State Lawmakers Join Fight Against Wall Street Landlords

Following reports early in the year that investors snapped up a record number of homes to rent out in the fourth quarter of 2023, Democrats in the U.S. Senate and House introduced legislation in January that would ban hedge funds from the single-family housing market and require them to sell off all single-family homes they own over a decade. Momentum is now growing at the state level, according to a Wall Street Journal article by Will Parker.

Lawmakers in Ohio, Nebraska, California, New York, Minnesota, and North Carolina have proposed laws aimed at stopping Wall Street investors’ “home-buying spree,” which bill sponsors say are driving up home prices, pushing individual home buyers out of the market, and contributing to low inventory of affordable properties.

Some bills focus on limiting the number of rental-home ownership a company can own, forcing them to divest of any properties over that number — 100 under the North Carolina bill, 50 under the U.S. House and Senate bills and 20 under a Minnesota bill. Other states’ bills, including Ohio’s, would tax investor-landlords on what they consider to be excess properties to such an extent that they would be “compelled to sell,” reports Parker.

While most calls are coming from liberals, Parker writes that an increasing number of conservatives are expressing a need to curb the trend. One Republican Ohio senator described his state’s bill as “antitrust in spirit,” according to the WSJ. And though voters appear to be in favor them, the bills are not gaining traction in legislatures. Critics of such measures argue the culprit is lack of supply and high interest rates, not large single-family rental companies.