The Business Review December 2022

and approximately 30% more single mothers than the national average, with 12.9% of households headed by single women with children under 18. In order to meet Americans’ housing needs and root out systemic inequities in the housing market, the End Hedge Fund Control of American Homes Act bans hedge funds and private equity investors from owning large numbers of homes by establishing a $20,000 federal tax penalty for each single family home owned by a single company and its affiliates over 100 homes. The bill allows companies with large portfolios to sell homes over several years to come into compliance so there’s an orderly exit, and includes incentives to make sure buyers of divested homes are ordinary people who will live in the home. The tax penalties collected will be used to provide down payment assistance to homebuyers. “We support Senator Merkley’s proposal to address the impact of large investors in the housing market. Often, these firms concentrate their purchases in communities of color, limiting first-time homebuyer opportunities to families that already face discrimination in the marketplace. The transfer of the tax revenues to downpayment assistance programs further enhances the value of this bill,” said Doug Ryan Vice President, Policy & Applied Research, Prosperity Now. “In addition to helping curb the consolidation of single family homeownership by Wall Street firms, this legislation would go a long way in helping prospective first time homeowners by providing the means for down payment assistance. Additionally, limiting concentration in rental housing will likely result in lower rent increases for tenants, which is crucial in this time of great economic uncertainty,”

said Chris Noble, Esq., Senior Policy Coordinator for the Private Equity Stakeholder Project. “Everyone deserves a safe, stable, and affordable place to call home. Private equity firms, however, have instead devised a business model that prioritizes profits over people, regardless of the economic consequences that fall on our communities. The presence of private equity firms engaging in the housing market is one of the most concerning threats to financial stability among Oregonian families, especially for renters, prospective homebuyers, and Oregonians living on low or fixed incomes. This bold piece of legislation will help change the tide of our national housing market and will protect families from predatory investment practices that contribute to our ongoing housing and affordability crises here in Oregon and in other communities across the country,” said Loren Naldoza, Legislative & Communications Manager with Neighborhood Partnerships. Senator Merkley has kept a steady drumbeat on the need for federal action to meet the Americans’ housing needs and to root out systemic inequities in the housing market. That work has included urging the Federal Financial Institutions Examination Council to work with the housing appraisal industry to address disparities in home valuations for communities of color; and pushing Senate leaders to deliver critical housing assistance to Oregonians struggling to find shelter in the wake of last year’s catastrophic wildfires. Final bill text can be found here. A bill summary can be found here. n

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December 2022 | The Business Review

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