Congress is working on a bipartisan bill aimed at making housing more affordable by, among other things, making it easier to build more homes. One provision that’s gotten a lot of attention, including from the president, is placing limits on how many single-family homes companies and institutional investors can purchase.
The idea is to prevent deep-pocketed investors with all-cash offers from competing with regular buyers. Those investors argue they are not the problem. So who’s right?
To answer that question, I headed to Las Vegas — a city with a disproportionately high rate of institutional purchases. There, I went on a ride-along with Congresswoman Dina Titus, whose district stretches from the glitzy casinos in the heart of town to suburbs in the north and south.
“Well, this is a nice, fairly new middle-class neighborhood in Henderson, and I'm sure it's all single-family,” she said.
We’re looking out at rows and rows of stucco homes, often one or two stories with tile roofs. All were built at once as one development.
There are many neighborhoods just like this around Vegas. And in some, a quarter of all homes are investor-owned, according to analysis by the University of Nevada.
Titus, who supports some limits on investor purchases, said companies often crowd out potential homeowners. “All the numbers show that having a house is the key to building wealth,” she said. “So if you can't find one to buy, you have to rent. That's not building your own personal wealth.”
A decade ago, a hospitality worker at a casino with a union job would have been able to buy a modest home here, Titus said.
That includes a worker like Samuel Delgado, a houseperson at the Bellagio. “I actually bought my house back in 2012,” he said.
I met Delgado as he was out canvassing for midterm election candidates backed by his union, Culinary Workers Local 226. The union helped him with the down payment he needed to purchase his five-bedroom home.
“I was very blessed to be a homeowner,” he said. “My boys have a place to call home, have a backyard. Just, it feels great.”
I asked him if he would have been able buy that same home today. “Absolutely not,” he responded. “I don't think at this time, with the market price, if everything skyrockets, it'll be quite impossible for me.”
Are prices up because of investors, or are investors here because home prices are accelerating? Experts say it’s hard to know for sure.
Nevertheless, homeownership in Vegas is slipping further away. Delgado said a lot of his neighbors now are renters in investor-owned homes. And they come and go, he said, as rents go up, making his community more transient than it otherwise would be.
“The most impact is the children, because the children have to be located to school to school. And, you know, my boy's nine, so he gets friends here and there, and then he just sees his friends come and go, due to the fact that they have to move out,” Delgado said.
One of the people Delgado and I met as he was canvassing is 45-year-old Christopher Rice, He was out in the baking sun repairing his SUV.
“She's my old Jeep, man — 5.2 liter. And she's a beast,” he said.
Rice said he’s renting his home from an investment company, but he would rather buy.
“I do, I am looking at this time,” he said. “Me and the lady have worked on our credit for over two years. We are in that process.”
The problem, he said, is that they can’t find an affordable house.
“Homes are what, $325,000 to $450,000, easy, yeah,” he said. “I can get a $325,000 home that's 50 years old and aging, needs plumbing, needs all kinds of work.”
Rice said he’s thinking of moving to another state instead.
So, would the investor limits Congress is considering actually help Christopher Rice buy in Las Vegas?
The answer is complicated, because researchers struggle to separate the bigger trends — interest rates, lack of supply — from any effects that might be caused by corporate purchases.
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