New Bill Targets Single-Family Rental Investment

Senate Democrats take aim at tax deductions for single-family rentals.

By Ben Harrold |

2 minute read

A new bill in the Senate would prohibit investors who own 50 or more single-family rental homes from deducting interest or depreciation on properties purchased after the date of enactment. If the property is sold to an individual or certain nonprofit organizations, the bill would allow interest paid or accrued for only that taxable year. The proposed law would also exempt properties financed through the Low-Income Housing Tax Credit and build-for-rent single family homes. 

The bill's definition of "single family residential rental property" includes any residential rental property containing 4 or fewer dwelling units, potentially impacting small property owners of duplexes or fourplexes.

The so-called “Stop Predatory Investing Act,” S. 2224, was introduced by Sen. Sherrod Brown (D-Ohio) along with Sens. Ron Wyden (D-Ore.), Tina Smith (D-Minn.), Jeff Merkley (D-Ore.), Jack Reed (D-R.I.), John Fetterman (D-Pa.), Elizabeth Warren (D-Mass.) and Tammy Baldwin (D-Wis.). With a split government, it is exceedingly difficult to pass any legislation and a partisan bill such as this has even slimmer odds of becoming law. 

The current shortage of affordable housing has been caused by decades of undersupply in no small part caused by burdensome restrictions on development at all levels of government. The National Apartment Association (NAA) is committed to advocating for sustainable solutions to the affordable housing shortage. Placing hurdles on investment in rental property may serve to exacerbate the supply crunch at a time when the country desperately needs more homes to be built.