End Hedge Fund Control of American Homes Act of 2023

[jtr1962]

It's about time:

Representative Smith and Senator Merkley Lead Bicameral Action to Ban Hedge Fund Ownership of Residential Housing

adamsmith.house.gov

"The housing in our neighborhoods should be homes for people, not profit centers for Wall Street. Yet, in every corner of the country, giant financial corporations are buying up housing and driving up both rents and home prices," said Senator Merkley. "It's time for Congress to put in place commonsense guardrails that ensure all families have a fair chance to buy or rent a decent home in their community at a price they can afford."

I hope this bill passes. High housing costs are among the biggest problems average people face. There's zero reason for institutional investors to own residential housing. Last I heard they were even buying up trailer parks, which are last bastion of affordability in many places.

Yes, we also need to add more supply, but there's no point doing that if institutional investors end up owning that additional supply also.

In my opinion the bill should also have prohibited rentals of single family homes, regardless of ownership, but it's a great start nonetheless. Many noninstitutional investors have loaded up on SFHs for the purpose of renting them out but that can be addressed later, perhaps on a state level instead of a federal one.

 

[bykfixer]

The housing market in America is ridiculous anymore. There's plenty of blame to spread around.
Way back around 1990 I had an opportunity to buy my grand mother's nicely kept, modernized rancher from my dad but I had to sell my old house to do it. I hired a real estate agent to sell it. I'd only lived in it a few years and paid $42k. She wanted to sell it for $72k.

Figuring $60k was too much I asked "why $72k?" She said a mile away was a similar home that had just sold for that. I replied "that is a 3 year old house with modern amenities, this one was built in 1921 and has a window unit ac and a clothes dryer in the kitchen". She put it on the market for $72k and while she was planting the for sale sign a person offered her cash on the spot.

Now, I'd fixed the place up with nice landsscaping and some other improvements, yet it was still an old house that needed a lot of work. The person kept the house 6 months and sold it for $85k.

According to the market that house is currently worth $225k. Uh, no it's not. It's still worth $60k in my view, maybe less now because it's a dump anymore. Yet the so-called market dictates it's not and the local government sure don't mind asessing it at $200k because they get revenue in the form of taxes each year.

My pop said he used to pay $72/month for mortgage, taxes and insurance when he had his house built in 1953. That was a lot of money back then. Just the taxes are $125/month now. Meanwhile rental houses nearby are going for as much as $3000/month. No wonder the younger generation thinks socialism is a good thing. They're stuck sitting on the sidelines watching the "grown ups" getting fat cat revenues and ruining any chance at the American dream they once had.

 

[raggie33]

I just wish food cost wasn't crazy omg wth

 

[jtr1962]

According to the market that house is currently worth $225k. Uh, no it's not. It's still worth $60k in my view, maybe less now because it's a dump anymore. Yet the so-called market dictates it's not and the local government sure don't mind asessing it at $200k because they get revenue in the form of taxes each year.

I feel the same about the house I'm in now. My parents paid $52K for it in 1978. When I put that in a CPI calculator that's equivalent to $245K now. At best that's what the house should be worth. We made no major improvements beyond new windows. Window A/Cs, one bathroom, three bedrooms, 850 square feet. The market says the house is worth upwards of $850K. Ridiculous.

My pop said he used to pay $72/month for mortgage, taxes and insurance when he had his house built in 1953. That was a lot of money back then. Just the taxes are $125/month now. Meanwhile rental houses nearby are going for as much as $3000/month. No wonder the younger generation thinks socialism is a good thing. They're stuck sitting on the sidelines watching the "grown ups" getting fat cat revenues and ruining any chance at the American dream they once had.

Interestingly, the entire country is now experiencing the same issues which only the coasts did 30 years ago. You were able to buy a home in your 20s. In NYC even rents back then were like $600 to $800 a month, way beyond what I could afford on what I was making, never mind buying a house. Now with $3,000 rents where you are, this problem is everywhere. You correct what were unaffordable rents for me in the 1980s to today's dollars, you come up with $1,500 to $2,000 a month. And yet rents are way beyond that in most places. And people wonder why lots of adult children are still with their parents into their 30s, even 40s. That was actually pretty common in NYC even 30 years ago on account housing costs. Now it's spread everywhere.

 

[bykfixer]

There's a conspiracy to destroy the middle class in America that is unfortunately working all too well.

Again, lots of blame to pass around. In my industry we can't keep youngsters because they require more than we pay for starting out due to the cost of living starting out. It's strange how it works though. One group of college educated youngsters in a segment of the business work for half of what my segment pays yet they stay year after year. They sit in a comfy cubicle typing all day for 8 hours a day. My role involves being outdoors and often involves 10 hours a day for twice the pay but we can't keep anybody more than a year, if that. So some of the blame is on the youngsters themselves.

In the one segment those folks think it's normal to share an apartment with 2 or 3 others, where in my segment they clamor for their own home, a wife (or husband), a picket fence and some grass to keep cut.

I also noticed the other day that some living nearby take an uber to and from the office. They don't ride a bicycle or e-bike. There's a giant parking lot with nowhere to stash a bicycle. I wanted to take a bicycle to work so when I dropped off the work truck at a nearby repair shop I wouldn't need somebody to pick me up and carry me back, yet there's nowhere to store my bicycle. Not even a pole to chain it to. I used a skateboard instead. Man, I got all kinds of stink eye about bringing a skateboard into the office. "What's that fat old guy doing with a skateboard?" lol

 

[bykfixer]

 

[TPA]

The scary part is that there's some collusion going on out there. Brand new "starter home" developments are being bought up by hedge funds and private capital groups before the first residents arrive. What were going to be starter homes are now (and forever will be) corporately-owned rentals.

With 10 million more people crossing the border, all of them also will be putting pressure on the housing supply as well...but they have the benefit of using YOUR tax dollars for their housing, while you're left paying for them and your family.