INVESTMENT FIRMS MAKING IT DIFFICULT FOR FIRST TIME HOME BUYERS
Democratic lawmakers are scrutinizing whether the American dream of a suburban home and white picket fence is being seized upon by large institutional investors, costing working people a shot at property ownership.
The House Financial Services Subcommittee on Oversight and Investigations held the virtual panel Tuesday, titled “Where Have All the Houses Gone? Private Equity, Single Family Rentals, and America’s Neighborhoods,” to probe the impacts of firms engaging in what Rep. Al Green, the subcommittee’s chair, dubbed “mass predatory purchasing.”
Shad Bogany, a real estate agent and advocate who testified before the committee, also said that institutional investors are “creating a generation of renters that will miss out on the benefits of homeownership, the ability to create wealth and stabilize communities.”
“Congress, we need you to act,” Bogany said.
Corporate ownership of single-family rental homes — which comprise about a third of the nation’s rental housing stock — has risen significantly since the 2008 financial crisis, when firms swooped in to purchase foreclosed properties, according to a committee memorandum. And the third quarter of 2021 marked the fastest annual increase in corporate ownership in 16 years, the memorandum said. What’s more, as the housing market grew hotter, and prices skewed higher, the investors had the advantage of being able to purchase homes with cash, trumping first-time and lower-income buyers.
‘After an extensive investigation into this practice, we have found that private equity companies have bought up hundreds of thousands of single-family homes and placed them on the rental market.’
In the Atlanta metro area, 42.8% of for-sale homes went to institutional investors in the third quarter of 2021, while investors purchased 38.8% of homes in the Phoenix-Glendale-Scottsdale area during the same period, the committee’s memorandum said.
“After an extensive investigation into this practice, we have found that private equity companies have bought up hundreds of thousands of single-family homes and placed them on the rental market,” Green, a Democratic congressman from Georgia, said during the hearing Tuesday.
“This removes from the housing market homes that might otherwise have been purchased by individual homeowners,” he added. “These corporate buyers have tended to target lower-priced starter homes requiring limited renovation; these homes would likely have been bought by first-time buyers, low- to middle-income home-buyers, or both.”
The homes, Green said, are often located in communities with higher-than-average populations of people of color. For example, the average population of five large investors’ top 20 ZIP codes is about 40% Black, although Black people comprise just 13.4% of the overall population in the U.S. according to to survey data from Invitation Homes, INVH, +0.64% American Homes 4 Rent AMH, +0.42%, FirstKey Homes, Progress Residential, and Amherst Residential, as well as an analysis of government data, according to the committee’s memorandum.
The average population of five large investors’ top 20 ZIP codes is about 40% Black, although Black people comprise just 13.4% of the overall population in the U.S.
Republicans, however, said during the hearing that the Biden administration was to blame for rising prices and accused Democrats of scapegoating Wall Street while attempting to distract people from the worst inflation in decades.
AFFIDAVIT OF SURVIVORSHIP affidavit of title BUYERS commercial real estate COMMON LAW MARRIAGE COVID AND EVICITION DEATH AND REAL ESTATE Deed estate planning estate planning real estate trends FSBO future of commercial real estate Future of real estate home buying Home seller home selling inheritance KC real estate LANDLORD Landlords land use midwest real estate PROBATE Property Management real estate closing real estate contracts real estate deeds Real estate deed work real estate ethics real estate finance Real estate financing real estate investing real estate lawyer real estate management real estate market real estate markets real estate planning real estate transactions real estate trends seller financing SELLERS SURVIVORSHIP AFFIDAVIT TENANTS IN COMMON TRANSFER ON DEATH DEED wholesale real estate
- Accredited Investor Verification Letter
- Areas of Practice
- Brokerage Services
- Buy Real Estate Form Templates
- Flat Fee Legal Protection for Buyers and Sellers of Real Estate
- FSBO Lawyer in Kansas City
- FSBO-OWNER FINANCING
- General Disputes
- Glossary of Terms
- Investor List
- Investor Services
- Kansas City Real Estate Lawyer in Missouri – Book same-day, online document reviews for transfer of beneficiary & quit claim deeds, marital waivers, commercial & residential contracts, Investments & more.
- Kansas Legal Resources
- Kansas Resources
- Legal Services
- LIFE ESTATE DEED
- Missouri Legal Resources
- MISSOURI REAL ESTATE TAX ASSESSMENT APPEALS
- Missouri Resources
- MLS Commission Rates
- My Account
- My account
- My Cabinet
- Our Firm
- Real Estate Tax Sales Overages in Missouri
- Same Day Production
- Seller Agent
- Seller Financed Instruments
- Short Sale
- THE SANDWICH GENERATION
- Title Insurance
- WHAT IS AN EASEMENT?
- What Makes Us Different
- Who we Represent
- ASSISTANCE/SERVICE ANIMAL AS AN EXCEPTION TO LANDLORD PET POLICY BASED ON FAIR HOUSING ACT
- KANSAS REAL ESTATE TAX APPEAL
- KANSAS TAX FORECLOSURE AUCTIONS
- TAX SALES AND TAX OVERAGES IN MISSOURI
- REAL ESTATE TAX ASSESSMENT APPEALS IN MISSOURI