Hochul wants to curb private equity firms buying single-family homes in New York
Photo by Niv Rozenberg on Unsplash
To address the rising cost of housing across New York, Gov. Kathy Hochul wants to limit purchases of single-family homes by private equity firms and hedge funds. As part of her 2025 State of the State, Gov. Kathy Hochul proposed legislation discouraging institutional investors from purchasing large numbers of single- and two-family homes and requiring a 75-day waiting period before these investors can place bids on real estate. Additional measures include increased funding for innovative homebuilding, down-payment assistance for first-time homebuyers, and the introduction of an affordable homebuyer tax incentive.
Hedge funds, private equity firms, and other investors have increasingly shaped the single-family and two-family housing market in recent years.
According to the governor, equity firms currently own over 500,000 homes nationwide, and some estimates predict they could control up to 40 percent of the single-family rental market by 2030.
These entities often outbid prospective homebuyers with all-cash offers and accelerate the purchasing process by waiving inspections, appraisals, and other steps that traditional buyers are unable to avoid.
Plus, digital technology has streamlined the purchasing process for these investors, allowing them to continuously monitor the market and quickly identify, evaluate, and make offers on single- and two-family homes, Hocul says.
When large investors hold a significant share of the housing market, they drive up prices for the remaining homes, making it even more difficult for first-time and low- to moderate-income homebuyers to afford a property.
“The cost of living is just too damn high — especially when it comes to the sky-high rents and mortgages New Yorkers pay every month,” Hochul said. “Last year, we passed the most transformative plan in half a century to build more housing and lower costs for families.”
“But shadowy private equity giants are buying up the housing supply in communities across New York, leaving everyday homebuyers with fewer and fewer affordable options. I’m proposing new laws and policy changes to put the American dream of owning a home within reach for more New Yorkers than ever before.”
To create a more equitable housing market, Hochul’s legislation would limit large entities’ ability to exploit tax code provisions, such as interest and depreciation deductions, that make these investments so appealing.
The governor has also proposed implementing a 75-day waiting period for large investors before they can submit offers on one- or two-family homes.
Under the proposal, Hochul has proposed $50 million in capital funding to incentivize the development of starter homes, particularly on innovative homebuilding methods like factory-built and modular construction.
The governor will also allocate $50 million in new state funding to assist New Yorkers in saving for down payments, helping families across the state achieve their dream of homeownership.
However, even when single- and two-family homes are built with low- and moderate-income homebuyers in mind, local property tax assessments often value them at fair market value, making it challenging to create homes that these buyers can afford.
To address this, the governor is proposing an opt-in affordable homebuyer property tax incentive for homes built with support from the government, nonprofits, land banks, or community land trusts, and sold to low- and moderate-income buyers.
The proposal will also bolster laws and policies to prevent home appraisal discrimination, a practice that has historically denied families access to homes and widened racial homeownership and wealth gaps.
Hochul’s proposal aligns with the national platform of Democrats, including the presidential campaign of Vice President Kamala Harris, who called for Congress to pass bills eliminating tax benefits for investors who buy single-family rental homes and also cracking down on corporate landlords who use private equity-backed price-setting tools to hike rent prices, as 6sqft reported.
As part of her 2025 State of the State address, Hochul has so far proposed inflation refund payments, the largest expansion of the child tax credit, the creation of new childcare facilities, and significant investments in Metro-North’s Hudson Valley Rail service. The governor’s full address will take place Tuesday, January 14.
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