In addition, the proposed legislation, titled the “End Hedge Fund Control of American Homes Act of 2023,” would require hedge funds to sell off all the single-family homes they currently own over a 10-year period.
The bill would impose stiff tax penalties on hedge funds that fail to comply with the sell-off, with the proceeds from the fines going toward down-payment assistance for Americans looking to buy homes.
The legislation raises the question: Should companies be banned from buying homes in the U.S.?
Homeownership has become increasingly unattainable for many Americans as home prices and interest rates surge.
A recent study by MetLife Investment Management found that by 2030, institutional investors could control 40% of single-family rental homes.
Chief Washington anchor Leland Vittert said the current rules “allow billionaires to get richer by putting the American Dream out of reach for hardworking Americans.”
Between January 2020 and January 2023. rents for a two-bedroom, detached home increased 44% in Tampa, 43% in Phoenix, 35% near Atlanta and 24% nationwide.
Vittert said millionaire-backed hedge funds now compete with average Americans for the starter home and normally win.
“And thus,” Vittert said, “it’s the hedge funds, not the means of everyday Americans, that set the price for the American dream.”
NewsNation political and economic contributor Mick Mulvaney took a different approach and called housing affordability a local issue.
“Housing is too expensive,” he said. “Do you know why? Because we don’t build enough. That’s it. That’s the bottom line.”
“I’m not sure how the federal government changes it because it’s a local issue,” he continued. “If you want housing to be cheaper, though, just build more housing.”
NewsNation political contributor Johanna Maska said she has a big problem with hedge funds buying up “all of the critical housing.”
“I think that single-family homes need to be protected,” she said. “We need to have more protection for our communities to have access to those homes.”
Democratic strategist Ameshia Cross also said housing affordability “is one of the biggest concerns facing Americans.”
“There has to be regulation here,” Cross said. “One, because I don’t think that we’re building to the extent that people actually need homes. We’re not building fast enough to meet the needs of families across this country. In addition to that, they’re not able to afford the homes that are already there. And they’re getting priced out.”
While the bill faces challenges passing into law this session due to a divided Congress, advocates argue that initiating a conversation on these issues is crucial.
A recent New York Times report explored the impact of corporate-backed investments on housing markets, citing instances where investors outcompeted first-time buyers, particularly in neighborhoods with large Black and Latino populations.
“You can imagine the hedge funds will spend an awful lot of money on Capitol Hill to try and stop this,” Vittert said. “We will let you know if the rest of Congress sides with the billionaires or the American Dream.”