CONGRESSMAN PAT RYAN DEMANDS INVESTIGATION INTO PRICE GOUGING BY WALL STREET PRIVATE EQUITY FIRMS DRIVING UP HOUSING COSTS

Congressman Pat Ryan Demands Investigation into Price Gouging by Wall Street Private Equity Firms Driving Up Housing Costs

Single-family home prices have risen by 47.1% since 2020, and the average cost to rent a single family home has increased by 30%, while mortgage rates have also doubled

KINGSTON, NY –  Today, Congressman Pat Ryan demanded that Federal Trade Commission (FTC) Chair Lina Khan investigate price gouging by Wall Street private equity firms driving up housing costs. Private equity firms are estimated to own more than 500,000 homes across the United States, and are expected to control 40% of the single-family rental market by 2030, yet have totally avoided antitrust oversight. Meanwhile, single family home costs, both to buy and rent, have skyrocketed due to their monopolistic practices. Ryan’s letter comes two days before the introduction of his Housing Affordability Agenda, a comprehensive legislative package to lower housing costs for Hudson Valley families.

“Wall Street speculators are buying up houses and jacking up prices on hard-working families across the Hudson Valley. It’s textbook price gouging, and we have to hold them accountable,” said Congressman Pat Ryan. “What do you expect to happen when we have working people going head to head with multi-billion dollar monopolies? The private equity firms rake in record-breaking profits, and everyone else is left holding the bag.  It’s time to level the playing field.”

A copy of Congressman Ryan’s letter to Federal Trade Commission (FTC) Chair Lina Khan appears below:

Dear Chair Khan,

The role private equity plays in the lives of hardworking Americans has steadily grown over the last decade. Private equity is connected to housing, healthcare, jobs, and pensions around the United States, and left unchecked, its influence poses great financial risk to working families.  While raising rental rates and the price of single family homes, private equity companies can simultaneously lower wages, all in an effort to boost their profits regardless of the impact on our communities. It is time for the government to investigate the effect of private equity on the housing market and reign in out-of-control monopolistic practices.

Single-family home prices have risen by 47.1% since 2020, and the average cost to rent a single family home has increased by 30%. This is in large part due to private equity’s growing influence in the housing market. Last year private investors bought 26% of the most affordable homes across America, pushing working families out of the market. The top private equity firms are estimated to own more than 500,000  homes across the United States and are expected to control 40% of the U.S. single-family rental market by 2030. Private equity is the Standard Oil of the housing market and hardworking families cannot afford for the government to look the other way. Their practices and bottomless reserves of capital are driving everyday consumers out of the market and stifling competition.

I urge the FTC to act now and investigate private equity’s monopolistic practices and the impact they have on the price of residential housing. Private equity groups have enjoyed shelter from the antitrust reporting requirements under the FTC’s current interpretation of the Hart-Scott-Rodino Antitrust Improvements (HSR) Act. However, this interpretation is out of date as today’s private equity practices amount to large-scale residential and investment property acquisitions that surely must be reexamined. Government regulators must not overlook massive commercial acquisitions of residential properties – they should fulfill their oversight responsibilities under the Clayton Antitrust Act. When private equity can come in and buy large swaths of residential real estate for cash and then sell it later at a 10% markup, we have a problem. This practice is anti-competitive and prevents everyday Americans from putting a roof over their heads and food on the table for their families. If the government does not act now, homeownership rates for the middle class will continue to decline as the private equity monopoly grows. I urge you to investigate these practices and update your reporting requirements based on your findings.

Thank you for your consideration. I look forward to working together to improve the lives of hardworking Americans, including my constituents.

Sincerely,

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