Home ownership costs have skyrocketed in recent years and New Mexico’s Sen. Martin Heinrich knows just who to blame: billionaire private equity investors.
In new legislation announced Tuesday, Heinrich and a handful of other Senate Democrats introduced the Humans Over Private Equity (HOPE) for Homeownership Act to tax and penalize private equity investors who buy up local housing stock, which creates a shortage and raises costs on individual local buyers.
“My message to hedge funds: Get out of the housing market. The American dream of home ownership should be in the hands of New Mexico families, not billionaire investors,” said Heinrich. “I’m proud to push for legislation that will kick hedge funds out of the housing market and help bring down housing costs for working families. Because every New Mexican deserves an affordable place to call home.”
The bill’s sponsors highlighted data showing large-scale hedge fund investors have drastically increased their stake in local home markets over the past 15 years. In 2011, no single entity owned over 1,000 single-family rental units, according to the data. In 2022, large institutional investors and hedge funds owned about 700,000 single-family home rentals, and financial analysts forecast that this ownership footprint will grow to 40% of all single-family home rentals by 2030.
Without available homes to purchase, many would-be homebuyers are forced into the rental market, where rates are inflated because of low inventory. The bill’s sponsors highlight the case of Invitation Homes, the country’s largest landlord of single-family homes. In 2024, the Federal Trade Commission (FTC) fined them $48 million for deceiving renters, charging junk fees and withholding security deposits. Two weeks before paying the fine, the company announced it had purchased 580 single-family homes in Tampa, Denver, and the Carolinas for a total of $216 million to turn into more rentals, sponsors said.
The HOPE for Homeownership Act penalizes and removes incentives for large-scale hoarding of single family homes by taxing new home purchases by large investors 15% of the sale price (or $10,000, if greater), taking away depreciation and mortgage interest tax breaks; and 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.
The HOPE for Homeownership Act is led by U.S. Senator Jeff Merkley (D-Ore.). Alongside Heinrich, the HOPE for Homeownership Act is cosponsored by U.S. Senators Ruben Gallego (D-Ariz.), Mark Kelly (D-Ariz.), Angus King (I-Maine), Chris Van Hollen (D-Md.), and Bernie Sanders (I-Vt.). U.S. Representative Linda Sánchez (D-Calif.) and U.S. Representative Adam Smith (D-Wash.) are leading the House companion legislation.
No Republicans have signed onto the legislation so far.