President Donald Trump said Wednesday that he wants Congress to codify a ban on large institutional investors buying houses, arguing that such a move would make it easier for younger families to buy their first homes.
Trump made the case as he faces pressure to address voters’ concerns about housing affordability ahead of the November midterm elections. His comments drew on long-standing fears that corporate ownership of homes has pushed out traditional buyers, increasing demand for renting.
In a social media post, Trump said, “People live in homes, not corporations,” and called on Congress to codify his ban. The proposal has also been tied to Trump’s broader plan to discuss housing and affordability in more detail at the World Economic Forum in Davos, Switzerland, in about two weeks.
Trump pledged in a prime-time address last month to roll out “some of the most aggressive housing reform plans in American history” this year. He said he would cover housing and affordability in more detail at Davos, an event that draws CEOs, wealthy financiers and academics with a global focus.
Trump has previously floated expanding the length of a mortgage, saying in the past that the 30-year mortgage could be extended to 50 years to lower monthly payments. Critics have said that change would reduce people’s ability to create housing equity and increase their own wealth.
The AP reported that institutional investors are only a small share of single-family homebuyers in the U.S. An August analysis by researchers at the American Enterprise Institute, which defined institutional investors as owning 100 or more properties, found that such investors account for just 1% of total single-family housing stock.
That analysis also found that institutional ownership varies by city, reaching 4.2% in Atlanta, 2.6% in Dallas and 2.2% in Houston. Even with that variation, the AP reported that these investors do not dominate neighborhoods, though they are generally more concentrated in lower- and middle-income communities.
Democrats have argued that corporate ownership should be curtailed, but Sen. Elizabeth Warren said the Trump administration could also push housing prices higher by allowing the real estate companies Compass and Anywhere to merge. Warren told reporters Wednesday, “But he’s feeling the heat because the American people want to see us lower the cost of housing and it is Democrats who are committed to getting that done.”
The Senate in October passed a bipartisan bill sponsored by Warren that would create incentives for local governments to streamline zoning regulations, among other policies, to increase housing supply. The AP reported that the measure has been held up in the Republican-majority House.
While Trump’s comments focused on large investors, the AP said the larger housing challenge involves a national shortage of home construction and prices that have climbed faster than incomes. The AP also cited a Goldman Sachs estimate from October that the U.S. would need 3 million to 4 million additional homes beyond normal construction levels to relieve cost pressures, along with higher mortgage rates following the coronavirus pandemic that increased monthly payments faster than incomes.
Trump also addressed a potential tradeoff between building more homes and the value of existing properties. He said last month he did not want to knock down numbers tied to existing home values, adding, “I don’t want to knock those numbers down because I want them to continue to have a big value for their house,” while also saying, “At the same time, I want to make it possible for young people out there and other people to buy housing. In a way, they’re at conflict.”