On November 30th, Senator Jeff Merkley (Oregon) introduced a bill—End Hedge Fund Control of American Homes Act—that seeks to ban hedge fund and private equity firms’ ownership of affordable housing. In announcing the bill, the Senator raised concerns about the impact Wall Street is having on housing affordability for renters and potential homeowners throughout the nation.
According to the Senator:
- In 2021, large hedge fund investors bought nearly 43% of the homes available for sale in the Atlanta metro area and nearly 40% of the homes in the Phoenix area.
- These investors targeted homes in areas with significantly larger populations of Black families and single mothers.
- A study of foreclosed homes in Atlanta found that investors were 68% more likely to file for evictions than small landlords.
The bill would limit investors from owning large numbers of homes by establishing a new $20,000 federal tax penalty for every single-family home owned in excess of 100, with the revenues collected providing first time homebuyer down payments. Investors would be required to sell the homes they have acquired over a period of time and are banned from selling to another corporation or investor. The law specifically exempts nonprofit organizations, public housing authorities, local governments, and home builders.
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