A Nebraska lawmaker is taking a stand against out-of-state hedge funds and corporate entities buying up single-family homes in the state. Senator Justin Wayne's bill aims to address the housing shortage in his north Omaha district and potentially make Nebraska the first state to prohibit such acquisitions.
Similar legislative efforts have been seen in other states and at the federal level, with concerns raised about the impact of corporate purchasing on home prices, rent, and real estate taxes. Wayne points to an Ohio corporation that has purchased over 150 single-family homes in his district, often outbidding individual homebuyers with all-cash offers and subsequently renting out the properties.
Experts in the housing industry attribute the scarcity of available homes to various factors, including high mortgage interest rates and a history of inadequate construction of affordable housing. Wayne's bill, however, provides only a single sentence specifying that corporations, hedge funds, or other businesses can only purchase single-family homes in Nebraska if they are located in the state, and their principal members reside there.
Wayne outlined the motivation behind the bill, emphasizing the need to preserve Nebraska's existing housing stock for Nebraskans. He sees this proposed legislation as an opportunity for Nebraska to take a leading role in addressing the issue.
At a committee hearing where the bill was presented, Wayne Mortensen, the director of NeighborWorks Lincoln, an affordable housing developer in Lincoln, echoed Wayne's concerns, stating that corporate interests purchasing single-family homes has become a nationwide problem. Mortensen attributes this phenomenon to the appeal of housing as a corporate investment compared to bond markets, especially amidst economic downturns like the one caused by the COVID-19 pandemic. The result, according to Mortensen, is neglect and deterioration of properties by absentee landlords who prioritize maximizing value extraction over community accountability.
Mortensen adds that about 13% of single-family homes in Lincoln are currently owned by out-of-state corporate firms, emphasizing the extent of the issue. Several other states have introduced comparable bills to address corporate home purchases, but they have encountered obstacles or failed to progress.
Despite acknowledging the housing shortage in the state, Republican lawmakers present at the committee hearing expressed skepticism about Wayne's proposed solution. They highlighted potential loopholes that could be exploited by companies, such as setting up shell companies or manipulating ownership layers.
Senator Brad von Gillern of Omaha also voiced opposition on grounds of pure capitalism. His concerns highlight the debate between preserving affordable housing for local residents and promoting free-market principles.
The ultimate fate of Wayne's bill remains uncertain. Although Nebraska leans conservative, the issue at hand poses significant challenges that warrant attention and potential solutions. As the housing crisis persists, the state's lawmakers must weigh the benefits of preserving housing for Nebraska residents against the principles of an open market.
