Bipartisan U.S. Senate bill aims to ban large investment firms from buying single-family homes, addressing housing affordability concerns. Known as the Hom
Overview of Proposed Legislation
A bipartisan effort in the U.S. Senate aims to address growing concerns over housing affordability by introducing a bill that would ban large investment firms from acquiring single-family homes, condominiums, or townhouses. The legislation, known as the Homes for American Families Act (HAF), is set to be introduced by Republican Sen. Josh Hawley and Democratic Sen. Jeff Merkley on Thursday.
Historical Context
The proposed HAF builds upon recent calls by President Donald Trump in his State of the Union address for lawmakers to limit institutional investors' purchases of residential properties. This new legislation marks the first significant piece of proposed federal action on this issue since the President's address, though earlier this week Merkley and over a dozen other Democrats had introduced their own bill with similar goals.
Details of the Proposed Legislation
The Homes for American Families Act amends the Sherman Antitrust Act of 1890 to prohibit investment funds with assets exceeding $150 million from purchasing single-family homes, condominiums, or townhouses. Notably, it excludes homebuilders who construct units for sale. The bill also mandates that the Justice Department's antitrust division enforce compliance with these restrictions.
Sen. Hawley explained: "Families deserve to be able to buy their own homes and achieve the American dream without competing with big investment companies that irrevocably drive up housing prices." He emphasized his commitment to addressing what he perceives as a significant barrier to homeownership for many Americans by proposing this legislation.
Sen. Merkley echoed these sentiments, stating: "As corporate investors invade the housing market nationwide, we need action to protect hardworking Americans achieving the dream of homeownership."
Impact and Expert Perspectives
The push for such legislation comes at a time when American families face increasing challenges in affording homes. According to Federal Reserve data, homebuyers now require incomes 43% higher than the median worker just to afford typical housing. CBS News polling indicates that 83% of Americans believe it is more difficult to purchase a house today compared to previous generations.
Large institutional investors currently own approximately 3.8% of all single-family rental homes nationwide, as reported by the Urban Institute in a recent analysis. However, this figure varies significantly across regions; for instance, large investors control over 28% of single-family rentals in Atlanta and about 20% in Charlotte.
Experts attribute much of the housing affordability crisis to broader structural issues, including a persistent national shortage of homes due to reduced construction following the 2008 financial crisis. Goldman Sachs has estimated that the U.S. might need to construct up to four million additional homes beyond typical levels just to address this shortfall.
Both parties recognize that institutional investors' market presence complicates homeownership for average Americans. President Trump, in his recent State of the Union address, highlighted a case involving Raysall Wiggins, who faced repeated bids lost to large investment firms. The president called on lawmakers to make current executive actions permanent, including one that restricts most single-family home sales to such investors.
Additional Proposed Legislation
On Tuesday, Merkley and Democratic Sen. Elizabeth Warren of Massachusetts introduced an alternative bill aimed at curbing tax breaks for property owners with 50 or more units by preventing them from claiming depreciation and mortgage interest deductions on those properties. This measure seeks further to address the role of large investors in exacerbating housing market challenges.
The introduction of these bills signals a significant bipartisan effort to tackle what many perceive as a critical issue affecting homeownership opportunities across the United States.
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