Why Sen. Sturtevant wants to stop big investment firms from buying homes in Virginia

Sen. Glen Sturtevant, R-Chesterfield, has been frustrated by large investment firms purchasing homes in Virginia. Both in posts on social media and in a Zoom call open to the public and press on Wednesday, he outlined some policy proposals that he hopes can help with affordable housing. 

First, he laid out his legislative efforts to reign in investment firms. After an unsuccessful attempt in 2024, he said that he’s reworking his bill for the 2025 session. If passed, it would prohibit investment firms worth more than $50 million from purchasing homes. Similar ideas have been introduced in Congress and other state legislatures, so Sturtevant wants to try it in Virginia. 

“This is intended to target the big Wall Street investors, not your mom-and-pop investors who buy a home and flip it or who have a duplex under management,” he said.

Mostly, he hopes it can help people who are struggling to afford a home, particularly first-time homebuyers. 

A meeting attendee named Holly Dougherty wrote in the group chat that her adult children are losing out on homebuying opportunities to investors with cash offers. 

“There needs to be a way to keep young families in the community,” she said. 

Sturtevant said that anecdotally, it’s been a “nightmare” for “millennials and older Gen Zers who are coming out of school and trying to buy their first home.”

He pointed to data from Redfin that confirms a spike in investment firms purchasing homes. Investors bought one out of every six homes in the nation and one out of every four low-priced homes that sold in the second quarter of this year. Single-family homes made up nearly 70% of their purchases. 

Sturtevant also pointed out how investment firms can sit on properties rather than redeveloping them or selling them, with a team of people analyzing the best moment they can sell for the highest price, despite having an advantage over individual buyers when acquiring the property in the first place. 

“It’s ultimately not fair for them to be competing with regular people,” he said. 

Other legislation Sturtevant wants to spearhead would allow homebuyers to inherit a seller’s mortgage and its rate. 

An example of where people could see immediate benefit through that measure, he said, are people who were able to purchase a home or refinance their home during lower rates when the COVID-19 pandemic was surging. A new buyer could inherit that benefit if the law were to pass. 

And finally, he said he is exploring ways to incentivize companies in the commonwealth to offer down payment assistance to employees. He said that the idea is to benefit both young employees who may lack the cash for down payments while also nurturing workforce development and keeping people in Virginia.

And while Sturtevant is still fine-tuning his proposals with Virginia’s Division of Legislative Services — legal experts that assist lawmakers in drafting legislation — he stressed that the laws are only part of broader solutions when it comes to the state’s affordable housing issues. 

Chris Saxman, a former state delegate who hosted the Zoom call, noted how “everybody seems to be having housing issues these days.” 

Housing was a prominent topic in this year’s local and federal elections. Presidential candidates Kamala Harris (who offered a downpayment assistance proposal) and President-elect Donald Trump talked about the nation’s housing needs during their campaigns. 

Though housing is typically addressed at the local level, in Wednesday’s Zoom Saxman and Sturtevant reflected on ways state and federal governments can help with supply and affordability. 

Saxman said that he thinks Sturtevant’s bills might be hard to vote against, especially with the House of Delegates up for election in 2025. His ideas will first need to clear the Senate before review by the House and approval from the governor. 

Sen. Mamie Locke, D-Hampton, who chairs the Housing Commission, welcomes Sturtevant’s intended work in addressing housing issues. 

But she stressed that Republicans have not always been on board with supporting other efforts to boost affordable housing. 

“Accessible and affordable housing has been at the forefront of the Democratic agenda for decades, (with) proposals often thwarted by our Republican colleagues,” she said. “That was never more evident than during the housing crisis in the 2009-2010 time frame and during the eviction crisis. Many voted against the budget that included funding for the Housing Trust Fund.”

Locke said that she is “glad to know some finally understand this is a serious problem.” 

Virginia lawmakers on both sides of the aisle have put forward measures this year to address housing challenges in the state.

Del. Carrie Coyner, R-Chesterfield and Sen. Ghazala Hashmi, D-Chesterfield carried a proposal called “5,000 Families,” which would provide rental relief to certain families with school-age children to prevent displacement during academic years. Though it did not pass this year, housing groups have their eye on it for next session. 

Sen. Jeremy McPike’s Senate Bill 597 would have allowed more local governments to utilize federal housing tax credits to encourage the development of additional affordable housing — typically associated with ranges of an area’s median income. The bill cleared both chambers before being vetoed by Gov. Glenn Youngkin.

These new housing laws will take effect next month

Both proposals may resurface in the next legislative session beginning in January, and Sturtevant will try again on his investment firm bill. 

The legislature was able to approve a series of housing reforms this year. Some support renters, while another bill established a workgroup that can explore future building code changes. Another successful bill was aimed at protecting existing mobile home parks — a vulnerable but affordable type of housing for which residents own their homes, but not the land beneath it. 

Gov. Youngkin also recently issued a directive to invest up to $75 million towards localities that want to bolster housing supply tied to new job creation over the next five years. 

“This isn’t partisan stuff,” Saxman said.