Should Mass. ban corporate home buyers?

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Between 2004 and 2018, nearly 1 in 5 of all residential properties sold in Greater Boston were purchased by an investor or some form of institutional entity.


It’s no secret home buyers in Massachusetts face a daunting market.

And while high interest rates, low inventory, and unrelenting demand have definitely spurred fierce competition, there’s also one other component experts say has steadily made housing affordability that much more challenging to secure: real estate investors.

Between 2004 and 2018, nearly 1 in 5 of all residential properties sold in Greater Boston were purchased by an investor or some form of corporate entity, according to an analysis of Warren Group data the Metropolitan Area Planning Council published late last year.

“It is a very, very challenging market because of the investor competition and because of the lack of inventory,” said Jessie Partridge Guerrero, interim director of data services at MAPC and lead author of the November report. “I know lots of people that haven’t been able to buy their first home because of the environment we’re in.”

Sometimes called “institutional” buyers or investors, these purchasers can take many forms — from limited liability companies, or LLCs, to real estate investment trusts and hedge funds — and often make all-cash offers, allowing them to move fast on properties and beat out mortgage-dependent, low-to-middle-income prospective buyers, experts said. (Some individual homeowners opt to establish LLCs for privacy and financial liability reasons.)

These investors also are more likely to flip the homes they purchase, selling them at a significantly higher price than they initially paid and driving up prices, according to MAPC. Those that purchase multifamily housing often raise the rent on tenants — with increases up to 70 percent — “if not evict them outright without cause,” the report found.

“Institutional investors buying a property is bad for everyone,” said Catherine Porter, a community organizer with the Community Action Agency of Somerville, or CAAS, which works to combat evictions. “It’s bad for all consumers. It’s bad for home buyers. It’s bad for renters.”

The trend is not unique to Massachusetts. Seeking relief, lawmakers around the country — from Texas to Minnesota to Nebraska — and in Congress have floated several bills aimed at curtailing or even prohibiting institutional buyers from real estate transactions.

So is limiting — or outright banning — institutional buyers a solution for the state’s housing crisis?

“I don’t think so, unfortunately,” said Colleen Barry, CEO of Gibson Sotheby’s International Realty in Boston. “What I see in some circumstances … is there is a reaction and a response to the lack of affordable housing that is a bit off the mark.” The main issue, she said, is a lack of inventory.

Greg Vasil, CEO of the Greater Boston Real Estate Board, agreed.

“No matter how you slice it, you need to create more housing,” Vasil said. “So, you can try to pass laws like that, but I mean, I think the first step should be to get cities and towns to build stuff.”

The institutional buyer in the single-family home market really isn’t the problem in Massachusetts. The MAPC study found that single-family houses here are too expensive to turn a profit as rental properties.

“If you’re not seeing it in the marketplace, that might be well-intentioned legislation, but it could be a waste of time because it’s not actually really addressing the problem,” Barry said.

Multifamily housing, however, is a different story.

Investors are most prevalent in the two- and three-family-home market, dominating 30 percent and 50 percent of sales of those properties, respectively, in 2018, according to MAPC’s analysis. These sales often happen in lower-cost urban neighborhoods of color.

“We would definitely be in favor of legislation limiting corporate investor purchasing of housing,” said Samantha Wolfe, lead organizer at CAAS. “No one is debating that we have a housing shortage across Massachusetts, and yet, we’ve got corporate investors who are allowed to buy as many homes as they want and charge as much rent as they want.”

While he also believes a ban could aid families looking to buy, Mike Leyba, co-executive director of City Life/Vida Urbana — an organization that works to secure tenant rights in Greater Boston — said there is little, if any, appetite on Beacon Hill for such a measure.

“I think the thing that actually is the problem is the fact that there are … outside investors who are coming in, buying property with the purpose of speculating on it,” Leyba said. “I think that’s the core of the problem, not the form of ownership.”

And, like some experts, officials, and other housing advocates, he isn’t necessarily convinced this kind of legislation addresses the key issue of affordability.

In addition to building more housing, they said, lawmakers should target the lack of LLC transparency.

State Senator Lydia Edwards, an East Boston Democrat, is among those who see this as a starting point.

“This kills me: An LLC will own an LLC will own an LLC will own an LLC, and trying to get to the live person who is actually behind this when it could all just be the same major hedge fund someplace is concerning,” said Edwards, who cochairs the Legislature’s Housing Committee.

More transparency also would provide for accountability when corporate landlords raise rents, advocates said.

“There are many renters who don’t actually know who their actual landlord is,” said Lynette Ng of the United Properties Tenant Association in Malden. In 2022, the association reached an agreement to set capped rent increases after Ng’s apartment building and two others were sold to United Properties, a local company. “For us, it was really important to know who our landlord was so that we knew who we were fighting against,” Ng said.

‘This kills me: An LLC will own an LLC will own an LLC will own an LLC, and trying to get to the live person who is actually behind this when it could all just be the same major hedge fund someplace is concerning.’

State Senator Lydia Edwards

In addition to rent control, activists also favor the Tenant Opportunity to Purchase Act — or a similar measure — which would require building owners to grant their tenants or selected representative, such as a nonprofit or land trust, the right to first refusal when it comes to buying a property. The Legislature passed TOPA in 2021, but the bill was vetoed by then-governor Charlie Baker, who said the measure could discourage housing production.

“TOPA would probably be more effective at getting people to own their own homes than an LLC ban would be,” Leyba said. Land trusts that are able to purchase properties under TOPA could later sell those buildings to the people who live in them when they’re ready to buy, he said.

Renters would love to be home buyers, Wolfe said, but “folks just can’t compete.”

“They’ve done the first-time home buyer courses,” she continued. “They understand all the steps they have to take, and it just seems impossible for them to be able to find a home that’s not two hours away from where they live and work and send their kids to school.”

Christopher Gavin can be reached at [email protected]. Follow Address on X at @globehomes and subscribe to our weekly real estate newsletter at

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