Corporations, developers could be prohibited from purchasing single-family homes for conversion to rentals

Should corporations be allowed to purchase more than 10 single-family homes and put them up for rent in Minnesota?

The answer is no if you are Rep. Esther Agbaje (DFL-Mpls) or any of her DFL colleagues on the House Housing Finance and Policy Committee. The bill she sponsors, HF685 was approved, as amended, by the committee on an 8-5 party-line vote Wednesday and referred to the House Judiciary Finance and Civil Law Committee.

Agbaje said the bill is aimed at fostering home ownership and generational wealth among families, including in Black, brown and low-income communities.

But Rep. Jeff Dotseth (R-Kettle River) said it may create, rather than solve, a problem.

The bill would prohibit corporations, real estate developers, and home construction contractors from purchasing more than 10 single-family homes and converting them into rental properties. It would not apply to individuals wanting to convert homes into rental units.

Letters of opposition were submitted by representatives of the Builders Association of Minnesota and the National Rental Home Council.

Opponents say the bill would burden corporations with vacant properties, leading to fewer homes being built and exacerbating the state’s housing crisis. Pat Paulson, treasurer of Minnesota Realtors, said its “market restrictions” would result in fewer options for home purchases, confining people to apartment buildings.

The Equity in Place coalition wrote in support of the bill. Beth Gendler, executive director of Jewish Community Action and Temi Ogunrinde, equity and engagement director at Urban Homeworks, spoke in support of the bill.

“There are so many ‘flippers’ and corporations buying these homes that the owner-occupied, lower-income buyer cannot outbid this group,” wrote Tim Buck, a loan officer for 20 years. “They have priced out many would-be homeowners who could use this first purchase to build community and wealth by selling this home, moving to a nicer home, and giving the next homeowners the same opportunity.”