YOUNGSTOWN, Ohio (WKBN) – Following the nearly three years of a tumultuous housing market, Senator Sherrod Brown, D-Ohio, has joined other colleagues in an attempt to crack down on corporate buys of homes that drive up prices for everyone else.
Brown, who chairs the Senate Banking, Housing, and Urban Affairs Committee, along with Senator Ron Wyden (D-OR), chair of the Senate Finance Committee, and Senators Tina Smith (D-MN), Jeff Merkley (D-OR), Jack Reed (D-RI), John Fetterman (D-PA), Elizabeth Warren (D-MA) and Tammy Baldwin (D-WI) introduced a new bill to restrict tax breaks for big corporate investors that buy up homes.
The Stop Predatory Investing Act would prohibit an investor who acquires 50 or more single-family rental homes from deducting interest or depreciation on those properties.
Right now, two big investors own more than 12,000 homes in just three Ohio markets, and other large investors don’t report how many homes they own, according to information provided by the bill’s sponsors.
The goal of restricting the tax breaks is to free up housing for single-family homebuyers.
“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,” said Brown. “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.”
According to information provided by Brown’s office, 16% of homes purchased in Cleveland, Ohio in 2021 were bought by investors. In one zip code, that number was 70%. In Cincinnati, a single company bought 29 homes on the same street.
Large investors use technology and all-cash offers to outcompete individual buyers. And because investors often target the same types of affordable starter homes as first-time homebuyers, they push families out of the housing market, according to sponsors of the bill.
Key highlights of the Stop Predatory Investing Act include:
- Prohibit an investor who acquires 50 or more single-family rental homes from deducting interest or depreciation on those properties.
- Incentivize big investors to sell single-family rental homes back to homeowners or nonprofits in the community.
- Support affordable rental housing and the construction of new housing supply by allowing owners to continue to take deductions on properties that are financed using Low-Income Housing Tax Credits or that are newly constructed for rental.
- Protect renters who live in existing single-family rental housing by not disallowing deductions for single-family rental homes purchased before enactment.