It’s Okay That Corporations Own Some Homes

Policy outcomes don’t care about your populist intentions.

There are few places for bipartisanship these days, but one seemingly productive area is the populist impulse to ban corporations from owning homes. Yesterday, President Trump announced that he is “immediately taking steps to ban large institutional investors from buying more single-family homes,” promising to call on Congress to codify the measure. “People live in homes, not corporations,” he wrote.

Trump’s announcement follows a wave of state-level efforts. In California, AB 1240 passed the state Assembly in June, seeking to bar companies that own more than 1,000 single-family homes from acquiring any more. In Nebraska, State Senator Jason Prokop introduced LB 643 to end tax breaks for companies owning more than 30 properties. Bills have been introduced in at least 28 states over the past two years to block institutional investors from owning homes.

Housing is expensive – it is the biggest monthly expense for most people and the largest nominal driver of inflation since 2020. The median existing single-family home price sits at $426,800. The 30-year mortgage rate hovers above 6 percent. First-time home buyers are older than ever – hitting 40 in 2025.

It is worthwhile to take seriously how mad people are about housing affordability – but it is also worthwhile to point out how bad a solution this would be.

Corporations Don’t Own Many Homes

The rate of bills introduced leads one to assume this is a pervasive national crisis, but that isn’t the case. Data from John Burns Research and Consulting finds that institutional investors account for less than 2 percent of all home purchases in 2025. The Urban Institute estimates that single-family rentals owned by institutional investors account for 3.8 percent of the total nationwide.

There is significant geographic variation, though. Institutional investors utilize a specific “buy box” that often targets newer homes, 3-4 bedrooms, in markets with high job growth and good school districts. This leads to higher activity in certain geographies, such as “Sun Belt” markets like Atlanta, Phoenix, Tampa, Charlotte, and Jacksonville.

But even in these markets, the narrative of dominance is overstated. An American Enterprise Institute analysis found that only 22 counties nationwide have institutional ownership rates between 5 and 10 percent – none exceed 10 percent. This isn’t to say that increased demand is having no effect on housing costs in these places, or that concentration could cause problems if left unchecked, but there’s little case that institutional investors have been the cause up until this point.

Case in point: these Sun Belt cities are not nearly the most expensive places to live in the United States. When you look at the most expensive metro areas – places like San Francisco, New York, Boston, etc. – they are the areas with some of the lowest shares of institutional ownership of single-family homes.

This isn’t to say that investors don’t buy and rent out single-family homes. But the vast majority of these homes are owned by individuals: families who rent out their starter home rather than sell it, amateur real estate investors who own a property or two, or struggling Airbnb entrepreneurs. These small-time investors who own 1 to 5 homes account for 89.6% of single-family rentals.

The Case For Renting Out Homes

There is an important niche that single-family homes occupy in the housing market.

Unlike the oft-cited claim that landlords leave housing vacant for some reason, the homes institutional investors build or acquire are rented out to people who are generally poorer than those who would have otherwise bought the home. Konhee Chang, who is now an economist at the Federal Reserve Board, found in his job-market paper that people who move into single-family rentals are poorer, younger, and more racially diverse than their immediate owner-occupied neighbors.

Eric Levitz@EricLevitz

A new paper finds that when large investors buy up single-family homes in the suburbs, rents in the area fall, along with levels of class/racial segregation

Paul Novosad @paulnovosad

New entrants who take up the rental housing are poorer, younger, racially diverse. It makes sense — these are families who couldn't afford to buy into these suburban (and generally upwardly mobile) neighborhoods. 3/

8:51 PM · Jul 26, 2025 · 209K Views

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23 Replies · 90 Reposts · 790 Likes

An assumption underlying investor bans, then, is that every home purchased by an institution is a home stolen from a would-be buyer, forcing them to remain in the rental market in perpetuity. But many of the people renting are not sitting on pre-approved mortgages waiting for inventory to open up. They are renters because they are cash-poor and would remain renters regardless of who owns the property.

There’s also a geographic dimension to this. In most American cities, the majority of residential land is zoned exclusively for single-family homes. Multifamily housing is either prohibited outright or confined to narrow corridors. For a cash-constrained family seeking access to a better school district, proximity to job opportunities, or simply a yard for their kids, a single-family rental may be the best option. Single-family homes that are available to rent provide a workaround that lets people access neighborhoods that would otherwise be owner-only enclaves.

Increasingly, these landlords are not only buying existing homes but also building new ones. American Homes 4 Rent, one of the largest single-family rental operators, constructs entire subdivisions specifically for renters. In 2024, the company delivered over 2,200 homes that would not have existed otherwise.

The Drawbacks of Mom-and-Pop Landlords

In 2021, I rented a small single-family home in DC’s Hill East neighborhood. We had been living in 5-over-1 apartments up until that point, and while they were fine, the kind of neighborhoods those buildings are common in were also getting whacked by the crime surge at the time. We wanted the extra space in a relatively quieter neighborhood.

That was a mistake.

We had to break our lease less than a year into living there – failing HVAC, rodents, and a mold problem, to name a few – and got entangled in a legal battle with our landlord that lasted 18 months. In the end, we came out with roughly $2,000 from the ordeal. It was not worth the trouble.

The advantage of living in a large apartment building owned by a professional management company, or a single-family development rented out to hundreds of families, is that these landlords have the scale to provide amenities and services that mom-and-pop landlords can’t. Large landlords have enough tenants and revenue to hire dedicated maintenance and management teams whose full-time job is to maintain their properties and provide service to their tenants. They are diversified across hundreds of properties instead of being dependent on the revenue of just one or two.

Mom-and-pop landlords are different.

Being landlords is rarely their full-time job, so mom-and-pop investors’ main focus can’t be ensuring their tenants are well cared for. They lack the expertise to understand tenant laws and the legal requirements they must follow. Because they are less capitalized than institutional landlords, when things go wrong, they have fewer funds to address problems.

This isn’t to say that all small-scale landlords are bad, or that this is even necessarily their fault, but their renters still are the ones who end up holding the bag.

Distractions Are An Enemy of the Good

If nothing else, proposals like this distract from actually doing effective housing policy.

Not every lawmaker is an expert on housing policy. However, you’d be hard-pressed to find a lawmaker in this country – Democrat or Republican – who is not concerned with affordability. So, when a bill to stop greedy corporations from buying up homes from working-class Americans lands on their desk, they may be inclined to get on board without knowing better, so they can tell their constituents that they are addressing the cost-of-living crisis.

The issue is that these nice-sounding, populist solutions give lawmakers the impression that they did something to address housing affordability when, at best, they did nothing that will affect the cost of living at all.

Addressing housing affordability is tricky because it involves trade-offs that will make some people mad. Building on greenfield land angers environmentalists; upzoning angers the people who live around new construction; taking measures to knock down the cost of existing homes angers the people whose net worth depends on their homes. President Trump said the quiet part out loud when he rightly admitted that housing values were “at conflict” with making it possible for young people to buy homes.

Taking on an amorphous corporate scapegoat is easier to stomach, politically, because there are fewer people to get mad at you. There are no pro-Blackstone rallies happening in Sacramento.

Matthew Zeitlin@MattZeitlin

it's interesting that no one thinks it's weird institutional investors build and own multifamily housing...

8:39 PM · Jan 7, 2026 · 16K Views

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24 Replies · 4 Reposts · 199 Likes

But if there is only so much legislative time to be spent on housing issues, then it ought to be expended on solutions that work. Political posturing and “messaging” bills can only get you so far before people wise up and realize that they are not better off.

There is merit in hard work, addressing problems, and doing things that might annoy constituents in the short term if, in the long term, they are net positive. New York’s foray into congestion pricing is a good example: the program went from a political stinker to a success in a year’s time.

Beating the Dead Horse of YIMBYism

Build more housing. Reduce costs by increasing supply. This is the well-trodden path to affordability for renters and first-time homebuyers alike, and I won’t belabor the point.

It is worth noting that institutional investors exist in the housing market precisely because of housing shortages. They buy homes where local governments have failed to approve enough new housing, betting that scarcity will sustain rental yields. They are capitalizing on shortages, not creating the shortage themselves.

President Trump is unlikely to use the federal government’s levers to fix the root cause. Keen observers of his first administration’s housing strategy will remember that HUD Secretary Ben Carson briefly embraced zoning reform in 2018 before being forced off the issue in 2020 as part of Trump’s “We’ll Protect America’s Suburbs” campaign message. President Trump’s political inclinations on this haven’t likely changed since then.

Targeting “corporations” rather than regulatory failures is, at best, a distraction. At worst, it is actively harmful. The politics of housing affordability are difficult for a reason. Blaming Blackstone is easier than telling homeowners that the path to affordability runs through their property values. It is easier than telling exclusionary cities that the vacant lot down the street will become an apartment building. It is easier than telling voters that the housing crisis is, in part, their own making.

But easy politics do not produce affordable housing.