KNOXVILLE, Tenn. — When an investor is looking to buy the same home as a family, average people may be bidding against a business that can have millions of dollars in cash to offer.
According to the Knox City Property Assessor, there are around 65,000 residential units in Knoxville. Roughly 4,500 of them are owned by a limited liability company, corporation, or partnership. All 4,500 homes are all single-family housing.
Finding a house has been a struggle for many people as prices soared and average Knoxville housing prices outpaced and outranked the U.S. average. Rep. Tim Burchett (R-TN) said it's been hard for the average homebuyer.
"We're really a victim of our own success tendencies, a low tax state, people are moving here in droves," Burchett said. "You got a supply and demand issue. You got rental properties that are going through the roof, you have college kids that can't find affordable housing, and it just gets worse and worse."
Democratic lawmakers proposed two bills to help housing affordability. In the House of Representatives, The American Neighborhoods Protection Act would require corporations that own more than 75 single-family residences to pay $10,000 per home annually.
That money would go into a Housing Trust Fund for down-payment assistance grants to help families.
"A lot of it, going after rich people, is just envy, really," Burchett said. "I know a lot of billionaires, and there's some very, very generous people, and you put them out of business, and they're gonna stop employing people, and that will further cause erosion."
In the Senate, The End Hedge Fund Control of American Homes Act bans hedge funds from owning single-family homes.
After a ten-year phase-out process, it will impose a 50% tax on the fair market value of any future hedge fund purchase of a single-family home.
"All they would do was pass that on to the renters, and they would further drive them out," Burchett said.
John Whitehead, Knox County's Property Assessor, laid out the problem in Knoxville. It's hard for a single family to bid against a company, Whitehead said, and prices keep rising.
"The ones that we're being concerned with are the single families, because there's been they've been buying up," Whitehead said. "I don't know if what they're doing is going to help make the housing more affordable. I don't know what makes housing more affordable. When people are paying more, how do you rent for less?"
Over the last few years, Whitehead said he's never seen anything go up as fast as this housing market.
WBIR asked Burchett whether he is taking any action to address housing affordability, or working on something to improve the market for average homebuyers in Knoxville.
"What that action is, I don't know yet," Burchett said. "But I do worry about Washington. Getting in the middle of something and making it worse."