I & I Editorial BoardPresident Donald Trump said last week that he was “immediately taking steps to ban large institutional investors from buying more single-family homes” and “will be calling on Congress to codify” the proposal. His advisers need to show him why that’s a bad idea.
Trump promised to “discuss this topic, including further housing and affordability proposals, and more, at my speech in Davos in two weeks.” So there is time to present clear arguments that should convince him to quietly drop the plan.
If we had an audience with the president, we’d first remind him that the government in a free country has no authority to determine who is allowed to buy homes and who isn’t. Of course the principle of limited government has been violated for much of our republic’s history, but that doesn’t make state intervention in private affairs right.
If the Trump administration can block institutional investors from participating in the free market, imagine what a Democratic administration would do using it as a precedent. Would a Democratic president balk for even one moment at issuing an executive order limiting the economic freedom of a political opponent, say white Christian conservatives?
Not if doing so fit the narrative and punished a group of Americans that the elites have designated as hostiles.
We’d further point out that institutional investors are hardly even minor players in the single-family home ownership game. An Urban Institute report from 2023 said they own only about 600,000 single-family homes across the country, less the 4% of the total.
Some estimates we’ve seen are higher, but they include “mom-and-pop” investors who own from three to nine properties. It’s misleading to lump them in with true institutional investors, such as private equity company BlackRock, which has been accused of “plundering the future” by “buying up tons of real estate” even though it doesn’t buy single-family homes. (Blackstone, however, does invest in single-family homes, but owns only 0.5% of all single-family homes in the U.S. and has cut its purchases by 90% since 2022.)
The true portion of single-family homes owned by these “plunderers,” those holding 1,000 or more properties, is in reality much lower than 4%. They “make up just 2% of all investor-owned homes,” says CNBC. Ninety percent of the market is actually under the ownership of small investors who have “10 properties or less.”
We’d also tell the president that when institutional investors buy single-family homes, they improve the neighborhood. They often purchase “distressed properties that no one else would buy and in fact put a floor on the market,” says Laurie Goodman, vice president for housing finance policy at the Urban Institute. These buyers provide “a very, very valuable service and they” have “basically cleaned up the distressed market, a lot of which required repairs.”
Goodman co-authored a report that noted that due to their “operational and financing advantages, these institutional investors can repair these properties more quickly and efficiently than an owner-occupant generally can.”
The Urban Institute also shows us that the “spillover effect” can extend “a quarter mile (roughly five blocks),” with homes selling at a value of “1.4% higher than properties a quarter- to a half-mile farther.” In the most distressed areas, the value grows by 7.4%.
Excluding large institutional investors from the single-family home market has a populist appeal. But it is poor public policy for a number of reasons, any one of which should be enough to change the president’s mind. We hope someone in the administration will show him our editorial.
— Written by the I&I Editorial Board
And, presumably, buyers of properties, whether institutional or individual, don’t only renovate, they also pay for maintenance and property taxes on the properties they own. And that’s got to be good for the common weal.
Dont usually disagree with you guys but large investors will distort the market. They also have sway that the average homeowner doesnt. Will distort local governance issues to the benefit of investors and not communities. The more important question is what if any positive impact would they have over individual owners or investors. The answer is NONE.
Your argument is persuasive but to my mind , incomplete. The overall percentages you cite are probably correct but localized pockets of much higher percentages can have a negative result. As a former apartment owner and manager, I generally come down on giving investors some leeway, however I see a problem without some limits on those who would make us a society of renters with the disengagement from civic issues that results from an absence of a majority of homeowners in a community. A free society need homeowners with a personal interest in the future of their cities. Big business and big government often collude to work in another direction.
Absolutely wrong. No business entity should ever be allowed to have an inventory of actively managed and rented single family separate properties.
Apartment complexes? Sure. Subdivisions they build? ok for something say 25 year maximum and then they must sell the homes. But never existing homes.
Single family homes are meant for and should be reserved for single family mortgages.
Only allow them to buy and sell, never to maintain ownership and lease or rent the homes. Eventually supply and demand will balance. Use GAO housing affordability matrix they use for setting military housing benefits to assess the actual value of a property. Any property not sold by the time limit to be taken by HUD for a tax break equal to the house’s value. HUD to hold quarterly auctions open only to individuals with pre-approved loans with the prior property valuations as the reserve price.
Who really wants to live in a future where you can NEVER EVEN DREAM and work toward owning your own place because the corporations with their deep, deep pockets buys up every property anywhere near anywhere people might actually want to live? (or even every property as soon as they get put on the market?)
Laws against purchasing real estate . . . did you ever believe such a nutty idea would take root?
Post 2008 Institutional Investors were invited in to soak up the excess foreclosure rea estate. While that made sense at the time, that time is now past. Single family housing is best left for Single Families not as investment portfolios for REIT’s or Hedge Funds. The unequal playing field between an individual or couple trying to swing a standard mortgage vs Institutional Investors using commercial loans and bulk purchasing power has got to stop. Trump is 100% correct on this call.
“Should investors be banned from buying homes?”
Wrong question.
RIGHT question: “What happens when Blackstone owns your street?”
See the death spiral? My HOA does.
https://novus2.com/righteouscause/2026/01/13/the-digital-landlord-dilemma-why-your-hoas-ban-on-investor-purchases-deserves-scrutiny/
Free market conservatives: “Government shouldn’t pick winners and losers in housing!” Also free market conservatives: Live in HOA that bans who can buy homes. The cognitive dissonance is spectacular. And your property values depend on it.
I usually agree with most of your articles and very much appreciate the effort that goes into each one. I do think it is a slippery slope, to ban something but, something should be done. My daughter and her husband tried to buy a distressed home because he is a contractor and can do most of the work himself but, they couldn’t compete with the big investors. Maybe it’s a simple adjustment, rather than ban, that limits investors to homes that have been on the market for 180 days, or some number. They already have time limits on homes that can go FHA and there are condo projects that are cash only, so why not limit investors?
I do not think investors such as Blackstone, and other investment companies should be able to buy hundreds of future rentals that bring down the value of the homes in neighborhoods. Anybody that lives in neighborhoods inundated with rentals, therefore filled with renters that usually don’t care about the home or what it looks like. Yes there is exceptions, but they are the few.
As others have commented on this thread, I too usually agree with your POV.
Not this time: When we had to come back to the saintly part of the TPA bay area to care for elderly parents, we tried to buy, for cash, half a dozen houses that were either already bought for cash by large Corps. or held by banksters for their buddies in large corps to buy.
That the market was seriously distorted was very clear.