Single-Family Home and Land Ownership Protection Act

[Richard_Wolf (Richard L Wolf)]

Title: Single-Family Home and Land Ownership Protection Act

Section 1: Short Title
This Act may be cited as the “Single-Family Home and Land Ownership Protection Act.”

Section 2: Findings and Purpose

(a) Findings
Congress finds the following:

1. The increasing acquisition of single-family homes and land purposed for single-family dwellings by corporate entities and institutional investors is reducing access to affordable housing for private citizens.
2. Private ownership of single-family homes by U.S. citizens and legal foreign nationals promotes stable, equitable communities.

(b) Purpose
The purpose of this Act is to ensure that ownership of single-family homes and land purposed for single-family dwellings is restricted to private citizens, in order to maintain affordable housing options and preserve community integrity.

Section 3: Definitions

For the purposes of this Act, the following definitions shall apply:

1. Single-family dwelling: A residential structure designed and constructed to house a single family, as defined by local zoning laws.
2. Purposed land for single-family dwellings: Any parcel of land that is zoned for, or currently used for, single-family dwellings, including but not limited to mobile home parks.
3. Private citizen: A natural person who is a U.S. citizen or a legal foreign national authorized to reside in the U.S. and eligible to own property.
4. Entity: Any corporation, partnership, limited liability company, real estate investment trust, or other legal person that is not a natural person, excluding trusts for the direct benefit of private citizens.
5. Divest: The legal process of selling or transferring ownership of property in accordance with this Act.

Section 4: Ownership Restrictions

(a) Eligibility for Ownership
Ownership of any property classified as a single-family dwelling or land purposed for single-family dwellings shall be restricted to private citizens who are:

1. U.S. citizens; or
2. Legal foreign nationals authorized to own property in the United States.

(b) Prohibited Ownership
No entity, as defined in Section 3—including Real Estate Investment Trusts (REITs)—may own property classified as a single-family dwelling or land purposed for single-family dwellings, except as otherwise provided in this Act.

Any trust that benefits entities or non-private citizens, directly or indirectly, shall be subject to the ownership restrictions of this Act.

Long-term leasing of prohibited properties by entities for more than 12 months shall be treated as ownership under this Act, and subject to the same restrictions.

Section 5: Mandatory Divestiture

(a) Phased Divestiture Timeline
Entities that own prohibited properties must divest their holdings in phases: at least 1/3 of such properties within 12 months, 2/3 within 24 months, and full divestiture by 36 months from the effective date of this Act.

(b) Enforcement of Divestiture

1. Any entity that fails to divest itself of prohibited property within the timeframe specified in subsection (a) shall have the property subject to a mandatory government auction.
2. The entity shall be entitled to the proceeds of the auction, less the costs of the auction process as determined by the relevant government agency.

Section 6: Government Auction Process

(a) Auction Procedures

1. After the expiration of the divestiture period, any property that remains in violation of this Act shall be placed into a public auction administered by the Department of Housing and Urban Development (HUD) or a designated state agency.
2. The auction shall be conducted in a manner consistent with existing government property disposal laws, with a preference for selling the property to eligible private citizens.
3. In auctions of divested properties, priority shall be given to current tenants, first-time homebuyers, or families. These individuals may be eligible for incentives, including reduced administrative fees, mortgage assistance, or other applicable benefits to facilitate homeownership.

(b) Distribution of Auction Proceeds
The proceeds of the auction shall be distributed as follows:

1. The entity that previously owned the property shall receive the remaining proceeds after deduction of auction-related costs.
2. Auction-related costs include, but are not limited to, administrative fees, property management fees, legal fees, and any taxes owed on the property.

Section 7: Enforcement and Penalties

(a) Penalties for Non-Compliance
Any entity that attempts to retain ownership of prohibited property after the mandatory divestiture period, or that seeks to obscure ownership in violation of this Act, shall be subject to:

1. Civil penalties in an amount equal to the assessed value of the property.
2. Forfeiture of the property to the government for auction.

(b) Investigations and Inspections
HUD and other designated state agencies shall be authorized to conduct investigations and inspections to ensure compliance with this Act.

Section 8: Exemptions

(a) Non-Profit Entities
Non-profit organizations whose primary mission is the creation or preservation of affordable housing for low-income individuals may apply for an exemption from the ownership restrictions. To qualify, organizations must demonstrate that properties will be used exclusively for affordable housing purposes and not as investments. The Secretary of Housing and Urban Development shall conduct regular audits and reviews every two years to ensure compliance. Organizations found to be using properties for profit or investment purposes will lose their exemption and be subject to penalties under Section 7.

Non-profits must submit detailed reports of their board members, funding sources, and governance structures annually. Organizations acting as fronts for prohibited entities will be disqualified and subject to penalties.

(b) Grace Period for New Construction
Entities involved in the construction of new single-family homes shall be given a grace period of up to 24 months from the completion of construction to transfer ownership to private citizens, provided they demonstrate a good faith effort to do so.

Section 9: Effective Date
This Act shall take effect 30 days after the date of its enactment.

[Loveyourneighbor (Matt Hopper)]

I came here to propose this exact thing. Thank you

[Richard_Wolf (Richard L Wolf)]

You’re welcome. All of the other proposals that I’ve seen, I feel leave way too many loopholes and “outs” that could easily be exploited.

I think you need to keep it simple and direct, the less language in an act the better.

[LaFever (Denise LaFever)]

I really like what you have written up!

I would recommend adding language in your ACT to address Securities and Exchange Commission (SEC) has allowed single-family homes to be packaged in Real Estate Investment Trusts (REITs) and placed on the stock market, thus enabling institutional investors, private equity and large corporate investors to profit from the mass ownership of residential properties.

I would also recommend expanding the timeframe to divest. Given single family houses have been packaged in REITs at a continued rapid pass divesting 365 days could have flood the market. For REITs holding multiple single-family homes I would recommend immediately ending any new purchases and a percentage phase out. (1/3 per year.)

[LaFever (Denise LaFever)]

Here were some of my ideas concerning REITs specifically:

Proposal to End the Practice of Packaging Single-Family Homes in REITs and Restore Homeownership to American Citizens

WHEREAS, homeownership is a cornerstone of the American Dream, providing stability, security, and a foundation for building generational wealth; and

WHEREAS, the Securities and Exchange Commission (SEC) has allowed single-family homes to be packaged in Real Estate Investment Trusts (REITs) and placed on the stock market, thus enabling large corporate investors to profit from the mass ownership of residential properties; and

WHEREAS, this practice has contributed to increased housing costs, reduced availability of homes for purchase by American families, and limited opportunities for individuals to achieve homeownership; and

WHEREAS, the practice of institutional investors and REITs acquiring large numbers of single-family homes for investment purposes has exacerbated housing shortages and driven up prices, creating significant barriers for average Americans to purchase homes; and

WHEREAS, restoring access to single-family homes for individual citizens will strengthen communities, stabilize housing markets, and promote equitable access to homeownership;

NOW, THEREFORE, BE IT RESOLVED that the [Governing Body/Organization Name] calls for the immediate cessation of the practice of allowing single-family homes to be packaged into REITs or other publicly traded investment vehicles; and

BE IT FURTHER RESOLVED that the following measures be adopted to ensure that single-family homes are available for purchase by individual American citizens:

1. Prohibition on New REIT Investments in Single-Family Homes:

• The SEC and relevant regulatory agencies shall be directed to immediately prohibit any new acquisitions of single-family homes by REITs or institutional investors for the purpose of packaging these homes into publicly traded assets.

2. Phased Transfer of Existing REIT-Owned Single-Family Homes to American Citizens:

• A phased process shall be implemented to transfer existing REIT-owned single-family homes to American citizens through direct purchase.
• This process shall prioritize offering homes to current tenants, first-time homebuyers, and families, with incentives such as favorable mortgage terms, down payment assistance, and reduced fees to facilitate home purchases.

3. Promote Direct Ownership by Individuals and Families:

• Federal and state agencies shall provide support and programs to help American families directly purchase single-family homes, with a focus on affordability, transparency, and long-term stability.
• Homebuyers shall be given first right of refusal for properties currently owned by REITs that are put up for sale.

4. Prevention of Future Exploitation of Single-Family Housing by Institutional Investors:

• Legal and regulatory safeguards shall be established to prevent institutional investors from acquiring excessive amounts of single-family homes in any given market, ensuring that the housing market remains accessible to individuals and families seeking to buy homes for personal use.

BE IT FURTHER RESOLVED that this party shall be communicated to the U.S. Congress, the Securities and Exchange Commission, and relevant housing authorities to take immediate action to protect American citizens’ access to homeownership.

[Richard_Wolf (Richard L Wolf)]

I still think the less wording the better. Based on your suggestions I made the following modifications:

1. Section 3 already listed REITs specifically, but I amended 4(b) to emphasize REITs.
2. I reworked section 5(a) to be a phased divestiture, my original limit may have been a bit draconian
3. I modified section 6(a) to prioritize current residents and 1st time buyers.

Hopefully that addresses your concerns!

[Brian_Cooper]

I came here to propose the same thing.

[LaFever (Denise LaFever)]

Nice work! The only other comment is I have seen abuses of non-profits and their classification of affordable housing. NGOs and non-profits have been used to shield what should be for-profit companies from paying taxes.

[LaFever (Denise LaFever)]

I would recommend you reviewing Richard_Wolf policy and providing comments.

[Richard_Wolf (Richard L Wolf)]

Excellent points. I amended the wording for 4(b) to address trusts and long-term leasing as workarounds to ownership, and in section 8(a) I more clearly defined what qualifies as an NPO and added some oversight conditions.

It’s getting more verbose than I’d like but hopefully we’ve covered all the prosaic loopholes.

[ErinPiper (Erin)]

It needs to be “dumbed down” for the average American to comprehend. Try this: Title: This law is called the “Single-Family Home and Land Ownership Protection Act.”

Purpose of the Law:

The U.S. government is concerned that big companies and investors are buying too many single-family homes, making it hard for regular people to afford houses. The goal of this law is to make sure homes meant for families are owned by people, not businesses, so communities stay fair and stable.

Important Words:

• Single-family home: A house meant for just one family to live in.
• Private citizen: A person who is a U.S. citizen or legally allowed to live in the U.S. and can own property.
• Entity: A company or organization that’s not a single person, like a corporation or real estate group.
• Divest: This means selling property, which companies must do if they aren’t allowed to own certain homes.

Who Can Own These Homes:

Only regular people, not companies, can own single-family homes or land for single-family homes. This means companies can’t buy these types of houses or land, except in some special cases.

What Happens if Companies Already Own These Homes:

If a company owns a single-family home or land that it’s not supposed to, it must sell it within a certain amount of time: one-third within the first year, two-thirds by the second year, and all by the third year.

Auction Rules:

If a company doesn’t sell the property in time, the government will sell it at an auction. Priority goes to tenants, first-time homebuyers, and families. These buyers may get help with things like mortgage costs to make it easier for them to buy a home.

Penalties for Breaking the Law:

Companies that try to keep homes or hide their ownership could face fines and might lose their property to the government.

Special Cases:

1. Non-profit groups: Some non-profits that focus on affordable housing can apply for an exception. They must follow rules to make sure the housing stays affordable and isn’t used for profit.
2. New Homes: Companies that build new single-family homes get up to two years to sell them to people, as long as they show they’re really trying.

When the Law Starts: This law begins 30 days after it’s officially approved.

[ErinPiper (Erin)]

Here are some problems with this idea:

Ashvillle, NC “land grab” by example. The land was sold to a “Church” NPO at first. That overrides the eminent domain clause in the fifth amendment as the land was with all purposes to be use as “COMMUNITY PROPERTY”. However, that 501c “Church” immediately sold the land to Albemarle. A.k.a the Blackrock subsidiary. There needs to be a 100 year zoning clause where if the land is owned as a private property, it must remain zoned for 100 years as either government, commerical, or residential properties. One cannot be rezoned unless the citizens of that township put it up for a vote! Clearly, the citizens of Asheville opposed Albermarle “pushing in” to the community as digging up lithium is toxic to the community. Now they have invaded and confiscated the land without the communities permission by force.

2.) All contracts and titles to the land and home need to be redistributed and changed effective immediately to every American Homeowner. The banking / mortgage contracts must no longer state “Tenant” on the mortgage or deed of the land and home. All contracts need to be rewritten and redistributed as “OWNER” / “BUYER” on the mortgage. After paying off the entire agreement a deed must me issued as the “OWNER” with the Allodial Title to the home and land! No bank nor government can claim that home or land unless it is abandonded and unihabitable for over 7 years and the home and land cannot be seized or rezoned by a government or banker even when it is abandoned without the consent of the citizens puting that to a vote inside of that township.

[Richard_Wolf (Richard L Wolf)]

I wrote it to be as an act before Congress, not necessarily a “general-public-consumable” document, although I do appreciate your TL;DR.

Your 1st point is directly addressed by 8(a) in the act, The subsidiary would be prohibited from buying the land from the church in the 1st place unless they were approved for exemption from the act by HUD.

Your 2nd point, I think, is beyond the scope of this act

[Linda_Steadman]

If this was enacted, could an individual own residential property as a landlord? Lots of people rent, because they don’t have the financial ability to own or because they don’t want the responsibility of home ownership. Who will be allowed to own these rental homes?

[Richard_Wolf (Richard L Wolf)]

Section 4(a/b) defines this, basically if “Jon Doe” private citizen owns a house and wants to rent it out, he can. If “Global Land Company” wants to buy a house and rent it out, they are prohibited unless they have been approved exempt under section 8. If “John Done” is secretly working for “Global Land Company” and it’s found out the penalties section comes into play.

[leigh]

Interesting idea and besides corporation controlled houses, the other factor to how we got here may be a limited pool of skilled construction workers. Many left the trades after the 2008 topple of housing. and with that, the passing down of knowledge. The inclusion of trade schools with this idea and the removal of dependency on HUD would be key for me to propose as well as “federal funding” projects that usurp local controls. Has anyone figured out that cities own lots of land but opt to keep it “open” while creating a need for the private or quasi-private sector to build to their standards and with their affordable requirements? Wonder how that could get weaved into this idea. Thanks all!

[Richard_Wolf (Richard L Wolf)]

All very valid and important points to be sure. I think, beyond the scope of this act.

If you haven’t investigated it yet, you should look into https://mikeroweworks.org/ I think he’s done a fantastic job of creating a model for this that could be supported and adopted more widely.

[whp (Charley)]

This should be one of the first things America needs. Families need long term homes and corporations are taking that ability away from millions of families for profit, homes should be owned by people not companies.

[leigh]

Hi Richard,
I really like Mike Rowe and agree 100%. We’re working on a home remodel and trying to get younger Americans involved to build more confidence in dealing with homeowners. I’ve done a few remodels and know skilled labor is in short supply. One element of what I do for work is let people know about their property’s potential through zoning - I created a special report/system to help make this heavy duty research easy. It is designed for those new to zoning and land use. Maybe fusing Mike’s work and helping Americans know about their property rights (which are really not part of the zoning/land use planning process) could be a winning combination. I’d be happy to talk.

[AD_GA (Adam D)]

I support the concept 100% but this would nearly end the single family home rental market along with the real estate investor economy. All single family homes would need to be owned personally without liability protection except through personal insurance.

These massive investment companies have gone too far, gobbled up too many homes… But there is demand for single family rentals as well as homes in poor condition being restored.

My counter would be a limit on the number of homes either by entity or controlling entity. I know a company could create 10,000 LLCs to buy 10k homes but if we allow regulation then any corporate purchase needs to be cleared by title company prior to closing. Hate to say it but fed will have BOE info to bump it up against.

Also forced divestitures may be problematic constitutionally to force the sale of private property. Perhaps a better incentive is simply a tax that increases exponentially based on the number of single family homes owned. $0 tax for small investors but taxes up to thousands per year per home for larger investors. They will unload their inventory as their expenses will be more than their income.