Hochul Seeks to Limit Private-Equity Ownership of Homes in New York

Gov. Kathy Hochul of New York on Thursday proposed several measures that would restrict hedge funds and private-equity firms from buying up large numbers of single-family homes, the latest in a string of populist proposals she intends to include in her State of the State address next week.

The governor wants to prevent institutional investors from bidding on properties in the first 75 days that they are on the market. Her plan would also remove certain tax benefits, such as interest deductions, when the homes are purchased.

The proposals reflect a nationwide effort by mostly Democratic lawmakers to discourage large firms from crowding out individuals or families from the housing market by paying far above market rate and in cash, and then leasing the homes or turning them into short-term rentals.

Activists and some politicians have argued that this trend has played a role in soaring prices and low vacancy rates — though low housing production is widely viewed as the main driver of those problems.

If Ms. Hochul was inviting a fight with the real estate interests who have backed her in the past, she did not seem concerned. She even borrowed a line from Jimmy McMillan, who ran long-shot candidacies for governor and mayor as the founder of the Rent Is Too Damn High Party.

“The cost of living is just too damn high — especially when it comes to the sky-high rents and mortgages New Yorkers pay every month,” Ms. Hochul said in a written statement.

The plan — the specifics of which will be negotiated with the Legislature — is one of several recent proposals the governor has made with the goal of addressing the state’s affordability crisis. Voters have expressed frustration about the high costs of housing and basic goods in the state. This discontent has led to political challenges for Ms. Hochul, who is likely to face rivals in the 2026 Democratic primary and in the general election.

In 2022, five of the largest investors in the United States owned 2 percent of the country’s single-family rental homes, most of them in Sun Belt and Southern states, according to a recent report from the federal Government Accountability Office. The report stated that it was “unclear how these investors affected homeownership opportunities or tenants because many related factors affect homeownership — e.g., market conditions, demographic factors and lending conditions.”

Researchers at Harvard University found that “a growing share of rental properties are owned by business entities and medium- and large-scale rental operators.”

State officials were not able to offer a complete picture of how widespread the practice was in New York. They said local officials in several upstate cities had told them about investors buying up dozens of homes at a time and turning them into rentals.

The New York Times reported in 2023 that investment firms were buying smaller buildings in places like Brooklyn and Queens from families and smaller landlords.

Ms. Hochul’s concern is that these purchases make it harder for first-time home buyers to gain a foothold in the market and can lead to more rental price gouging.

“Shadowy private-equity giants are buying up the housing supply in communities across New York, leaving everyday homeowners with nowhere to turn,” she said in a statement on Thursday. “I’m proposing new laws and policy changes to put the American dream of owning a home within reach for more New Yorkers than ever before.”

Cracking down on corporate landlords became a prominent talking point in last year’s presidential election. On the campaign trail, Vice President Kamala Harris called on Congress to pass previously introduced legislation eliminating tax benefits for large investors that purchase large numbers of homes.

“It can make it impossible then for regular people to be able to buy or even rent a home,” Ms. Harris said last summer.

In August, Representative Pat Ryan, Democrat of New York, called on the Federal Trade Commission to investigate price gouging by private-equity firms in the housing market. He cited a study that estimated that private-equity firms “are expected to control 40 percent of the U.S. single-family rental market by 2030.”

Statehouses across the country have recently looked at ways to tackle corporate homeownership. One effort in Nevada, which passed the Legislature but was vetoed by Gov. Joe Lombardo, proposed capping the number of units a corporation could buy in a calendar year. It was opposed by local chambers of commerce and the state’s homebuilders association.

A bill was introduced in the Minnesota State Legislature that would ban the conversion of homes owned by corporations into rentals. It has yet to come up for a vote.

At the federal level, Senator Jeff Merkley, Democrat of Oregon, and Representative Adam Smith, Democrat of Washington, introduced joint legislation that would force hedge funds to sell all the single-family homes they own over 10 years.