Lawmakers Want to Crack Down on Institutional Landlords

Investor Scrutiny

Across the country, plenty of residential homes are owned by institutional investors. So instead of renting from an individual, you may be renting from a huge investment manager. Now lawmakers want to crack down on that.

During the pandemic, large institutional investors bought up residential property in droves, incentivized by record-low interest rates at the time.

Policymakers are exploring legislation that would limit the institutional ownership of single-family homes in particular. Why? America is finding itself in the midst of a housing affordability crisis with no immediate end in sight. The institutional buying spree likely exacerbated the ongoing housing shortage in the U.S., which has in turn been driving up prices, making it harder for regular Americans to buy a home. That’s making the fact that Wall Street firms are making money off residential properties even less palatable.

New Rules on the Horizon

Several legislators at the state and federal levels have announced initiatives to curb institutional ownership of homes.

In Ohio, lawmakers are proposing heavy taxation and forced sales by large-scale owners of single-family homes. Other proposals include a hard cap on the number of rentals investors can own.

Institutional homeowners are adamant that they make it possible for people to live in neighborhoods they may otherwise have been priced out of. Others blame the structural undersupply of new homes and obstacles in the way of new construction for the issues in the housing industry, rather than institutional ownership.

Either way, the housing affordability crisis is on the minds of lawmakers and voters.

Read more reporting here.

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