Virginia State Senator Glen Sturtevant (R-Midlothian) revealed on Saturday he intends to file legislation that would prohibit institutional buyers, like hedge funds and private equity groups, from purchasing single-family homes in the commonwealth.
In posts to the social media platform X, Sturtevant noted that Redfin found in August that one in six homes in the United States are purchased from such institutional buyers, and revealed that the figure increased to 11 percent of home purchases in Virginia Beach and 9 percent in Washington, D.C.
“These hedge funds and private equity groups can hold these homes and keep them off the market, which cuts supply and helps drive up prices,” wrote Strutevant in a post to X. “When they outbid a regular buyer, that helps drive up the comps of surrounding houses and prices too. In fact, these groups actually have an incentive to overpay for the houses they buy because it raises the value of the houses in the area that they already own.”
In Virginia, these investment groups bought up 11% of the single-family homes in Virginia Beach, and 9% of the homes in the DC Metro area.
(Redfin tracks the top 50 metro areas, so the Virginia-specific data they publish is for DC/NoVa and VA Beach.) pic.twitter.com/ous6syo26R
— Glen Sturtevant (@GlenSturtevant) November 30, 2024
The state senator proposed three solutions in remarks to ABC 7 News, including allowing a home buyer to retain the interest rate secured by the purchaser and incentives for employers to help their workers purchase houses, but the outlet reported Sturtevant is also interested in “banning hedge funds from buying single-family homes in Virginia.”
Sturtevant’s proposal was received warmly by State Senator Mamie Locke (D-Hampton), who suggested it represented “Democratic values” in a statement to 8 News.
“For too many Virginians, the path to homeownership—the cornerstone of the so-called ‘American Dream’—has become an arduous uphill battle, made even harder by the lingering effects of the COVID pandemic,” Locke told the outlet. “I look forward to working with my colleagues to break down these barriers and create real opportunities for Virginians to achieve the stability and security that homeownership provides.”
Concerns about large financial groups purchasing single-family homes generated headlines in 2021, when The Wall Street Journal reported that pension funds and private-equity firms were “snapping up single-family houses to rent out or flip.”
The next year, reports about companies purchasing single-family homes led BlackRock, the world’s largest asset management firm, to publicly clarify that it was not purchasing single-family homes, but instead building large numbers of them with the goal of turning the homes into rentals.
More recently, BlackRock lost an $8.5 billion investment from the Texas Permanent School Fund over its adherence to environmental, social and governance (ESG) policies, and in January the company inked a deal to “decarbonize the world” with government subsidies.
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Tom Pappert is the lead reporter for The Tennessee Star, and also reports for The Pennsylvania Daily Star and The Arizona Sun Times. Follow Tom on X/Twitter. Email tips to [email protected].
Photo “Home for Sale” by Jongorey CC2.0.
