Michigan Bans Large Corporate Homebuyers

Michigan Governor Gretchen Whitmer signed a series of bills aimed at increasing the state's housing supply and affordability, including a new ban on large corporate investors purchasing single-family homes. This legislative package, approved late last week, also introduces a new housing tax credit, allocates $50 million to the state's housing fund, and implements reforms to zoning and building codes. The measures come as housing affordability is a significant concern both locally and nationally, and as Michigan works towards its goal of adding 115,000 new or rehabilitated housing units to its stock by 2027. Governor Whitmer stated that these bills are designed to cut red tape, lower housing costs, and expand housing availability for working families. Michigan first introduced a statewide housing plan in 2022, and has since focused on addressing what lawmakers have called "nonsensical" building policies and regulations. The state's housing affordability performance was rated a C by Realtor.com® in both the current and previous year, with 73.2% of its housing stock being owner-occupied, a figure considerably higher than the national average. The new investor ban specifically targets corporations that own more than 100 single-family homes within Michigan. This state-level prohibition is more stringent than the federal 21st Century Road to Housing Act, which was passed earlier and restricts institutional investors owning more than 350 single-family homes, imposing penalties on such companies. Violations of Michigan's new ban will result in civil fines of up to $25,000 per infraction. The legislation includes clarifying language to ensure its focus remains on institutional investors, differentiating them from smaller-scale property owners. The broader housing package also includes provisions to streamline the development process and encourage the construction of more diverse housing types, such as accessory dwelling units and multi-family housing. These efforts are intended to address the state's housing shortage and make homeownership more accessible. The reforms aim to create a more balanced housing market, where homes are primarily available for individual buyers and families rather than large investment firms. The state's Department of Licensing and Regulatory Affairs will be responsible for enforcing the new ban and associated penalties. This legislative action places Michigan among a growing number of states and cities considering or implementing measures to curb the influence of large institutional investors in the single-family housing market.