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.
......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.