Bill Overview
Title: Stop Wall Street Landlords Act of 2022
Description: This bill denies certain tax and other benefits to large investors whose assets exceed $100 million in a taxable year for investment in single-family housing (i.e., real property including at least one dwelling unit and not more than four units). It denies such investors a tax deduction for interest paid on a single-family home mortgage, for insuring such homes, and for the depreciation of such homes. The bill imposes an excise tax on the sale or transfer of a single-family home by a large investor equal to the price of such home. It allows a tax credit for home sellers equal to the lesser of either the excess of reasonable development costs paid over the sale price, or 35% of the lesser of eligible development costs paid by the taxpayer, or 80% of the national median sale price for homes. The bill prohibits large investors from obtaining certain federal mortgage assistance.
Sponsors: Rep. Khanna, Ro [D-CA-17]
Target Audience
Population: People residing in single-family homes in the United States
Estimated Size: 150000000
- Large corporate investors with over $100 million in assets are directly targeted by the bill, as it introduces tax penalties and removes certain tax benefits.
- The bill directly influences the real estate strategies of large investment entities that focus on single-family homes, potentially reducing their investments.
- By making such investments less attractive, the bill may indirectly benefit individual homebuyers by reducing competition for single-family homes from large investment firms.
- The single-family housing market may see shifts in pricing and availability, thereby impacting current homeowners, potential homebuyers, and renters.
Reasoning
- The policy aims at limiting the involvement of large corporate investors in the single-family home market, potentially making homes more accessible to individual buyers, who might otherwise struggle against corporate competition.
- Homeowners and renters could experience the effects differently. Those hoping to buy might benefit from reduced competition, while current homeowners might see a fluctuation in property value based on changing market dynamics.
- The policy does not directly allocate funds to individuals but aims to alter market conditions in favor of smaller actors (i.e., individual buyers).
- The initial budget limitation restricts the scale at which the policy can influence the market in its early years, meaning only a fraction of the suggested population might see immediate effects.
Simulated Interviews
Software Developer (Austin, TX)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- I think this policy might give me a better chance at buying the house I've been eyeing if investors aren't inflating prices.
- Rent is high right now, so this might alleviate some of that pressure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Real Estate Agent (San Francisco, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This policy could slow down some business transactions that involve large investors.
- It's better for individual buyers, but not great for my commissions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Small Business Owner (Detroit, MI)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- I might get a better deal on an investment property without big investors driving up prices.
- The policy sounds good in terms of leveling the playing field.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Freelancer (Los Angeles, CA)
Age: 29 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- If it means cheaper rent or houses, I'm all for it.
- I haven't thought of competing with investors as a problem, but maybe it is.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 4 |
| Year 20 | 4 | 4 |
Retired (Newark, NJ)
Age: 65 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 9/20
Statement of Opinion:
- This might make it easier for me to find a smaller home without heavy competition.
- I'm all for any policy that tries to make homes more accessible to regular folks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 6 |
Corporate Lawyer (Boston, MA)
Age: 40 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could impact my investment returns significantly.
- It might help normalize property prices in competitive areas, which can be helpful in the long-run.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 5 | 8 |
| Year 3 | 5 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Artist (Seattle, WA)
Age: 38 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 11/20
Statement of Opinion:
- If this policy can keep my rent from rising, I'm all for it.
- It's hard to feel any long-term effects immediately, but hopeful it'll help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Public School Teacher (Miami, FL)
Age: 47 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- Hopefully this policy will make it easier for teachers like me to buy homes.
- Homeownership feels more within reach with less investor competition.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Construction Worker (Phoenix, AZ)
Age: 30 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- I feel like I can contribute to building the homes that people like me can afford.
- The policy seems like it could slow work temporarily, but might make housing affordable in the end.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Investment Manager (Dallas, TX)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- This could represent a significant challenge to my clients' strategies.
- Might push us to look for alternative investments outside single-family homes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 5 | 8 |
| Year 3 | 5 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $200000000 (Low: $150000000, High: $250000000)
Year 2: $250000000 (Low: $200000000, High: $300000000)
Year 3: $300000000 (Low: $250000000, High: $350000000)
Year 5: $350000000 (Low: $300000000, High: $400000000)
Year 10: $500000000 (Low: $450000000, High: $550000000)
Year 100: $1000000000 (Low: $900000000, High: $1100000000)
Key Considerations
- Potential decreased incentive for large investors to hold single-family homes could affect housing availability.
- Increased tax revenue from excise taxes could offset initial financial gaps.
- The bill may lead to potential administrative costs related to enforcement and compliance monitoring.
- Potential downstream effects on the construction and real estate markets should be monitored.