House Democrats unveil bill to 'keep corporate investors out' of housing market

[tulipsandroses]

To help address the nation's housing crisis while at the same time confronting Wall Street greed, three California members of Congress on Saturday touted new legislation to target rent-gouging in the U.S. by private equity firms and investment giants who have gobbled up huge numbers of single-family home and residential units in the years since the 2008 financial crash.

"Wall Street should not be any family's landlord.” Co-authored by Democratic Reps. Ro Khanna, Katie Porter, and Mark Takano, the Stop Wall Street Landlords Act aims to "deter future institutional investments" in the Single Family Residential (SFR) market by ending taxpayer subsidies to profit-seekers as a way to help struggling families battling housing costs amid rising inflation.

If enacted into law, the proposal would impose "a tax on existing and future acquisitions of SFRs" by large institutional investors, a statement from the lawmakers explains. The legislation would also prohibit federal lending institutions Fannie Mae, Freddie Mac, and Gennie Mae from purchasing and securitizing mortgages held by Wall Street firms who leverage their size and ability to purchase large numbers of single-family homes with debt in order to turn around and rent them out for exorbitant profit—a tactic that by itself pushes rental prices ever higher.

Private equity firms and Wall Street rarely if ever strayed into the single-family housing market prior to the 2008 crash, but the market exploded when large firms were given access to trillions in low- or zero-interests dollars over the last decade and as regulators at the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) offered subsidies via federal programs such as Fannie and Freddie. In 2015, Sen. Elizabeth Warren (D-Mass.) was among those blowing the whistle by telling HUD that it had no business colluding with Wall Street in such a way.

https://www.alternet.org/2022/11/americans-arent-serfs-house-democrats/

[jmbar2]

1. FANTASTIC!!!

Well overdue!

[Rebl2]

2. Like that!

[FoxNewsSucks]

3. Now if we could just keep corporate investors from buying

Senators, Congresspeople and judges.

Then we'd really get things done!

[leftstreet]

10. +1

[Faux pas]

4. Yes Please!

[PortTack]

5. Bout time!!

[gulliver]

6. So traditional slumlords will now get a price break?

The way to get more affordable housing is to build more homes and apartments. If Wall Street is tariffed out of the market, the other house flippers and rent gougers will just step in I'd bet. See also: "family farm."

[SheltieLover]

7. Excellent! 👏👏👏👏

[onecaliberal]

8. This cannot happen soon enough.

[Merlot]

9. Better late than never?

A lot of damage has been done as so many SFR have been bought up by large corporations. A friend of mine who has rental property says he gets letters from companies who "have a buyer" and will pay cash. Says he will never sell to those companies because they are ruining the housing market.

The latest letter he got was offering to buy the house at a pre-determined fixed price - never mind market value! and they were going to do the whole deal for a 4% fee. So no market value or price bidding, and charging more in fees than an actual transaction between buyer and seller. They are very arrogant.

Hopefully this legislation passes and works. Buying a house is hard enough without the large investors ruining the market.

[DENVERPOPS]

17. A little late..................NC

[Earthrise]

11. Yieldstar, too! It is what's causing rental prices to skyrocket

Propublica in Yieldstar
https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent

[Pinback]

20. Thanks for the info

Didn’t know about this. The deck is really stacked against renters these days.

[I_UndergroundPanther]

23. If I was a landlord with

Significant properties to rent I'd lower my price just above maintenance costs, I'd live on a smaller wage for a few months or more just to fuck up thier stupid yield star.

The other landlords are terrified of living on a lower wage.
But fucking up thier yield star algorythm would force them to do just that.

We just need more people with properties not scared to live on a lower wage to rent for less. And want to help people.
Than the rent prices would eventually become reasonable again.


And they'd toss yield star out because nobody would put up with the price gouging.

[Gaugamela]

12. K&R.

[lindysalsagal]

13. This, plus, individuals now store assets in vacant real estate, driving the prices up.

I wonder if there's a way to limit all investors so people can really find available houses. Maybe tax them if they're unoccupied?

[hermetic]

14. Fantastic!

And long overdue.

[calimary]

15. NOW yer talking!

Let’s do it!!!

[packman]

16. Great - but we all know it'll NEVER pass

[ancianita]

18. It was introduced by WA's Adam Smith (9th Dist) & called the SHAPE Act --

The Saving Homes from Acquisition by Private Equity Act, which

Creates a federal real estate transfer tax, set at 100% of the property's sale price, charged to large private equity firms or corporations with $20 million in assets purchasing any single-family home(s).

Directs all revenue from the tax into HUD’s Housing Trust Fund, which provides grants to states to produce and preserve affordable housing for extremely low- and very low-income households.

Allows exemptions from the tax for non-profits and government entities, or if the purchase is pursuant to a government program providing housing to low-income individuals.

The Saving Homes from Acquisition by Private Equity (SHAPE) Act is endorsed by several organizations, including Private Equity Stakeholder Project, Prosperity Now, the National Association of Consumer Advocates, CPD Action, and the Washington Low-Income Housing Alliance.

https://adamsmith.house.gov/2022/7/rep-smith-introduces-the-saving-homes-from-acquisition-by-private-equity-act-to-combat-nationwide-housing-crisis

Full text of the bill:

https://adamsmith.house.gov/_cache/files/e/7/e70db781-f667-4fb5-8580-fc30491624af/E9151669200547FA2555B46CA5A34391.smitwa-050-xml-draft-4-.pdf

[patphil]

19. This predatory activity is causing a lot of grief for lower and middle class buyers/renters.

We need to stop this and disincentivize the whole idea. It would be a disaster if the housing market was taken over by a few corporate conglomerates.
Instead of giving lending breaks for these companies, we should make it more costly for them to do this...perhaps higher loan rates, high corporate income tax rates, and significant penalities for purchasing single family dwellings and turning them into rental properties.

[TheFarseer]

21. YES

Where was this a couple months ago when it would have been a dynamite issue for the midterms?

[I_UndergroundPanther]

22. Good

Fuck those assholes buying up whole neighborhoods to force everyone into thier rental economy scam.

I would also limit how much property and land foreign investors could buy too.

[PlutosHeart]

25. Totally agree and big point

as well as they need to be broken up and forced to release some properties back onto the market.

[pfitz59]

24. we should also institute a 'vacancy tax'

to prevent firms from claiming business losses on unrented units. force the firms to lower rents and fill existing apartments.

[appalachiablue]

26. Many thanks for this!! K/R

[Samrob]

27. HELL TO THE YES!! Maybe my letter to two Senators and a Representative about this shit hit a nerve.

I have posted about this several times here at DU. Fired off a few nasty letters to the Montgomery County Maryland, Council and Housing agency as well as three letters to Congress. I just wonder it took so long for this to happen. Half the battle is won by knowing what the fuck is going on which means thinking, researching, and staying awake. Just being angry at Trump and the GOP is not going to do it. Educating people about how this current capitalistic corporate hegemony operates to screw over working class people is a necessary start. It should have begun years ago. Let it begin now!

[MichMan]

28. Why not also tax those selling the homes to these investors 50% of the selling price ?

If I'm selling my family home and I know if I sell it to one of these vultures, it will cost me 50 % of the selling price compared to selling it to an individual, I know what I would do. That would ensure they can't buy them in the first place

[seta1950]

29. About time

I can actually see it happening everywhere