To help solve the country’s housing crisis while dealing with Wall Street greed, three California congressmen on Saturday touted new legislation aimed at targeting predatory rents in the United States by private equity firms and investment giants that gobbled up large numbers of single-family homes and residential units in the years following the financial crash of 2008.
“Wall Street shouldn’t own a family.”
Co-authored by Democratic Representatives Ro Khanna, Katie Porter and Mark Takano, the Stop Wall Street Landlords Act aims to “deter future institutional investment” in the single family residence (SFR) market by ending taxpayer subsidies to people with low incomes. the pursuit of profit. way to help struggling families deal with housing costs in the face of rising inflation.
If enacted, the proposal would impose “a tax on existing and future acquisitions of SFR” by large institutional investors, a statement from lawmakers says. The legislation would also prohibit federal lending institutions Fannie Mae, Freddie Mac and Gennie Mae from buying and securitizing mortgages held by Wall Street firms that take advantage of their size and ability to buy large numbers of single-family homes. in debt in order to turn around and praise them. for an exorbitant profit – a tactic that alone drives rental prices ever higher.
Private equity firms and Wall Street rarely, if ever, strayed into the single-family housing market before the crash of 2008, but the market exploded when big corporations gained access to trillions of dollars at interest rates. little to no interest over the past decade and as regulators the Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) have offered grants through federal programs such as Fannie and Freddie. In 2015, Sen. Elizabeth Warren (D-Mass.) was among those who spoke out, telling HUD it had nothing to do with colluding with Wall Street in this way.
“These Wall Street investors made money crashing the economy, got bailed out and now they’re back to bottoming out again, scooping up those loans at rock bottom prices to keep them going. profit a second time – and it’s up to us to stop that!” Warren told a cheering crowd at a rally in Washington, D.C. in 2015.
In remarks posted online Saturday, Khanna said there may have been a time after the 2008 financial crash when it made sense for private entities to step in to buy residential units to stabilize the housing market, but that in the decade since it became clear that Wall Street investors have exploited government policies and a lack of oversight to defraud millions of renters who find themselves at the mercy of a housing crisis housing they have done nothing to create and have no way to fight.
Khanna said that with 25% of single-family homes in the United States being taken over by for-profit investors, these companies are “damaging the American dream of homeownership” and the economy in general.
“We need to stop the financialization of housing,” Khanna said. “Americans aren’t serfs. We’re not supposed to pay Wall Street money to go live in a house. What we need is for more American families to own their own homes. “
“When I was on the front lines of the foreclosure crisis, I saw firsthand how corporate vested interests were taking advantage of families to line their pockets,” MP Porter said in a statement. “The Stop Wall Street Landlords Act promotes affordable homeownership, so our children can live in the same communities they grew up in. I am proud to work with Representatives Khanna and Takano to hold Wall Street accountable. “
Takano said, “Wall Street should own no family.”
“As the housing crisis continues to plague the country, America’s middle class is acutely feeling the strains of our country’s low housing stock and rising prices,” Takano added. “Meanwhile, wealthy investors are driving up those costs by monopolizing ownership of single-family homes. The Stop Wall Street Landlords Act takes the urgent steps needed to drive corporate investors out of the single-family housing market.”
According to Khanna, “low and middle income families in my district and across the country are being evicted due to the profits and unfair practices of big business landlords. This legislation will help level the playing field and put an end to rents abusive in America.”