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Take Wall Street Out. What does new legislation proposal mean for buyers
Dated: January 19 2024
In a bold move to address housing market challenges, Democrats in Congress have introduced two key bills seeking to limit the impact of hedge funds and corporate entities on the single-family housing sector. The "End Hedge Fund Control of American Homes Act of 2023" and the "American Neighborhoods Protection Act" are positioned as transformative measures with the potential to rebalance the current housing landscape.
The proposed legislation puts forward a ban on hedge funds from purchasing and owning single-family homes in the United States. Defined as corporations, partnerships, or real estate investment trusts managing funds pooled from investors, hedge funds would be required to divest all single-family homes over a 10-year period. During this transitional phase, the bills suggest imposing significant tax penalties, with the generated proceeds reserved for down-payment assistance to facilitate individual buyers' access to homes currently owned by corporations.
These legislative efforts come in response to a notable trend where corporate-backed investments, particularly from hedge funds and institutional investors, have increasingly dominated the single-family housing market. The bills aim to disrupt this growing sector, thereby potentially increasing the supply of single-family homes available to individual buyers. This strategic move seeks to alleviate challenges associated with surging home prices and interest rates, making homeownership an increasingly elusive goal for many Americans.
Senator Jeff Merkley of Oregon, a co-sponsor of the bill, emphasized the need to address the impact of corporate-backed investment on housing affordability for everyday Americans. The legislation is a direct response to instances where corporations focus on acquiring moderately priced homes, thereby limiting access to the rest of the population. The bills aim to counter this trend, promoting fair access to housing opportunities.
An additional legislative proposal, the "American Neighborhoods Protection Act," introduces an annual fee for corporate owners possessing more than 75 single-family homes. This fee would contribute to a housing trust fund designed to offer down-payment assistance for families seeking to enter the housing market.
While these bills face challenges in passing into law due to a divided Congress, they symbolize a significant step toward initiating a national conversation about the influence of hedge funds and corporate entities on the housing market. As the struggle for homeownership intensifies, these legislative efforts underscore the importance of balancing the interests of individual buyers against corporate dominance in the current real estate landscape.
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In a bold move to address housing market challenges, Democrats in Congress have introduced two key bills seeking to limit the impact of hedge funds and corporate entities on the single-family