HUD says large investors are “impossible to compete with” and sees them as a threat to homeownership – a “much bigger problem” that needs to be addressed.
WASHINGTON – On Tuesday, the U.S. Department of Housing and Urban Development (HUD) Office of Policy Development & Research (PD&R) held its quarterly update meeting to discuss issues around institutional investors – specifically their impact on housing markets across the United States.
“Institutional investors have access to resources that make them impossible to compete with,” says HUD Secretary Marcia L. Fudge. “This is especially true for minority first-time homebuyers, who already face institutional barriers.”
Fudge says that HUD has already taken steps to ensure that our defaulted assets land in the hands of non-profits or individual owners – such as extending the amount of time an FHA foreclosure home is available only to buyers who plan to live within the property – but “this is a much bigger problem that will take everyone coming together to figure out how to sustain housing that people can afford.”
During Tuesday’s meeting, a group of experts and stakeholders shared research and data focused on things that communities have done to preserve affordable housing.
However, since the start of the pandemic, the housing market witnessed an increase in activity by large investors who often oversee more than 1,000 properties in their portfolio. The rise of institutional investors largely started after the Great Recession when many homes went into foreclosure, and institutional investors created a relatively new business model where they handled single-family renters in the same way as renters in a single-location high-rise.
However, since the new business model often buys lower-cost single-family homes, it also removes housing stock. HUD says that “produced a strain on the already limited prospects of first-time homebuyers and has deepened the gaps in racial wealthy and homeownership.”
“This PD&R Quarterly will profile the impact of institutional investors in the housing market and provide examples of how various levels of governments, along with nonprofits, can drive housing supply to owner-occupants and mission-driven entities,” says Solomon Greene, PD&R’s Principal Deputy Assistant Secretary.
A list of the HUD panelists is posted online.
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Author: kerrys