Key Takeaways
- • Knox County Commission advanced the "Homes Not Hedge Funds Ordinance" on first reading with a 9-2 vote, proposing to ban purchases of more than 100 single-family homes by investment groups, hedge funds, private equity firms, and limited partnerships intended for rental purposes.
- • The ordinance includes carve-outs for affordable housing programs, qualifying build-to-rent developers, existing investors who already own more than 100 rental homes (provided they do not acquire additional properties), government entities, and publicly traded companies with market capitalizations under $1 billion.
- • Investor purchases represented 8.8% of home sales in Knoxville during 2024, down from a peak of 14% in 2022, according to the East Tennessee Realtors 2025 State of Housing report, indicating cooling investor activity in the regional market.
- • A similar state-level initiative, Tennessee's "Homes not Hedge Funds Act," failed to pass the General Assembly in 2025, making this county-level ordinance a localized approach to address institutional investor concentration in residential real estate.
- • The ordinance requires second reading approval to become effective, establishing a 100-home acquisition threshold as the regulatory boundary for institutional investment in Knox County's single-family rental market.
Summary
Knox County Commission has advanced a restrictive housing ordinance designed to limit large-scale institutional investment in single-family residential properties. The "Homes Not Hedge Funds Ordinance" passed first reading on a 9-2 vote and would prohibit any entity—including hedge funds, private equity groups, limited partnerships, and other investment vehicles—from purchasing more than 100 single-family homes within Knox County if those properties are intended for rental purposes.
The ordinance structure incorporates several exemptions that reflect policy priorities around housing supply and existing market participants. Purchases earmarked for affordable housing initiatives and qualifying build-to-rent development programs are excluded from the restriction. Critically, the ordinance grandfathers existing large-scale investors: any party already owning more than 100 rental homes in Knox County may retain their portfolio provided they do not acquire additional properties. Government entities and publicly traded companies with market capitalizations below $1 billion are also exempt from the purchase cap.
Market context suggests investor appetite for Knox County single-family rentals has already moderated. According to the East Tennessee Realtors' 2025 State of Housing report, institutional investor purchases accounted for 8.8% of Knoxville home sales in 2024, declining from a cyclical peak of 14% in 2022. This deceleration indicates cooling institutional demand in the regional market, which may reduce the ordinance's practical constraining effect if investor interest remains subdued.
The Knox County initiative represents a localized regulatory response to institutional housing concentration, following the failure of a parallel state-level effort. Tennessee's proposed "Homes not Hedge Funds Act" did not pass the General Assembly in 2025, leaving county-level jurisdictions to pursue independent policy solutions. The ordinance will move to second reading for final approval, where passage would establish the 100-home threshold as the binding regulatory standard for institutional rental property acquisition in Knox County.
The ordinance structure incorporates several exemptions that reflect policy priorities around housing supply and existing market participants. Purchases earmarked for affordable housing initiatives and qualifying build-to-rent development programs are excluded from the restriction. Critically, the ordinance grandfathers existing large-scale investors: any party already owning more than 100 rental homes in Knox County may retain their portfolio provided they do not acquire additional properties. Government entities and publicly traded companies with market capitalizations below $1 billion are also exempt from the purchase cap.
Market context suggests investor appetite for Knox County single-family rentals has already moderated. According to the East Tennessee Realtors' 2025 State of Housing report, institutional investor purchases accounted for 8.8% of Knoxville home sales in 2024, declining from a cyclical peak of 14% in 2022. This deceleration indicates cooling institutional demand in the regional market, which may reduce the ordinance's practical constraining effect if investor interest remains subdued.
The Knox County initiative represents a localized regulatory response to institutional housing concentration, following the failure of a parallel state-level effort. Tennessee's proposed "Homes not Hedge Funds Act" did not pass the General Assembly in 2025, leaving county-level jurisdictions to pursue independent policy solutions. The ordinance will move to second reading for final approval, where passage would establish the 100-home threshold as the binding regulatory standard for institutional rental property acquisition in Knox County.
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