Chair of the U.S. Senate Committee on Banking, Housing, and Urban Affairs Sherrod Brown (D-OH) led the introduction of the “Stop Predatory Investing Act” on July 11. Co-sponsors for the bill include Senator Ron Wyden (D-OR), Tina Smith (D-MN), Jeff Merkley (D-OR), Jack Reed (D-RI), John Fetterman (D-PA), Elizabeth Warren (D-MA), and Tammy Baldwin (D-WI).
If enacted, the “Stop Predatory Investing Act” would prohibit investors with 50 or more single-family rental homes from deducting interest or depreciation on those properties. Currently, two large investors own more than 12,000 homes in Ohio alone, while other large investors are not transparent about how many homes they own. The bill would restrict the ability of private equity companies and other large investors to take advantage of tax breaks that give them an unfair advantage in the housing market. In addition, the bill offers incentives to big investors to sell single-family rental homes back to homeowners or nonprofits in the community.
The bill aims to address a growing problem in local housing markets: private equity companies and other Wall Street-backed investors buying up single-family homes and renting them out for profit. Often, these firms use technology and all-cash offers to outcompete individual buyers. These practices push home ownership farther out of reach for many families, especially families with lower incomes. Limiting incentives for investment companies to buy up single-family properties and encouraging these firms to sell their housing stock to homeowners or nonprofits will help make homeownership an attainable goal for more people.
“The predatory practices of institutional investors who buy out single-family homes is a rapidly developing issue in affordable housing policy, and one that must be addressed head-on to protect the rights of tenants and help preserve the nation’s supply of affordable housing,” said NLIHC President and CEO Diane Yentel in a press release for the bill. “I applaud Senator Brown for his vision and leadership in introducing the ‘Stop Predatory Investments Act’, which will help ensure investors do not buy up available properties only to raise rents and displace tenants.”
Learn more about the “Stop Predatory Investing Act” here.
Read a press release about the bill here.