FTC seeks feedback on the largest single-family rental investors
In
a
5-0
vote,
the
commission
authorized
the
publication
of
a
notice
in
the
Federal
Register
that
will
solicit
comment
on
potential
6(b)
orders.
These
orders
would
target
more
than
30
of
the
largest
investors
in
U.S.
single-family
homes
—
those
that
own
more
than
1,000
SFR
properties
—
and
compel
them
to
report
information
on
their
“corporate
structure,
current
and
historical
housing
information,
rental
and
fee
income,
as
well
as
strategic
business
plans
and
other
investor
information,”
the
FTC
explained
in
an
announcement.
The
FTC
plans
to
use
this
feedback,
which
would
include
the
entities
that
may
qualify
as
mega
investors,
to
compile
a
comprehensive
study.
This
study
would
include
a
list
of
SFR
homes
that
are
matched
to
their
owner.
“As
Americans
face
a
housing
shortage
and
pay
soaring
rents,
it’s
vital
to
understand
the
role
played
by
large
institutional
investors,”
FTC
Chair
Lina
M.
Khan
said
in
a
statement.
“This
proposed
study
would
shed
much-needed
light
on
the
mega-investors
that
have
amassed
huge
portfolios
of
single-family
rental
units
and
potentially
contributed
to
the
housing
challenges
that
Americans
face.”
“The
rise
in
mega
corporate
landlords
has
deeply
troubling
implications
for
renters,”
said
Hannah
Garden-Monheit,
director
of
the
FTC’s
Office
of
Policy
Planning.
“The
FTC
is
committed
to
uncovering
the
scope
of
these
large
corporations’
holdings
and
their
effects
on
housing
costs.”
The
public
has
60
days
to
submit
comments
online
before
the
FTC
reviews
them
and
begins
work
on
any
6(b)
orders.
A
report
issued
in
May
2024
by
the
Government
Accountability
Office
(GAO)
determined
that
institutional
investors
such
as
Blackstone
Group
and
Invitation
Homes
may
have
contributed
to
rising
home
prices
since
2009,
but
it’s
more
difficult
to
assess
whether
they’ve
hindered
homeownership
opportunities.
The
GAO
said
the
studies
it
reviewed
found
no
investors
that
owned
at
least
1,000
SFRs
as
of
late
2011.
By
2015,
however,
these
corporations
collectively
owned
170,000
to
300,000
homes
across
the
country.
CoreLogic
economist
Thomas
Malone
reported
last
month
that
“institutional
investors
aren’t
the
housing
market’s
biggest
players.”
Company
data
for
third-quarter
2024
data
showed
that
homebuying
activity
among
all
investors
grew
by
only
2%
from
the
prior
quarter
and
that
the
vast
majority
of
investors
are
small
landlords
who
own
10
or
fewer
homes.
In
some
of
the
nation’s
largest
metro
areas
—
including
Atlanta,
Los
Angeles,
Las
Vegas
and
St.
Louis
—
the
investor
share
of
home
sales
topped
30%
in
Q3
2024.
But
mega
investors
accounted
for
only
small
portions
of
this
activity.
“All
signs
point
to
investor
share
remaining
around
25%
of
total
sales
for
the
foreseeable
future
as
mortgage
rates
and
home
prices
remain
high,”
Malone
wrote.
HousingWire
Lead
Analyst
Logan
Mohtashami
also
dispelled
ongoing
clams
that
institutional
investors
have
accounted
for
more
than
40%
of
all
U.S.
home
sales.
Data
from
John
Burns
Research
and
Consulting
showed
that
their
market
share
peaked
at
less
than
5%
following
the
COVID-19
and
has
since
fallen
below
2%.
Rising
rents
have
been
targeted
by
some
high-profile
politicians
of
late.
During
her
presidential
campaign,
Kamala
Harris
said
she
planned
to
“take
on
price
gouging
and
bring
down
costs”
by
capping
“unfair
rent
increases,”
among
other
measures.
Around
the
same
time,
President
Joe
Biden
called
on
Congress
to
cap
annual
rent
hikes
at
5%
for
two
years
for
anyone
who
manages
50
or
more
rental
units.
Those
who
failed
to
adhere
to
the
cap
would
have
been
denied
federal
tax
benefits.
Senate
Democrats,
led
by
Amy
Klobuchar
of
Minnesota
and
Sherrod
Brown
of
Ohio,
introduced
the
Housing
Acquisitions
Review
and
Transparency
(HART)
Act
in
July
2024.
The
bill
would
require
bulk
homebuyers
to
disclose
their
purchases
to
the
FTC
and
the
Department
of
Justice
for
review,
potentially
stopping
“anticompetitive
transactions
that
could
increase
rents,
decrease
services,
and
push
homebuyers
out
of
the
market.”
The
HART
Act
did
not
advance
past
the
committee
stage
during
the
previous
congressional
session.
And
the
likelihood
of
any
significant
actions
against
corporate
landlords
appears
lower
as
the
Biden
administration
is
set
to
give
way
to
the
second
Trump
administration
next
week.
Khan
will
be
replaced
at
that
time
as
FTC
chair
by
one
of
the
current
commissioners,
Andrew
Ferguson,
who
does
not
require
Senate
confirmation.