‘Level the Playing Field’: Texas Bills Seek to Regulate Institutions in the Housing Market

While the housing market seems to be cooling off, institutional buyers have been having a field day throughout the pandemic. They’ve been buying up single-family homes as soon as they’re listed, then renting them out. Some say this has driven prices up and made it harder to become a homeowner.

Investors bought nearly a quarter of U.S. single-family homes sold last year, according to Stateline, a research initiative by the nonprofit Pew Charitable Trusts. However, convoluted ownership through investors’ use of limited liability companies has made it difficult to determine exactly how much of the market they control.

Two bills filed in the Texas Legislature last week aim to slow investors down and make them more transparent about the properties they own.


State Rep. Gina Hinojosa in Austin said her constituents have felt the effects of investor-owned housing firsthand. “This is a problem we are experiencing in Austin, just like most other fast-growing housing markets across the country,” Hinojosa said. “Financial institutions are the single largest buyer of middle-income housing in Travis County.”

Additionally, lax filing requirements have made it hard to determine just how big the problem is, she said. That’s why Hinojosa filed House Bills 1056 and 1057.

HB 1056 would create a registry for institutional landlords, who would be required to register with the state comptroller. That registration would include the name of the institution or firm and the number of dwellings it had in each county. From there, the comptroller would compile and maintain all of this information in a searchable format on its own website.

Hinojosa’s HB 1057 would keep institutional investors from buying homes until 30 days after they’ve been listed for sale. This could allow for a more competitive environment in the housing market between investors and future homeowners. The bill would take effect in September, while the registry bill would take effect in January 2024. 

“This is a problem we are experiencing in Austin, just like most other fast-growing housing markets across the country.” – Rep. Gina Hinojosa

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“This is a national problem, but certainly Austin has been hit hard,” Hinojosa said. “This legislation is our attempt to raise awareness about the problem of hedge funds scooping up affordable housing and our effort to begin to level the playing field for Texans.”

Institutional investors haven’t spared Dallas’ housing market. They accounted for 43% of home purchases in Dallas County last year. Many of these purchases are concentrated in moderate-income Black and Hispanic communities.

City Council member Jaynie Schultz noted the increase of investors in the housing market during a meeting in April, asking if Dallas planned to do anything about it. “Are we working on a bigger policy regarding the scourge of investment buyers?” Schultz asked Dallas Housing Director David Noguera. “It is across the country, where individuals are no longer buying homes, but [real estate investment trusts] are.”

The city hasn’t taken up the issue since, but some question whether the institutions buying all these properties are a problem at all. They may have some effects on the market, but those are exacerbated by a larger problem that’s been brewing since the 2008 financial crisis: a housing shortage. The country hasn’t built enough homes over the years, and the shortage has been catching up with us. This problem, supply chain issues and inflation are the culprits behind high home prices, some say.

During a congressional hearing in June over investor-owned housing, U.S. Rep. Tom Emmer, a Minnesota Republican, said all of these things have put homeownership out of range for many in the country. To Emmer, renters should be thanking their institutional landlords for letting them live in a home they’d otherwise never be able to afford.

He said, “We cannot demonize institutions for facilitating this supply of quality housing that otherwise would be out of the realm of possibility for many Americans due to the economic consequences of inflation.”