The Knox County Commission passed an ordinance Aug. 31 barring institutional investors from buying up existing single-family homes in Knox County.
The ordinance will act as a "guardrail," protecting Knoxville's housing stock from large-scale buyers, said Commissioner Damon Rawls, who sponsored the ordinance.
Knox County's ordinance bans any single company from buying more than 100 single-family homes with the intent to rent them. Tennessee-based groups and affordable housing or small public companies are exempt. Any company that already owns 100 homes can continue to operate, but won't be able to expand their holdings.
The ordinance applies to existing homes and it doesn't prevent a company from building new home and then renting them.
The Tennessee
General Assembly considered a similar law, "Homes Not Hedge Funds Act" based on the same principal, but it wasn't enacted. Rawls saw their attempt as an opportunity to be proactive as the county grows.
In Knoxville, investor-purchased homes accounted for 8.8% of sales in 2024, according to an East Tennessee Realtors report. Rawls said he found one company that owns hundreds of homes under 12 different LLCs and he's worried there may be more.
Between now and 2040, Knox County is expected to attract 56,636 new residents, according to the Tennessee State Data Center. Rawls said passing the ordinance now will protect homeowners 10 to 15 years down the line.
Any company that violates the law can be sued by the county and will owe $100 per day on each home. Residents who've been "outbid" by an investor also can bring civil action under the ordinance.
Sophia Tiedge is the growth and transformation reporter for Knox News. Email: sophia.tiedge@knoxnews.com
This article originally appeared on Knoxville News Sentinel: Knox County sets 'guardrail' to stop firms from buying more than 100 homes
