Trump ban on institutional investors will harm housing affordability

President Trump today called for a government ban on “large institutional investors” purchasing single-family homes. While the ban may be aimed at making housing more affordable, it won’t have that outcome, says John Berlau, CEI financial policy director:

“President Trump’s call on Truth Social to ban large institutional investors from buying single-family homes is a misguided proposal that could undermine many constructive housing initiatives the administration is pursuing.

“Today, institutional investors own only two percent of single-family homes. By rehabbing those homes for the rental market, they provide a service to many families with children unable to finance homeownership but seeking a living space larger than an apartment. Also, since many firms investing in homes are publicly traded companies, middle-class shareholders will likely see harm to their returns in their 401(k)s and other investment accounts if such a ban were put into effect.

“Banning institutional investors would do nothing to reduce red tape around building and financing homes at the root of the government-induced housing shortage. Fortunately, the Trump administration is pursuing solutions to these problems: clearing barriers to financing homes with ‘adjustable dwelling units’ for multigenerational living; ending energy-efficiency mandates that add costs to building and maintaining homes; opening up government-owned land to homebuilding. President Trump should speed up these initiatives and throw the proposed ban on institutional investors into the dumpster.”