New Bill Takes Aim at a Major Housing Crisis Menace: Corporate Landlords
It's about damn time.
America is very much in the midst of an affordable housing crisis; the average rent has risen 18% in the past five years alone and the median home sale price has surged by 100 thousand dollars in the same amount of time.
There are many factors causing and exacerbating the problem: competition, inflation, and the pandemic certainly all contributed to the crisis. There’s also what’s often dubbed the “Airbnb takeover,” with corporations and corporate landlords buying up the bulk of available homes with the intention of turning them into rentals.
Thankfully, Minnesota may soon be implementing a solution that will help renters and house hunters alike.
HF 685 is a Minnesota bill that would “prohibit corporate entities, developers, and contractors from converting single-family homes into a rental property unit.”
In an attempt to combat developers and corporations competing with average Americans trying to buy homes, HF 685 states that “No corporate entity, real estate developer, or residential building contractor shall: (1) directly or indirectly purchase, own, build, acquire, or otherwise obtain any interest in property classified as class 1a under section 273.13, subdivision 22; and (2) subsequently convert the property into nonhomestead residential real estate containing one rental unit.”
It’s not clear if this will affect Airbnb listings at all, but it will likely limit Zillow, OpenDoor, and other LLCs.
The bill is not without its critics, of course.
A LinkedIn post by a founder of a property redevelopment organization commented that the bill may backfire as “companies like mine will likely be forced to significantly cut back on the number of new homes we’re building, causing a huge shortage of rental homes available.”
The bill does include limitations on these businesses building new homes, so he may have a point there.
However, his post didn’t address the current major issue, which is companies buying up already-existing housing just to flip it and increase the price.
To companies like OpenDoor or Zillow, housing is a business and an investment. But to most Americans, it’s a basic necessity that has been denied by competition with corporations.
One commenter on a Reddit post about the bill claimed that when they were house hunting, they found OpenDoor and other LLCs made up more than 80% of the listings.
Even when new housing is built, it’s often geared toward middle and high-income households, which puts further limitations and strain on affordable housing.
This bill is a much better fix than the racist, anti-Asian, anti-immigrant bills coming out of Texas and Kansas; those bills tried to shift blame onto foreign nationals and immigrants in their ‘attempt’ to fix the housing crisis. But Minnesota’s bill actually gets to the root of the problem and may kill two birds with one stone.
By preventing companies from buying single-family housing, Minnesota would not only create less competition in the housing market, but it would also prevent the companies from being able to charge outrageous rent on said properties.
It also helps that this is just the most recent in a string of bills and subsidies that the government has used to try and fix its housing crisis. The state has already looked into rental and downpayment assistance, as well as bonds and other general housing boons.
Obviously, this bill hasn’t even been passed yet, so it’s hard to say if/how much it will help Minnesotans. But it is worth it to keep an eye on it and any similar bills that may be proposed in your local governments.
(featured image: Brodie from Burst)
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