U.S. Sen. Jeff Merkley (D-Ore.) and U.S. Rep. Adam Smith (D-Wash.) introduced the Humans Over Private Equity (HOPE) for Homeownership Act, legislation aimed at tackling the housing affordability crisis by kicking hedge funds out of the single-family housing market.

The legislation targets hedge funds that own and control large parts of the housing market, driving up purchase prices for homes.

“Houses should be homes for families, not profit centers for hedge funds,” Merkley said in a release. “The HOPE for Homeownership Act fights back against billionaire corporations controlling the single-family housing market. Let’s kick hedge funds to the curb to restore the dream of homeownership, one of the foundations that working families need to thrive.”

“Too many families are struggling to afford to rent or to buy a home,” Smith added. “Large investors are buying up homes and squeezing out prospective buyers. The HOPE for Homeownership Act will crack down on corporate greed and make housing more affordable for families.”

Large-scale hedge fund investors have taken over the housing market at an alarming rate, the Congressmembers said. In 2011, no single entity owned over 1,000 single-family rental units. In 2022, large institutional investors and hedge funds owned about 700,000, and financial analysts forecast that will grow to 40 percent of all single-family home rentals by 2030.

The HOPE for Homeownership Act aims to kick hedge funds out of America’s single-family housing market by:

• Establishing a new tax penalty of 15 percent of the sale price (or $10,000, if greater) for hedge funds buying additional single-family homes
• Taking away depreciation and mortgage interest tax breaks
• Imposing a new $5,000 per home tax penalty for hedge funds failing to fully sell off their currently owned single-family homes each year over a 10-year period.

In addition to Merkley and Smith, the HOPE for Homeownership Act is cosponsored by U.S. Sens. Ruben Gallego (D-Ariz.), Mark Kelly (D-Ariz.), Angus King (I-Maine), Chris Van Hollen (D-Md.), and Bernie Sanders (I-Vt.), and U.S. Rep. Linda Sánchez (D-Calif.)

“It is outrageous that homes Americans lost to foreclosure during the Great Recession were sold to the Wall Street firms that caused the crisis,” Sanders said. “Meanwhile, in America today, there is not a city, state or town where a full-time minimum wage worker can afford rent. Enough is enough. Wall Street billionaires cannot continue raking in obscene profits by buying up homes across the country and raising rents. That has got to end — this bill would help us do just that.”

The HOPE for Homeownership Act is endorsed by Americans for Financial Reform, Consumer Action, National Housing Resource Center, National Consumer Law Center (on behalf of its low-income clients), National Housing Law Project, and Private Equity Stakeholder Project.