In the past few years, there has been an influx of institutional investors buying properties across the US and converting them to rentals. With its impact to the housing market, some states are now proposing actions and ordinances that promote homeownership.
The National Association of Homebuilders reported that the rate of single-family homes that were built to be rented out increased by 16% last year.
Some state and local officials are now pushing to slow this trend by making it harder for investors to convert their properties to rentals. As reported by Route Fifty:
Officials in the Atlanta suburb of College Park, where 75% of its approximately 14,000 residents are renters, turned away one developer who requested permits for a build-to-rent subdivision of new single-family homes that would never be offered for sale.
Atlanta Mayor Andre Dickens has said he wants the city, where the median home price rose 14% over the past year to $426,000, to place limits on how much real estate institutional investors may purchase.
Some local governments are considering ordinances that would cap the number of rentals in any community or restrict investors from competing with local homebuyers for homes.
Some homeowner associations are stopping investors from buying in bulk in their communities by adopting bylaws that ban or cap the number of rentals or require new homeowners to wait one to two years before allowing them to rent out their property.
In Ohio, a state senator introduced a bill to impose a 45-day waiting period once a private investment firm offers the highest bid on a rental property in foreclosure. During that time, the tenants, if they can match the bid and agree to live in the home for one year, may buy the property. Also during that window, another buyer—an individual who promises to live there for a year and offers more than the winning bid, or a nonprofit affordable housing group—may buy it. Failing those offers, the investor would be allowed to purchase the home.
