New York's Bold Move to Curb Institutional Investors in Housing

Governor Kathy Hochul is taking a strong stance to protect homeownership opportunities for everyday New Yorkers. In her 2025 State of the State proposal, she introduced legislation that would impose a 75-day waiting period before large institutional investors can make offers on or purchase one- or two-family homes.

This move is designed to prevent deep-pocketed hedge funds and private equity firms from outbidding individual buyers and making the already tight housing market even more competitive.

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Why This Matters for Homebuyers

In recent years, large investors have been rapidly acquiring single-family and two-family homes across the country. These firms often make all-cash offers, waive inspections, and buy homes in bulk, making it nearly impossible for the average buyer to compete. In cities like Rochester, hundreds of homes have already been snapped up by these investors, limiting opportunities for first-time buyers and inflating home prices.

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According to estimates, private equity firms could own 40% of the single-family rental market by 2030. This not only reduces homeownership opportunities but also raises rents, further worsening housing affordability.

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What the Legislation Proposes

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If passed, the new law would:

• Require a 75-day waiting period before institutional investors (with assets of $50 million or more and ownership of at least 10 properties) can make an offer on a one- or two-family home.
• Eliminate certain tax breaks that make these investments more lucrative, including depreciation tax and most interest deductions on these properties.
• Penalize violations with fines of up to $250,000 per illegal offer to ensure compliance.

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These changes aim to level the playing field for first-time and moderate-income homebuyers, giving them a fair shot at homeownership without competing against Wall Street-backed investors.

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A Step Toward Solving New York’s Housing Crisis

Governor Hochul’s plan is part of a broader effort to increase housing supply and affordability across the state. Other measures include:

• $100 million in funding for starter homes and down payment assistance for first-time buyers.
• A five-year, $25 billion housing plan to create or preserve 100,000 affordable homes.
• New tax incentives and funding to develop additional housing statewide.

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The Future of Institutional Investing in Real Estate

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If these measures are approved, New York will be setting a precedent that other states may follow. The idea is simple: homeownership should be about building wealth for families, not just another profit center for big investors.

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For those looking to buy a home, this could be a game-changer. If institutional investors are forced to slow down their acquisitions and lose some of their financial advantages, more homes could remain available for everyday buyers. While this legislation won’t solve the housing crisis overnight, it’s a step in the right direction.

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Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.

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