SAINT PAUL, Minn. - Today, the Minnesota House Housing Finance and Policy Committee passed HF 685. Authored by Rep. Esther Agbaje (DFL – Minneapolis), the bill would give individuals and families an equitable opportunity for homeownership in the marketplace by restricting when corporations may purchase single-family homes.
Under the bill, corporate entities would be prohibited from purchasing single-family homes with the intent to turn them into rental properties. There is a persistent trend across the nation of major corporations monopolizing property and gentrifying neighborhoods rich in history and culture. As a result, families are losing affordable housing and inevitably being displaced.
“This bill is necessary to protect the rights for all Minnesotans to have the ability to purchase their first home,” said Rep. Agbaje. “Homeownership continues to be out of reach for many Minnesotans of color and working-class citizens. The lack of housing supply, the high cost of housing, discriminatory practices in the market, and corporate ownership single-family homes, are some of the many reasons why homeownership continues to be a challenge in Minnesota. This bill intends to allow more people to buy homes and build their wealth rather than corporations. Every Minnesotan deserves the right to generational homeownership and the opportunity for their families to live and grow in a community that is reflective of their culture and values.”
Before 2010, institutional investors didn't really exist within the U.S. single-family housing rental market. But since then, Wall Street has swept up hundreds of thousands of homes to the tune of $60 billion, the New York Times reported in 2020, squeezing out would-be individual buyers and worsening the country's housing affordability crisis. Private equity firms like Blackstone and Pretium Partners might control 40% of single-family rental homes by the end of the decade, according to analysts with MetLife Investment Management, representing a huge chunk of a market that's currently valued at $4.4 trillion.
“Minnesota is experiencing a dire housing shortage, made all the worse by corporations snatching up what would be perfect starter homes for single families and turning them into rental properties instead,” said Rep. Michael Howard (DFL - Richfield), chair of the Housing Committee. “If we do nothing, the dream of owning your own home, and the generational wealth that comes with it, will be lost for generations of Minnesotans. Now is the time to take a stand and save these homes for Minnesota families, not private equity firms.”
The legislation calls for the state attorney general’s office to enforce the ban. A corporation found violating the law would have one year to divest from the property. If the corporation fails to sell the property, it would be sold through the foreclosure process in court.
The committee approved the bill on a 8-5 vote and will be referred to the Judiciary Finance and Civil Law Committee.
Additional information and documents from the hearing are available on the committee webpage.
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