Tennesseans may have a better chance at homeownership as a new bill seeks to limit how many homes big corporations can purchase.
Sen Charlane Oliver (D-Nashville) and Rep. Aftyn Behn (D-Nashville) have introduced the “Homes Not Hedge Funds Act” to tackle the influence of out-of-state investors and real estate corporations on the housing market.
Under the bill, corporate investors would not be able to purchase more than 100-single family homes in counties with more than 150,000 people for rental purposes. According to lawmakers, these areas are affected the most by “corporate real estate speculation.”
“When corporate landlords control too much of our housing stock, working-class families lose out,” Behn said in a statement. “This bill sets a clear boundary to keep communities stable and homeownership attainable.”
Oliver added that families are not able to attain homeownership because investors are “buying up entire neighborhoods and turning them into rental properties.” The bill acknowledges this and notes that these corporations lower home supply, thus driving up the costs for potential buyers.
“Owning a home is one of the most reliable ways to build wealth, and this bill ensures that more working families have a fair shot at the American Dream,” Oliver said.
According to the Tennessee Housing Development Agency, the state’s Housing Cost Index is at a 10 year high. Officials said this has resulted in the median purchase price doubling.
“Families now spend an average of 45.5 percent of their household income on stable housing,” they added.
A report from the United Way found that 44 percent of households in the state cannot afford basic necessities, with 13 percent earning below the Federal Poverty Level (FPL). Out of 362,643 households in Shelby County, 15 percent were below the FPL and 30 percent were deemed Asset Limited, Income Constrained Employed (ALICE.)
The United Way’s “United for ALICE” organization defines this group as people who “earn more than the FPL, but not enough to afford the basics where they live.”
The bill is scheduled to be heard in the Senate State and Local Government Committee on March 18.
