Vermont committee opens hearings on H.607 to curb institutional purchases of single‑family homes

The House Committee on General and Housing opened hearings Thursday on H.607, a bill that would limit when institutional real‑estate investors can buy single‑ and two‑family homes and change tax rules for such entities.

Cameron Wood of the Office of Legislative Council walked legislators through the bill’s text, saying it would add a new section to Title 27 that defines a "covered entity" and prohibits covered entities from acquiring an interest in a single‑ or two‑family residence unless the property has been listed to the general public for at least 90 days. Wood said a change in the seller’s asking price restarts the 90‑day period and that violating the rule would be treated as an unfair method of competition under the state Consumer Protection Act.

The bill sets three criteria for an entity to be treated as an "institutional real‑estate investor": ownership of 10 or more single‑ or two‑family residences (directly or indirectly, with at least a 10% interest counting toward that total); managing or receiving investor funds and acting as a fiduciary for those investors; and having at least $30 million in net assets under management. Wood said all three conditions must be met for the entity to fall under the statute. Nonprofits (501(c)(3) organizations), land banks, community land trusts and creditors who acquire property in satisfaction of secured debt are excluded from the definition.

Wood said the bill’s second section would mirror the definition in the tax code and limit certain tax benefits — such as depreciation deductions — for covered entities; he deferred technical tax questions to the bill’s tax counsel. He told the committee the waiting‑period provision would take effect July 1, 2026, and the tax provisions would apply to the 2026 tax year (retroactive to Jan. 1, 2026) unless the committee changes the dates.

Dr. Katie Nelson, assistant director at Rutgers’ CLIMB (Center for Law, Inequality and Metropolitan Equity), testified remotely and drew on multi‑city research to explain why states are considering limits on investors. "When we looked at who was buying homes in Newark, almost half of homes sold between 2017 and early 2020 were purchased by corporations," Nelson said, describing corporate, LLC or private‑equity buyers who have grown their share of single‑family transactions.

Nelson said national and regional studies show investor ownership remains a modest share of housing stock at the state level but can be highly concentrated locally. She cited a New Jersey study that found corporate ownership rose from 1.6% to 3.8% statewide over a decade, and she pointed to neighborhoods where the local share is much higher. "A small statewide share masks a huge amount of variation from place to place," she told the committee.

Nelson described three categories of harms linked in research to investor activity: crowding out home ownership — investors often buy with cash and outbid first‑time or lower‑income buyers; renter harms — including higher rents, algorithmic rent‑setting and more frequent evictions and habitability complaints; and transparency problems — difficulty tracing beneficial owners because many purchases are held in shell LLCs with minimal public records. "There was a willful intention to obfuscate the identity of the buyers," she testified, noting that tracing ownership often requires detailed local research.

Citing work in Philadelphia, Nelson said the largest corporate buyers (those that acquired 100 or more homes in the study period) were more likely to be local or regional private companies than household names, and that about 14% of tenants in properties acquired by those large corporate buyers had eviction cases filed within four years of acquisition; she warned that including pandemic months with eviction moratoria likely undercounts the eviction pressure.

Committee members asked procedural and scope questions: whether loans available to the public count as "funding" (Wood said mortgages available broadly are excluded), how the law would treat out‑of‑state entities that own properties elsewhere, and whether multifamily or manufactured housing should be included (Wood and Nelson said these are policy choices the committee can make). Members also asked whether proposed federal bills or a recent executive order would preempt state action; Nelson said she had not seen congressional language that would preempt state measures but encouraged the committee to review federal proposals carefully.

Nelson outlined a menu of state‑level approaches other jurisdictions have considered or proposed: increased disclosure and rent‑registry requirements; "first‑look" or priority‑window rules that delay corporate purchases 30–90 days to give individual buyers a chance; graduated taxes or transaction fees tied to a firm’s portfolio size; and indirect measures such as vacancy taxes, down‑payment assistance for owner‑occupants, and proactive inspection programs to target poorly maintained portfolios.

Chair Mark Mahali said the committee will hear additional witnesses this week and will remain in contact with Nelson and staff as members explore technical details and policy choices. No formal vote on H.607 was scheduled at the hearing’s end; the chair said the committee will continue to gather evidence and may refine thresholds (for example, the "10 unit" or "$30 million" tests) based on local data and policy choices.

Why it matters: The bill targets equity‑funded or investor‑managed purchases that research links to displacement risk, concentrated rental ownership, and reduced local transparency. Supporters say waiting periods, disclosure and tax changes can protect first‑time buyers and communities; opponents note the risk of unintended consequences for housing supply and lenders and the need to tailor definitions to Vermont’s market.

Next steps: The committee paused for a short recess but expects more testimony this week and follow‑up work with legislative counsel and Ms. Nelson. The committee chair asked staff to supply local ownership data to estimate how many Vermont entities would meet the bill’s thresholds.