A group of Senate Democrats are targeting institutional investors in single-family rental (SFR) homes.
Reps. Amy Klobuchar, D-Minnesota, and Sherrod Brown, D-Ohio, unveiled legislation on Friday that would require corporations and private equity firms to report large buy orders to federal regulators. household housing for antitrust review.
The legislation – known as the Home Acquisition Review and Transparency (HART) Act – would require landlords with deep pockets to disclose purchases to the government. Federal Trade Commission (Federal Trade Commission) and Ministry of Justice (Department of Justice). According to the lawmakers’ statement, antitrust enforcers can “block anticompetitive transactions that could increase rents, reduce services, and drive homebuyers out of the market.”
“Like many parts of our economy, housing is increasingly concentrated in the hands of large corporations,” Klobuchar said in a statement. “As we have seen in other cases of uncontrolled consolidation, Consumers often end up paying higher prices for fewer choices and my legislation with Senator Brown would ensure that antitrust reporting rules apply to residential properties so that commercial transactions on these properties are no longer in the spotlight.
The SFR industry has been the subject of ridicule by affordable housing advocates since it came under increasing scrutiny following the financial crisis in the late 2000s. At the time, private equity firms were buying large numbers of foreclosed single-family homes at deep discounts. The federal government encourages these purchases in the hope of stabilizing home prices.
black stone Invitation Homes spun off its SFR business into Invitation Homes and went public as a real estate investment trust in 2017. Other large SFR companies include progressive housing, American House 4 for rent and First Key Home.
Critics have long argued that the presence of large landlords in a community causes rents to rise rapidly, displacing residents and driving potential homeowners out of the market by inflating home values.
A recent study comes from Zillo found that since the COVID-19 pandemic began in March 2020, single-family rental prices have increased by nearly 40%. Federal Reserve Bank of Philadelphia It concluded that the presence of SFR companies increases rents on the homes they purchase as well as other SFRs in the community, but found no evidence that they lead to gentrification.
The timing of the release is noteworthy. President Joe Biden’s poor performance in the first presidential debate two weeks ago alarmed congressional Democrats and donors and sparked discussion about whether Biden should be removed from the ticket.
At a high-profile news conference Thursday night, Biden said his goal was to limit rent increases to 5%. He didn’t say how he planned to do that, and it’s not mentioned in the HART bill.
Co-sponsors of the bill include Mazie Hirono (D-Hawaii), Jeff Merkley (D-Ore.), Bernie Sanders (D-Vt.), Tina Smith (D-Minn.) ), Chris Van Hollen (D-Md.).
The bill received support from American Antitrust Institute, National Low Income Housing Coalition, this American Economic Freedom Project, P Street, Accountable.US and Open Markets Institute.
