Legislation that would ban large corporate landlords from acquiring more single-family rental homes is depriving the US housing market of much-needed investment, Pretium founder Don Mullen said in an interview with Bloomberg Television.
The ban was included in a sweeping housing bill passed by the US Senate in March. While the House of Representatives has yet to vote on the legislation, the prospect of its passage has made it difficult to fund new rental-home construction projects known as build-to-rent.
“We have a client, as an example, that I spoke to last night, who’s been a big investor in build-to-rent,” said Mullen, speaking from the sidelines of the Milken Institute Global Conference in Beverly Hills on Monday. “He has his ‘no’ stamp out, and every time a project comes on his desk now: ‘No.’”
Mullen said there are good parts of the housing bill, including provisions that would make it easier for builders to get new projects approved. But a section of the bill that would require large landlords to sell assets after a seven-year holding period risks freezing new investments, according to Mullen.
“Capital is drying up for home construction in the United States,” Mullen said.
Mullen, a former partner at Goldman Sachs Group Inc., founded Pretium in 2012 and built the firm into one of the largest single-family rental companies in the US. It oversees more than $62 billion of assets, including $32 billion of real estate equity.
The firm said Monday that it has surpassed $3 billion in financing to homebuilders and multifamily developers.
Written by: Patrick Clark — With assistance from Romaine Bostick and Katie Greifeld @Bloomberg
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