Senate Democrats, led by Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon, last week unveiled legislation aimed at curbing corporate ownership of single-family homes and redirecting federal tax benefits toward affordable housing development.
The bill, known as the American Homeownership Act, would eliminate major tax breaks and other federal housing benefits for private equity firms and large corporate landlords that have acquired single-family homes and rental properties.
Lawmakers said the savings from ending these tax breaks would be reinvested to expand affordable housing supply.
The bill would also strengthen the authority of federal antitrust enforcers to address large-scale corporate acquisitions of housing, which Democrats say have constrained supply and driven up prices for families.
“Hedge funds are driving up home prices and rents across America as they gobble up single-family homes,” Merkley said in a statement. “They are a significant factor in killing the dream of homeownership and must be stopped.”
Warren, the ranking member of the Senate Banking, Housing and Urban Affairs Committee, said the legislation is part of a broader response to the nation’s housing affordability crisis.
“Democrats are introducing legislation to stop Wall Street from snapping up homes in bulk and jacking up rent for families,” Warren said. “This bill will take on predatory landlords while making investments to increase housing supply and boost homeownership for Americans.”
The legislation is co-sponsored by Sens. Amy Klobuchar, Tina Smith, Richard Blumenthal, Tammy Duckworth, Dick Durbin, Martin Heinrich, Mazie Hirono, Tim Kaine, Andy Kim, Ed Markey, Chris Murphy, Brian Schatz, Bernie Sanders, Adam Schiff, Chris Van Hollen and Peter Welch.
Endorsers include the National Low Income Housing Coalition, National Housing Law Project, National Community Reinvestment Coalition, Americans for Financial Reform and Private Equity Stakeholder Project, among others.
In separate statements, several senators said the bill would help level the playing field for working families competing with institutional investors that make all-cash offers. Blumenthal said the measure would “end major federal tax deductions and other benefits for Wall Street landlords and reinvest those tax savings to build more housing and lower costs.”
“Owning a home is a key way for Americans to lay down roots, build equity, and establish long-lasting community. But while Americans are struggling with skyrocketing costs of living, high rent prices, and limited housing availability, Wall Street executives are profiting,” Hirono said.
The proposal is part of a larger debate about how to balance the housing market between investors and ordinary Americans. President Donald Trump’s recent signing of an executive order, which aims to restrict large institutional investors from buying single-family homes, also addresses the issue.
The executive order directs federal agencies to issue guidance preventing certain federal programs from approving, insuring, guaranteeing or securitizing sales of single-family homes to institutional investors. It also instructs the Department of the Treasury to review rules and guidance related to large institutional investors acquiring or holding single-family homes.
While many are in support of the bill, others have criticisms. S.T. Karnick, a senior fellow at The Heartland Institute, a conservative and libertarian think tank, suggested that the proposal amounted to government overreach.
“The only way to solve the housing affordability crisis is to increase the supply of housing. Like elements of President Trump’s recent executive order on ‘Stopping Wall Street from Competing with Main Street Homebuyers,’ the congressional proposal would reduce the supply of available housing by decreasing investment in it. That is the opposite of what needs to happen,” Karnick said.
“The bill goes much further than Trump’s order, which itself went far beyond efforts to limit the damage the federal government itself has been doing to the housing market, venturing into antitrust restrictions and other harsh, market-limiting policies,” he added.
