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Michigan bars big investors from buying more homes. Will it work?

Gov. Gretchen Whitmer on Tuesday signed legislation to bar private equity groups from owning more than 100 single-family homes in Michigan. But the legislation may be a solution in search of a problem for state residents. Photo courtesy of the Office of the Governor.

by Jordyn Hermani, Bridge Michigan 

LANSING — Gov. Gretchen Whitmer on Tuesday signed to bar large private investors from buying single-family homes in Michigan if they already own 100 or more in the state.

It part of a broad push to address an ongoing housing crisis by limiting the ability of private equity firms and other investors to buy homes that would otherwise be available to residents. A separate will bar purchases by firms that already own 350 or more houses nationwide.

But in Michigan, even some members of Whitmer administration doubt the laws will have a major impact in the state, where private investors have bought up housing at a slower rate than other parts of the country.

“In our state, that’s not a big issue,” Amy Hovey, MSHDA executive director, told Bridge Michigan a day before the bill signing.

Some Michigan cities have fought private investors, including Detroit, which sued to by a cryptocurrency landlord and related companies linked to more than 400 local properties.

And supporters contend the new law is a forward-looking attempt to help people live in the communities they work, especially in parts of Michigan with tourism-driven economies that have seen a rapid rise in properties owned exclusively as vacation rentals.

“When homes are purchased by large out-of-state investment firms, it becomes harder for local families, teachers, nurses, first responders, and tradespeople to buy homes in the communities they serve,” said sponsoring state Rep. Karl Bohnak, R-Deerton, arguing the law will help “keep more Michigan homes available for Michigan residents.”

In committee testimony, Bohnak cited estimates that 75,000 to 100,000 of Michigan are owned by “large institutional investors.” Hovey said Tuesday the state needs approximately to address shortages.

Whitmer signed the private investor buying cap alongside other housing-related laws, including a new state-level and amendments to Michigan that backers say could spur more affordable housing developments.

“Every Michigander deserves an affordable, quality place to call home,” Whitmer said in a statement. “I’m proud to sign these bills that cut red tape, lower housing costs, and expand our housing stock available to working families looking to put down roots.”

The new laws

Under , large institutional investors — defined as an investment fund, corporation or any other for-profit entity that not associated with tribal, local, state or federal government — could be immediately barred from directly or indirectly buying additional single-family homes.

The prohibition would apply to entities that already own 100 or more properties in Michigan and have a net value of $375 million or more.

Bohnak said those provisions would prevent “big business from invading Michigan housing market armed with buying power no average person could compete with.”

But skeptics have questioned whether firms could simply create new LLCs to evade enforcement, and the law could negatively impact medium-sized owners with rental properties.

At the federal level, the new – which became law without President Donald Trump signature – will prohibit additional single-family home purchases by institutional investors that already own 350 or more.

That will “prevent corporate investors who treat family homes like their personal stock portfolio from buying up all the supply,” US Rep. Tom Barrett, R-Charlotte, said earlier this month.

Much like the Michigan law, however, the federal act will not force private investors from giving up property they already own.

Nationally, large-scale investors (those owning 100 or more properties) owned about 3% of all single-family rental homes as of 2023, according to a study from the , a nonprofit public policy organization based in Washington, DC. Another study from the same time by the think tank put that number closer to 3.8%.

Home purchases by institutional investors peaked right after the COVID-19 pandemic, but such sales have since slowed, said Shawon Cecil, public policy field director for the Michigan Realtors Association.

Regardless, Michigan hasn’t “seen much of a trend of this being a major issue,” Cecil said earlier this year in opposing the bill.

“Where we see most of the strain is in states where there is a larger strain on the market” for housing demand, he added.

Getting ‘ahead of the game’

Institutional investors bought more than 8% of all housing in at least eight US states during the first quarter of 2025, reporting from , with Alabama seeing the most homes bought at 10.9%.

In Michigan, that figure was closer to 6.5%, holding steady from the year prior.

“There’s not a whole lot of this going on at this point,” Bohnak, the bill sponsor, acknowledged in a June committee hearing. “We’re just trying to get out ahead of the game.”

In Detroit—Michigan largest city, with an estimated population of 649,095 in 2025—nearly 93% of all landlords in the city own two or fewer properties, according to a from the nonprofit think tank .

Those same findings note roughly 65% of Detroit more than 54,300 unique landlords also have a city-based address.

While the law seeks to stop large-scale investors from purchasing more than 100 single-family homes, there are some exceptions.

Investors could still buy additional homes if they’re able to secure a brownfield redevelopment plan or other housing development activity approved by the Michigan State Housing Development Authority.

There also little to stop investors from simply creating multiple limited liability companies and maintaining multiple portfolios with under 100 homes each, Bohnak conceded.

Failure to follow the new rule could result in a civil fine of up to $25,000 per home purchased over the 100-home cap. Any money collected would return to the state general fund.

This first appeared on and is republished here under a .

by Sara Swanson

Sara Swanson is an editor, writer and a founder of the Manchester Mirror.