One of the bills under consideration in Congress to address the affordability crisis is the Humans Over Private Equity (HOPE) for Homeownership Act. Introduced in February 2025, the bill points to large financial entities purchasing single-family homes in bulk as a reason for high prices, and looks to remedy it with new tax statutes.
The bill’s sponsors are all Democrats and Democratic-aligned independents. Thus, the bill likely has an uphill battle due to the current Republican trifecta in the House, Senate and White House.
Nonetheless, Senator Jeff Merkley (D-OR), the bill’s original sponsor in the Senate, is continuing to advocate for its importance in addressing ongoing housing problems.
“Hedge funds are killing the dream of homeownership, which has been by far the biggest wealth builder for middle-class America. The HOPE for Homeownership Act is a part of our strategy to tackle the housing affordability crisis by going after hedge funds that own and control large parts of the housing market,” Merkley tells RISMedia via email.
The bill summary cites projections that institutional investors owned about 700,000 single-family homes in 2022, and could own 40% of single-family home rentals by 2030, as a cause for concern and action.
There are three planks of the legislation, which does not outright bar hedge funds from purchasing single-family homes, but rather, disincentivizes them from doing so. The bill would introduce a new tax of 15% of the sale price—up to $10,000—if a hedge fund seeks to buy a single-family home. The bill would also remove tax breaks for depreciation and mortgage interest.
Finally, there would also be a new $5,000 per home annual tax if a hedge fund fails to sell 10% of their single-family homes to non-homeowning families (rather than another financial institution) over a 10-year period. This tax would likely disincentivize financial entities from holding housing stock as a long-term rental property investment.
Merkley has previously introduced legislation attempting to end hedge fund ownership of homes before, including in 2022. When asked why the issue is one of importance to him, he cited his work at Habitat for Humanity prior to taking public office. (Merkley was the executive director of the organization’s Portland office from 1991 to 1994.)
“I saw every day how fair rental costs or homeownership were essential for families to thrive. Having a safe, decent place to call home empowers families who then have a stake in the community, the ability to build wealth through equity and stability for their children. Hedge funds, by raising rents and home sale prices, are squeezing both renters and potential homeowners, and limiting their opportunities to thrive,” said Merkley.
Merkley is far from the only lawmaker, at the state or national level, to introduce legislation aimed at reducing institutional investors’ presence in the single-family home market. HOPE for Homeownership, which is focused on taxing out the entities, is broadly similar to a proposal by Ohio State Senator Louis Blessing III (R-Colerain Township). Stronger proposals have called for an outright ban on institutional investors owning and holding single-family homes.
In his response to RISMedia, Merkley argued that real estate consumers and professionals should support the legislation.
“Efforts to loosen the grip of hedge funds on the housing market are good news for families looking for homes, REALTORS®, mortgage loan officers, lenders and anyone else who’s been frustrated by the totally unfair competition they’ve been dealing with from hedge funds.”
The ability of financial institutions to quickly and easily outbid individual homebuyers has been cited as a disadvantage of institutional investors’ presence in the single-family home market. However, some experts have said that the effect of institutional investors in driving up home prices has been exaggerated.
Merkley did not directly respond to a question about concerns, raised by some economists and investors, that discouraging institutional investors’ homeownership could discourage construction of new units.
