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Van Hollen, Merkley, Smith Launch Renewed Effort to Kick Hedge Funds Out of America’s Housing Market

Today, U.S. Senator Chris Van Hollen (D-Md.) joined Senator Jeff Merkley (D-Ore.) and U.S. Representative Adam Smith (D-WA-09) to introduce strengthened legislation to put an end to the harmful practice of hedge funds buying up single-family homes. The Humans Over Private Equity (HOPE) for Homeownership Act continues their efforts to tackle America’s housing affordability crisis by going after hedge funds that own and control large parts of our housing market, driving up both rents and purchase prices for single-family homes.

“Hedge funds are buying up larger and larger shares of single-family homes – hoarding the housing supply to turn huge profits for their rich investors and crowding out hardworking families from the market. This legislation ends the warped incentives that are enabling deep-pocketed hedge funds and private equity firms to dominate the housing market, while leveling the playing field so more everyday Americans can achieve their goal of homeownership and build wealth,” said Senator Van Hollen.

“Houses should be homes for families, not profit centers for hedge funds,” said Senator Merkley. “The HOPE for Homeownership Act fights back against billionaire corporations controlling the single-family housing market. Let’s kick hedge funds to the curb to restore the dream of homeownership, one of the foundations that working families need to thrive.”

"Too many families are struggling to afford to rent or to buy a home," said Rep. Smith. "Large investors are buying up homes and squeezing out prospective buyers. The HOPE for Homeownership Act will crack down on corporate greed and make housing more affordable for families."

Large-scale hedge fund investors are taking over the housing market at an alarming, accelerating rate. In 2011, no single entity owned over 1,000 single-family rental units. In 2022, large institutional investors and hedge funds owned about 700,000 single-family home rentals, and financial analysts forecast that this ownership footprint will grow to 40% of all single-family home rentals by 2030.

The HOPE for Homeownership Act aims to kick hedge funds out of America’s single-family housing market by:

  • Establishing a new tax penalty of 15% of the sale price (or $10,000, if greater) for hedge funds buying additional single-family homes;
  • Taking away depreciation and mortgage interest tax breaks; and
  • Imposing a new $5,000 per home tax penalty for hedge funds failing to fully sell off their currently owned single-family homes each year over a 10-year period.

In addition to Van Hollen, Merkley and Smith, the HOPE for Homeownership Act is cosponsored by U.S. Senators Ruben Gallego (D-Ariz.), Mark Kelly (D-Ariz.), Angus King (I-Maine), and Bernie Sanders (I-Vt.) and U.S. Representative Linda Sánchez (D-CA-38).

“Arizona families shouldn’t be forced to compete with massive Wall Street firms when trying to buy a home,” said Senator Gallego. “I’m proud to back the HOPE for Homeownership Act to level the playing field for hardworking Arizonans."

“Rents are too high, and for many Arizona families the dream of owning a home feels out of reach. A big part of the problem is hedge funds buying up houses and driving up prices,” said Senator Kelly. “We’re putting a stop to Wall Street’s control of the single-family housing market so more working families can afford a place of their own.” 

“Family homes should not be used as a profit center for private companies and investors to get richer, making the American dream of home ownership more difficult,” said Senator King. “Currently, hedge funds are able to purchase single family homes in bulk with no restriction as part of their investment strategy. The Humans Over Private Equity (HOPE) for Homeownership Act would establish sensible restrictions that level the playing field for potential buyers. This legislation is a commonsense step toward putting American families ahead of large-scale, profit-seeking investors.”

“It is outrageous that homes Americans lost to foreclosure during the Great Recession were sold to the Wall Street firms that caused the crisis. Meanwhile, in America today, there is not a city, state or town where a full-time minimum wage worker can afford rent. Enough is enough. Wall Street billionaires cannot continue raking in obscene profits by buying up homes across the country and raising rents. That has got to end — this bill would help us do just that,” said Senator Sanders.

“Homeownership for working families today feels more like a fever dream than the American Dream,” said Rep. Sánchez. “Greedy corporations are buying up residential properties, especially in neighborhoods like mine in Southern California, pushing affordable options out of reach for first-time buyers and driving up home and rent prices. That’s why I’m proud to cosponsor the HOPE for Homeownership Act, which will lower housing costs and give working families a fair shot at owning a home.”

The HOPE for Homeownership Act is endorsed by Americans for Financial Reform, Consumer Action, National Housing Resource Center, National Consumer Law Center (on behalf of its low-income clients), National Housing Law Project, and Private Equity Stakeholder Project.

"Our housing market needs to work for U.S. families, not hedge funds. Unfortunately, private equity firms and other corporate landlords, flush with cash, have unfair advantages over first-time homebuyers who are struggling with sky-high home purchase prices and high interest rates. The HOPE for Homeownership Act will keep corporate landlords from gobbling up even more of our housing stock while giving a leg up to people who actually want to live in the homes they buy," said Caroline Nagy, Associate Director for Housing at Americans for Financial Reform.

"With penalties for predatory hedge funds, the HOPE for Homeownership Act provides hope to homebuyers that the housing market will no longer be overrun by hedge funds devouring consumers’ chances of homeownership," said Ruth Susswein, Director of Consumer Protection at Consumer Action.

Full text of the HOPE for Homeownership Act can be found by clicking here.

A bill summary can be found by clicking here.