Michigan Governor Gretchen Whitmer signed a new law on July 21 to bar large private investors from buying single-family homes in Michigan if they already own 100 or more in the state. This move aims to address the ongoing housing crisis by limiting the ability of private equity firms and other investors to buy homes that would otherwise be available to residents.

Background

A separate new federal law will bar purchases by firms that already own 350 or more houses nationwide. However, some members of Whitmer’s administration doubt the laws will have a major impact in the state, where private investors have bought up housing at a slower rate than other parts of the country.

Supporters of the law argue that it will help people live in the communities they work, especially in parts of Michigan with tourism-driven economies that have seen a rapid rise in properties owned exclusively as vacation rentals. State Rep. Karl Bohnak, the bill’s sponsor, said the law will help "keep more Michigan homes available for Michigan residents."

Details of the Law

Under House Bill 6074, large institutional investors could be immediately barred from directly or indirectly buying additional single-family homes if they already own 100 or more properties in Michigan and have a net value of $375 million or more. Investors could still buy additional homes if they secure a brownfield redevelopment plan or other housing development activity approved by the Michigan State Housing Development Authority.

Failure to follow the new rule could result in a civil fine of up to $25,000 per home purchased over the 100-home cap. Any money collected would return to the state’s general fund.

Original reporting: BridgeDetroit — read the source article.