Blocking corporate homebuyers: bill passes MN House committee

ST. PAUL, Minn. (FOX 9) - Frustrated homebuyers and people watching their rent go up might get some relief from a new bill blocking corporate investors.

It would limit any corporation or LLC to owning ten single-family homes in Minnesota.

Four out-of-state corporations own about 3,000 single-family homes in the Twin Cities — all of them bought since 2013.

Democrats here are hoping to keep big investors like them from adding to their inventory.

Buying a home can be a frustrating process made more maddening when individual buyers are competing against corporations.

"Individual families are priced out of the buyer market because of all the cash bids that many of these corporations use to purchase large numbers of properties," said Rep. Esther Agbaje, DFL-Minneapolis.

Economists say big investors tend to drive up housing costs, for buyers and renters.

And housing advocates say corporate owners are often unresponsive landlords, especially in poorer neighborhoods.

"If I view your housing as my investment, my priority is not your well-being," said Asale Sol Young or Urban Homeworks. "My priority is maximizing the return on my investment."

Builders initially opposed the bill, saying it would discourage new home building when Minnesota needs more.

But a new version would not apply the limits to developers with the primary function of building and rehabilitating single-family homes.

Lobbyists for investors point out the homeownership rate is rising, and corporate investment has slowed.

The Federal Reserve Bank of Minneapolis says investors owned about 3.4% of single-family homes in the Twin Cities Metro in 2022.

That’s about 25,000 homes and twice as many as they owned in 2006, before the Great Recession.

The Fed says they own around 25% of single-family homes in large areas of Northeast Minneapolis, Fridley, and Hopkins.

And their reach may be increasing. 

A Redfin study showed they bought one out of every eight single-family homes in the Metro over the last three months of 2023.

"We know that we need to act so that this does not become a problem that becomes too big to handle," said Rep. Agbaje.

The bill passed through the housing committee in the House on Wednesday, and it’s headed for the judiciary committee.