On July 28, Representative (D-WA) Adam Smith introduced the Saving Homes from Acquisition by Private Equity (SHAPE) Act (H.R. 8582), which would create a significant federal real estate transfer tax on institutional investors and private equity firms who purchase single-family homes on the open market. The revenue from this tax would go directly towards grants that will help states build and preserve affordable housing and slow the consolidation of single-family home ownership among the investor class.
In introducing the bill, Rep. Smith said “[o]ne of the greatest challenges we face as a country is housing affordability. Individuals and families across the country are struggling to afford to rent or buy homes. This has been exacerbated in recent years by a troubling increase in investors purchasing a significant percentage of existing single-family homes, squeezing out prospective homebuyers and harming future renters. We must curb this harmful trend before it further accelerates our nation’s housing crisis – that’s exactly what the SHAPE Act will do. Folks in our communities should not have to compete with large institutional investors and private equity firms when they go to buy a home, and renters should not be subjected to the harmful practices by these investor class landlords that want to wring the value out of each house. My bill will deter this problematic trend that is damaging the housing market, consumers, and our communities.”
The Private Equity Stakeholder Project fully (PESP) supports the SHAPE Act. “Private equity firms and other corporate landlords have contributed to the housing crisis by crowding out families from buying homes on the open market and raising rents on tenants to the point of unaffordability. This legislation would go a long way in discouraging the hoarding of single-family homes by corporate investors and give American families a fighting chance at realizing the American Dream of owning a home and securing an affordable place to live.” said Chris Noble, PESP’s Senior Policy Coordinator as part of the bill’s press release.
The bill currently has two cosponsors: Rep. Raúl Grijalva (D-AZ) and Rep. Katie Porter (D-CA). If you have any questions about the SHAPE Act and its possible implications for corporate landlords, please contact Chris Noble at firstname.lastname@example.org.