The housing market provides shelter and security for millions of Americans. However, some believe the housing market is plagued by anti-competitive behavior, as large corporations and private equity firms purchase a lot of housing soon after it hits the market. The result is rising rents while higher prices push potential homebuyers out of the market and back into renting; thus this unproductive cycle concerns Oregon Senators Jeff Merkley and Ron Wyden, who now join efforts to combat anticompetitive behavior in the residential housing market, according to a recent press release.

What is Anticompetitive Behavior?

Anticompetitive behavior refers to actions that harm competition and stifle innovation in a market. In the residential housing market, anti-competitive behavior occurs when large corporations and private equity firms use investor and private funds to control home prices, limit supply, and ultimately exploit homebuyers, who must find renters willing to pay off their rising mortgage payments. Such anti-competitive behavior leads to higher rents, untouchable entry-level home prices, and a lack of housing options.

The Stated Problem with Housing-Related Disclosure Exemptions

The largest residential property transactions are exempt from reporting to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) for antitrust review. This means that these corporations and private equity firms now operate in secrecy, which makes it difficult to track nefarious housing market activity and stop anti-competitive behavior.

One Proposed Solution is the Housing Acquisitions Review and Transparency (HART) Act

The HART Act is a piece of legislation introduced by Senators Amy Klobuchar (D-MN) and Sherrod Brown (D-OH), cosponsored by Senators Jeff Merkley (D-OR) and Ron Wyden (D-OR), among others. The bill requires corporations and private equity firms that purchase homes in bulk to report those transactions to antitrust enforcers for review. The result is more transparency on home sale transactions, allowing regulators to identify and prevent consumer harm.

Why is The HART Act Important to Wyden & Merkely?

While The HART Act is not yet a bipartisan effort, it may end up one as it’s an important piece of legislation that levels the playing field in the housing market. By requiring transparency into large housing acquisitions, regulators could identify patterns of anti-competitive behavior and take action to prevent them, as they freely do in other industries. The act might therefore benefit renters and homebuyers by:

• Increasing competition in the housing market, leading to lower prices and better services
  
• Providing more affordable housing options (affordable being a term some have come to hate).
  
• Stopping predatory practices that take advantage of vulnerable populations such as the elderly and disabled.

• Deterring anticompetitive conduct and mergers that deprive taxpayers of the benefits of natural housing market competition and the dream of home ownership.

Who Else Supports the HART Act?

The HART Act has been endorsed by several organizations, including the American Antitrust Institute, National Low Income Housing Coalition, American Economic Liberties Project, P Street, Accountable.US, and Open Markets Institute. These organizations hope for transparency in the housing market and believe that the HART Act would help to promote fair market practices and prevent unfair price gouging.

What Are The Potential Consequences of This Act?
Good? Bad? Awesome? Terrible? Tell us!

The Housing Acquisitions Review and Transparency (HART) Act addresses anticompetitive behavior in the residential housing market and demonstrates concern the lack of disclosures harm consumers. Senators Jeff Merkley and Ron Wyden hope their support for this legislation promotes fair market practices and ensures all Americans can buy a home or at least gain access to affordable housing (rather than sleeping in our city streets).

Do you agree or disagree? Are you in favor of this act? If so, why or why not? If you have objections, please tell us, so we can create a follow-up piece by researching your point of view. This is a hot Oregon issue that deserves close examination. As of date, we are unaware of other politicians, on the left or the right, who also support this legislation.

This could be a groundbreaking act if it passes, folks. . .