Raysall Robertson feels drained when she reflects on her ordeal of the last couple of years. “I’ve had plenty of days that I’ve wanted to break down, and I have cried,” she says. “It’s a lot. I’m just trying to really, truly keep the faith in the system and everything.”

It was 2021 when the single mother of two boys, who has rented a house in northwest Houston’s Acres Home neighborhood for nearly a decade, decided it was time she became a homeowner. After getting preapproved for a $250,000 mortgage, she and her real estate agent, Vachael Starks, set out to find a house with three bedrooms and two baths. They’re still looking.

To date, they’ve put in full-price bids on between twenty and thirty properties, in locations ranging from Houston’s south side to suburban Spring, without any success. Starks says that “cash investors from everywhere” have outbid Robertson on almost every property.

“You have to have a pocketbook to be able to bid twenty thousand, thirty thousand over the listing price to beat these companies, and you’re never going to beat them,” she says. “The seller’s realtor would call for the highest and best bid and wind up with eight or ten offers and say, ‘I have an investor from New York, and they’re paying cash.’ ”

Consider, for example, the time in October 2021 when Robertson lost out on a home in Houston’s Bammel Village neighborhood, on the far north side of the city, that was listed for $190,000. Harris Central Appraisal District records show that the house was purchased in late November of that year by a limited liability company with a Dallas address. According to Realtor.com, the home was listed for rent a week later.

For Robertson, a contract employee in health-care administration for the government, the long search has been especially frustrating because mortgage interest rates have doubled since she began, decreasing the amount of home she can afford to buy.

Deep-pocketed institutional buyers have rushed into the booming market for single-family rental homes in recent years, and in no state more so than in Texas, according to a 2022 report from the National Association of Realtors. (“Institutional buyers” can refer to corporations, hedge funds, private equity firms, small businesses, and LLCs of all stripes, including those formed by mom-and-pop landlords who own multiple properties.) Dallas-based Invitation Homes, a real estate investment trust, is the nation’s largest institutional owner of single-family rentals, with roughly 80,000 homes in sixteen U.S. markets, including about 5,000 houses in Texas. Another major national player, Amherst Residential, has its headquarters in Austin.

With home prices and rents skyrocketing since the COVID-19 pandemic—though both have cooled some lately, due to rising interest rates and worries about the economy—affordable-housing activists have accused corporate investors of driving up home prices, as well as rents and fees; muscling out first-time home buyers; evicting tenants at higher rates; and worsening the racial gap in wealth and homeownership.

Reflecting such concerns, two bills introduced in this year’s state legislative session by representative Gina Hinojosa, a Democrat from Austin, are aimed at reining in corporate landlords. One, HB 1056, would require investment firms that lease homes in Texas to register their ownership information, county by county, with the state comptroller. The other measure, HB 1057, would bar an investment firm from entering into an “executory” (or tentative) contract to purchase a single-family home before the thirtieth day after the home is listed for sale. Both bills were referred to the House Business & Industry Committee in early March.

“What we’re hearing is that investors are coming in with all-cash offers, no contingencies, which leaves little room, if any, for your average home buyer to make an offer,” Hinojosa told Texas Monthly. “Homeownership is one of the fastest ways to create personal wealth, and investors are fundamentally changing the landscape of single-family real estate throughout Texas.”

HB 1056 is designed to bring greater transparency to situations in which investors have accumulated a substantial share of rental properties within a particular geographic area. “This could allow them to set higher rates, because renters have fewer options to choose from,” Hinojosa says. “We also know that renting from an institutional investor can be the biggest predictor of an eviction.”

While there’s little doubt that institutional buyers are capturing an increasing number of single-family homes in Texas, whether they’re responsible for fundamentally altering the market is less clear. Recent surveys and studies indicate that, at a minimum, they have put further strain on a the state’s relatively limited housing supply and exacerbated the housing affordability crunch in some areas.

But would Hinojosa’s proposals tangibly address those issues? Could any actions that legislators might take do so?

Nationally, institutions owned about 700,000 single-family rentals last year, or about 5 percent of the 14 million single-family rentals in the country, according to research from MetLife Investment Management. Still, MetLife said that share could increase substantially, to more than 40 percent, by 2030. For now, big Wall Street– and private equity–backed institutions—which first got into single-family rentals in a big way by snapping up foreclosed homes after 2008’s Great Recession—still lag far behind mom-and-pop landlords, who have traditionally owned the lion’s share of houses for rent.

A study of its members last year by the National Association of Realtors said institutions bought 13.2 percent of all residences sold in the U.S. in 2021, up from 11.8 percent in 2020. The biggest institutions were buying these homes strictly to rent out. Texas led all states with the highest share of institutional buyers, at 28 percent. Several Texas counties saw even higher percentages, including Tarrant (52 percent), Rockwall (45), Midland (44), Dallas (43), and Travis (41).

Institutional buyers, the NAR said, focused their purchases on areas in Sunbelt states with a growing number of households (such as Collin, Denton, and Williamson Counties), a high density of renters (Dallas and Travis), high income and education levels (Denton, Travis, and Williamson), fast home appreciation in affordable areas (Dallas and Midland), or rapidly increasing average rents (Dallas). The main reasons for selling homes to institutional investors, according to the survey: they paid with cash, bought the property “as is,” or promised to complete the purchase quickly, sometimes in a matter of days or less.

In Texas especially, the NAR found, institutional firms shelled out a lot of dough to buy houses. While the median price these investors paid nationwide for single-family homes was typically 26 percent below the median in a state, investors paid 70 percent above the median in Texas—the highest premium paid among any state. In January, according to the Texas Real Estate Research Center at Texas A&M University, the median home price in Texas was $319,000—more than 20 percent higher than the $262,000 it had been in January 2021.

Adam Perdue, a research economist at the A&M center, says the center’s preliminary internal data show significant recent increases in institutional investors’ single-family home market share in all four big Texas metros. In the Austin area, these investors—defined as “known companies, LLCs, and other corporate identifiers”—were responsible for 19 percent of all single-family home purchases in 2022, up from 8 percent in 2017. Investors likewise accounted for 19 percent of the market in Dallas–Fort Worth, up from 11 percent in 2017, and 17 percent in San Antonio, where they’d snapped up 10 percent of purchases five years earlier. In Houston, the investor share was 15 percent, compared to 8 percent in 2017.

But what’s chiefly been to blame for pushing up Texas home prices and rents, Perdue says, are interest rates, which at record lows in 2020 and 2021 encouraged a buying frenzy before shooting up last year as a result of the Federal Reserve’s anti-inflation fight. He also blames unexpectedly robust economic growth in the state, plus supply-chain issues and other restrictions on new home building in places where people want to live.

It’s the expectation of continuing rent hikes, Perdue says, that may be “driving investors to target these areas for both increasing cash flow and appreciation in the housing units they buy.” Arben Skivjani, deputy chief economist at Dallas-based real estate–software company RealPage, said during a recent webinar that rent growth in 2023 is expected to average from 2 percent to more than 5 percent in the biggest Texas markets.

At a Financial Services subcommittee hearing in the U.S. House last June, and in an accompanying report, the five largest investment firms—including Invitation and Amherst Residential, which had more than 32,000 houses at the time—were lambasted for acquiring homes that otherwise likely would have gone to first-time home buyers or low- and middle-income buyers, or both. Shad Bogany, a Houston real estate agent and former chairman of the state realtors association, testified that by buying and renting homes in neighborhoods with larger populations of Black residents, profit-driven investors are “creating a generation of renters that will miss out on the benefits of homeownership, the ability to create wealth and stabilize communities.”

The big investment firms reject the premise that they’re in competition for homeownership, however. They own too few of the nation’s roughly 90 million single-family homes to have a significant impact, they say, insisting that misguided talk about their influence diverts attention from the real housing problem.

“The primary challenge facing housing markets across the country is lack of supply, and this is certainly the case in Texas,” says David Howard, CEO of the Washington, D.C.–based National Rental Home Council. Among its fewer than thirty member companies nationwide, the NRHC represents the interests of about fifteen single-family home rental companies that are active in Texas and own about 40,000 houses in the state—mostly in Austin, Dallas–Fort Worth, Houston, and San Antonio. (Texas has nearly 9 million single-family houses in all, including about 1.5 million rental homes, according to the U.S. Census Bureau.)

“Whether in larger metropolitan areas like Dallas or Austin or smaller, more rural communities, there simply isn’t enough housing to meet the demand—whether for owner-occupied housing, apartment housing, or single-family rental housing,” Howard says. The U.S. is indeed short more than 2 million homes, a recent analysis from Realtor.com showed. And Texas has the second-greatest undersupply of housing units among the states, trailing only California, according to the latest data from a research and policy group called Up for Growth.

Not surprisingly, the NRHC doesn’t think much of Hinojosa’s two bills in the Legislature targeting corporate landlords. “Rather than creating obstacles to new home development—like HB 1056 and HB 1057—policy makers need to work with industry to spur new home building and attract new sources of capital and investment,” Howard says.

Chuck Dannis, an adjunct professor of practice in real estate at Dallas’s Southern Methodist University, is leery of Hinojosa’s legislation as well, partly because he says it would restrict the free flow of capital into housing. “I’m hesitant to have the government come in and say who can buy houses and who can’t,” he says. “There’s already a public registry, because they record the deeds—that’s how they know who’s bought what. And the thirty-day [pause on institutional buying] sounds like too much government intervention. Capital typically figures out where to go and how, and if it works, it works, and if it doesn’t, it doesn’t.”

Texas Realtors, the state-level realtors association, is also wary of the two legislative measures, saying it would be cautious about limiting the right of a seller to select a buyer of their choice. In addition, it’s hard to pinpoint the impact of institutional buyers on the market because the group’s housing data “does not differentiate between types of buyers,” the association said in an emailed statement. “Similarly, it would be difficult to legislate separate rules for the ‘large corporations’ and mom-and-pop owners of real property who might use a small LLC [and] are also important housing providers in all of our local markets.”

Howard notes that many of the NRHC’s members now are working to expand housing in Texas by partnering with home builders to develop new communities for rent, or by putting up homes for rent on their own. In 2021, for example, Invitation and Atlanta home builder PulteGroup agreed that, over five years, Invitation will buy 7,500 single-family homes that Pulte will design and build specifically for the Dallas company. The first batch of those houses could be ready in the Dallas–Fort Worth area this year, an Invitation spokesperson says.

Hinojosa doesn’t know whether HB 1056 and HB 1057 will get hearings this session, but “these bills at least start the conversation about the modern state of homeownership,” she says. “We have shined a light on the problem, and that’s a necessary step towards a solution.”

In the meantime, Raysall Robertson continues her search for a house to call her own, despite the disappointing results so far. Vachael Starks, her agent, hopes to get Robertson approved for a grant from the Harris County Community Land Trust, which would help.

“Once I get you through this program, hopefully we should be able to land something,” Starks told Robertson the other day.

“I do believe that,” Robertson said. “I believe ‘everything in God’s time.’ ”