Hawley and Merkley Advance Bill to Bar Large Funds From Buying Single‑Family Homes
Context and chronology
A bipartisan Senate measure announced this week would prohibit large investment pools from acquiring detached houses, condos and townhomes intended for sale to individual buyers; the statutory cutoff is funds with assets above $150,000,000. Sponsors framed the move as restoring buying power to typical households after years of deep‑pocketed firms entered for profit‑driven rental conversions. The lead sponsors are Senator Josh Hawley and Senator Jeff Merkley (Mr. Hawley and Mr. Merkley on second reference). The bill amends federal antitrust law and routes enforcement to the U.S. Department of Justice Antitrust Division, signaling civil litigation as the primary compliance tool rather than a new licensing regime.
The Hawley‑Merkley proposal arrives alongside a broader policy push: the White House has issued executive guidance aimed at discouraging large‑scale investor purchases, and other congressional Democrats are advancing a complementary legislative track that would tighten tax preferences for large single‑family rental portfolios. Some outlets describe the White House action as having been driven into public view by Mr. Trump; others report the directive in neutral terms. Together, these parallel actions create three distinct policy levers — antitrust litigation, executive agency guidance, and tax‑code changes — that could operate in concert or separately depending on political and judicial outcomes.
Market data cited by analysts show institutional owners hold roughly 3.8% of single‑family rentals nationally but concentrate unevenly, with holdings above 28% in Atlanta and near 20% in Charlotte. Those localized concentrations are likely enforcement and messaging targets. Public polling indicates strong voter frustration about homebuying affordability — a dynamic lawmakers are leveraging to build support across parties in an election year.
Policy architects caution that demand‑side restraints are not a substitute for expanded supply. Banks and analysts, including Goldman Sachs, estimate a multi‑million unit shortfall in new construction; absent a material increase in housing starts, any price relief from limiting investor purchases will be partial and uneven. Still, in markets with outsized institutional footprints, limiting large buyers could lengthen listing times for some sellers and restore near‑term bidding power to small, owner‑occupant purchasers.
Operationally, firms that scaled portfolios to buy detached homes will face immediate dealflow disruptions: acquisition pipelines may be paused, underwriting will incorporate regulatory risk premiums, and capital could migrate toward multifamily, commercial property, or build‑to‑rent projects. Lenders and investors will reprice legal and political risk into cap rates and securitization structures. For municipal and regional markets that relied on deep‑pocket buyers, sellers may see demand narrow and listing times extend; conversely, small buyers could regain leverage in targeted zip codes.
Legal experts expect swift constitutional and preemption challenges, which will thrust courts into defining the boundary between antitrust enforcement and property markets. The statutory approach — classifying categories of buyers as unlawful rather than policing individual transactions case‑by‑case — accelerates litigation and raises enforceability questions. Financial markets will monitor whether the antitrust route, tax changes, or executive guidance prove the durable mechanism to reshape investor behavior.
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