Tennessee lawmakers have failed three times since 2024 to pass legislation aimed at limiting large institutional investors in the housing market, but Knox County has now enacted its own version of those restrictions.
A new housing provision, approved Aug. 31 by the Knox County Commission, bars institutional investors from acquiring more than 100 single-family homes in the county. The measure mirrors provisions that have repeatedly stalled in Nashville and follows a federal law signed in July that caps large institutional investors at owning 350 homes.
The ordinance, sponsored by District 1 Commissioner Damon Rawls, protects existing properties and their owners from being outbid by large firms. Smaller companies, Tennessee-based investors and affordable
housing projects are exempt.
Knox County pursues its own version of failed Tennessee proposals
Tennessee state legislators have floated three different proposals since 2024 aimed at limiting the influence of large institutional investors in the housing market.
- Tennessee's failed "End Hedge Fund Control of Tennessee Homes Act" was introduced in 2024 and aimed to assist homebuyers with down payments and imposing a tax on real estate investors who own more than 100 properties across the state.
- A 2025 bill requested a report with records on real estate investment trusts that buy 10 or more homes in a calendar year. The proposal, which passed through multiple committees before dying in the House, would've included acquisitions through foreclosure and properties bought with the intent to rent or convert to rentals in the future.
- In March of this year, the "Homes Not Hedge Funds Act" passed 31-1 in the state Senate but failed in the House. This bill would've restricted investors who owned 100 single-family homes from buying more in nine Tennessee counties, including Knox County, and would have allowed counties to sue investors directly.
Rawls conducted his own research before sponsoring the county ordinance and identified an out-of-state firm that purchased Knox County homes through multiple LLCs, raising concerns that the practice was more widespread than a single case. He presented his findings to the Knox County Commission at its Aug. 31 meeting.
"This is just a small example of some of the companies that I found," he said at the meeting. "This was not easy to put together, so this tells me that there are more individuals doing the same thing."
As Knox County grows, residents now have legal protections
While the prevalence of widespread investor ownership in Knox County is unclear, Rawls said, the local measure will serve as a "guardrail" as the county grows over the next 10 to 15 years. Between now and 2040, Knox County is expected to attract 56,636 new residents, according to the Tennessee State Data Center.
Firms already owning 100 homes are grandfathered in but can't acquire more rental properties. Any company that violates the ordinance can be sued by the county and will owe $100 per day for each home, while residents who've been outbid by an investor could also take legal action.
The measure does not restrict investors from building new rental communities.
Sophia Tiedge is the growth and transformation reporter for Knox News. Email: sophia.tiedge@knoxnews.com
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This article originally appeared on Knoxville News Sentinel: Knox County passes homebuyer protections that Tennessee lawmakers couldn't
