They’d probably rather be free of the investor chaos and renters who dont care about the neighborhood. I have 4 houses on my street owned by investment groups. So far, everyone keeps to themselves l.
There might be some obscure financial penalty for not complying with term of residence “rules” but those are easily overcome in court. Homeowners cannot be prevented from selling their home to anyone they choose (within the law [not people with certain criminal history, for example, but let’s not go there]). The lender may have some rules and penalties for non-compliance, but that’s about it.
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There are certain laws regarding descrimination and even older covenants that were discriminatory and have been deemed illegal. Im a real estate broker of 38 years and have seen some interesting old restrictions. It might depend on HOA. Not sure anyone would consider investors any kind of protected class. One condo association in denver is over 55 and restricts the number of rental units. Mom passes and kids need to sell the property. Might be a different story in a single family home area. Best resource would be a real estate attorney.
Years ago. I wrote an offer on a house. While agent was presenting the offers, i brought my 14 year old daughter for a look-see. She was going through growing pains. Dressed in black. Motorcycle jacket and boots, blue hair, etc. She was a straight A student and math whiz. We did not get the offer as sellers were appalled by my daughter and didn’t want to submit their neighbors to that “element.” My friendly real estate attorney said blue hair on a 14 year old was not a protected class. I was also not married.
Only with regards to Federally protected classes such as race, etnicity, sexual orientation, religion and in some states, marital status. Many HOAs have first rights of refusals in their DOCs. Perfectly legal. The HOA has the right to better any existing offer. It is a way to end run around any discrimination laws. But has to be used carefully, so no protected class is excluded. I had a lost sale because my buyers were motorcycle people. Certainly. Any HOA or municipality needs to have legal representation in these matters.
To control who resides in a particular home might require a change to the Deed itself. Local jurisdictions can decide what type of residential properties can stand; Single Family, Multi-Family, Condos, Multi-Plex…
All of this depends on what’s written into the State’s Property Laws.
An institutional investor isn’t prohibited from developing, or buying out a builder’s/developer’s inventory, an entire neighborhood. This is the situation I observed that I mentioned in my OP. When the institutional Investor buyers up any outstanding inventory they’ll have majority vote on what the HOA does with the rules.
The second option is to purchase adjoining land with the intent of establishing a rental neighborhood or Section 8 housing. Since this would be outside the HOA boundaries there’d be no means to stop it, without getting really creative.
An HOA might not have anything to dobl with it. A municipality may be able to limit rentals in an area.
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I may be wrong on this, it seems that local municipalities may not want to hinder rentals as this would create artificial scarcity that would affect property taxes. This artificial scarcity would drive up housing costs discouraging new construction pushing new taxpayers out of the market. This is what Engineers call a complex adaptive situation. Try to adjust for one factor, institutionalized rental market, affects another factor that leads to unintended results.
Most scenarios on Earth are by design in a symbiotic relationship . . .
One only needs to merely glance around at their immediate surroundings to witness symbiosis. 
Thank you @RiverpointeTax for this analogy on the current discussion of Real Estate. 
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I’m in Florida and we have many HOA’s with the 55+ age restriction and restrictions against motorcycles.
Courts have UPHELD these rules. Yep
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Wanted to let you know my son was at a crossroads a few years back on rather to invest in stock market or property ~ he chose property and now owns several homes. No regrets because now not enough homes in areas he chose and he can still sell if necessary and make a good profit. As we all know, stock market not so good. 
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Congratulations! He made the wise choice.
Merry Christmas
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wow I didn’t know that they could do that
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Two words - Black Rock.
Thankfully more and more people and towns are waking up to this large equity firm property buy up, unfortunately it may be too late for many areas.
I live in West Michigan and there is a rather huge battle happening where towns are putting ordinances in place restricting short term rentals. Residents of these high tourist destinations don’t want their home values decreased by short term, Airbnb rentals.
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I saw the same thing here in NC. A whole neighborhood was going up a couple of years ago with houses in an affordable price range for the sizes. After about a year and a half the signs changed and they were advertising them as rentals. Very strange to have 3-4 bedroom nice houses to all of a sudden switch to a rental community.
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My best guess would be it takes a while to buikd a development. My son just moved into his newly built house in the end of October. The planning and financials were complete way before the interest rate spike. Most likely same scenario. Builder sets up development but now doesnt have all the homes sold due to interest rates. Im sure they had no choice but to sell to investors.
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This is reflective of what I’m saw first hand that led to my OP.
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The stock market is a great way for younger people to diversify their investments. The key it’s a long term investment. Stock markets go up, down, they crash and bubble up, but in the long term (20+ years), they average about 6% a year (takingi into account inflation). Based on the “rule of 72”, where you divide your interest rate (in this case 6 into 72= 12). That means you double your money every 12 years. Plus, with companies like Charles Schwab, Fidelity, or Vanguard, they allow monthly contributions within your budget. And if you invest within a traditional IRA, you get the advantage of tax deferred growth. So if you make $50,000 in a given year, and invest $1200 ($100 a month) into that traditional IRA in that year, you only pay taxes on $48,800. Finally, check out S&P 500 index funds. They invest in the 500 largest companies in the U.S. Happy New Year to all!
Financial Bla, Blah, nothing to do with NSA,LSA business I’m getting bored…
I’m not certain where you’re getting your numbers on your IRA example. An individual pays taxes on both the contributions and growth when they begin taking withdrawals. The traditional IRA only delays taxes.
There are several tax advantages and hazards when it come to retirement saving. Since everyone’s situation is unique, I encourage every one top seek the advice of a qualified retirement or tax professional.