LANSING, Mich. (WZMQ) – Michigan lawmakers hope a new law will leave more homes on the market for families instead of large investment companies.
Gov. Gretchen Whitmer signed House Bill 6074 into law last week. Sponsored by state Rep. Karl Bohnak, R-Deerton, the measure limits the number of single-family homes that certain large investment companies can own in Michigan.
“It was House Bill 6074, which would prohibit large investors from owning more than 100 single-family housing units in the state,” Bohnak said. “Very simply put, what we’re trying to do is to make housing available for families.”
The law applies only to very large companies. To fall under the law, a company must own more than 100 single-family homes in Michigan and have a net worth of at least $375 million. Companies that buy homes beyond that limit can face fines of up to $25,000 for each purchase made in violation of the law.
Several types of purchases are exempt, including build-to-rent developments, certain homeownership assistance programs, major home rehabilitation projects and some foreclosure-related transactions.
Bohnak said the legislation is one piece of a larger effort to address Michigan’s housing shortage, especially in the Upper Peninsula.
“There’s just a number one, a shortage of single-family homes,” Bohnak said. “And what we want to do is make as many available as possible for families to move into.”
He acknowledged the bill won’t solve the problem by itself.
“This bill to limit large investors from owning more than 100 units is not the cure for the problem,” Bohnak said. “But again, it’s one aspect over a number of aspects that we’re looking at.”
Not everyone agrees the new law will have a major impact.
According to a nonpartisan analysis by the House Fiscal Agency, some lawmakers raised concerns that large investors could work around the law by creating additional companies. Others who testified on the bill argued that institutional investors make up only a small share of Michigan’s housing market, meaning the legislation may have only a limited effect.
The House Fiscal Agency also found the law’s financial impact on the state is unknown because it depends on how many violations occur and whether county prosecutors or the attorney general pursue enforcement.
Bohnak said lawmakers expect to continue discussing housing issues when they return to Lansing this fall. One proposal would address the “pop-up assessment,” the increase in a home’s taxable value that often occurs after it’s sold.
“We’ve talked about limiting the pop-up assessment to try to limit that, so we don’t all of a sudden see single families get into a home and then their tax bill, their property tax bill skyrockets,” Bohnak said.
For Bohnak, success will be measured by whether more families can find homes in communities across the Upper Peninsula.
“Certainly here in the Upper Peninsula, we have a problem,” Bohnak said. “You can go in any town. I’ve been in Baraga, L’Anse area, and there’s a shortage of single-family homes. So any sort of progress that we see would be success.”
