Bill Overview
Title: End Hedge Fund Control of American Homes Act
Description: This bill imposes an excise tax, with certain exclusions, on individuals who own more than 100 single family homes. The amount of such tax is the product of $20,000 and the number of homes owned over 100. The bill establishes a Housing Trust Fund into which the excise tax amounts shall be deposited and used to provide grants for down payment assistance.
Sponsors: Sen. Merkley, Jeff [D-OR]
Target Audience
Population: People living in countries where housing markets are significantly influenced by large institutional homeownership
Estimated Size: 3000000
- The bill aims to impose an excise tax on individuals and entities owning more than 100 single-family homes, suggesting its primary impact will be on large institutional property owners such as hedge funds, real estate investment trusts, and other large-scale investors in the housing market.
- The presence of a Housing Trust Fund that provides grants for down payment assistance indicates that home buyers, particularly those facing financial challenges in securing home ownership, will also be impacted positively by this bill.
- The tax is designed to disincentivize the accumulation of large numbers of single-family homes by a single entity, which might stabilize or reduce housing costs for renters and potential home buyers.
- By targeting owners of over 100 homes, the bill affects a niche market but with potentially broad ramifications for housing affordability and availability.
Reasoning
- The policy's impact is mostly targeted at large property owners, not individual homeowners, suggesting that direct effects on typical US residents will be negligible unless they are stakeholders in housing trusts or home buyers receiving assistance.
- The Housing Trust Fund will be beneficial to first-time homebuyers or those needing down payment assistance and will more prominently impact lower-income groups.
- The bill could indirectly benefit renters if it leads to a slight reduction in housing prices or rent through reduced institutional competition for homes.
- The influence of institutional investors is most concentrated in urban areas, so urban renters and potential urban homeowners may experience more notable impacts.
- Residents in areas less affected by large-scale property ownership will likely see minimal effects unless they're benefiting from the Housing Trust Fund grants.
Simulated Interviews
Real estate agent (New York, NY)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I've seen hedge funds affecting the market significantly, pushing prices up. This bill might help stabilize the market.
- The grants for homebuyers will be helpful for my clients struggling with down payments.
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 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Software engineer (Los Angeles, CA)
Age: 28 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- If this decreases competition from hedge funds, I might have a better chance of buying a home.
- Grants could help too, given the high prices in LA.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Retired teacher (Houston, TX)
Age: 58 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- This won't affect me much directly. I don't own investment properties.
- I hope it stabilizes the market a bit for young people.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Nurse (San Francisco, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- The competition from large investors is tough in San Francisco.
- I'm optimistic about the grants but unsure how many people they can really help given the city's prices.
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 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Hedge fund manager (Portland, OR)
Age: 50 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This will have financial implications for my firm; we need to reassess our property investments.
- The housing market dynamics could change if we scale back our portfolio.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Public school teacher (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- Healthy skepticism—a lot depends on fund distribution and market response.
- Could be positive for my kids' future in affording a home.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
Stay-at-home dad (Charlotte, NC)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- Corporations owning neighborhoods isn't ideal, so maybe this can help reduce that.
- Our family's housing stability feels unaffected by this bill directly though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Real estate investor (Miami, FL)
Age: 43 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 11/20
Statement of Opinion:
- My business strategy focuses more on mid-sized investments.
- This policy likely won't affect me unless expansion plans increase property numbers significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Barista (Phoenix, AZ)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 8/20
Statement of Opinion:
- Phoenix is getting tougher to afford, so any drop in investor buys could be good.
- Down payment grants sound nice, but I'll have to see what it realistically means for me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
University professor (Boston, MA)
Age: 61 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- My retirement plan includes selling my home at a decent price, so I hope this policy doesn't suppress the market.
- Balancing benefits for new buyers and current owners is tricky.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 7 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $50000000 (Low: $40000000, High: $60000000)
Year 3: $50000000 (Low: $40000000, High: $60000000)
Year 5: $50000000 (Low: $40000000, High: $60000000)
Year 10: $60000000 (Low: $50000000, High: $70000000)
Year 100: $70000000 (Low: $60000000, High: $80000000)
Key Considerations
- The potential reduction in institutional ownership of homes stabilizes or decreases housing market pressures, potentially enhancing affordability.
- Compliance and enforcement of the excise tax could present challenges, particularly in accurately identifying ownership structures designed to circumvent taxes.
- While revenue generated can be significant, it must be weighed against potential economic disruptions in real estate markets.