Hey, What If We Didn't Let Hedge Funds Buy Up All The Houses?

Somebody should write a law! Oh, somebody did!

For more than a decade now — since the 2008 housing crisis — hedge funds have been buying up houses all over the country, often for higher than asking price, in order to turn them into rental properties.

This has led to all sorts of unfortunate outcomes, starting with the fact that they are specifically targeting areas with more affordable housing, driving up the costs of houses and making it more difficult for regular people looking to buy homes for themselves to be able to afford them. Frequently, they buy up single family homes in an area and turn them into multi-unit rentals — and when they do ultimately sell them, they usually just sell them to other hedge funds or private equity firms and not to families looking to buy a home for themselves.

Senator Jeff Merkley of Oregon has introduced legislation barring hedge funds and private equity firms from doing this. The "End Hedge Fund Control of American Homes Act" will require these firms to pay a $20,000 tax penalty for each single family home they own over 100 houses. The bill will provide companies with several years to come into compliance and sell off the homes they've bought, with incentives to sell them to families who will choose to live in them.

As a bonus, those tax penalties will go to assist homebuyers with their down payments.

“Everyone should have a safe, affordable place to call home,” Senator Merkley said in a statement . “In every corner of the country, giant financial corporations are buying up housing and driving up both rents and home prices. They’re pouring fuel on the fire of the affordable housing crisis that so many of our communities are facing, leaving working families behind. The housing in our neighborhoods should be homes for people, not profit centers for Wall Street. It’s time for Congress to put in place commonsense guardrails that ensure all families have a fair chance to buy or rent a home in their community at a price they can afford.”

Like many crappy things in this country, hedge funds bogarting all the houses hurts everyone, but it hurts Black people the most.

Via Jeff Merkley:

Large scale hedge fund investors are accelerating their harmful takeovers in recent years. Data from 2021 show the fastest year over year increase in hedge fund home purchases in 16 years. For example, in 2021, large hedge fund investors bought 42.8 percent of homes for sale in the Atlanta metro area and 38.8 percent of homes in the Phoenix area.

To meet investor’s return expectations, hedge funds and other investors maximize profits by imposing high rent increases, inflating fees, and delaying home maintenance and improvements, which diminishes the quality of housing over time.

A 2018 study of foreclosed homes in Atlanta found that hedge funds and investors were 68 percent more likely than small landlords to file for evictions, even after controlling for property, tenant, and neighborhood characteristics.

A recent House Financial Services Committee report found that predatory hedge fund investors targeted homes in neighborhoods with significantly larger Black populations and approximately 30% more single mothers than the national average, with 12.9% of households headed by single women with children under 18.

That's all pretty evil.

As my uncle once said when a cop found him hiding in the trunk of my father's car and asked him what he was doing in there, "everybody's gotta be somewhere." And, you know, that's just a fact. People need affordable housing, because if people can't afford to live anywhere, they're either going to be in the streets or somewhere declaring squatters rights. It's not sustainable. As much as Americans love the idea that people who have money should be able to do whatever they want with it, nothing happens in a vacuum and it is detrimental to our country and our entire economic system for people to not be able to afford to live anywhere.

Fingers crossed that the bill passes, because this thing is not going to end well.

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