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USTIN, Texas — The state of Texas is experiencing rapid growth, leading to an increase in real estate purchases. However, there are concerns about large-scale property purchases made by institutional investors. These investors are typically large groups or organizations that buy real estate, unlike individual homeowners or "mom-and-pop" owners.

    In a recent hearing before the Texas House Committee on Business and Industry, stakeholders had differing opinions on how to address institutional investors. While some argued for limiting their influence, others believed that prohibiting or restricting access to rental housing markets based on whether an investor is an individual or an institution does not address the underlying supply and demand imbalance.

    The issue has bipartisan support, including from Texas Governor Greg Abbott, who expressed his support for free markets but expressed concerns about corporate large-scale buying of residential homes distorting the market and making it harder for average Texans to purchase homes.

    Data on the impact of institutional investors on the housing market presents varying pictures. Some argue that institutional investors only make up a small percentage of the real estate market, while others point to a report indicating that nearly a third of all Texas homes purchased in 2021 went to institutional investors.

    However, there is no clear definition of an institutional investor, and stakeholders testified on Thursday about the need for more up-to-date and clearer data to understand the activity of institutional investors across the state.

    While some stakeholders believe that increasing tax incentives for housing development and streamlining the approval process for housing developments could help address the housing supply issue, others argue that prohibiting or limiting access to rental housing markets based on whether an investor is an individual or an institution does not address the supply and demand imbalance.