As the Texas real estate market explodes, the city of Dallas is weighing new restrictions on real estate investors.
The proposed legislation comes in the midst of alleged “exploitation” of home sales by REITs and other single family-home investors, according to Spectrum News 1.
Texas’ fast-climbing home prices have heavily impacted home buyers. Though demand has yet to reach a ceiling, many home buyers are being priced out of the market by investors.
Median home prices in North Texas jumped 22 percent year-over-year in March, according to Fox 4. Dwindling supply has also wreaked havoc on the regional market. North Texas only had 767 new listings hit the market in March — down 93 percent from March 2021.
“Are we working on a bigger policy regarding the scourge of investment buyers?” said Councilwoman Jaynie Schultz at a recent council meeting, “it is across the country, where individuals are no longer buying homes, but REITs are.”
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North Texas home sales plummet
“They should completely cut off foreign investors,” one Reddit user told Spectrum. “In this case, foreign means anybody that isn’t registered in Texas. Global investors as well as Wall Street investors wouldn’t be able to plunge local economies.”
Others are a little hesitant that the legislation would resolve the issue. Laws such as this one could “just restrict small-time landlords from buying investment properties, while only acting as a speedbump to the megacorps that are actually causing the runaway housing prices,” another user told the news station.
The legislation is by no means novel, however. Earlier this month, Prime Minister Justin Trudeau’s government imposed a ban on foreign investors from buying homes in Canada for two years in a bid to cool off a hot housing market.
Dallas Director of Housing David Noguera cited this Canadian policy as a solution for North Texas’ similar real estate problems. “Canada restricts how many foreign investors can come into your market and buy up your real estate,” he said.
[Spectrum News 1] — Maddy Sperling