H.R. 7186: American Family Housing Act

This bill, titled the American Family Housing Act, seeks to amend the Investment Company Act of 1940 to impose restrictions on large-scale companies regarding the purchase of single-family residences. Here are the main points of what the bill would do:

Purpose

The goal of the bill is to restrict large-scale investment companies and private funds from acquiring single-family homes. This is aimed at addressing concerns related to housing availability and affordability in the market.

Restrictions on Purchases

The legislation prohibits large-scale companies from:

• Purchasing any single-family residence, including properties that might be sold by the federal government.
• Buying equity securities of qualified issuers if the purchase would give them more than a 49% ownership stake in those issuers.

Definitions

To clarify the limitations, the bill defines several key terms:

• Large-scale company: A registered investment company or private fund with over $100 billion in assets under management.
• Private fund: An issuer that would qualify as an investment company if not for certain provisions.
• Qualified issuer: An issuer that owns more than 100 single-family residences as assets.
• Single-family residence: A dwelling unit designed for one household, functioning independently without shared walls or utilities, and not part of a condominium or cooperative housing project.

Effective Date

The restrictions would take effect 100 days after the enactment of the legislation, should it pass.

Intended Impact

The bill aims to limit the growing trend of large investment firms purchasing single-family homes, which has been argued to contribute to rising property prices and reduced availability of homes for individual families.

Implementation

If enacted, this bill would require enforceable measures to monitor compliance and could influence the housing market dynamics, potentially altering the behaviors of both investors and homebuyers.

Relevant Companies

• BX (Blackstone Group) - A major player in real estate investment, potentially affected by restrictions on their ability to acquire single-family homes.
• INVH (Invitation Homes) - A company specializing in acquiring and renting single-family homes, which could see significant changes in their business model due to the purchase limitations.
• AMH (American Homes 4 Rent) - As a residential rental home company, they may face challenges in expanding their portfolio if restricted from purchasing additional properties.
• ZNGA (Zillow Group) - Although primarily a real estate marketplace, any business tie to residential acquisitions could be impacted by the proposed changes.