meant 10 Equal "sell off value" minimums over a decade, but I suppose you make a good point. Legal semantics like that are the difference between being technically legal or illegal.