A Nebraska lawmaker whose northern Omaha district has struggled with a housing shortage for years is pushing a bill that, if passed, could make Nebraska the first in the country to ban third-party hedge funds. States and other corporate entities purchase individual properties. family properties.

Sen. Justin Wayne’s bill echoes legislative efforts in other states and Congress to limit corporate hoarding of single-family homes, which critics say has contributed to lower home prices, rents and taxes. real estate have skyrocketed in recent years. Wayne said that has been the case in his district, where an Ohio corporation has purchased more than 150 single-family homes in recent years, often displacing individual home buyers with all-cash offers. The company then rents the homes.

Experts say the shortage of homes to buy can be attributed to a multitude of factors, including sky-high mortgage interest rates and years of underconstruction of modest homes.

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Wayne’s bill offers few details. It consists of a single sentence that says a corporation, hedge fund or other business cannot buy single-family homes in Nebraska unless it is located and its principal members live in Nebraska.

“The goal of this is to preserve the limited existing housing stock for Nebraskans,” Wayne said this week at a committee hearing where he introduced the bill. “If we did this, we would be the first state in the country to take this issue seriously and address it.”

A 14-page bill called the End Hedge Fund Control of American Housing Act has been introduced in both houses of Congress and would impose a 10-year deadline for hedge funds to sell single-family homes. they own and, until they do, would burden those investment trusts with heavy taxes. In turn, those tax penalties would be used to help people make down payments on homes sold.

Single-family homes

A Nebraska lawmaker has introduced a bill aimed at preventing corporations from purchasing single-family homes. (Amanda Andrade-Rhoades/For The Washington Post via Getty Images)

Democratic lawmakers in several other states have introduced similar bills, including Minnesota, Indiana, North Carolina and Texas, but those bills have stalled or failed.

The housing shortage from out-of-state corporate interests is not just an Omaha problem, said Wayne Mortensen, principal at a Lincoln-based affordable housing developer called NeighborWorks Lincoln.

Mortensen said the 2008 recession and, more recently, the economic crisis fueled by the COVID-19 pandemic made single-family homes a more attractive corporate investment than bond markets.

“When that was the case, housing became a commodity and became like trading any stock,” he said. “Those outside investors are interested only in how much value they can extract from the Lincoln real estate market.”

Those corporations often don’t invest in maintaining the homes, he said.

“And as a result of that, we’re seeing incredible blight and housing decline in many of our neighborhoods because of these absentee landlords who are not accountable to local communities,” Mortensen said.

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Currently, about 13% of single-family homes in Lincoln are owned by out-of-state corporate companies, he said.

As in other states, Wayne’s bill likely faces an uphill task in the deep red state of Nebraska. At Monday’s hearing before the Banking, Insurance and Commerce Committee, several Republican lawmakers acknowledged a statewide housing shortage but cast doubt on Wayne’s solution.

“You know, you can create shell companies, establish different levels of ownership. You can move your domicile base. There are a lot of solutions here,” said Omaha Senator Brad von Gillern. “I too, as a pure capitalist, am fundamentally opposed to the idea.”

By Sam