Texas Is the Latest State to Gauge Impact of Corporate Buyers of Single-Family Homes

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Corporate investors buying up single-family homes are facing growing bipartisan scrutiny, with concerns rising about their impact on housing affordability and homeownership opportunities.

Now, let’s dig in!

Texas Is the Latest State to Gauge Impact of Corporate Buyers of Single-Family Homes

Corporate investors have been buying up large swaths of single-family homes in markets around the country in recent years, and it’s led to rising concern and backlash from communities and elected officials. Vice President Kamala Harris and other high-profile Democratic politicians have spoken out against the trend and its impact on housing availability and affordability for some time, but it’s an issue that Republicans are starting to examine as well: Texas Governor Greg Abbott is one of the latest high-level politicians to raise concerns about the practice. 

In a post on the social media platform X (formerly Twitter) earlier this year, Governor Abbott said that while he remains in support of free markets, corporate acquisitions of homes could be negatively impacting would-be Texan homebuyers. “This corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home,” Abbott said in the post. “This must be added to the legislative agenda to protect Texas families.” 

Last week, the Texas House Business and Industry Committee followed up on Abbott’s call to examine Wall Street’s presence in the state’s housing market, and met to discuss what lawmakers could do to address the problem with potential policy changes, in order to make sure Texans aren’t unfairly priced out of home ownership. Several presentations were made at that meeting, one of which was from the National Rental Home Council, a trade association that advocates for the single-family rental industry, which claimed that only 0.4 percent of the total number of housing units in Texas are owned by large SFR providers, that homeownership rates in Texas have increased over the last five years, and that large SFR providers are “part of the solution” to the nation’s housing shortage. 

On the other hand, analysis from the Texas Real Estate Research Center found that assessing the impact of institutional investors was difficult. They found that there is little consensus on the definition of investors and large investors, so studies on the issue often use different and inconsistent methods and rely on what they described as “messy” data that is hard to analyze in a standard way. “There are many working papers and few peer reviewed publications,” the organization wrote. However, the center did agree that, however defined and measured, investor buyers are a small share of market transactions in Texas (less than 20 percent in recent years) and large buyers a tiny share (less than four percent).

So far, no policy proposals have been made at the state level since the meeting took place. But if they do decide to take action, they won’t be alone. Outside of Texas, a number of states have proposed legislation aimed at curbing the reach of corporate buyers of single-family homes. In March, Nebraska lawmakers proposed a bill that would ban out of state corporations from buying single-family homes, and state lawmakers in North Carolina, Minnesota, California, and New York have also proposed similar laws. At the federal level, the Stop Predatory Investing Act was introduced last year and was designed to curtail key tax benefits for major investors that acquire large numbers of SFR properties.

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