Real estate investors still account for a significant number of single-family home purchases, buying 26% of all homes sold in June 2023, according to a recent report. These numbers have remained fairly unchanged over the past two years, and are causing some lawmakers to call for banning large investors from purchasing homes that could otherwise be a homeowner’s primary residence.
Last month, Arrived, a Jeff Bezos-backed real estate company, announced a new fund aimed at acquiring single-family homes. U.S. Rep. Ro Khanna (D-California) responded to this news in a post on X saying, “The last thing Americans need is a Bezos-backed investment company further consolidating single-family homes and putting homeownership out of reach for more and more people. Housing should be a right, not a speculative commodity. Congress must pass my Stop Wall Street Landlords Act.”
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Since the congressman’s post, the issue has garnered more attention from lawmakers, and a new bill was introduced on Dec 4 — the End Hedge Fund Control of American Homes Act of 2023. Khanna’s Stop Wall Street Landlords Act calls for additional taxes to be placed on institutional investors that buy single-family homes, while the new bill calls for a complete ban on hedge funds from buying homes and forcing them to sell off their current holdings over a 10-year period.
During a recent appearance on Fox Business’s “The Big Money Show,” Kevin O’Leary shared his stance on the proposed legislation.
“Very bad idea. Very bad policy when you try to manipulate markets or sources of capital,” O’Leary said. “I don’t care if they’re Democrats or Republicans, whoever they are, stay out of the markets. Let the markets be the markets.”
O’Leary argues that Wall Street provides a needed funding source for the housing market and offers the lowest cost of capital.
The author of the new bill, U.S. Sen. Jeff Merkley (D-Oregon), argues that institutional investors are driving up home prices and rents.
“The housing in our neighborhoods should be homes for people, not profit centers for Wall Street. Yet, in every corner of the country, giant financial corporations are buying up housing and driving up both rents and home prices,” said Merkley in a press release. “It’s time for Congress to put in place common-sense guardrails that ensure all families have a fair chance to buy or rent a decent home in their community at a price they can afford.”
Other opponents of the bill fear that it would have the opposite effect on home prices and rents. Housing economist Kevin Erdmann told FastCompany that the bill could limit the supply of new homes saying, “If this passes, I cannot fathom a functional source of new housing that could stop the bleeding in American rent inflation.”
Arrived Co-Founder Alejandro Chouza said on X, “I agree homeownership is out of reach for most, which is why we created Arrived — to help anyone own property for as little as $100. Investors on Arrived aren’t billionaires; they’re just folks who want the same security and wealth homeowners enjoy.”
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This article ‘Stay Out Of The Markets’ — Kevin O’Leary Urges Government To Not Get Involved In Housing — Says New Bill That Would Ban Hedge Funds From Buying Homes ‘Is Very, Very Bad And Destructive’ originally appeared on Benzinga.com
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