President Donald Trump has proposed a ban on large institutional investors purchasing single-family homes, stating the measure is intended to improve housing affordability. However, John Berlau, financial policy director at the Competitive Enterprise Institute (CEI), criticized the proposal and argued it would not achieve its intended effect.
“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,” Berlau said.
Berlau pointed out that institutional investors currently own only about two percent of single-family homes. He explained that these investors often rehabilitate properties for rental use, providing options for families who cannot afford homeownership but need more space than an apartment offers. He also noted that many of these firms are publicly traded companies, so a ban could negatively impact middle-class shareholders through their retirement accounts and other investments.
“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,” Berlau added.
The debate over how best to address housing affordability continues as policymakers consider both regulatory reforms and restrictions on market participants.
