Senator Baldwin Making Second Attempt to Pass Legislation Taxing Real Estate Investors From Buying Large Numbers of Homes

Wednesday, February 7th, 2024 -- 9:00 AM

(Margaret Faust, Wisconsin Public Radio) U.S. Sen. Tammy Baldwin is making a second attempt to pass federal legislation that would tax real estate investors who buy up substantial numbers of single family homes, the plan aimed at increasing the availability of affordable housing.

According to Margaret Faust with Wisconsin Public Radio, the Affordable Housing and Homeownership Protection Act would impose a transfer tax on investors who purchase and hold more than 15 single-family homes nationwide.

The revenue would provide up to $50 billion over ten years to help build and preserve approximately 3 million affordable housing units nationwide, according to the senator.

“In some communities, the path to homeownership is really almost eliminated because of the number of homes that have been snatched up by big wealthy investors, mostly out of state,” Baldwin said.

According to Redfin, a residential real estate brokerage corporation, the number of single family homes being purchased by investors fell nationwide last year as home prices increased.

But investors still were buying about 16 percent of all homes purchased nationwide in the third quarter of 2023, more than double the share bought up by investors in 2000.

In Wisconsin, the share of purchased homes bought by investors in the third quarter of 2023 was 13 percent. The most recent legislation introduced by Baldwin is similar to the Stop Predatory Investing Act Baldwin co-sponsored in 2023.

Christine Donahoe, a civil rights attorney in Wisconsin, spoke with WPR’s “The Morning Show” about that legislation. She criticized out-of-state real estate investors buying local housing stock.

“They see single-family homes as an asset class. They don’t see single-family homes as a necessity for families, and cities, and part of the community. They are going to gouge their tenants for as much as possible,” Donahoe said. Donahoe said investors are driving out tenants because rent is too high, and home buyers because investors are buying real estate in bulk with cash.

According to research from Marquette Law School’s Lubar Center for Public Policy Research and Civic Education, from 2005 to 2020, the owner-occupied percentage in Milwaukee fell from 80 percent to 69 percent. Parts of the north and west sides saw declines double that.

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