ATLANTA — Anyone who lives in Atlanta is aware that big Wall Street investors are buying up homes in the metro area.
It’s been happening here more than anywhere else in the country in the past few years.
Now, a new bill proposed in Washington would block most of those sales.
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Channel 2 Consumer Investigator Justin Gray was in a Pittsburgh neighborhood, where investors often swoop in with an all-cash offer with no contingencies, making it hard for families to compete against them.
In the past few years, one out of every three home sales in metro Atlanta has been to an investor.
Sen. Jeff Merkeley said that the bill won’t pass this Congress with just a few weeks left in the year, but he plans to re-introduce the legislation in January.
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Atlanta City council memberMatt Westmoreland said no other city has been faced with a housing crisis caused by investors.
“As you look over the last several years, literally no other city has been the victim of this type of activity more than Atlanta,” Westmoreland said.
Investors not only drive up the prices of homes, but a series of Channel 2 Investigations dating back to 2017 show that those big investors often don’t make good neighbors or landlords.
“It just takes an act of Congress to get them to come out here and fix anything,” one tenant said.
Redfin’s latest numbers show that 17% of Atlanta home purchases in the third quarter of the year were by investors, adding up to more than $2.2 billion, but that’s 42% fewer purchases made by investors than last year as they pull back on a cooling market.
“That’s a huge decline, but as a share, they are still buying one in four homes,” Redfin’s Taylor Marr said. “It’s down from their peak where they were purchasing one in three.”
Merkley’s bill would limit these companies to only buying 100 single-family homes.
“These hedge funds are driving up the prices,” Merkley said. “They’re taking so many houses off the market.”
Free market advocates counter that the investors are following the housing market, not leading it.
“Private equity firms or other large investors driven by a profit margin are not responsible for the price increase in the U.S. housing market,” one member of Congress said in a hearing.
Westmoreland said this is one aspect of fighting the home affordability crisis that City Hall can’t fight without help from Washington.
“We can’t tackle giant financial companies buying up all our housing stock,” Westmoreland said. “That has to be done at the state, really at the federal level.”
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