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A Mass Eviction Mandate?
Via Kevin Erdmann, several Democratic and Independent U.S. senators have introduced a viciously NIMBY bill:
The “Humans over Private Equity for Homeownership Act” is [would require] firms that own more than 50 single-family rental properties to divest their properties [over 10 years]. [Sen. Jeff] Merkley [D-OR] claims that this would affect about 700,000 homes today and 40% of all single-family rentals by 2030.
Erdmann says that the bill calls for 700,000 families to be evicted [Edited]. Many – perhaps most – would see their homes sold at firesale prices (in a flooded market) to smaller investors. You can call them “mom and pop landlords” or “slumlords” depending on your mood affiliation. Would that lower rent, improve management quality, or make housing more stable?
And – with firesale prices enabling an expansion of homeownership, short-term rentals, flips, and other alternatives – many of the 700,000 renting families would, indeed, lose their housing. Some of them might rise to homeownership – but it’s still a forced move (of another family) unless they happen to buy the home they currently live in.
Apartment renters would likely suffer from higher rents as those displaced compete for the remaining rentals. Merkley and co seem unperturbed by corporate ownership of multifamily rental property.
Erdmann goes on at length, so I need not. But the utter thoughtlessness of the bill is astounding.
According to the bill summary, the corporate owners would be required to sell the homes to homeowners.
If I were a Wall Street firm facing this mandate, I’d quickly sell to small landlords before the mandate kicked in. That could either be accomplished temporally (i.e. selling before the law takes effect) or in quantity (by selling the required 10% to homeowners and then selling a lot more homes to investors).