Senate Democrats take aim at investor home purchases
Democratic lawmakers introduced a bill Tuesday aimed at curtailing investor activity in the housing market that can drive up home prices.
The Stop Predatory Investing Act, introduced by Sens. Sherrod Brown (D-Ohio), Ron Wyden (D-Ore.) and others, would restrict investors who purchase 50 or more single-family rentals from deducting interest or depreciation on those properties from their taxes.
“In too many communities in Ohio, big investors funded by Wall Street buy up homes that could have gone to first-time homebuyers, then jack up rent, neglect repairs, and threaten families with eviction,” Brown said in a statement.
“Our 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,” he added.
The bill would also offer incentives to investors to sell single-family rentals back to homeowners or community nonprofits and help bolster housing supply by allowing owners to continue receiving tax deductions on homes financed using low-income tax credits.
Investors’ share of the housing market dropped by a record amount in the first quarter of the year, accounting for just 18 percent of purchases, data from real estate brokerage Redfin shows.
Despite their declining share, investor presence in the market can still create challenges for buyers, especially for those looking for starter homes, Redfin senior economist Sheharyar Bokhari said in May.
“Investors have gravitated toward more affordable properties due to still-high housing costs and rising mortgage rates, which has left first-time homebuyers with fewer starter homes to choose from,” Bokhari added.
The Redfin data showed that investors purchased $27.5 billion worth of homes in the metros the company tracked in the first quarter, and more than 41 percent of homes they purchased were starter homes.
Redfin noted the data could also include purchases made through a family trust for personal use.
Source: The Hill
