AN ACT to amend Tennessee Code Annotated, Title 13; Title 47 and Title 66, relative to housing market manipulation.
Summary
SB0242, titled the “Homes not Hedge Funds Act,” would restrict certain large-scale business entities from buying additional single-family homes in qualifying counties for investment or rental purposes. The bill defines a qualifying county as one with a population over 150,000 and makes it unlawful for a person or affiliated group that already owns 100 or more single-family homes in such counties primarily used as rentals to purchase another single-family home there unless the home is to be used as the purchaser’s residence.
The bill also creates enforcement mechanisms. The attorney general may sue violators, and an individual harmed by a violation may also bring a civil action. Courts could impose civil penalties of up to $100 per day per unlawfully acquired home and award equitable relief, compensatory damages, attorneys’ fees, and punitive damages up to $50,000 or three times compensatory damages, whichever is greater. The bill allows joinder of affiliated parties to determine total ownership and, in some cases, joint and several liability. It applies prospectively to contracts entered into on or after the effective date.
Impact
If enacted, the bill would add a new part to Tennessee Code Annotated Title 13 and would directly regulate large corporate or affiliated investors in the single-family housing market in larger counties. It would limit future acquisitions of single-family homes for rental or investment purposes by entities that already own at least 100 such homes in qualifying counties, while leaving ordinary homebuyers and smaller-scale landlords unaffected. The measure also expands potential civil enforcement and remedies for both the state and private plaintiffs, and it expressly preserves other available rights and remedies under state law.
Sentiment
The available voting history suggests generally favorable sentiment toward the bill. The Senate State & Local Government Committee recommended passage unanimously with amendment, and the floor vote was overwhelmingly supportive at 31-1. No committee transcript was provided, so there is no recorded debate to indicate broader public arguments, but the vote pattern suggests the bill was viewed positively by most legislators.
Contention
The central point of contention is the bill’s restriction on institutional or large-scale ownership of single-family homes, which supporters likely view as a response to housing affordability and supply concerns, while opponents may see it as an intrusion on property rights and market activity. The bill itself acknowledges a balance between encouraging homeownership and allowing business entities to acquire homes for rental use, indicating that the policy debate is about whether large investors are contributing to higher prices and reduced supply. The use of a 100-home threshold, the definition of affiliates, and the private right of action are also likely areas of concern because they determine who is covered and how aggressively the law could be enforced.