Housing

By: Caroline Nagy

Rising housing costs are a critical driver of the current affordability crisis, and they cannot be addressed without genuinely confronting the role of private equity and big investors buying up the nation’s housing stock.  

The American Homeownership Act, introduced earlier this week by Senator Warren and 17 co-sponsors – does that. The bill would strip private equity and hedge fund landlords of highly profitable tax breaks subsidized by the U.S. taxpayer; fund programs that support housing for people, not corporations; and increase antitrust monitoring of the largest residential real estate acquisitions. 

The American Homeownership Act is sorely needed: today nearly half of U.S. renters are paying higher rents than they can afford and homeownership is out of reach for most young people. People are struggling to save for a downpayment during a cost-of-living crisis, and now they must compete with all-cash purchases from private equity firms and investors, who bought a record three of ten homes last year. 

Turning homes into commodities is worsening the housing crisis. As corporate investors including private equity firms continue to buy up single family homes, multifamily apartment buildings and complexes, and manufactured housing communities, affordable and safe housing is being pushed further out of reach. There are fewer homes available for sale, higher home purchase prices, and rising rental costs. 

Corporate landlords gouge tenants with increased junk fees, skimp on maintenance and upkeep, and have higher eviction rates. Investors also tend to buy more homes in markets or areas with lower housing values, which means they are buying a disproportionate share of what would traditionally be considered starter homes. 

Stopping Wall Street housing abuses like these is one key step to keep affordable and safe housing from being out of reach for too many people.