Legislation aims to protect Pittsburgh homeowners from predatory residential property wholesalers

Pittsburgh City Council is considering a measure that aims to protect homeowners from predatory practices by residential property wholesalers.

Residential property wholesalers buy up houses and then sell or lease them. Councilwoman Deb Gross, D-Highland Park, who sponsored the legislation, said these entities often are large corporations that sometimes use predatory solicitation techniques to buy homes from vulnerable people for less than they’re worth.

“So much of our housing stock is being bought up by large corporate investors,” Gross said.

That makes it harder for people to buy houses and can contribute to soaring housing costs, she said.

She added that residential property wholesalers are less likely to have a stake in the community and may be less motivated to maintain the properties compared to traditional homeowners.

It also can lead to people being pressured into selling their homes for low prices, which can lead to people being displaced from their communities, Gross wrote in the bill.

“There’s a subset of this corporate takeover of housing that is very predatory,” Gross said. “They’re unregulated. They’re unlicensed. They harass people and seem to prey on seniors or on low-income homeowners or on minority homeowners.”

The legislation Gross introduced Tuesday would require all residential property wholesalers to get a license, which they would need to renew annually. The proposed licensing process includes a $200 fee, an insurance requirement and a background check to ensure wholesalers have not been convicted of any crime involving fraud, dishonesty, breach of trust or deceit in the past six years.

The legislation also would require wholesalers to provide homeowners with information on how to assess their property’s value, hire a real estate agent or seek legal counsel.

A related bill also introduced Tuesday would create a do-not-solicit list for homeowners who do not want to be contacted by residential property wholesalers.

In the bill, Gross said statistics show more than 18% of home sales across the country involved residential property wholesalers. A report from the Pittsburgh Community Reinvestment Group showed 24.8% of sales locally in 2021 involved the wholesalers, up from 15.5% in 2010.

Gross said there would be further public discussion on the proposed legislation in advance of any votes on it.