Texas bill would limit corporate ownership of rental homes to 10

Texas lawmakers are proposing a bill that would limit corporate ownership of single-family housing.

If Senate Bill 443 were to pass, corporations would be limited to owning 10 single-family homes in the state.

What's in the Bill?

What we know:

The bill would create a study that would look into homeownership in the state by corporations. Specifically, the number of single-family homes owned by those corporations for use as rental properties.

The study would look to determine the impact of corporate ownership on housing prices and look for any advantage corporations might have over individual buyers.

The state would maintain a database of corporate owners that would be available to the public and updated monthly.

The second part of the bill would limit the number of single-family homes that can be held by a corporation to 10.

Corporate owners could possibly be fined $100,000 per unit over 10.

Senate Confirmation Hearings

Why you should care:

The issue of corporate ownership, specifically in Texas, was brought up during a U.S. Senate confirmation hearing Thursday.

Scott Turner, Donald Trump's pick to lead the Department of Housing and Urban Development, was asked by Sen. Elizabeth Warren (D-Mass.) about the percentage of corporate ownership in Texas.

Turner is a former Texas state representative and served as the director of the Opportunity and Revitalization Council during Trump's first term. 

"In 2011, no investor anywhere in America owned more than 1,000 single-family homes. By 2022, just five investors collectively owned 300,000 homes," Warren said. "In fact, in your home state of Texas in 2021, big investors moved in, and they bought a whopping 28% of all homes that went on the market."

Turner agreed with Warren.

"I do believe we have a housing affordability crisis," Turner said.

Turner went on to say that he would work with the Senate to find solutions to the housing problems in America.

Housing Ownership Bill Vetoed

In May 2023, the Texas legislature passed Senate Bill 1979

The bill would have commissioned the Texas A&M University Texas Real Estate Research Center to conduct a study and build a database that looks at the impact of corporate ownership of single-family housing.

The bill did not impose limits on the number of homes that could be owned.

Gov. Greg Abbott vetoed the bill when it reached his desk in June of that year.

"While Senate Bill No. 1979 is important, it is simply not as important as cutting property taxes," Abbott's veto stated. "At this time, the legislature must concentrate on delivering property tax cuts to Texans. This bill can be reconsidered at a future special session only after property tax relief is passed."

Less than a year later, Abbott called on lawmakers to look into the effects of corporate buying on Texas homebuyers.

"I strongly support free markets," Abbott said in a March 2024 post on social media platform, X. "But this corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home. This must be added to the legislative agenda to protect Texas families."

A bill that would just establish the report was filed in the House of Representatives.

Either of the filed bills would need to go through committee before being heard on the legislative floor.

The Source: Information in this article comes from the Senate confirmation hearing and bills filed in the Texas legislature.

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