Senator Merkley introduced a bill to ban 'hedge funds' from the housing market—ResiClub's analysis finds only 2.2% of his bills become law

Back in 2013, when I was a 20-year-old economics and journalism major at the University of Cincinnati, I took a semester off to do a reporting internship at the Ohio Statehouse. I worked in a windowless room in the basement of the statehouse, covering state government for newspapers across the state. One takeaway from the experience was that some politicians (and you could find them in either party) were more interested in stirring controversy, proposing bills/ideas without any chance of passing for media publicity than actually getting anything done. Others, more shrewd and out of the limelight, were the ones actually doing policy, and often it was unglamorous stuff.

Why bring this up?

Back in December, U.S. Senator Jeff Merkley (D-Oregon) introduced a bill titled "End Hedge Fund Control of American Homes Act.” If passed it would ban "hedge funds,” which according to the text of the bill also encompasses real estate investment trusts (REITs) and corporations, from amassing large portfolios of single-family homes. If passed, it’d force them to sell off their portfolios over the next 10 years.

The bill, if passed, appears to not only force out giant single-family rental operators but also halt many future build-to-rent projects.

This raises the question: Setting aside whether a bill like that is even constitutional, does it actually have a chance to pass? Or is this bill simply an attention seeking measure that is dead on arrival?

To get an idea, ResiClub looked at the 407 bills Senator Merkley has sponsored since he took office in January 2009. We examined records from Congress.gov, a site managed by the Library of Congress.

Among those 407 bills, 16 passed the Senate. That’s a pass rate of 3.9%.

Of course, a bill that passes the Senate still doesn't become law unless it is also passed by the House and signed into law by the President.

In total, of the 407 bills Merkley has introduced, just 9 have been signed into law.

That’s a batting average of 2.2%. For every one bill that Merkley has introduced that becomes law, there are another 45 that didn't become law that session.

The 9 bills that Merkley has introduced that were singed into law includes:

• A bill to amend the Act of August 9, 1955, to authorize the Coquille Indian Tribe, the Confederated Tribes of Siletz Indians, the Confederated Tribes of the Coos, Lower Umpqua, and Siuslaw, the Klamath Tribes, and the Burns Paiute Tribe to obtain 99-year lease authority for trust land (2010)

• Oregon Tribal Economic Development Act (2018)

• Columbia River In-Lieu and Treaty Fishing Access Sites Improvement Act (2019)

• A bill to nullify the Supplemental Treaty Between the United States of America and the Confederated Tribes and Bands of Indians of Middle Oregon, concluded on November 15, 1865 (2020)

• A bill to prohibit the commercial export of covered munitions items to the Hong Kong Police Force (2019)

• A bill to amend the Klamath Basin Water Supply Enhancement Act of 2000 to make certain technical corrections (2020)

• A bill to designate the clinic of the Department of Veterans Affairs in Bend, Oregon, as the "Robert D. Maxwell Department of Veterans Affairs Clinic" (2020)

• Klamath Tribe Judgment Fund Repeal Act (2022)

• Saline Lake Ecosystems in the Great Basin States Program Act (2022)

Those bills, it appears, are hardly on par with the scope and magnitude of this institutional homebuying ban bill.

Big picture: This ResiClub research project is just one more indication that the "End Hedge Fund Control of American Homes Act”, which doesn’t have support from Democratic or Republican leadership in the House or Senate, is unlikely to pass anytime soon.

This week, seasonally adjusted mortgage purchase applications, a forward-looking indicator for existing home sales, jumped +7.5% week-over-week. While that reading is historically low, it marks the highest since April 2023. This suggests that the recent dip in mortgage rates, with the average 30-year fixed mortgage rate falling from 8.03% in October to 6.90% as of Thursday, has spurred a bit more activity just as the market also nears the start of the spring selling season.

Activity in the resale market, on a national level, is still significantly constrained. However, there are indications that it might be easing up a bit.

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