In a 5-0 vote, the commission authorized the publication of a notice in the Federal Register that will solicit comment on potential 6(b) orders. These orders would target more than 30 of the largest investors in U.S. single-family homes — those that own more than 1,000 SFR properties — and compel them to report information on their “corporate structure, current and historical housing information, rental and fee income, as well as strategic business plans and other investor information,” the FTC explained in an announcement.
The FTC plans to use this feedback, which would include the entities that may qualify as mega investors, to compile a comprehensive study. This study would include a list of SFR homes that are matched to their owner.
“As Americans face a housing shortage and pay soaring rents, it’s vital to understand the role played by large institutional investors,” FTC Chair Lina M. Khan said in a statement. “This proposed study would shed much-needed light on the mega-investors that have amassed huge portfolios of single-family rental units and potentially contributed to the housing challenges that Americans face.”
“The rise in mega corporate landlords has deeply troubling implications for renters,” said Hannah Garden-Monheit, director of the FTC’s Office of Policy Planning. “The FTC is committed to uncovering the scope of these large corporations’ holdings and their effects on housing costs.”
The public has 60 days to submit comments online before the FTC reviews them and begins work on any 6(b) orders.
A report issued in May 2024 by the Government Accountability Office (GAO) determined that institutional investors such as Blackstone Group and Invitation Homes may have contributed to rising home prices since 2009, but it’s more difficult to assess whether they’ve hindered homeownership opportunities.
The GAO said the studies it reviewed found no investors that owned at least 1,000 SFRs as of late 2011. By 2015, however, these corporations collectively owned 170,000 to 300,000 homes across the country.
CoreLogic economist Thomas Malone reported last month that “institutional investors aren’t the housing market’s biggest players.” Company data for third-quarter 2024 data showed that homebuying activity among all investors grew by only 2% from the prior quarter and that the vast majority of investors are small landlords who own 10 or fewer homes.
In some of the nation’s largest metro areas — including Atlanta, Los Angeles, Las Vegas and St. Louis — the investor share of home sales topped 30% in Q3 2024. But mega investors accounted for only small portions of this activity.
“All signs point to investor share remaining around 25% of total sales for the foreseeable future as mortgage rates and home prices remain high,” Malone wrote.
HousingWire Lead Analyst Logan Mohtashami also dispelled ongoing clams that institutional investors have accounted for more than 40% of all U.S. home sales. Data from John Burns Research and Consulting showed that their market share peaked at less than 5% following the COVID-19 and has since fallen below 2%.
Rising rents have been targeted by some high-profile politicians of late. During her presidential campaign, Kamala Harris said she planned to “take on price gouging and bring down costs” by capping “unfair rent increases,” among other measures.
Around the same time, President Joe Biden called on Congress to cap annual rent hikes at 5% for two years for anyone who manages 50 or more rental units. Those who failed to adhere to the cap would have been denied federal tax benefits.
Senate Democrats, led by Amy Klobuchar of Minnesota and Sherrod Brown of Ohio, introduced the Housing Acquisitions Review and Transparency (HART) Act in July 2024. The bill would require bulk homebuyers to disclose their purchases to the FTC and the Department of Justice for review, potentially stopping “anticompetitive transactions that could increase rents, decrease services, and push homebuyers out of the market.”
The HART Act did not advance past the committee stage during the previous congressional session. And the likelihood of any significant actions against corporate landlords appears lower as the Biden administration is set to give way to the second Trump administration next week. Khan will be replaced at that time as FTC chair by one of the current commissioners, Andrew Ferguson, who does not require Senate confirmation.
