New Policies Could Limit Corporate Control Over the Housing Market and Keep More Americans in Their Homes
It’s no coincidence that in the United States, the startling rise of the mega landlord coincides with the silent death of the middle class.
Once vital, life-sustaining resources like housing become a corporate enterprise, any semblance of a financially balanced society is sure to dissipate. For this reason, policies like the Stop Predatory Investing Act, which restricts corporate landlords from taking too much stock out of the housing market, are vital to preventing future homelessness.
Have You Wondered Why the Rent is Too High? Corporate Landlords Play a Huge Role in This.
The housing crisis in America has reached a fever pitch, causing millions of people to fall into homelessness each year. To give the situation some perspective, more Americans are rent-burdened than ever before in the history of the US housing market. This means that more than half of all US-based renters are shelling out at least 30% of their income toward rent and utilities, and in most cases, they’re spending a whole lot more.
One of the lesser-reported issues driving would-be homebuyers and renters into the current state of financial hardship and destitution is the recent rise of mega landlords.
Who are these mega landlords anyway? And more importantly, what do they want with us?
Corporate landlords are often private investment groups that own vast portfolios of housing stock, contributing to the overall lack of supply. They represent hedge funds and private equity firms.
According to Forbes, even Wall Street is getting in on the gig lately. These major corporations have figured out how to manipulate the housing market by artificially inflating prices. This puts additional housing into their hands and additional billions into their pockets. The six largest real estate investment firms racked up a whopping $4.3 billion in net income in 2022 alone. That profit comes at a horrifying price: more homelessness and less affordable housing in our communities.
It might seem as if all the mega landlords want is our money – which is kind of true – but in order to get our money, they first have to buy up all of our homes. Enter the Stop Predatory Investing Act, a bill designed to stop them at the front door.
At A Glance: How Sherrod Brown’s Stop Predatory Investing Act Aims to Stifle Corporate Greed
According to Ohio Senator Sherrod Brown, who authored the proposal, the bill “will help prevent corporate landlords from driving up local housing prices, and put power back in the hands of working families, who need a safe, affordable place to live and raise their children.”
How exactly might the bill curb corporate landlords? Theoretically, it would achieve this goal through a series of tax policies that prioritize purchaser and renter needs over the desires of investors. Proposed actions include
- Eliminating the ability for private investors with a surplus of more than 50 rental homes to deduct interest or depreciation except on homes purchased prior to enactment
- Allowing private investors to deduct interest or depreciation if they agree to sell the homes back to the community, creating a financial incentive to do so
- Allowing private investors to take deductions on properties using Low-Income Housing Tax Credits which financially incentivizes the construction of more affordable housing
Endorsements, Incentives, and Support
Predatory investing, as it exists today, is a growing issue, particularly across the digital landscape. Right now, nothing prohibits private investment firms and Wall Street-backed entities from using their big bank tax breaks to squeeze the working class out of the housing market. They are currently outbidding potential homebuyers and then artificially inflating rental costs manually and through artificial intelligence.
As technology advances, predatory investing can snowball into something almost unstoppable and unrecognizable if new legislation is not immediately introduced.
In an exclusive interview with Invisible People, The National Low Income Housing Coalition’s Senior Vice President of Public Policy and Field Organizing, Sarah Saadian, explained that the Harris Administration endorsed the bill, meaning it will have a leg up next year when Congress is negotiating a tax package. The NLIHC and several other not-for-profit organizations have also offered their endorsements at the legislative table.
“We endorsed the bill because what we’ve seen is that institutional investors are purchasing homes and then quickly raising rents or engaging in abusive and predatory practices against renters, which leads to more housing instability,” Saadian explained. “We think it’s really helpful to have a bill like this that would prevent institutional investors from taking advantage of renters for their profit.”
Tell Your Representatives to Take Action Against Predatory Investing Today
Legislation protecting the ever-shrinking supply of affordable housing is critical in preventing more homelessness. If we were to get the housing market under control, we could allocate our resources toward reducing current homelessness rather than needing to use that funding to address new cases of homelessness that continue to occur and increase.
Talk to your legislators about supporting the Stop Predatory Investing Act today.
