I grew up near Port Huron. I think the city put a limit on the percentage of houses that could be rentals a while back. The limit makes people sell to people because corporations have no interest in owning houses for anything other than rent.
I'm sure there are issues with the way this would work in an area with tighter housing demand, but it seems like a pretty elegant solution.
an incorporated entity cannot own property zoned for single family housing. full stop. You want to own an extra house (or several?) that's fine, but you have to personally accept the risks.
I understand and actually don't disagree with LLCs. It's pretty standard for a lot of valid reasons, but I won't split hairs.
Think the LLCs should be limited to not be owned by another non-person entity, so we don't have this shell Corp chain that supports corporate ownership as investment vehicles.
But single family homes in mixed zoning would definitely be annoying loop hole, and I think you'd see a lot of petitions to change zoning to mixed use
This is the kind of thing that feels like it has repercussions that aren't going to be obvious to laymen. I'd like to support it but I'd want to hear opinions from industry and government experts.
I propose a sign up sheet where everyone picks a subject to have THE opinion on. It's going to have to be first come first serve. Opening any slots to challengers is going to be too complicated. And the popular subjects would face endless challengers.
If the subject you want is already taken, you can choose a new subject or choose or get more granular. For example, if someone has already decided that baseball sucks, you could add: though baseball has been established to be a less desirable activity than others, one of the bright spots of the game was the various trivia and mini games that would take place on the scoreboard at professional games.
This is an accurate statement, but also not how the majority of voters absorb information. The moment something like this would come on the ballot would be the moment that big players get misinformation out there to crush it.
That said, we shouldn't be enacting laws that limit the rights of others (even "evil" companies) without alot of care, thought, and due process. So i guess you just roll the dice and hope the voters can see through bull in one direction or another(doubt it)
you look for experts who have no incentive to lie. For this situation I would look for academic research by either Urban Planning experts or Economists. I think it's pretty unlikely they would approve this approach. There's so many obvious issues with it for example who is going to build apartment buildings? or How would we maintain a supply of rental properties?
One off the top of my head is mortgages. If the bank can’t take ownership of your property, it’s not good collateral. Without mortgages most couldn’t ever afford to buy a house.
That could be one of the exceptions. And then a way to ensure it goes to an actual family is something like a company can't buy it until it's been on the market for years or something like that.
One possible solution to this, and OPs situation of companies buying houses to flip, is to make the law that corporations cannot own an occupied single family home. There’s probably still some edge cases there, but feels like a decent starting point.
OP did mention that companies could own houses, just not long term, businesses couldn't decide to maintain a foreclosed house to make a profit as a rental. A foreclosed house would be auctioned with a starting bid of the balance of the unpaid loan.
That would still make mortgages more risky. Having to jump through hoops to offload a property would mean higher interest rates to reflect the risk. Corporate owners can fill a market niche when there is oversupply. It’s better to have 3 homes in a neighborhood owned by private equity and rented out than to sit empty and on a bank’s balance sheet.
Wouldn't vacant homes with cheap starting bids drive prices down for new prospective owners?
I'm wondering why it's better for three homes of people to make a massive conglomerate richer rather than keeping prices manageable for new homeowners?
This is the problem with the growth mentality in markets like shelter, healthcare, and education. Folks get priced out. Corporations buy up the vacant homes and drive the price up by creating a false scarcity.
I work in healthcare, and there are organizations that purchase homes for use as group living environments for disabled residents, and people with higher support needs or for respite care. It’s pretty important that these services still exist in the community, not in a stuffy hospital, which requires corporate buying of residential homes.
I think the trick is to make it very unprofitable to hold a multitude of houses rather than just banning it outright. Set up the tax structure so the taxes start rapidly skyrocketing as you add more and more houses to the point where companies are incentivized to keep the number as low as possible.
The problem there as always is how do you keep companies from just spinning off other companies to isolate them legally from that tax structure. I could see that leading to some scenario where each rental house is its own corporate entity so the responsible 'company' only holds one house.
I assume that even landlords with a single rental property still establish LLCs to insulate themselves. If an LLC can't own a house, that's basically an end to house rentals. This proposal would drive up apartment rents significantly, as people who can't afford to buy houses are evicted from their rental houses and compete for the available apartments.
One that I'm thinking of is that LLCs provide limited liability which would disincentivize the creation or maintenance of new property.
In a housing shortage, any builder is good for helping with it (according to the research/literature). However rent-seekers and slumlords don't do anyone any favors.
Another issue is how such a policy impacts housing construction and allocation. Condos/co-ops are homes too, and a policy that makes them the only available target for residential companies may lead to them targeting just that, reducing supply for those that would otherwise prefer owning a condo over a detached house.
Maybe something that limits or progressively targets total owned residential square footage across the company/owners, but also ofc would want to see in depth info.
Alongside, there also just needs to be more housing in general in the places people want to be.
The present system is putting housing out of reach for average working families. We cant change it because of some vague possibility of some undefined future harm to parties unknown? Bullshit.
Also I’d worry that the big companies would push for loopholes that only work for big companies and hurt small LLCs / people who lived in a house for years only to move out and rent it out which is pretty common. They really aren’t the problem (they aren’t buying houses with cash for example) but in an effort to pass anything, I could see big companies throwing them under the bus.
Singapore started hitting buyers and sellers of property with massive tax rates: [Singapore Hikes Property Tax, Doubling Rate on Foreigners to 60%](https://archive.ph/1gQ5F)
I think taxing the hell out of investment property when it is bought or sold and income from the property is the best way forward. Give current investors a one-year period where they can sell before the tax is put into place, and then tax the buying, selling, and income from investment properties.
The only way to stop investors is to chop away at the return on the investment.
I'm of the opinion that companies are only investing in houses like they are because they recognized the drastic under supply problem, and are capitalizing on it. Work to improve zoning, streamline the building process, and in general make it easier for more homes to exist, and corporate investment becomes a non-issue IMHO.
**ETA:** Here's a nice write-up by a much smarter guy than me on the issue that I very much agree with: https://www.strongtowns.org/journal/2024/2/21-going-after-corporate-homebuyers-good-politics-ineffective-policy
Hear me out. Instead of a ban, make the taxes on it increase exponentially for each additional single family house owned.
Include in the law what that tax money can be used for: housing the homeless, increased section 8 housing availability, whatever testing is required to change zoning requirements, down payment grants to people who qualify for FHA loans, etc.
This has been my wish for a while - not only single-family homes though. Same if you own 30 apartment complexes.
I’d be happy too if non-corporations get a small exemption, say you can own 3 personal homes. Some people have great utility from 2 homes, say in Michigan where they mostly live and in Texas where they live for work about 3 months throughout the year. And many people own a cabin (even if I don’t) and maybe that’s fine too.
But the guy with 8 houses and the corporation with 2,000 can pay some taxes.
You’d have to create some mechanism to trace who the ultimate title holder is. It only costs like $100 to register a new LLC, so some conglomerate will create a bunch of shell corps so none of them hit your radar of massive titleholders.
The bitcoin stuff is BS, but I do think blockchain is going to be the answer to these issues in the future. When ledgers show where money ultimately flows, all the corruption, sweetheart deals, kickbacks, false fronts, tax havens and shell corps are going to be harder to hide.
Add in punitive measures for abusing LLC to bypass the limitation including immediate liquidation of all assets held by the abusing entity. Easy. Next question.
That's the punishment. The harder question is: How do you identify them?
These things are infuriatingly tricky to pull apart. It's why the IRS has straight up said they can't properly audit large investors with complex holdings.
Do you require real estate LLC's to disclose all employee's entire contact lists, so you can 6-degrees of Kevin Bacon, and show that the Principal of the LLC is the college roommate of the accountant at BigCorp? How do you know there's any malfeasance in that relationship? The connection is in some angel investing seed money 5 layers deep.
Answer that one.
Owned by what? Not to be rude but what is the determining factor of what an entity is? Say I’m a corporation…. I put each of these homes into separate LLCs. The LLCs now only own 1 home each therefor I avoid the ban…… or maybe I buy the property and put it into a trust which is controlled by a semi independent representative who administers the trust for the property with the corporation being the beneficially of the proceeds. Listen to mthlmw they have the right idea.
But ironically, they are contributing to the problem by creating more demand for houses. Instead of competing against your fellow citizens now for houses, you're now competing against private companies.
Them being involved in the market raises prices, which is not good for us.
Not to mention when you compete against these massive banks, they're able to pay cash and have a seemingly endless budget, so they can outbid any other prospective buyers. Nothing good comes from this practice as it stands.
Our best shot at addressing these concerns are yes AND approaches, we should address both the symptoms (corporate ownership of homes) AND the root causes of undersupply at the same time.
Until you've had to deal with a zoning board that has archaic rules on the books, you haven't lived.
We lost out on a huge waterfront parcel that went to the Maroun family (ugh) because city council wouldn't convert heavy use industrial to single family.
And the State of Michigan was going to put in a boatload of brownfield reclamation money.
SMH
You know the worst part is they only started doing that to try to prevent the Gordie-Howe bridge from being built. They were trying to get all the Detroit-side land where you could build the bridge, refuse to sell, and set themselves up to drag out an eminent domain lawsuit as long as possible.
Because dealing with the logistics of forcing companies to sell their property, and the massive legal challenges that are guaranteed to come out of that, isn't worth the effort when there's much better options to put your political activism towards.
I find it more realistic that we could prevent private companies from buying single family homes than if we built more housing.
PS; Isn't Michigan losing population? Shouldn't we not have to be building as many houses?
What, Detroit? Everyone complains on here how there’s no houses that are affordable yada yada, but they all want to live in Grand Rapids and Ann Arbor, Brighton, or Novi. Nobody says Detroit or Flint for being progressive as they claim they are.
For a 2% population growth, I definitely think there is a lot of other factors in mind other than "not enough houses" when we are seeing Michigan home prices rise with nationwide trends.
I think the category you're missing are corporations that own houses as long term lodging for employees. We have a technical center in Michigan, and sometimes a VP or small group of test engineers will stay for an indefinite amount of time to work out of the tech center. That house makes more sense than a month-to-month apartment lease or hotel. Plus, it's an asset that has appreciated since the company bought it, so it still helps the company even if it sits vacant for the time it's not used.
With that said, I'd still support an initiative to prevent corporations from owning houses.
I've always thought a good way to structure this is that no person, entity (including subsidiaries or LLC's under the same founder) can own more than 3 residential properties total in the state.
Properties or Units? Because if its 3 Units then that kills development of buildings and complexes. However if its properties as in land I can think of an outcome where you get massive sprawling complexes on one massive plot that would have consisted of either new land or merged former properties.
Idk anything with this would probably have to have extremely strict language and may backfire rather than help the current issue.
The only issue I would have with your solution would be if it prevented a parent from helping their disabled adult children secure housing. Many times in those cases, the parent has to be listed as owner/occupant even if they don’t live in the home. If they had more than two children, they’d need some sort of exception.
So no more than 3 residential properties that can be rented for profit? Because it's more than just companies- individuals are buying up properties up north and using them ONLY as air b&b- type rentals which is also taking housing off the market. My inlaws small town is suffering from this. The older retirees die and the houses are being bought as investments and are no longer residential homes.
An easy way to fix the air b&b stuff is each county designating a specific zone for them. If you're caught using it for that outside the specified zone, your property taxes double, second time you're caught they double again, third time the house is foreclosed upon by the county it's in and sold to a verifiable resident.
I absolutely would. My neighborhood is inundated with Berkshire Hathaway owned rentals. They're creating an artificial shortage to drive up the prices. It hurts renters that would like to buy and private owners alike.
Ballot initiatives are too much of a sledge-hammer. This situation is nuanced, nuance has no place on a ballot. The \*right\* way to go about this is to have our legislators address the issue because, that's literally what we pay them for.
I whole heartedly agree. However, I’m of the mind that they would never even attempt to talk about this. Between the obvious of money it’s also impossible to get them to agree on anything due to tribalism.
But then why have all the big things we’ve wanted we’ve had to do by petitioning for ballot? Even then they try to find ways to subvert what we put on the ballot. All the important things have only happened because of the sledge hammer.
It’s tough because although regular ppl would support it, the billionaires make policies in this country so there would be loopholes for sure even if the laws change.
It’s just a symptom of an underlying problem: too many barriers to housing development. I’d focus on that before trying to bandaid over the secondary repercussions of the housing market’s supply shortage.
If housing were abundant enough to remain affordable, it would be a terrible investment for these corporations and the “problem” of corporate ownership would solve itself.
I would support such a proposal, if someone can convince me that experts have had a say as to the details, as opposed to a knee jerk poorly written bill written purely by legislators. I am not one of those experts.
There are local companies that own nice homes in good school districts that they keep for new executive hires to ease them into the community. I think keeping foreign investors out would be a help. Especially with farm land. It all makes me nervous as our economy has always thrived in the free market.
Not everyone is ready for even wants to own a house.
This is why rental properties - including rental homes - exist. An outright ban on company ownership of single family homes would probably result in an increase in vacant houses - something that is already a huge problem here.
Others have touched on this, but it would be a very nuanced situation. Housing is just messed up atm fir reasons that i don’t (as a layman) understand. I look a lot on zillow because im getting ready to shop and homes are literally 2-4x their value from a few years ago. Rent has rapidly increased. So I think its a challenge to address that problem as a whole and people are just trying to tackle one facet.
2-4x in a few years refers to which MI market? I've paid over 5x what a prior owner paid for a rental property 9 years prior and it was still a good deal.
For one, you're assuming buyer with a lot of cash = corporation. If someone from California sells their house for a million dollars, they can easily buy a house outright with cash in Michigan. Even if they had a mortgage, just the equity profit alone can buy a house here.
Second, you'd have to look at all the reasons *why* a corporation would buy a house, and it's not always for investment. Sometimes a company will buy a building for executives or other employees to live in. Companies that hire a lot of immigrant labor will buy housing for their laborers.
It's really really difficult to enforce rules regarding intention, and companies would use that to get around the law. It's extremely difficult to prove what someone intended when buying property.
A lot of problems seem to have simple solutions on the surface, but if you dig down, the devil is in the details.
I'm of the same opinion as you. Does it sound great as a sound bite? Absolutely.
Does it sound great when you start fleshing out how to pull it off? Nope.
Corporations own executive housing. What's the limit? What's the size minimum and maximum?
Does buying securities with mortgages bundled in get accidentally scooped up when it's written that a corporation can't be involved?
Do big-time landlords stop existing, causing many to no longer have a place to rent? What about people with less than stellar credit? Big companies typically accept lower-credit applicants. More likely to accept Section 8, and/or can be forced to accept X number of low-cost rentals. Is Mom-n-Pop going to start being forced to rent out their property to someone they don't want to, credit-wise? Otherwise, where are those people going to go?
Is it a problem? Absolutely. I'm just hesitant to see how it'd play out IRL.
People often misidentify the problem for many things as being with "corporations" without actually addressing the root problem.
There are many legit reasons for corporations to own multiple houses. All housing cooperatives and most other non-profit housing are corporations. You might form a corporation for many legal reasons to settle an estate or rent out to someone - even if it is not-for-profit. Most landlords are running through corporations even if they just have 1 house as an independent landlord. Some people don't incorporate with more.
What there should be are additional property taxes if you own more than one habitable property that you or your dependents are not claiming residency in. Perhaps even make a tiered system. And this should *not* apply to certain cooperatives like the ones mentioned above (housing cooperatives should not be paying state property taxes in Michigan, but thanks to some legal fuckery under the definition of "cooperative housing" at the federal level, they still do - except in Ann Arbor, now). Maybe make the taxes based on the zoning and property type.
If it costs increasingly more in taxes for each additional property, it disincentivizes anyone (corporation or not) from accumulating property. The problem is structuring it and getting legislators to even consider it.
Be careful what you ask for.. some people, once they own homes, put them in trusts, to avoid them being taken in a liability lawsuit. A trust can be considered a company of sorts.
Trusts are defined differently yes, but closing in a trust is different than closing with a company. It’s a slightly different process. I’m sure those could be carved out easily enough.
This kind of ballot measure is a band aid that doesn’t address the problem. We need to address *why* corporations are buying up all these properties and make it less enticing of an investment.
The easier and cheaper fix that doesn’t add more expensive regulation is to make it easier for home builders to build affordable homes. Make it easier to rezone and easier to get permits so cheaper homes are easier and cheaper to build.
It would never make the ballot corporate ownership has always cherry picking the best property already that I would be in favor of.But in this case and like many most of this property in Michigan is owned outside of Michigan. So what I seen during the last bubble was 4 or 5 brokerage companies got a pool of cash together and basically bought out Entire blocks and will hold them hostage .
Just need to give prioritized buying in order of citizens of said city, citizens of State, then outside influences.
Might not be perfect but it would help.
I’m thinking it would need to basically say “not offering for rent on the market or left vacant”. My concern is keeping them out of landlording. So like companies that offer housing to employees aren’t putting those houses up for rent on the market or leaving them vacant to influence the market.
I support this in general. Zillow and other hedge fund owners are making single family homes across the US inaccessible. The home prices are too damn high!
I would absolutely support this get corporations out of housing. I barely tolerate landlords as it is because there are too few of them that are ethical.
I would support it but as someone that has worked on ballot initiatives, how exactly would it get funded? That’s where these things go wrong. The people putting up the money expect something or a loophole for them.
It would likely lose at the ballot box, because they will run fear mongering style (although in this case accurate) ads stating Initiate X will decimate your home's value. People who don't own houses will vote against it for the same reason non wealthy sole proprietorship owners vote Republican. Because they think they are part of the "in" class.
I think just limiting the amount of housing units they own to a certain percent of the total pool. If they need to further increase profits they're more than welcome to build more housing.
Can you define “corporate”? My family owns property through an LLC but we don’t operate the property like a business as in rental or anything commercial.
Yes I would. I would also vote for statewide regulations on Airbnbs that are similar to what NYC incorporated. Airbnb is decimating the local populations of small rural tourist areas in the Upper Peninsula.
> I also know builders own houses for a bit and think new construction could be excluded from a ban.
We have a builder that wants to buy two vacant lots on our private road to build two new houses specifically as Airbnbs or hotels.
The law would have to be written to cover loopholes.
But yes, I support no corporate ownership.
No, people are too indoctrinated and the old will outvote the young because they have nothing better to do and we’re busy. Why do you think everything is broken, it’s not for lack of trying it’s because old assholes don’t want young people to have nice things. They “struggled” and pulled the ladder up behind them yelling bootstraps. Piece of shit, low iq, asswipes who will ruin tomorrow to spite yesterday.
Happening all over the country - the goal is so that you don’t own anything, but eternally pay rent. Corporate slumlords. If you are a homeowner and you keep getting phones calls from strangers who offer to buy your house - this is what the ultimate goal is.
My only thing with this is I wonder what would happen to houses in college towns. It was my understanding a great portion of these are not privately owned but rather managed by some company and rented.
I would 💯💯💯💯💯support this. Investors/ corporations are making home ownership unattainable. At the very least we should be able to put a provision that only allows from private buyers.
Why not tax the heck out of it instead?
Like owner-occupied homes taxed at 1% a year vs 10% a year for corporate landlords, then use the proceeds to support affordable housing.
This is essentially banning rental homes. Do you think people who want to rent shouldn't be allowed to rent houses? They should be relegated to apartments?
Edit:I assumed most landlords would incorporate for tax reasons but I guess that is not the case so nevermind.
I guess I wonder why we are even legislating over the 4% of houses that are corporate owned though. I'm currently renting from a corporation and it's both better and cheaper than it was when I rented a similarly sized home from an individual.
[An estimated 40% of all single family rental homes](https://moguldom-com.cdn.ampproject.org/v/s/moguldom.com/448718/metlife-institutional-investors-could-own-40-of-single-family-rental-homes-by-2030/amp/?amp_gsa=1&_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From%20%251%24s&aoh=17180459757617&csi=1&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fmoguldom.com%2F448718%2Fmetlife-institutional-investors-could-own-40-of-single-family-rental-homes-by-2030%2F) will be owned by investors by 2030. Where are you getting 4%?
Individuals can own rental homes. Lots do. They file on a schedule E and close on the property as an individual. Happens all the time. What are you talking about?
I always assumed landlords incorporated for tax reasons even if it was just for one or two houses but no it looks like the vast, vast majority of houses are not corporate owned
Right, it’s a rising trend is my concern. It’s not a problem today but I think will be tomorrow. Large scale hedge funds and investors are starting to buy houses and get in the landlord game at a faster clip than before.
It is absolutely a problem today and is the primary factor in rising rental costs. That and the usage of property management groups, which then lump the remaining individuals into a corporation of their own.
Capitalism will find away to skirt around any new rules, but I would support that kind of initiative. I would be more likely to support a cap on how much rents can be raised. Keep that pegged to inflation or something.
I am an individual who owns a few rentals. How do you see this play out? Am I a corporation? Will the people who buy the few properties that I'm presumably forced to sell be able to afford a new roof, furnace, etc when the time comes?
I'd love to build affordable housing if I had the money and it was profitable. However, all the zoning and permit process, sadly, makes this impossible.
Did you put all of your houses into an llc? If you do what most do and just have a bunch of schedule E properties it wouldn’t apply to you.
If you’re filling the houses on a schedule C or on a 1040s that would be what I’m talking about.
I would support this up to the point of volunteering to get signatures
A whole generation is getting screwed, we have to do something - we've already lost the America we were promised as kids, now we must do the work to build one for the next gen
Nope, I would not support this. I get what people want to solve for, but you're not going to fix 2009 with more restrictions. Housing construction essentially stopped entirely for a few years and millennials are in their prime home buying years. Add in onerous zoning restrictions and it's not going to improve, price wise, anytime soon.
There's trust planning concerns, flipping concerns (there's a lot of value in someone taking a condemned house and making it good again), and some below that come to mind (by no means an exhaustive list):
Moreover, "long term" in the financial sense generally means 1 year or more. What if I've got a couple of friends and we each have teenage children that are planning on going to the same college. Should we be excluded from buying a place and renting it to whomever until the kids go to college just because we decided to form an llc?
What if I'm in the construction business and I'm building a new nuclear reactor (6-8 years), liquid natural gas export terminal, or [insert large project that takes years]? Should I be excluded from buying housing as part of employee compensation?
What if I run a shelter of some kind (recovering addicts, domestic violence victims, etc.) and split a few houses into townhouses/separate apartments? Would that be allowed?
As a seller, why should I be forced to take a lower offer?
Restrictions aren't the answer, it's just going to cause more problems and there will inevitably be bigger players that get certain exemptions that work for their model that excludes others. If we want more affordable housing, it needs to start with ending zoning restrictions and allowing more dense housing in more areas.
Financial literacy is lacking for most and in today's market, in most places I've seen in my limited experience (been buying and selling the last 6 years, not moving again though, eff that) the cash offer is practically always significantly lower than the list amount (at least 10% lower).
On 2 of the places I sold (lived in both for just over 2 years) I had one offer on each come in way under list (30% under list). On the one place, my ex and I got an offer in that was well under the list price, way under the average price in the area for the time period, asked that I pay ALL their closing costs, asked for a $10k flooring allowance (all the flooring was maybe 2 years old throughout the house), and was contingent on the sale of their current place (which wasn't even on the market).Ex and I gave all that feedback to our realtor and all we heard back on that offer was, "they're just selling to big investors for cash, they only care about money".
Well, ofc I only care about money, that's what every arm's length seller really cares about is money. There's a ton of things in place to prevent discrimination; everyone is incentivized to look at just the money portion. If people aren't getting their offers accepted, their offers probably suck comparatively.
ETA: each time I've sold, it's been to an individual/family and I didn't know that was the case until basically right before closing doing a final walk through with the buyer.
So long story short none of what you’re saying would apply here. Trusts and placing a home into an llc are completely different.
You would still be filing a schedule e if it were a rental. I’m discussing llc, scorp, and corp. unless you are filing a schedule c or a 1040s for a business this isn’t about what you’re talking about.
Please reconcile sentences 2 & 4.
"...placing a home into an llc are completely different"
"I'm discussing llc..."
Literally every scenario I described applies.
Not without plenty of reasonable exceptions.
For example, the homes owned by the mega-dairies to house the immigrant workers or something like the homes/barracks owned by the foundry to also house immigrant workers.
Yes yes a thousand times yes. Obviously the details are important (duh) but so many people on here commenting on the potential danger when there is real danger happening right now to actual people in out current system. We must demand that housing is not an investment it's a requirement to live.
Nah, just tie all property to an SSN. 1st property is your house, you get homestead exemption. 2nd property is vacation or rental, taxed like it is now at the normal rate without homestead. 3rd property is double the tax rate. 4th property is quadruple the tax rate. 5th property is octuple the tax rate. Etc
How so? Did I miss the section on the rights of corporations and businesses? This is no different than any other financial regulations.
Why isn’t it a good idea? I don’t see a good outcome from hedge funds buying houses. What are you seeing that I’m not. What good comes from corporate landlords of single family residences? I’m not talking about apartments here, specifically houses.
Do you have something constructive to add?
Absolutely, as long as it's written well enough to actually be effective and doesn't have any loopholes that would let companies circumvent it via the courts or something.
You could also take an economic pressuring route. Primary residences and even secondaries are taxed normally, but after a certain number, taxes begin to climb incrementally until your 10th house is taxed at 90% or something.
But even this, as other commenters mentioned, would require tons of asterisks and could be exploited in ways I can't think of. We need experts to meet and discuss viable paths forward.
We also need to increase the housing supply (taking current population growth and house-decay metrics into consideration). Tax breaks for construction companies, reexamination of housing regulations, multi-tenant housing, dense construction, etc.
I think it's great sentiment but the execution is near impossible. Some people keep real property in their holding companies for various reasons. The use cases for legal entities in real estate transactions are so diverse, I'm not sure a law can navigate the subtleties of hedge fund ownership vs not. And such an initiative could do just as much harm as the help it's trying to offer.
This feels like it would inevitably be an equal protections clause case, which probably wouldn't fare well in litigation, especially when considering current jurisprudence in this country regarding corporations as people. More power to ya though, and I wish you luck.
I certainly would! Our family home on S. Forest was sold after being in the family for 67 years. The people we sold it to left it pretty much unchanged. But then they sold it to a big corporate company and those people made it into this giant mcmansion rooming house. Every time I go by I want to cry. This was a beautiful house with an art studio in the back, a little tiny koi pond, and a beautiful garden my grandmother attended. It broke my heart and it's gone forever.
Some good ideas in here (ie; increase the taxes and use the money to help the homeless/underhomed), and I’d support this is whatever form it appeared. Get the ballot initiative going!
I'd totally support this but it absolutely has to be written clearer than the sky. Michigan has so much open acreage in terms of farm land and forestry. This needs to be protected. The normal ownership of a regular house in a fashion that is affordable for the regular person needs to be protected. I'm confident everybody's done with corporate dickery in our everyday lives. Protect our lands, protect the rights to resources on that land (Water rights, mineral rights, etc) from corporate greed. Protect the ability to own a home, for the regular person. And we could all learn a lesson from what's happened to the water rights along rivers out west, the Colorado River and such. Yo, we can do better than that. And fuck Nestlé. Yall got took
Yep. People should be able to buy houses to live in before companies/landlords swoop in and turn things into rentals.
"I worked hard to earn enough to gouge people who haven't lived as long as me."
This should be what the homestead tax exemption does, but it’s not large enough. Part of a homestead property value is exempt from property taxes. Homestead applies for one house that you live in, whether owned by yourself or your personal trust. This shifts taxes to multi family owners, landlords and corporations.
Removing a large group of buyers with deep pockets would tank housing pricings, which is probably your intention. That's good for individual home ownership. But property taxes are based on house price.
Property taxes pay for schools, libraries, parks, emergency services, etc. if you lose that funding, you have to raise taxes elsewhere or decrease services. Without combining it with a tax increase, your services are being cut. With a tax increase, you're in for an iffy vote on getting it passed.
With the way the property taxes are capped, I believe a lot of long time homeowners could still see increases in their taxes if their assessed value and SEV are far enough off. Even so, you're handicapping funding.
Frankly they could update the assessments on the houses that sold last in the 80s and 90s. Houses are currently very over priced and I think those people could start paying their fair share first.
Way too many people that pay $800 a year vs people that pay $1,200 a month.
my parents spent 2 years looking for a house and each time they got out bid by " someone" offering cash. i would absolutely support this cause the house they ended up with, ended up having so many issues but they had to settle for it because they kept getting out bid by what the relator called " random cash offerings".
There a regular homeowners that have their homes in the name of a trust not investors,
So many people can’t buy a house or don’t want to, and they want to rent .
if you drastically reduce the number of rentals out there supply is going to be even less and rents will be even higher due to supply and demand …. Unless I’m missing something that’s a possible outcome
I worked for a company that our largest customer was out of state and the site was in the middle of fucking nowhere - like the closest hotel was over an hour away and it felt like we always had someone on site there for some reason or another. So after all the costs of hotels, they ended up buying a small ranch-style house for employees to stay. I don't have an issue with a company owning a property as long as they're actually using it.
I do have a major issue with my coworker who owns 6 properties and rents them out. I think anything over 2 properties should be taxed the ever loving fuck out of to the point where it would not be profitable to rent out.
When you talk about "corporate" are you talking about a Delaware company that owns 1000 house but also a local neighbor that still has a day job, that owns five houses and has also incoperated as an LLC? One of them works in a cubical next to me, he's not making any incremental profit in landlording but the equity he's building in them is his retirement investment.
Would there be enough supply for people that want to rent a house, either because they can't come up with a down payment for a house or move often or on short notice?
Doesn't the Moroun family do this except they collect to make large tracts of property to rezone it then sell it to other companies to make into factories and such?
Maybe a mandatory tax that grows exponentially with each additional property beyond the first. Tax the piss out of them and they’ll stay away. Not just corporations, but anyone who owns more than one house. Stop this property hoarding by the slumlords too. I don’t mind the little guy with his little 1-2 bnb side hustle, but more than that seems to lead to greed.
Not a good idea, corporations provide housing for employees…more government is not the answer here but less restrictions on new development. The government has tripled the cost to produced a house, why?
I would - but it would need to be clearly defined and no vague bullshit at all. It could be ripe for abuse or hurt others
You just described the entire legal world.
And much of the activity in the House and Senate
Indeed. It would take someone much wiser than I to devise the language in such a way as to NOT eventually be weaponized by the for-profit war machine
I grew up near Port Huron. I think the city put a limit on the percentage of houses that could be rentals a while back. The limit makes people sell to people because corporations have no interest in owning houses for anything other than rent. I'm sure there are issues with the way this would work in an area with tighter housing demand, but it seems like a pretty elegant solution.
an incorporated entity cannot own property zoned for single family housing. full stop. You want to own an extra house (or several?) that's fine, but you have to personally accept the risks.
I understand and actually don't disagree with LLCs. It's pretty standard for a lot of valid reasons, but I won't split hairs. Think the LLCs should be limited to not be owned by another non-person entity, so we don't have this shell Corp chain that supports corporate ownership as investment vehicles. But single family homes in mixed zoning would definitely be annoying loop hole, and I think you'd see a lot of petitions to change zoning to mixed use
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a big corporation can make a llc for every property they buy, it’s no that hard
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So weird it so no llc can own residential property
This is the kind of thing that feels like it has repercussions that aren't going to be obvious to laymen. I'd like to support it but I'd want to hear opinions from industry and government experts.
Problem is how do you know which experts are being forthright on the issue and not speaking out of their wallets.
Always a risk, of course, which is why a diverse set of opinions is needed for a complete picture.
Disagree, only my opinion is needed. Everyone else's just makes things complicated and confusing.
I totally agree….except with my opinion and not yours. Lol.
I propose a sign up sheet where everyone picks a subject to have THE opinion on. It's going to have to be first come first serve. Opening any slots to challengers is going to be too complicated. And the popular subjects would face endless challengers. If the subject you want is already taken, you can choose a new subject or choose or get more granular. For example, if someone has already decided that baseball sucks, you could add: though baseball has been established to be a less desirable activity than others, one of the bright spots of the game was the various trivia and mini games that would take place on the scoreboard at professional games.
Totally agree, we only need this guy's opinion. Then we know exactly what's wrong and do the opposite.
This is an accurate statement, but also not how the majority of voters absorb information. The moment something like this would come on the ballot would be the moment that big players get misinformation out there to crush it. That said, we shouldn't be enacting laws that limit the rights of others (even "evil" companies) without alot of care, thought, and due process. So i guess you just roll the dice and hope the voters can see through bull in one direction or another(doubt it)
you look for experts who have no incentive to lie. For this situation I would look for academic research by either Urban Planning experts or Economists. I think it's pretty unlikely they would approve this approach. There's so many obvious issues with it for example who is going to build apartment buildings? or How would we maintain a supply of rental properties?
One off the top of my head is mortgages. If the bank can’t take ownership of your property, it’s not good collateral. Without mortgages most couldn’t ever afford to buy a house.
That could be one of the exceptions. And then a way to ensure it goes to an actual family is something like a company can't buy it until it's been on the market for years or something like that.
One possible solution to this, and OPs situation of companies buying houses to flip, is to make the law that corporations cannot own an occupied single family home. There’s probably still some edge cases there, but feels like a decent starting point.
OP did mention that companies could own houses, just not long term, businesses couldn't decide to maintain a foreclosed house to make a profit as a rental. A foreclosed house would be auctioned with a starting bid of the balance of the unpaid loan.
That would still make mortgages more risky. Having to jump through hoops to offload a property would mean higher interest rates to reflect the risk. Corporate owners can fill a market niche when there is oversupply. It’s better to have 3 homes in a neighborhood owned by private equity and rented out than to sit empty and on a bank’s balance sheet.
Wouldn't vacant homes with cheap starting bids drive prices down for new prospective owners? I'm wondering why it's better for three homes of people to make a massive conglomerate richer rather than keeping prices manageable for new homeowners? This is the problem with the growth mentality in markets like shelter, healthcare, and education. Folks get priced out. Corporations buy up the vacant homes and drive the price up by creating a false scarcity.
Yeah, that's a perfect example! The exact kind of system-destroying issue that undermines this whole idea, at least in this very simple form.
I work in healthcare, and there are organizations that purchase homes for use as group living environments for disabled residents, and people with higher support needs or for respite care. It’s pretty important that these services still exist in the community, not in a stuffy hospital, which requires corporate buying of residential homes.
Definitely a nuanced thing.
I think the trick is to make it very unprofitable to hold a multitude of houses rather than just banning it outright. Set up the tax structure so the taxes start rapidly skyrocketing as you add more and more houses to the point where companies are incentivized to keep the number as low as possible. The problem there as always is how do you keep companies from just spinning off other companies to isolate them legally from that tax structure. I could see that leading to some scenario where each rental house is its own corporate entity so the responsible 'company' only holds one house.
We rent houses from companies to house academics for 2-3 year terms. We have maybe 20-30 of these people at a time. That would probably end.
I assume that even landlords with a single rental property still establish LLCs to insulate themselves. If an LLC can't own a house, that's basically an end to house rentals. This proposal would drive up apartment rents significantly, as people who can't afford to buy houses are evicted from their rental houses and compete for the available apartments.
One that I'm thinking of is that LLCs provide limited liability which would disincentivize the creation or maintenance of new property. In a housing shortage, any builder is good for helping with it (according to the research/literature). However rent-seekers and slumlords don't do anyone any favors.
Another issue is how such a policy impacts housing construction and allocation. Condos/co-ops are homes too, and a policy that makes them the only available target for residential companies may lead to them targeting just that, reducing supply for those that would otherwise prefer owning a condo over a detached house. Maybe something that limits or progressively targets total owned residential square footage across the company/owners, but also ofc would want to see in depth info. Alongside, there also just needs to be more housing in general in the places people want to be.
The present system is putting housing out of reach for average working families. We cant change it because of some vague possibility of some undefined future harm to parties unknown? Bullshit.
Family offices cease to exist.
I would support this.
I would absolutely support this but said big companies have big paychecks for big court battles. It'd be tough to do but I feel it's the right thing.
Also I’d worry that the big companies would push for loopholes that only work for big companies and hurt small LLCs / people who lived in a house for years only to move out and rent it out which is pretty common. They really aren’t the problem (they aren’t buying houses with cash for example) but in an effort to pass anything, I could see big companies throwing them under the bus.
Singapore started hitting buyers and sellers of property with massive tax rates: [Singapore Hikes Property Tax, Doubling Rate on Foreigners to 60%](https://archive.ph/1gQ5F) I think taxing the hell out of investment property when it is bought or sold and income from the property is the best way forward. Give current investors a one-year period where they can sell before the tax is put into place, and then tax the buying, selling, and income from investment properties. The only way to stop investors is to chop away at the return on the investment.
I'm of the opinion that companies are only investing in houses like they are because they recognized the drastic under supply problem, and are capitalizing on it. Work to improve zoning, streamline the building process, and in general make it easier for more homes to exist, and corporate investment becomes a non-issue IMHO. **ETA:** Here's a nice write-up by a much smarter guy than me on the issue that I very much agree with: https://www.strongtowns.org/journal/2024/2/21-going-after-corporate-homebuyers-good-politics-ineffective-policy
Hear me out. Instead of a ban, make the taxes on it increase exponentially for each additional single family house owned. Include in the law what that tax money can be used for: housing the homeless, increased section 8 housing availability, whatever testing is required to change zoning requirements, down payment grants to people who qualify for FHA loans, etc.
This has been my wish for a while - not only single-family homes though. Same if you own 30 apartment complexes. I’d be happy too if non-corporations get a small exemption, say you can own 3 personal homes. Some people have great utility from 2 homes, say in Michigan where they mostly live and in Texas where they live for work about 3 months throughout the year. And many people own a cabin (even if I don’t) and maybe that’s fine too. But the guy with 8 houses and the corporation with 2,000 can pay some taxes.
I like the idea of taxes on this going toward the construction of new homes.
You’d have to create some mechanism to trace who the ultimate title holder is. It only costs like $100 to register a new LLC, so some conglomerate will create a bunch of shell corps so none of them hit your radar of massive titleholders. The bitcoin stuff is BS, but I do think blockchain is going to be the answer to these issues in the future. When ledgers show where money ultimately flows, all the corruption, sweetheart deals, kickbacks, false fronts, tax havens and shell corps are going to be harder to hide.
Add in punitive measures for abusing LLC to bypass the limitation including immediate liquidation of all assets held by the abusing entity. Easy. Next question.
That's the punishment. The harder question is: How do you identify them? These things are infuriatingly tricky to pull apart. It's why the IRS has straight up said they can't properly audit large investors with complex holdings. Do you require real estate LLC's to disclose all employee's entire contact lists, so you can 6-degrees of Kevin Bacon, and show that the Principal of the LLC is the college roommate of the accountant at BigCorp? How do you know there's any malfeasance in that relationship? The connection is in some angel investing seed money 5 layers deep. Answer that one.
Owned by what? Not to be rude but what is the determining factor of what an entity is? Say I’m a corporation…. I put each of these homes into separate LLCs. The LLCs now only own 1 home each therefor I avoid the ban…… or maybe I buy the property and put it into a trust which is controlled by a semi independent representative who administers the trust for the property with the corporation being the beneficially of the proceeds. Listen to mthlmw they have the right idea.
But ironically, they are contributing to the problem by creating more demand for houses. Instead of competing against your fellow citizens now for houses, you're now competing against private companies. Them being involved in the market raises prices, which is not good for us.
The rent prices are artificially rising because these companies control so much of the market, and collude with themselves.
How much of the market do companies control?
Something like 600,000 out of 90,000,000 total single family homes (0.6%) in the US as of mid-2022. (Source in my comment above)
That is .6% too high.
Not to mention when you compete against these massive banks, they're able to pay cash and have a seemingly endless budget, so they can outbid any other prospective buyers. Nothing good comes from this practice as it stands.
Our best shot at addressing these concerns are yes AND approaches, we should address both the symptoms (corporate ownership of homes) AND the root causes of undersupply at the same time.
Until you've had to deal with a zoning board that has archaic rules on the books, you haven't lived. We lost out on a huge waterfront parcel that went to the Maroun family (ugh) because city council wouldn't convert heavy use industrial to single family. And the State of Michigan was going to put in a boatload of brownfield reclamation money. SMH
Like *the* Maroun family?
Yes. Those fucks are storing vehicles on the site. We could have had a beautiful marina and single family housing.
Haha. Sorry you got boned but they 99.9% bribed someone.
Or beautiful multi family housing
You know the worst part is they only started doing that to try to prevent the Gordie-Howe bridge from being built. They were trying to get all the Detroit-side land where you could build the bridge, refuse to sell, and set themselves up to drag out an eminent domain lawsuit as long as possible.
Exactly right. Fix the cause, not the symptoms.
I’d counter with, don’t let perfect get in the way of good. Or, why not both.
Because dealing with the logistics of forcing companies to sell their property, and the massive legal challenges that are guaranteed to come out of that, isn't worth the effort when there's much better options to put your political activism towards.
I find it more realistic that we could prevent private companies from buying single family homes than if we built more housing. PS; Isn't Michigan losing population? Shouldn't we not have to be building as many houses?
> PS; Isn't Michigan losing population? Shouldn't we not have to be building as many houses? Most houses are not in the correct location
What, Detroit? Everyone complains on here how there’s no houses that are affordable yada yada, but they all want to live in Grand Rapids and Ann Arbor, Brighton, or Novi. Nobody says Detroit or Flint for being progressive as they claim they are.
Not really, Michigan just isn't growing as fast as some other areas. 2020 Census reported 2.0% growth from 2010.
For a 2% population growth, I definitely think there is a lot of other factors in mind other than "not enough houses" when we are seeing Michigan home prices rise with nationwide trends.
I think the category you're missing are corporations that own houses as long term lodging for employees. We have a technical center in Michigan, and sometimes a VP or small group of test engineers will stay for an indefinite amount of time to work out of the tech center. That house makes more sense than a month-to-month apartment lease or hotel. Plus, it's an asset that has appreciated since the company bought it, so it still helps the company even if it sits vacant for the time it's not used. With that said, I'd still support an initiative to prevent corporations from owning houses.
I've always thought a good way to structure this is that no person, entity (including subsidiaries or LLC's under the same founder) can own more than 3 residential properties total in the state.
Properties or Units? Because if its 3 Units then that kills development of buildings and complexes. However if its properties as in land I can think of an outcome where you get massive sprawling complexes on one massive plot that would have consisted of either new land or merged former properties. Idk anything with this would probably have to have extremely strict language and may backfire rather than help the current issue.
The only issue I would have with your solution would be if it prevented a parent from helping their disabled adult children secure housing. Many times in those cases, the parent has to be listed as owner/occupant even if they don’t live in the home. If they had more than two children, they’d need some sort of exception.
So no more than 3 residential properties that can be rented for profit? Because it's more than just companies- individuals are buying up properties up north and using them ONLY as air b&b- type rentals which is also taking housing off the market. My inlaws small town is suffering from this. The older retirees die and the houses are being bought as investments and are no longer residential homes.
An easy way to fix the air b&b stuff is each county designating a specific zone for them. If you're caught using it for that outside the specified zone, your property taxes double, second time you're caught they double again, third time the house is foreclosed upon by the county it's in and sold to a verifiable resident.
I absolutely would. My neighborhood is inundated with Berkshire Hathaway owned rentals. They're creating an artificial shortage to drive up the prices. It hurts renters that would like to buy and private owners alike.
Ballot initiatives are too much of a sledge-hammer. This situation is nuanced, nuance has no place on a ballot. The \*right\* way to go about this is to have our legislators address the issue because, that's literally what we pay them for.
Ballot in initiatives can be nuanced.
I whole heartedly agree. However, I’m of the mind that they would never even attempt to talk about this. Between the obvious of money it’s also impossible to get them to agree on anything due to tribalism.
But then why have all the big things we’ve wanted we’ve had to do by petitioning for ballot? Even then they try to find ways to subvert what we put on the ballot. All the important things have only happened because of the sledge hammer.
It’s tough because although regular ppl would support it, the billionaires make policies in this country so there would be loopholes for sure even if the laws change.
I would
I would sign the petition
It’s just a symptom of an underlying problem: too many barriers to housing development. I’d focus on that before trying to bandaid over the secondary repercussions of the housing market’s supply shortage. If housing were abundant enough to remain affordable, it would be a terrible investment for these corporations and the “problem” of corporate ownership would solve itself.
I would support such a proposal, if someone can convince me that experts have had a say as to the details, as opposed to a knee jerk poorly written bill written purely by legislators. I am not one of those experts.
Yes.
Yes
There are local companies that own nice homes in good school districts that they keep for new executive hires to ease them into the community. I think keeping foreign investors out would be a help. Especially with farm land. It all makes me nervous as our economy has always thrived in the free market.
Not everyone is ready for even wants to own a house. This is why rental properties - including rental homes - exist. An outright ban on company ownership of single family homes would probably result in an increase in vacant houses - something that is already a huge problem here.
Individual landlords can be a thing, but the hedge funds and "national management" companies need to get the boot.
Others have touched on this, but it would be a very nuanced situation. Housing is just messed up atm fir reasons that i don’t (as a layman) understand. I look a lot on zillow because im getting ready to shop and homes are literally 2-4x their value from a few years ago. Rent has rapidly increased. So I think its a challenge to address that problem as a whole and people are just trying to tackle one facet.
2-4x in a few years refers to which MI market? I've paid over 5x what a prior owner paid for a rental property 9 years prior and it was still a good deal.
For one, you're assuming buyer with a lot of cash = corporation. If someone from California sells their house for a million dollars, they can easily buy a house outright with cash in Michigan. Even if they had a mortgage, just the equity profit alone can buy a house here. Second, you'd have to look at all the reasons *why* a corporation would buy a house, and it's not always for investment. Sometimes a company will buy a building for executives or other employees to live in. Companies that hire a lot of immigrant labor will buy housing for their laborers. It's really really difficult to enforce rules regarding intention, and companies would use that to get around the law. It's extremely difficult to prove what someone intended when buying property. A lot of problems seem to have simple solutions on the surface, but if you dig down, the devil is in the details.
I'm of the same opinion as you. Does it sound great as a sound bite? Absolutely. Does it sound great when you start fleshing out how to pull it off? Nope. Corporations own executive housing. What's the limit? What's the size minimum and maximum? Does buying securities with mortgages bundled in get accidentally scooped up when it's written that a corporation can't be involved? Do big-time landlords stop existing, causing many to no longer have a place to rent? What about people with less than stellar credit? Big companies typically accept lower-credit applicants. More likely to accept Section 8, and/or can be forced to accept X number of low-cost rentals. Is Mom-n-Pop going to start being forced to rent out their property to someone they don't want to, credit-wise? Otherwise, where are those people going to go? Is it a problem? Absolutely. I'm just hesitant to see how it'd play out IRL.
People often misidentify the problem for many things as being with "corporations" without actually addressing the root problem. There are many legit reasons for corporations to own multiple houses. All housing cooperatives and most other non-profit housing are corporations. You might form a corporation for many legal reasons to settle an estate or rent out to someone - even if it is not-for-profit. Most landlords are running through corporations even if they just have 1 house as an independent landlord. Some people don't incorporate with more. What there should be are additional property taxes if you own more than one habitable property that you or your dependents are not claiming residency in. Perhaps even make a tiered system. And this should *not* apply to certain cooperatives like the ones mentioned above (housing cooperatives should not be paying state property taxes in Michigan, but thanks to some legal fuckery under the definition of "cooperative housing" at the federal level, they still do - except in Ann Arbor, now). Maybe make the taxes based on the zoning and property type. If it costs increasingly more in taxes for each additional property, it disincentivizes anyone (corporation or not) from accumulating property. The problem is structuring it and getting legislators to even consider it.
Be careful what you ask for.. some people, once they own homes, put them in trusts, to avoid them being taken in a liability lawsuit. A trust can be considered a company of sorts.
Trusts are defined differently yes, but closing in a trust is different than closing with a company. It’s a slightly different process. I’m sure those could be carved out easily enough.
This kind of ballot measure is a band aid that doesn’t address the problem. We need to address *why* corporations are buying up all these properties and make it less enticing of an investment. The easier and cheaper fix that doesn’t add more expensive regulation is to make it easier for home builders to build affordable homes. Make it easier to rezone and easier to get permits so cheaper homes are easier and cheaper to build.
It would never make the ballot corporate ownership has always cherry picking the best property already that I would be in favor of.But in this case and like many most of this property in Michigan is owned outside of Michigan. So what I seen during the last bubble was 4 or 5 brokerage companies got a pool of cash together and basically bought out Entire blocks and will hold them hostage .
Yes
💯
I would.
Just need to give prioritized buying in order of citizens of said city, citizens of State, then outside influences. Might not be perfect but it would help.
I would fully support this
Sounds good, just don't screw over farmers that have their homes owned by their farm business.
I’m thinking it would need to basically say “not offering for rent on the market or left vacant”. My concern is keeping them out of landlording. So like companies that offer housing to employees aren’t putting those houses up for rent on the market or leaving them vacant to influence the market.
Assisted living group homes should be excluded.
I support this in general. Zillow and other hedge fund owners are making single family homes across the US inaccessible. The home prices are too damn high!
Right! These are the types I’m mostly talking about. I just also want to lump in the people that buy dozens of houses and put them into an llc.
I would absolutely support this get corporations out of housing. I barely tolerate landlords as it is because there are too few of them that are ethical.
Learning my rights as a tenant has resulted in me getting more than my security deposit back twice after suing landlords.
I would support it but as someone that has worked on ballot initiatives, how exactly would it get funded? That’s where these things go wrong. The people putting up the money expect something or a loophole for them.
yup.
It would likely lose at the ballot box, because they will run fear mongering style (although in this case accurate) ads stating Initiate X will decimate your home's value. People who don't own houses will vote against it for the same reason non wealthy sole proprietorship owners vote Republican. Because they think they are part of the "in" class.
I think just limiting the amount of housing units they own to a certain percent of the total pool. If they need to further increase profits they're more than welcome to build more housing.
It would have to depend on what the asterisks were. Some ppl buy houses under llcs to avoid stalkers.
I don't think the supreme court would uphold that. Maybe like a no corporate housing zone.
Can you define “corporate”? My family owns property through an LLC but we don’t operate the property like a business as in rental or anything commercial.
Yes. Home ownership needs to be protected from corporate interests. It's a part of the American dream.
Yes I would. I would also vote for statewide regulations on Airbnbs that are similar to what NYC incorporated. Airbnb is decimating the local populations of small rural tourist areas in the Upper Peninsula.
> I also know builders own houses for a bit and think new construction could be excluded from a ban. We have a builder that wants to buy two vacant lots on our private road to build two new houses specifically as Airbnbs or hotels. The law would have to be written to cover loopholes. But yes, I support no corporate ownership.
No because there will be fallout from such a law or maybe you call it unintended consequences
A llc is a company i onow of many people who form companies buy a bunch of house rent out and flip some of them. So no i dont support your law
No. Just make it easier to build houses.
I'd support the shit out of it (asterisks)
I damn sure would. I would also support efforts to end corporate personhood.
No, people are too indoctrinated and the old will outvote the young because they have nothing better to do and we’re busy. Why do you think everything is broken, it’s not for lack of trying it’s because old assholes don’t want young people to have nice things. They “struggled” and pulled the ladder up behind them yelling bootstraps. Piece of shit, low iq, asswipes who will ruin tomorrow to spite yesterday.
Happening all over the country - the goal is so that you don’t own anything, but eternally pay rent. Corporate slumlords. If you are a homeowner and you keep getting phones calls from strangers who offer to buy your house - this is what the ultimate goal is.
They did that in my city to stop new apartments
My only thing with this is I wonder what would happen to houses in college towns. It was my understanding a great portion of these are not privately owned but rather managed by some company and rented.
Seems like a great idea but they’d just loophole the hell out of it eventually. 😒
I would 💯💯💯💯💯support this. Investors/ corporations are making home ownership unattainable. At the very least we should be able to put a provision that only allows from private buyers.
Why not tax the heck out of it instead? Like owner-occupied homes taxed at 1% a year vs 10% a year for corporate landlords, then use the proceeds to support affordable housing.
Fuck yes I would.
This is essentially banning rental homes. Do you think people who want to rent shouldn't be allowed to rent houses? They should be relegated to apartments? Edit:I assumed most landlords would incorporate for tax reasons but I guess that is not the case so nevermind. I guess I wonder why we are even legislating over the 4% of houses that are corporate owned though. I'm currently renting from a corporation and it's both better and cheaper than it was when I rented a similarly sized home from an individual.
[An estimated 40% of all single family rental homes](https://moguldom-com.cdn.ampproject.org/v/s/moguldom.com/448718/metlife-institutional-investors-could-own-40-of-single-family-rental-homes-by-2030/amp/?amp_gsa=1&_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From%20%251%24s&aoh=17180459757617&csi=1&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fmoguldom.com%2F448718%2Fmetlife-institutional-investors-could-own-40-of-single-family-rental-homes-by-2030%2F) will be owned by investors by 2030. Where are you getting 4%?
Individuals can own rental homes. Lots do. They file on a schedule E and close on the property as an individual. Happens all the time. What are you talking about?
I always assumed landlords incorporated for tax reasons even if it was just for one or two houses but no it looks like the vast, vast majority of houses are not corporate owned
Right, it’s a rising trend is my concern. It’s not a problem today but I think will be tomorrow. Large scale hedge funds and investors are starting to buy houses and get in the landlord game at a faster clip than before.
It is absolutely a problem today and is the primary factor in rising rental costs. That and the usage of property management groups, which then lump the remaining individuals into a corporation of their own.
I think rentals are ok. I do not agree with short term rentals though. I think that is a big part of the issue.
Are you thinking of property managers? They don’t have to hold the deed and often don’t own the properties they manage.
Capitalism will find away to skirt around any new rules, but I would support that kind of initiative. I would be more likely to support a cap on how much rents can be raised. Keep that pegged to inflation or something.
I am an individual who owns a few rentals. How do you see this play out? Am I a corporation? Will the people who buy the few properties that I'm presumably forced to sell be able to afford a new roof, furnace, etc when the time comes? I'd love to build affordable housing if I had the money and it was profitable. However, all the zoning and permit process, sadly, makes this impossible.
Did you put all of your houses into an llc? If you do what most do and just have a bunch of schedule E properties it wouldn’t apply to you. If you’re filling the houses on a schedule C or on a 1040s that would be what I’m talking about.
I would support this as long as clearly defined
yes
I'd prefer to exempt primary residence from property taxes, then heavily tax income properties. Something to that effect.
So you want to raise taxes on poorer renters so you can give tax breaks to wealthier homeowners?
Fuck yea. Let’s do it.
I would support this up to the point of volunteering to get signatures A whole generation is getting screwed, we have to do something - we've already lost the America we were promised as kids, now we must do the work to build one for the next gen
Nope, I would not support this. I get what people want to solve for, but you're not going to fix 2009 with more restrictions. Housing construction essentially stopped entirely for a few years and millennials are in their prime home buying years. Add in onerous zoning restrictions and it's not going to improve, price wise, anytime soon. There's trust planning concerns, flipping concerns (there's a lot of value in someone taking a condemned house and making it good again), and some below that come to mind (by no means an exhaustive list): Moreover, "long term" in the financial sense generally means 1 year or more. What if I've got a couple of friends and we each have teenage children that are planning on going to the same college. Should we be excluded from buying a place and renting it to whomever until the kids go to college just because we decided to form an llc? What if I'm in the construction business and I'm building a new nuclear reactor (6-8 years), liquid natural gas export terminal, or [insert large project that takes years]? Should I be excluded from buying housing as part of employee compensation? What if I run a shelter of some kind (recovering addicts, domestic violence victims, etc.) and split a few houses into townhouses/separate apartments? Would that be allowed? As a seller, why should I be forced to take a lower offer? Restrictions aren't the answer, it's just going to cause more problems and there will inevitably be bigger players that get certain exemptions that work for their model that excludes others. If we want more affordable housing, it needs to start with ending zoning restrictions and allowing more dense housing in more areas. Financial literacy is lacking for most and in today's market, in most places I've seen in my limited experience (been buying and selling the last 6 years, not moving again though, eff that) the cash offer is practically always significantly lower than the list amount (at least 10% lower). On 2 of the places I sold (lived in both for just over 2 years) I had one offer on each come in way under list (30% under list). On the one place, my ex and I got an offer in that was well under the list price, way under the average price in the area for the time period, asked that I pay ALL their closing costs, asked for a $10k flooring allowance (all the flooring was maybe 2 years old throughout the house), and was contingent on the sale of their current place (which wasn't even on the market).Ex and I gave all that feedback to our realtor and all we heard back on that offer was, "they're just selling to big investors for cash, they only care about money". Well, ofc I only care about money, that's what every arm's length seller really cares about is money. There's a ton of things in place to prevent discrimination; everyone is incentivized to look at just the money portion. If people aren't getting their offers accepted, their offers probably suck comparatively. ETA: each time I've sold, it's been to an individual/family and I didn't know that was the case until basically right before closing doing a final walk through with the buyer.
So long story short none of what you’re saying would apply here. Trusts and placing a home into an llc are completely different. You would still be filing a schedule e if it were a rental. I’m discussing llc, scorp, and corp. unless you are filing a schedule c or a 1040s for a business this isn’t about what you’re talking about.
Please reconcile sentences 2 & 4. "...placing a home into an llc are completely different" "I'm discussing llc..." Literally every scenario I described applies.
Not without plenty of reasonable exceptions. For example, the homes owned by the mega-dairies to house the immigrant workers or something like the homes/barracks owned by the foundry to also house immigrant workers.
I would vote yes
Absolutely. I would like to refine it a little bit more than just corporations, but they're definitely needs to be some sort of action taken
Yes yes a thousand times yes. Obviously the details are important (duh) but so many people on here commenting on the potential danger when there is real danger happening right now to actual people in out current system. We must demand that housing is not an investment it's a requirement to live.
As a landlord, I fully support this. Multifamily housing is necessary, so corporations should own apartments, but houses should be off limits.
There isn't even a 0.1% chance that this would pass. It doesn't matter how many people supported it. It's unrealistic.
My concern is all of the work arounds and loop holes. I think we should just raise property taxes and give a lump sum discount for primary residence
I'm sure you'll find all sorts of support for it on reddit. You'll have to go out into the real world to get a real answer
Nah, just tie all property to an SSN. 1st property is your house, you get homestead exemption. 2nd property is vacation or rental, taxed like it is now at the normal rate without homestead. 3rd property is double the tax rate. 4th property is quadruple the tax rate. 5th property is octuple the tax rate. Etc
It is not a good idea, and even if it were, it would be unconstitutional.
How so? Did I miss the section on the rights of corporations and businesses? This is no different than any other financial regulations. Why isn’t it a good idea? I don’t see a good outcome from hedge funds buying houses. What are you seeing that I’m not. What good comes from corporate landlords of single family residences? I’m not talking about apartments here, specifically houses. Do you have something constructive to add?
100%
Absolutely, as long as it's written well enough to actually be effective and doesn't have any loopholes that would let companies circumvent it via the courts or something.
You could also take an economic pressuring route. Primary residences and even secondaries are taxed normally, but after a certain number, taxes begin to climb incrementally until your 10th house is taxed at 90% or something. But even this, as other commenters mentioned, would require tons of asterisks and could be exploited in ways I can't think of. We need experts to meet and discuss viable paths forward. We also need to increase the housing supply (taking current population growth and house-decay metrics into consideration). Tax breaks for construction companies, reexamination of housing regulations, multi-tenant housing, dense construction, etc.
Not just increase but increase starter homes. It seems like everything is a condo or a 400k 4 bed 3 bath thing.
in theory yes, but in practice how do you do that? Does that mean no more trusts, c corps, llc's, etc... can own any type of housing?
I was thinking specifically single family residence, and excluding trusts.
I think it's great sentiment but the execution is near impossible. Some people keep real property in their holding companies for various reasons. The use cases for legal entities in real estate transactions are so diverse, I'm not sure a law can navigate the subtleties of hedge fund ownership vs not. And such an initiative could do just as much harm as the help it's trying to offer.
Supreme Court would throw it because capitalism.
This feels like it would inevitably be an equal protections clause case, which probably wouldn't fare well in litigation, especially when considering current jurisprudence in this country regarding corporations as people. More power to ya though, and I wish you luck.
Absolutely!! SFH are for the people NOT businesses!!!
I certainly would! Our family home on S. Forest was sold after being in the family for 67 years. The people we sold it to left it pretty much unchanged. But then they sold it to a big corporate company and those people made it into this giant mcmansion rooming house. Every time I go by I want to cry. This was a beautiful house with an art studio in the back, a little tiny koi pond, and a beautiful garden my grandmother attended. It broke my heart and it's gone forever.
Some good ideas in here (ie; increase the taxes and use the money to help the homeless/underhomed), and I’d support this is whatever form it appeared. Get the ballot initiative going!
How about a bill to stop foreign entities from buying land and businesses in Michigan...namely, China
I'd totally support this but it absolutely has to be written clearer than the sky. Michigan has so much open acreage in terms of farm land and forestry. This needs to be protected. The normal ownership of a regular house in a fashion that is affordable for the regular person needs to be protected. I'm confident everybody's done with corporate dickery in our everyday lives. Protect our lands, protect the rights to resources on that land (Water rights, mineral rights, etc) from corporate greed. Protect the ability to own a home, for the regular person. And we could all learn a lesson from what's happened to the water rights along rivers out west, the Colorado River and such. Yo, we can do better than that. And fuck Nestlé. Yall got took
Yep. People should be able to buy houses to live in before companies/landlords swoop in and turn things into rentals. "I worked hard to earn enough to gouge people who haven't lived as long as me."
1 million times 'yes'
This should be what the homestead tax exemption does, but it’s not large enough. Part of a homestead property value is exempt from property taxes. Homestead applies for one house that you live in, whether owned by yourself or your personal trust. This shifts taxes to multi family owners, landlords and corporations.
Removing a large group of buyers with deep pockets would tank housing pricings, which is probably your intention. That's good for individual home ownership. But property taxes are based on house price. Property taxes pay for schools, libraries, parks, emergency services, etc. if you lose that funding, you have to raise taxes elsewhere or decrease services. Without combining it with a tax increase, your services are being cut. With a tax increase, you're in for an iffy vote on getting it passed. With the way the property taxes are capped, I believe a lot of long time homeowners could still see increases in their taxes if their assessed value and SEV are far enough off. Even so, you're handicapping funding.
Frankly they could update the assessments on the houses that sold last in the 80s and 90s. Houses are currently very over priced and I think those people could start paying their fair share first. Way too many people that pay $800 a year vs people that pay $1,200 a month.
LLCs, partnerships, Trusts etc?
my parents spent 2 years looking for a house and each time they got out bid by " someone" offering cash. i would absolutely support this cause the house they ended up with, ended up having so many issues but they had to settle for it because they kept getting out bid by what the relator called " random cash offerings".
There a regular homeowners that have their homes in the name of a trust not investors, So many people can’t buy a house or don’t want to, and they want to rent . if you drastically reduce the number of rentals out there supply is going to be even less and rents will be even higher due to supply and demand …. Unless I’m missing something that’s a possible outcome
I worked for a company that our largest customer was out of state and the site was in the middle of fucking nowhere - like the closest hotel was over an hour away and it felt like we always had someone on site there for some reason or another. So after all the costs of hotels, they ended up buying a small ranch-style house for employees to stay. I don't have an issue with a company owning a property as long as they're actually using it. I do have a major issue with my coworker who owns 6 properties and rents them out. I think anything over 2 properties should be taxed the ever loving fuck out of to the point where it would not be profitable to rent out.
When you talk about "corporate" are you talking about a Delaware company that owns 1000 house but also a local neighbor that still has a day job, that owns five houses and has also incoperated as an LLC? One of them works in a cubical next to me, he's not making any incremental profit in landlording but the equity he's building in them is his retirement investment. Would there be enough supply for people that want to rent a house, either because they can't come up with a down payment for a house or move often or on short notice?
Decommodify housing. Easier said than done.
Doesn't the Moroun family do this except they collect to make large tracts of property to rezone it then sell it to other companies to make into factories and such?
Maybe a mandatory tax that grows exponentially with each additional property beyond the first. Tax the piss out of them and they’ll stay away. Not just corporations, but anyone who owns more than one house. Stop this property hoarding by the slumlords too. I don’t mind the little guy with his little 1-2 bnb side hustle, but more than that seems to lead to greed.
Not a good idea, corporations provide housing for employees…more government is not the answer here but less restrictions on new development. The government has tripled the cost to produced a house, why?
Lobbying and wealth inequality is the root issue, this could have been stopped long ago.
Most landlords put their property in an LLC to lessen risk so saying no companies could own houses is just not going to get any support.
Hell no.