- cross-posted to:
- housing_bubble_2@lemmy.world
- cross-posted to:
- housing_bubble_2@lemmy.world
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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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.
They’ll just spin up shell companies to bypass that 50 limit
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.
mixed with like converting a large percentage from regular rentals to short term rentals.
The legislators would not propose it if it wasn’t great for institutional investors
Our HOA made it much harder for corporate raider types to buy and rent houses in our neighborhood. Took a lot of legwork and paying a lawyer to get the changes passed. Was well worth it, though. Sleep better at night.
I’ve mentioned this before on Lemmy, and a few pious Ackshualemmys felt the compulsion to preach about how this was just a move to keep home prices up. But it really wasn’t. The legal language still allows individual families to rent their homes if they want to. But it strictly limits how many corporate / institutional type landlords can be in the neighborhood.
My main point here is: as much as most of us hate HOAs (including me)…if you have an HOA think about leveraging it to help slow this corporate creep of mass home buying.
My problem with HOA’s is that they seem to have no accountability if a power tripping asshole is in charge. If HOA’s lost the ability to put leans on properties and was just an organization that neighbors joined of their own volition, it might be better
Then again, if they don’t have that power then they can’t do what your HOA did.
I will NEVER live in another HOA community. To your point, it just takes a few dicks to ruin it for everyone. Sold my house to an institutional investor just to get out of one. Everyone peering out their blinds, ready to speed, dial the gastopo if a car they dont recognize appears at someone else’s residence. The 6am geriatric weed police making sure everyone’s lawns are mowed at 90’ angles. Can’t have a work truck in your own driveway, gotta repaint your house every 10 years now you wanna tell me who I can and can’t unload this paper house to? Get bent. Communities usually full of big truck, clean bed freedom lovers too.
They either speed-dial the police, OR they simply just come out and shoot at whoever they feel is “invading”. My friend had a whole list of areas he wouldn’t deliver when he was running Instacart stuff because he’d gotten shot at or threatened by neighbors (or sometimes the people who actually ordered things).
My guy YOU are the accountability. Yes, it’s another exhausting and thankless form of governance, but if you hate the board and the despots? Run a flyer campaign, run for the board/leadership, get on the finance committee and run obstruction, abuse the bylaws and force actual proper process and procedure - the power trippers rarely are actual good administrators, and generally hate procedures and checks on power.
It’s not a fun process to fight back, but “refi and run” doesn’t solve the issue of bad HOAs/leadership
its an election system and you can actually call a vote by petition of residents. I get peoples feelings but there are options to stop gross negligence. Its tougher when the person is sorta annoying but not enough to go through the pain of getting rid of them or like people deciding to run themselves and do the work. Its unpaid work and in my experience the ones doing it are more put upon than those that don’t. With a few exceptions.
My condo does not allow rentals and never did. Its one reason it was affordable for me.
When I lived in a condo, there was a cap on the total of units that could be rented.
Rentals required an additional administrative charge to the HOA, which essentially acted as a property manager.
Basically, it was so that people who had to move temporarily for extended periods (like being deployed) could keep their house.
Imo, it was a good compromise.
Yeah I would not mind that. From what I know from other people is you had to be on a list and it sorta rotated if all the slots were filled. Downside it would seem to me is if you had folks trying to keep it as rental property rather than a temporary situation. Also likely a bit harder to enforce compliance since some units are legitimately rented whereas in my situation folks would notice if you tried to rent it out. Its actually really restricted. Units can only be occupied if your on the lease or certain direct relatives like children.
Word.
They paid for a lawyer? I’m jealous. I couldn’t even get mine to create a 2024 budget…in April…which is not only needed for a lender to approve the sale, it’s a legal requirement to run an HOA. And this was after the president sabotaged the first sale because I renovated it and the appraisal would make his taxes go up. So glad I’m finally out of that place…
It was a huge PITA. Our fees are very low (thank goodness) so we don’t have much of a budget to work with. But it was one of those unicorn bipartisan things where almost everyone really wanted to do it. Even some of the nay-sayers changed their minds after all was said and done and they saw how it actually works (and not how they feared it would work).
I’m in NY and I literally have to quit my job and start over in another state because as it is right now there is literally 0 chance I ever own a home here… I’ve watched prices double in less than 4 years, it’s absolutely disgusting…
That’s not really true. Depending on where you live in NY, prices are very affordable. Also, NYC has neighborhoods that are also affordable.
You mentioned that “prices double in less than 4 years”. What happened 4 years ago? People left the city during Covid. Yes, that meant prices went down, but a lot of sellers pulled places off the market too. There was very few available places, so it’s not a valid point of comparison.
I don’t live in or near NYC, and you’d have to define affordable because I’ve been looking all over and I can’t find anything in the 200k range that is anywhere close to available work. Unfortunately I’m not someone who has the luxury to WFH. This market is absolutely killing people like myself that don’t have the WFH option.
I have no idea where you’re looking, but I just looked at Syracuse (chosen at random). There are tons of places available under $200K. Are you even looking?
Syracuse NY is a shit hole. The reason prices are cheap there is because people are fleeing and no one wants to live there.
So basically if you want an affordable house you have to move some where no one wants to live.
I stopped looking about 4 months ago, but when I was looking I was trying to stay within a 4-5 hour range of where my family lives so places like that were too far. Thanks for the suggestion though, if I get that desperate then that’s an area to look into.
Democrats and Republicans both pushing a bill that would make the world a little better?
Okay, the Republicans will last minute vote all against this
They won’t let Biden take a win, get your head out of your ass
Crackdown. My. Ass. I won’t hold my breath.
I would hope you do have a crack down your ass.
In some instances, extending that crack up to the shoulder blades would seem very appropriate
Well with all these wizards using “mend butt crack” I wouldnt bet on that. Though I would still prefer that over “Skrunch”.
There’s usually one down there yeah
How to tell they’ve almost bought everything they can already.
They’ve got quite a bit in California for sure.
Yes, just a couple thousand more and then crack away!
“The Government of Canada has announced a two-year extension to an existing ban on foreign ownership of Canadian housing. The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the Act) was set to expire at the end of 2024, it will now be extended to January 1, 2027.” Between foreign investment on U.S. housing ( who almost always pay cash so are less affected by borrowing costs) and corporate investing firms, the average American Family is pretty much hosed. Allowing unchecked investment practices in housing not only significantly drives up prices, but also property taxes. It also discourages investment in neighborhoods and local culture as investors are not forced or incentivized to maintain their investments (housing) so the houses then fall into disrepair or sit empty. For example, in my neighborhood, the local elementary school is struggling to stay open due to sharply declining enrollment as there are so few families that actually live here. Its full of investment houses that are overpriced and falling apart.
The Canadian law would have more teeth if it wasn’t so darn easy to set up a Canadian company to buy houses in the first place (please note: this is not from personal experience, I have not done this personally). The law we need progressively taxes corporate-owned houses to the point of making it unprofitable after they own X houses (pick your own value of X).
Laws can protect people or they protect corporations. It should be both, but it never really looks like both, does it?
The law we need progressively taxes corporate-owned houses to the point of making it unprofitable after they own X houses (pick your own value of X).
That would be awesome!
My value for X is 1.
Yep, in Utah the legislators ARE the investors buying the housing. Guess how “good” the renter protection laws are there.
That article is light on the details. The most unbiased data I could find is from July 2023. Searching percent of REIT purchased or owned single-family residences yields countless results from non-credible websites.
As a result, investors still purchased 27 percent of single-family homes in the first quarter of this year. [2023]
In the fourth quarter of 2022, investors purchased nearly one-third of homes sold in the bottom third by metro area sales price compared to about one-quarter of homes that sold in the top third.
https://www.jchs.harvard.edu/blog/8-facts-about-investor-activity-single-family-rental-market
It seems like it’s not the percent of all residences that is causing the constraint, but that REITs are specifically targeting the most affordable homes in metro and suburban areas.
Makes sense, affordable homes so their investment is less, affordable areas so they’re low income and will be dependent on your now rented house, and the markets are rigged thanks to those rent price websites so they’ll charge like 2x or more of what the mortgage price would have been as those are typical rent prices now…
To steal a George Carlin transition: “and another group of people I’d love to drag into the woods and disembowel with a wooden cooking spoon…”
Fucking wall street… They’re the reason I have to quit my job and leave the state my whole family lives in…
Excellent invocation of Carlin. I’m looking into moving as well. What states are you considering?
I don’t want to be too far from family so possibly Connecticut, or if I can somehow find something within my state then possibly “upstate” NY but I can’t seem to find much here that also has decent work opportunities close by. At the moment I’m stuck on super overpriced long Island so I definitely need to leave.
Westchester here. I feel your pain. Thinking about braving the cold in Buffalo. Rent and cost of living is insane by comparison.
How much you wanna bet they’ll just demolish them all out of spite? Bonus points if they build barely-maintained, high-rent apartments on the now-vacant lots.
Yeah, article is paywalled even when googling the title, so I couldn’t get any info.
But I can’t imagine both parties are going to unite about something that hurts their donors.
It’s probably a handful trying to get brownie points with voters before an election even tho they know they won’t ever try to follow thru.
Even if you get past the paywall, it’s devoid of detailed information. Here you go.
Crack the fuck out of the bastards
geez I wish I saw illinois on this list.
