The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses.
There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties.
Here's an article on the topic from 2023[0], a bit old but my understanding is large institutional investment in residential real estate was already starting to cool down.
Black rock isn't buying up all the housing, your neighbors are.
I suspect this statement, and even if it becomes an actual ban, is largely to gain wider popular support around a largely imaginary concern people have.
It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing.
The things that they do have massively outsized downstream impact contrasted against their relatively tiny overall participation in the market, and they can afford to behave in ways that manipulate the behavior of the majority.
If you can decouple them from the housing markets, you also decouple the interests of the donor class, and you allow for policy that doesn't maximize the cost of real estate over the interests of the majority of the population.
> They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing.
Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's another house for less.
> because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing.
I assume that you are already aware that regular home buyers use debt, and, thus lots(!) of leverage to buy their homes. The average down payment for first time buyers in the US is about 10%. That is a lot of leverage! Probably much more than corporate buyers of residential homes.
> instrumentalized
What does this term mean? I have never seen it before. My spell checker does recognize it as a word.
> securitized
Regular home buyers almost always enter into borrowing agreements with their bank that fit loan buying programmes with Fannie Mae and Freddie Mac. This allows for most of these loans to be securitized into MBS.
> with derivative products
Can you give an example scenario / product? Else, this feels like handwaving. CDS on MBS is an absolutely tiny market these days.
> speculation
There is already plenty of speculation from regular home buyers in the US. Do you have any suggestions to reduce the existing speculation by these regular buyers?
The vast majority of land in the country has been owned by capitalistic profit motivated players since 1776 - individual home owner occupiers.
If you doubt they will lobby to increase their profit, try proposing anything that has a 0.1% risk of their property value going down and see how they react.
Why doesn't your explanation apply to every commodity? Gold, cocoa, mustard seed, electricity? These are also essential products subject to the influence of markets and market makers.
I somehow doubt these institutions are market makers in the housing market, if they had been ones then they'd be offering to sell and buy houses all the time, this is a market maker's function.
A “market maker” provides liquidity that allows trades to clear and keeps prices stable. They make money on the bid-ask spread. They don’t have leverage to raise or lower prices.
The majority of the US population (65% https://fred.stlouisfed.org/series/RHORUSQ156N) are home owners. I agree that high home prices are not in the interest of the majority of the population, but I bet the majority think so.
If you have a model where you can do price manipulation of something while owning 1% of it, I understand why you wouldn’t share it. Where are you on the Forbes Billionaire List, out of curiosity?
If what you say is true, wouldn't the same argument apply to practically every market these institutions are in? Oil, timber, steel, AI stuff, cars, you name it.
> you allow for policy that doesn't maximize the cost of real estate over the interests of the majority of the population.
How do you think homeowners would feel about a policy that doesn't maximize the value of their homes. That's just another way to phrase "maximizing the cost of real estate"?
The gobbledygook you posted, “ properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing”, is just that, gobbledygook.
Just because a buyer as Inc. behind its name doesn’t give it magical powers to set market prices.
If you think it does, then please explain it to us like we are really slow.
Based on the data I've seen, respectfully, you are wrong. No, I can't share it. The data is publicly available, however. Feel free to dig it up and aggregate it. The data is publicly available, the effort to dig into it, finding meaning, and sell it to folks, however, is not.
Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.
This is basically a maximum wage for landlords, bound to start a secret society.
IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing.
Issue is when they want to politically and artificially raise the value of their property by preventing more housing from being built, so, if you're going to ban something, ban artificial regulations on construction!
North Carolina has done some good by loosening up code around tiny homes, but, a lot of municipalities want to enforce big homes only because they like the property tax of high value houses, 4 bedroom and all. Small town I'm in basically won't allow expansion of housing because the people that live here don't want the village to get any bigger, but if it's democratic like that I'm mostly OK with it, it's when there's demand for housing and someone with a perverse incentive to block it that we should want to solve for.
> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals.
Here in Norway the solution, as with so many other things, is taxing. Your home is evaluated at some "market rate", but if it's your primary residence the effective tax value is just 25% up to $1 million (70% on value above $1 million). For reference, a typical 3-room apartment in Oslo, the capital, is around $400-500k.
However, if it's not your primary residence, then you pay tax on 100% of the "market rate". The tax rate is 1%, so not insignificant.
Until a few years ago, tax on non-primary residences was much lower, and hence we had a lot more people buying to rent if they inherited money or similar. Some even had a dozen or more properties. These have now exited, so policy is working as intended.
One thing of course politicians for some reason didn't think of is that if most of the landlords suddenly sell, rental market will shrink. So now it's super-expensive to rent, and those who rent usually do so because they can't buy for one reason or another (no stable income to support a loan for example).
Landlord, or property management, is a job, same as any other job you might have. The problem is not owning multiple properties, but not paying enough taxes on land. Otherwise, landlords benefit from the free lunch that comes with economic growth and real estate price appreciation, which is true for every homeowners in this country.
IF you want affordability? Tax land.
Doesn't matter who owns them. Your grandma or wall street.
> there even should be a cap on how many homes an individual can own for rentals
India still has this in some states [1]. You wind up with everyone in the family owning a house. After that, other people own it and pass on most of the rent.
This would certainly drive down prices - how much is an open question. But I think its a fair compromise, UNTIL we actually do have enough homes for everyone. Until then something has to give - right now its people who can't own a single home that are yielding, but IMO it would be much more fair to ask people who already own a home to yield (not buy more than one). Ultimately that's the tradeoff to discuss.
> there even should be a cap on how many homes an individual can own for rentals
Many people wish to rent, not buy. If we make it so each landlord can own fewer homes, but renting demand stays similar we just incentivise more people becoming landlords
That's a surefire way to make sure that all rental properties are controlled by people who are able to de facto own a lot of properties with family members (or "family" members) on the paperwork, and who are able to enforce their ownership with extrajudicial means.
> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals
Price controls and limits like this rarely work out in history.
Around here, many landlords renovate or build new high density construction. Put a cap on how many properties they can own and they'll switch from building/renting as many units as possible to maximizing the rent on the limited number of properties they can own.
Restricting the market in one dimension rarely has the desire effect.
The purpose of people putting money into stocks or real estate is to allow for a simple, fairly 'hands-off' way to make money (real estate is not totally hands off, but is pretty close to a set-it-and-forget-it business).
Real estate works for this because you can really put in as much as you want into it.
Other business activities do not work because the entrance cost for non-rent-seeking business is extremely high and the risk is way too high compared to real estate. This is due to American regulation and labor laws.
This is a 'first-world problem', but now that I have capital, the question is 'what to do with it'?. Yeah, you could throw it in the stock market, but that's also rent-seeking in a sense because you're not really able to invest in primary rounds (I mean you can, but it's hard to find deals), so basically you're just providing liquidity to people, which is rent-seeking of a different kind.
So then the question becomes what else to do with it? I've given a ton away, but that's useless for the most part since it barely creates any economic value.
In my ideal world, I'd start a factory and hire a manager, but the capital cost of that is high, not because of the material or the rental cost, but because of the labor cost. So then, what's the option? I could easily outsource it all to China or India, but that's completely useless for the United States.
Then the question becomes, why start your own, when you could invest in others. Great! I would love to do that. It would be even better if I could simply invest in a local enterprise... Except, that's not easy either. Regulation over investments means that even investing in this is fraught with difficulty unless you want to establish some sort of 'fund'.
So basically, there's nothing to do with the money, which is sad, since I end up giving most of the money I make away anyway, and would prefer to have more of it to give away.
Until America figures out what it wants to be, it's going to be real estate for me... consistent incomes, fairly uncorrelated with equities (which I have a lot of too), etc. There's really not many other options here. There's barely any 'productive' activities taking place in the United States.
That would not be useful. A far better solution would be to drive up rates to make/force landlords unload properties they could only afford at lower rates and also deport the roughly 30 million foreign nationals that are currently in the USA driving up costs of everything. It’s basic supply and demand, but ironically the immigrant supporters are allied with the billionaires and generally wealthy who profit from piling in ever more people into the same supply of housing and amenities and resources.
This is treating a problem symptom, not a root cause.
Landlords owning property is not a problem. Some people prefer to rent - they may be students, or they may not anticipate being somewhere for long, they might not want the risk of owning a home, lots of valid reasons. Having housing available for these people is good and landlords are a necessary and valid part of this market.
The problem is when people who want to own houses can't afford them, even when they contribute meaningfully to society. The root cause of this is not landlords existing. It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system, to a point that the additional wealth gives them no real benefit, but serves only to remove that wealth from the vast majority of otherwise middle class people.
If you want to fix this problem return the top tax tiers to what they were 50, 75, 100 years ago and the problem will be severely reduced. It's not sufficient to solve it, but its low hanging fruit.
I propose two changes to (try) and broadly solve this:
- Additional property tax if you do not live in your home fulltime. This includes vacation homes.
- First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate.
If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the entire cost of the property to a bank in the form of interest payments.
Rich investors and companies effectively get to buy homes at a discount vs average joes.
> Additional property tax if you do not live in your home fulltime.
In states I've lived in with property tax there is a homestead exemption for the house you live in. In my current state that's about twice the tax.
The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax.
>Rich investors and companies effectively get to buy homes at a discount vs average joes.
Usually the difference is that the big investor bought the property at lower price, and your rent is based on the lower valuation. Annual rent increases are usually are much lower than market increases - there's a lot of value in keeping a tenant year over year.
> Rich investors and companies effectively get to buy homes at a discount vs average joes.
Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return.
So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money.
It depends on the state, but that is largely kind of already the case. At least in my state you get a significant deduction to your property taxes if it is your primary residence.
With today requirements for accounting, somebody with economics background could tell what would be wrong with following solution?:
If you house owned by commercial entity - taxes are payed from full value, but the valuation to any collateral/derivative goes by something like (0.75x)^l, where l how many levels deep (counting ownership levels). For example it house is in some sort collateral/derivate/indirect ownership mix with 4 levels deep, it can only valuated as 0.31x value (you can only account as it is worth 1/3). In my mind it should reduce attractiveness for speculative buying.
Additional property tax? Do you have any idea what property taxes are like in places like NJ, NY? It's 2-3% of the value, sometimes assessed at sales value. People buy despite this because they like an area or a school system. If you raise it more, rest assured that only the rich will have the right to buy. It's as regressive as it gets, your proposal.
> If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per mo
... and you would be building equity.
So you pay less and get less, right?
You're thinking this is a sign that you are being cheated. It seems to me that it's a sign you're getting a better deal by renting so that's beneficial to you.
You lumped a bunch of factors together (interest rates, HOA, taxes) that don't do much for your argument. You would pay less taxes than the landlord in most jurisdictions, because the unit would be owner-occupied. Do you think the landlord isn't paying HOA assessments? Sure they are. The landlord has a loan at 3% because they bought in 2021. You're offered 6.5% because you're buying in 2026. I'm not convinced it's worth my pity.
Opportunity cost means makes purchasing with a mortgage wiser than buying cash. $1000/month more for a few years is nothing compared to the property value increase of a $1M property
"Corporations" is meaningless in this context. If you want to own a rental home in the US, you should set up an LLC, both for liability reasons and because it makes it easier to deal with taxes and expenses.
In the parts of the country I lived in, I've never seen big corporations own single-family rentals en masse. They usually go for apartment complexes, which are far more profitable if you have the capital to buy / build one. Commercial real estate too.
If you click around your neighborhood, a lot of single-family homes are owned by living trusts and "Bob & Kate" LLCs, but that doesn't mean there's any hedge fund money involved.
But is that Big Money Private Equity or "took a class from that Rich Dad, Poor Dad guy who said we should create a company and invest in real estate" corporation?
> For example, corporate landlords own more than 12,000 homes in Paulding and Henry County, accounting for 11.2% and 9.9% of all single-family homes in the counties.
> Black rock isn't buying up all the housing, your neighbors are.
I'm pretty naive to the issue, but awhile back I took a look at property records for my neighborhood. In fact, equity firms, including BlackRock, were buying up a bunch of houses in my neighborhood.
A tiny datapoint, I know.
Edit: It might've been Blackstone. It's been about a year since I looked it up.
Edit 2: Looking up records now, it looks like most of these equity firm purchases are back to actual people owners! Interesting. What does this mean? Firm bought property and resold at a profit?
> Looking up records now, it looks like most of these equity firm purchases are back to actual people owners! Interesting. What does this mean? Firm bought property and resold at a profit?
I never went far enough to get all the details back when I was considering a move, but my impression is a lot of these "buy your home and close fast" corporate purchasers were offering just enough to make the speed and ability to not have to make a lot of major improvements worth the lost money from selling on the market. Then they do just enough work to clean up any "show stopper" problems and re-sell at market prices.
So (very simplified) if you have a home that might sell for 200k on the market if you put 10k of work into it, but you need to move in a few months, and you need to pay off 100k on the loan, the company offers you something like 180k. You walk away with 80k (instead of 90k) in your pocket and avoid the various real estate agent fees and the need to do any of the fix up work or deal with trying to sell and move at the same time. The company puts the $10k of work into it and sells for the 200k, pocketing the $10k you gave up.
Where I live, in the fastest growing big city in the US, it is absolutely commercial investment firms buying up all the homes. I used to get calls several times a week from these guys want to buy my house in cash. I stopped taking their calls and now it has slowed to only a few calls per month.
The last call I took, last year, they were ready to buy my house in cash at market value without looking at the property.
The majority of the houses in my neighborhood are rentals, and there are thousands of houses in my neighborhood under the same HOA.
> But most of the "investors" buying up property are individuals purchasing investment properties.
Maybe they should clamp down on that as well, especially individuals who are only purchasing SFH in residential neighborhoods as a way to park their overseas cash.
Exactly. Nobody wants to hear this, because we're all Temporarily Embarrassed Landlords, but if a corporation buying 100 houses to sit on and extract rent is bad (or good), then 100 individuals each buying 1 house to sit on and extract rent must be equally bad (or good).
Once you try to clamp down on investment properties, you have couples getting divorces so they can own two homes (this happened in China), and all your kids are going to have their own home as well.
It isn't a bad idea, people will game whatever. A singapore public housing system might work better, but I doubt it would work for SFHs.
"The Arrived team is cracked, and I love the audacity of their vision: a stock market for real estate," said Ali Partovi, CEO of Neo, in a release. "I'm betting on them to democratize and digitize access to America's $50 trillion in residential real estate." [0]
Should housing be a “$50 trillion” market for fractional ownership, bundled with its own secondary/speculative market to turn around and flip like penny stocks?
Lovely knowing I can have “access” to that platform and own a 0.004% share in a house someone somewhere out there lives in (rents). While I’ll probably never own a house again.
I can only provide anecdotal information. In my HOA community we had to make a rule that you need to live in your home for two years before you can rent it. This effectively stopped the companies like Innovation Homes from buying up properties in our neighborhood. Post housing crisis-2015 it was getting pretty bad with the investors purchasing the single family homes. I don’t know if places like Innovation Homes qualifies as “Wall Street” or not.
I thought one of the big problem with Wall Street buying housing inventory is that they were turning them into AirBnbs because that is more profitable (generally) than renting. This pressure takes a lot of units off of the market for normal people to rent or buy and makes holding on to your last house a lot more profitable as a rental. I think if we get rid of these (basically) unregulated hotel exception and forced people who who AirBnb to live in that property as a primary residence 180 days a year, then the inventory could correct.
Obviously, the other factor in home prices is zoning and people who own wanting to keep supply down so their house is guaranteed to appreciate. Affordable housing (just like homelessness) in the US is only a problem because we lack the political will to solve it.
> "Resident experience is hurting as a result," said Jeff Holzmann, COO of RREAF Holdings, a Dallas-based real estate investment firm with over $5 billion in assets. "Instead of you calling your landlord to discuss a problem, you're calling a call center that gives you the runaround."
I'm not sure I understand the difference between "Wall Street" buying up all the property and real estate investment firms like RREAF doing the same, or come to that the guy down the street buying a few properties to rent out.
A small company or single investor can buy up a large percentage of local available property and be just as bad a landlord.
> But most of the "investors" buying up property are individuals...
I think the relevant quantity we'd want to look at is what constitutes most of the property being bought-up by investors. Counting investors is going to bias the count towards multitudes of little-guys.
> "Large institutional investors, defined as those owning over 100 homes (which includes private equity firms), own 3 percent of the single-family rental stock nationwide according to Brookings. This share is higher in some local markets — in the 20 Metropolitan Statistical Areas where these investors are most present, they own 12.4 percent"
I personally believe that its problematic that large institutional investors own 12.4% of single family properties in the 20 main metro areas of the US.
I feel like this article is littered with suspicious statements
Like this one:
> In fact, institutional homebuyers (those who bought 100+ homes in a 12-month period) didn’t even reach 2.5% market share at the peak level in this data line, which goes back to the start of the century.
I don’t know how to evaluate this. I doubt this analysis rolls up subsidiaries. So what does it really mean for an entity to own 100+ units? Is that actually something we care about?
Imo only thing people need to give a shit about is whether a house is being bought to be lived in.
While that’s true, even if “Wall Street” is only holding a few percent of homes, those being released to the markets (and future ones not being purchased) might help.
Corporate entity creation in America is such that I don’t think this will be enforceable (“we don’t buy homes, our Gibraltar office’s subsidiary invested in its CEO’s LLC that bought the home”) but if I’m wrong, it could help somewhat.
It’s binary thinking to assume that just because it isn’t a one step solution it won’t make a meaningful impact. But still, I think it won’t yet hope I’m wrong.
Not really, because the problem isn't investors buying homes, its a lack of supply of new homes. Big investors don't buy homes to keep them empty, they buy them to rent them out. An exception to this might be short term rentals but that is going to be significant in only a few markets and the problem there is still fundamentally a supply problem.
This is meaningless, even with "Wall Street", as you've said. Several companies raise funds, to buy these homes. Institutions the like of Blackrock and REITs invest in these funds, all the time. This isn't new at all, and has been happening for years. It's just been accelerating. Add to that startups like Arrived, and there's simply more pressure on this market then ever before, sadly.
I would be very against individual investors not being allowed to buy property for investment. I think most people can agree that corporations like blackstone/rock shouldn't be manipulating markets. It would be very bad to force blackrock to liquidate its current holdings of 230k homes. It could crater the entire industry and it runs into ex-post-facto issues. Assets need to maintain value or banks will fail.
It really depends on the market. The institutional investors are common in the South and Southwest. I think the fact that they exist at all is a problem.
You are correct however that smaller private investors are more common. I live in a small city. Small property management companies from NYC and NJ are pretty commonly buying up 2-4 family houses. I suspect that some of these "small" players aren't small at all, but hiding in a maze of LLCs.
I know a couple of dudes from way back that have leveraged their way to a real estate empire with >2000 homes in the region.
You're right. It doesn't matter though. People love 'big fixes', the reality of systemic change is hard to present in a 2 minute sound bite or Instagram reel. This is the kind of 'fix' that gets implemented, then when things don't magically improve people will just give up.
Atlanta specifically when I was flipping houses in 2012-2015 had a lot of corporate investors buying up low income properties, fixing them up, then renting them out.
You seem to want it both ways. It was a misconception, but it apparently did happen, and apparently "cooled down?" I don't think all these things can be true.
It's highly possible they were heavily investing and were planning on continuing but people noticing and the social pushback it created caused them to change their minds about the strategy.
> Black rock isn't buying up all the housing, your neighbors are.
People may or may not be. They may or may not be my neighbors. You seem to be pushing a set of ideals rather than a set of facts.
But make no mistake, during the housing boom post 2019, in a lot of 'hot' metro areas, "wall street" was buying way more homes than individuals. Especially in the south. In the area I lived in, Invitation Homes, some weird shell company of Blackstone, was buying up every piece of tract housing they could get their hands on. At one point, they were making agreements with builders building out new neighborhoods to not sell to individuals since they wanted them all.
So no, I care far less about what my neighbor is doing because he or she isn't attempting to price out an entire city.
It might not solve the problem but we also have other countries buying up homes for pension accounts. Take AU for example doing this. Should be illegal regardless of the size.
> Black rock isn't buying up all the housing, your neighbors are
To a degree, but there's a whole tranche of investment vehicles that accredited investors use to invest in single-family homes that is not securitized at all, and not on Wall Street. The whole fix-and-flip industry feeds into this now, loaning out money to turn houses into rentals that some LLC holds.
If so, then we can at least put that myth to rest and move closer to a real solution. The only potential downside I see here is that maybe it pushes the real solution a bit further down the road.
I worked with these firms for several years when the business concept was in its earlier stages. The money coming in to buy these homes quickly went from family offices (2013-2019) to state pension funds (2019-present) to sovereign funds (2020-present).
Things like the largest pension fund in Sweden is invested in buying SFR. Or the sovereign fund of the UAE.
I’m not sure if that changed your opinion on this not having practical benefit for the average American.
"US will ban Wall Street investors" != "Trump says he will ban Wall Street investments..."
This a Truth Social post from the President. It doesn't mean it has happened, will happen or will happen in the form that either Trump says it will or is being implied here.
This is a very difficult issue to properly address for lots of legal/logistical reasons. For example - many legitimate homeowners have their homes registered as LLCs and most home legislation is governed by states.
After a decade of national politics, and many decades of his "business", too many people still take "Trump says" as anything more than a piece of a con.
It has definitely cooled dramatically; even reasonable interest rates make the numbers pretty meh.
This feels very similar to the Canadian narrative that foreign (read: Chinese) investors are buying all the houses in Vancouver & Toronto. Does it happen? absolutely, but it's also a nice way to blame a segment that has no voice or recourse. It also allows us to turn a blind eye to the impact of a generation of essentially zero % interest rates and a country that holds twice as much of their wealth in houses as the US. Other popular targets: out-of-province home owners, vacation property owners, multi-generational properties.
Its true that its a small number, but when you look at the statistics as a function of "percentage of homes purchased in 2024" instead of "total percentage ownership of homes", it is a bit more substantial: My understanding is the number is closer to 2% for Institutional investors, and as high as 4% for major markets like Phoenix and Dallas.
What it will come down to is the exact wording of what Trump means by "large institutional investors" (his exact words on Truth).
(forgive me if I don my aluminum chapeau going forward)
> Black rock isn't buying up all the housing, your neighbors are.
So in '08 we saw the veil drop on the mortgage folks. For a brief moment the sort of advantage they were taking of individual homeowners (I'm including landlords here) was plain for all to see, because the systems they had built to extract that value had been pushed too far and started to break.
The really clever/evil/nasty thing that happened next was that they all said "we're sowwy" and pretended to close up shop on the Mortgage Backed Securities markets, while sowing the seeds for a resurgence in mortgage lending by having Fannie run REO-to-Rental programs that sold foreclosed homes in bulk to investors. It would have been too obvious in the numbers if large institutional investors had bought those directly, so they let mom and pop go into business as landlords, effectively buying obfuscation of the stream of finances for the cost of whatever margins they had to take a hit on to allow for low interest rates to pump housing prices up to a place where, like in 07, they could go back to fucking around with mortages.
In less word salady terms, the plan looked like so:
- "oh fuck we pushed it too far and here come the torches and pitchforks"
- Stop making money on mortgages, but we're investment banks as well as mortgage lenders, so we can make up for the loss of mortgage money by buying a more significant fraction of the housing market at near-zero interest rates
- Wait for low interest rates to pump housing prices over time
- Okay cool, people have forgotten about the whole 08 thing and we've peeled back all the subsequent regulation so we can go back to making our money bundling risky ass mortgage securities again <--- we are here>
The essence of the problem as I see it is that finance has gotten so byzantine and complicated that the only people who understand it in real time are the people who are actively trying to manipulate it to maximize their profits, and by the time it becomes clear what dirty tricks they're pulling they've moved on to the next grift so it looks like they're innocent.
The (now somehow) political position that blackrock is not the reason a house in Seattle is $1,000,000 is somehow the most hated position in America. Both my left wing friends and right wing family believe blackrock owns something like 30% of houses in America, and saying otherwise is heresy.
The people responsible for the cost crunch middle class people feel isn’t billionaires. Bezos isn’t using his money to buy up houses or daycare spots in your neighborhood or Disney Word tickets. It’s upper quantile white collar workers. They are competing with the middle class for the same goods and services, but make much more money relatively than they did in past decades.
Unless your neighbor happens to be named Mr. Black Rock, private equity and wall street investors are indeed the #1 buyers of residential housing stock right now.
I don't think a stock market reaction is a good way to measure their impact on the housing market. It's not that they aren't involved in the market, it's that their impact is questionable given the relative size of their participation.
The tweet says blackstone. Thats a separate firm from blackrock. And the tweets misleading in the first place, it's looking at the bottom of a candle which wasn't even the current price at the time of the photograph? And the stock closed at about 154.
Besides all this says is that it matters for blackstone...not for the housing market at large.
A hit in the stock price doesn't prove or disprove their claims. What would disprove their claims is the number of properties Blackrock is buying and if it is affecting pricing at the margin.
That sounds right. And, I have to admit, it's pretty good politics to ban a mostly imaginary thing that is a popular talking point. Since it's barely going to affect anyone, it'll be easy to pass.
And it may win votes for Republicans in swing districts, since the "BlackRock bought all the houses!" line is heard much more often from the Left, meaning this is something you can show an on-the-fence voter to signal how you are against those evil Wall Street guys.
I wonder if he'll be able to resist slipping in some kind of small-time grift for a family member or campaign donor, though.
He's in real estate. Of course he has an angle. Hopefully they can get something worthwhile into the eventual bill anyways.
I would hard cap how many houses anybody can own to something like 4 - whether through an LLC or otherwise. Many countries do not or did not allow foreign ownership of residential real estate. It's definitely not in the interest of any people to have their very land taken from them. In the current climate that would likely take an extremely nasty turn so it's not the best time for it, but I would be very supportive of such a measure with an exception for permanent residents and spouses of US citizens.
People are always looking for an outside villain in this story. Over the years it's been "Chinese buyers", AirBnBs, private equity, or "the rich" generally, but the thing is that the system is working exactly as it is supposed to. Middle class homeowners demand that their homes go up in value every year and they get what they want. Homes are explicitly called investments my every mainstream organization with any stake in the game. The ones responsible are indeed your neighbors, but not just the ones with investment properties. Talk to these people and between complaints about the price of eggs going up a buck or two you'll hear them mention "property values" frequently in casual conversation and beam with pride as they show you their Zillow Zestimate. Your government is happy for the increase in tax revenue (even as they carve out exemptions for their voter base). The ever increasing prices are all going to be paid by future generations, so there is no need to worry.
If Black Rock is guilty of anything here above all else, it's taking advantage of a situation deliberately created for someone else. If government policy wasn't already going balls to the wall trying to constantly pump up property values, there'd be no investment returns to be had.
Give me the levers of federal, state, and local government and I promise you I can completely tank property values in 48 hours or less.
Daily reminder that the largest purchasers of residential real estate through these intermediary firms (since that's all they are... they own them in trust for others) are public employee pension plans.
I agree, but besides the fact that people overlook that the “C” in LLC is “Corporate” and most private rental investors will have put their real estate in an LLC; is that the real problem at the core is cheap, i.e., devalued money and low lending standards, that has made inefficient and reckless lending and investing possible, essentially the inverse of the BNPL ticking time bomb and the cousin of the housing bubble, i.e., fraud.
With house prices being driven up by reckless lending through a debased currency, you enter a feedback loop where every inflating currencies drive prices higher, which only fuels a further frenzy of lending (including through FOMO) to driver prices higher once again.
Agreed, I think the simple answer is the tax rate is one thing for a primary residence and another for non-primary residences regardless of who owns it. For example in CA, Prop 13 stays in place for your primary residence, but properties are re-assessed every year like in Texas if it's not your primary residence. In addition, take away some (or all) of the tax deductions for SFH that aren't primary residences.
There is no key word here. It's an aspirational assertion on social media. Everyone asking about how it will be implemented is asking questions Trump has spent zero seconds considering. He will maybe sign some EO that will have very limited scope but mostly he is asking Congress to figure it out. Given the makeup of the Senate it will require bipartisan support which means at least months of haggling if they even consider his request. So we really have no idea what the policy will be or when we'll see it.
Private equity has absolutely been buying up (and building) U.S. residential stock, and this is addressing a real problem. The fact that Trump's doing it doesn't change my opinion at all, but it's absolutely the right thing to do and hopefully will be bipartisan.
Black rock shouldn't buy any family homes. Not a single one.
I'm sick of the arguments that rely on the meaning of "most/many/some/not all". The arguments are irrefutable because you can always weasel your way through the meaning of the quantifier, or the false implication that only the "biggest" of something needs redress before the next in line.
A person owning a second home is fine, that's one of the paths towards financial independence: small business ownership. Someone starting out in a tiny money making operation is a good thing, and they do not need to compete with a trillion dollar empire!
From the moment I saw this in the WSJ this morning, I was wondering what people were going to come up with in order to be against this obviously-good idea, just because Trump said it.
I don’t read this as being against it at all. They’re simply pointing out it doesn’t have that big of an impact because of a bigger problem that remains.
I'm not against the idea per se, but "institutional investors are buying up homes" is an effect, not a cause. Boomers demanded that "house values are never allowed to go down, only up" and put all manner of construction-preventing policy in place to make sure this happened, so of course institutional investors showed up. If there's an asset class which is only allowed to go up, why wouldn't they?
Banning institutional investment doesn't remove the "can only go up" laws and mindset, so I think (assuming this even happens, which it probably won't: TACO) the actual effect on prices will be minimal.
You're going to need some exceptions. What happens when someone dies and leaves their house to their kids? What if someone's home is temporarily unlivable (say due to a fire or flood which requires extensive renovation) -- do they have to live on the streets?
And that's not even addressing the obvious question of what happens to tenants if there are no landlords.
Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities.
If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing.
In Australia we've treated the family home as an investment, a primary mechanism for wealth creation (rather than an essential for life) for far too long. I fully agree that supply is the #1 driver for housing affordability, but like many things it's mult-factorial. Tax incentives, market forces, town planning, land use regulation, etc. all play their role.
I'm hopeful that successive governments over here show the courage of their convictions and enact enough change that my kids have a chance of getting into their own places, same as I did.
Tangent: how should we approach changing the housing mix in a city like Perth where 95% of new homes are large four-bedroom detached houses? It's all very well saying "That's what the market wants" when that's also all the market supplies. How do we bootstrap the idea of smaller, denser, affordable, more-diverse housing options?
YIMBYs would argue (and in my view rightly) that if you allow townhouses and apartments to be built, the market will build them where there is a demand.
It's the same in New Zealand - property is the primary mechanism for wealth creation, and you have boomers with 10+ properties that they use for rental income for their retirement.
The issue is exacerbated by the tax structures not incentivizing investments in other assets - e.g. in NZ if you invest over $50k in offshore equities, there is an annual FIF tax that must be paid, even for unrealized gains.
> In Australia we've treated the family home as an investment
That's true of most of the Western world, unfortunately.
> a primary mechanism for wealth creation
I don't disagree but this needs to be correctly framed publicly as simply stealing from the next generation because that's what it is.
> Tax incentives
For anyone unfamiliar, Australia has a system called negative gearing. In the mid-2010s the then Labor party proposed scrapping it and lost the election. It really is the third rail of Australian politics. This is a shame because it needs to be scrapped.
It allows you to deduct losses on property against your ordinary income. So if you have a mortgage payment of $3000/month but only earn $2000/month in rent then your income is reduced by $1000/month. That's waht drives a lot of small investors to essentially speculate on property.
The US actually has a better system than this, which is that if you earn over a certain income level, you cannot deduct passive losses (like the above situation) against ordinary income. That would be better but still not enough.
So many upper income Australians essentially end up just hoarding property. They'll call it "investment properties" but really it's speculation. Historically, property was treated as an income producing asset, not a speculative capitals gains asset.
Oh and capital gains on non-primary residences should be like 70%. If you want to stop rampant speculation, that's how you do it.
> Tangent: how should we approach changing the housing mix in a city like Perth where 95% of new homes are large four-bedroom detached houses?
Perth like every Australian city is an urban planning disaster. It's just endless sprawl up and down the coast and inland to the hills. A generation or two ago it was a quarter acre block. Those days are long gone unless you're wealthy or you're 50km+ from the city (less if you go east).
So it's a car-dependent soulless hellhole. I say this as someone who knows Perth well. So even now if you build higher-density housing along transit routes, as they're doing, you still need a car (or 4) to go anywhere but work. And high land values make infrastructure projects incredibly expensive. Like imagine trying to build the Perth to Mandurah train line now instead of 30+ years ago when it was actually built. I guess they could utilize the Freeway they already had but what about the fremantle or Midland lines?
What you should do as you build out is reserve space for future infrastructure. AFAIK no Australian city, especially Perth, has never done. So Guildford Road or Great Eastern Highway should really be a freeway. Same with Albany Highway.
In 2024 Western Australia did really relax ADU (granny flat) development rules. The rules used to be really strict. Now you can basically always build one with normal building approval if you meet the minimum lot size requirements (generally 450sqm, sometimes as low as 350sqm, depending on the council).
Single family home zoning is really cancer to any decently sized city.
Anyway, the truth is, I'm not sure it can be fixed now. Big infrastructure projects are prohibitively expensive even with tools like eminent domain. We need to look at why it's so expensive to build apartments.
I think the only thing you can do now is for the government to become a significant suplier of housing to increase supply and stabilize rents.
The problem with "increase supply" is that existing property owners rarely want that.
In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments.
The "American Dream" is a single-family-home, surrounded by other single-family homes, but even with urban sprawl we simply run into the limits of a commute and prices skyrocket.
Ironically we actually solved this problem: Indefinite Telecommuting. But then decided to take our solution that reduces property prices, reduces air pollution, and improves quality of life and then just threw it away because commercial property owners were losing money.
I think it's possible to make apartment/condo living more attractive in the US, but you'd need a few changes. For example:
* American apartment complexes are typically ugly as hell. They're little building islands in a sea of asphalt, disconnected from the wider street grid too. They'd be more attractive if they were more like the complexes I saw while living in Munich: more green up front, car parking basically all underground.
* Require substantial backyards/courtyards for said complexes.
* More tenant protections that prevent landlords from arbitrarily non-renewing a lease, so that people in apartments can have long-term stability. If you break the rules repeatedly or severely, then sure, landlords should be able to remove you, but otherwise you should be left alone to live your life.
While in Munich, we lived in the Solln neighborhood. It's mostly apartments of some kind (we lived in an apartment, and then a backyard duplex), but they just look a lot less ugly than they typically do in the US. Example area: https://www.google.com/maps/place/Munich,+Germany/@48.081098...
> The problem with "increase supply" is that existing property owners rarely want that.
Yup. I'm a weirdo who owns his home but wants a shit-ton more housing built in his city, even if it means my home value goes down. I do know some like-minded folks here, but I would be very surprised if we weren't in the minority.
And it makes sense. We're taught (in the US) to treat our primary residence as an investment, and for most US homeowners it's the most expensive asset they'll ever own, and will be their main vehicle for maintaining their wealth through their later years, and for transferring the remainder of that wealth to their children.
Given that, you'd either have to be self-sabotaging-ly altruistic, or otherwise wealthy enough (outside of your home) that a significant dip in your property's value doesn't tank your finances. I expect that describes a small number of people.
> In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments.
Existing property owners can only afford to hold this opinion because land rents are insufficiently taxed. Through some sort of monumental stupidity we decided to tax labor instead of land. In this sense the SFH, “Americans like suburbia” problem is just a function of poor tax strategy. If homeowners were faced with the economic reality of their choices then markets would fix land use by themselves.
That means the American Dream is unsustainable, and until people can break through the entrenched interests and do something rational, American cities will continue to decline.
Where else do we simply accept that incumbents get to have full protection from loss at the expense of literally everyone else? Certainly other examples exist but we certainly wouldn’t tolerate wheat farmers stopping their neighbors from growing wheat.
No, we threw it away because executives wanted their control fantasy of being able to push people around like little chess pieces, as opposed to setting a vision, hiring professionals, and then giving them the tools to achieve the vision and staying the hell out of their way.
It's a good start. Would be nice to add a gradually increasing tax on multiple home purchases, e.g. buying a third home has a 5% tax, 4th 15% tax, fifth 25%, and if you want a sixth home you have to build it yourself. Would prevent regular people from buying up dozens of homes to rent.
Changing the excessively huge (and probably financially needed) capital gains deduction for selling a home and buying a new one to only work if you literally buy new construction - would probably spur something.
Existing stock would be depressed in value as the pool of buyers would be smaller, but they'd be more likely to be first time buyers anyway (no capital gains to deal with) and demand for new would increase.
But you could end up with insane inversions where existing stock was pulled down to build new to take advantage of the gains exclusion.
It should be much more punishing from the 4th home like 45%. One can understand 2/3 homes, e.g., one to live in and the rest as investment for retirement income. More than that is just greed. Also, if you don't live in one of your properties, either sell one to keep the total number within 3 or pay additional tax.
We have a significant number of problems related to housing; generally I would call it a demand side issue not a supply side however.
My reasoning is we have a massive construction sector compared to other nations, with a relatively high productivity in terms of dwellings built per capita. We also have pretty slack standards, with even weaker enforcement.
In addition to that, we have a very weak growth in productivity per capita; and since we are trying to rapidly grow, we have to play catch up to provide the same level of services. This needs to happen while our construction sector is stressed, so the same amount of wealth goes a shorter distance again.
You can also see this in rental prices; negative gearing should allow the capital price to decouple from the rental yield to a larger extent than without it; but we still see high rents...
It will make very little difference if Wall Street investors hold very little property.
Putting a finger on the scale of how much real estate is individually owned definitely makes a difference though. It makes it worse.
100,000 individuals who own 100,000 properties have far more political power than 10 companies who own 100,000 properties.
>If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing.
Yes. However supply is artificially restricted by government, to the approval of the average property owning voter. So more specifically, that is what needs to be changed. Everything else is window-dressing.
This is a country sliding further towards being us, with their housing being more restricted and more expensive.
As long as houses are treated as an investment, there will be all kind of incentives to make them go up in value.
China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy.
If buying a house delivers 5–10× the ROI of the S&P 500, that’s not “smart investing” then there is a huge problem to be addressed ... (preferably by building more)
5–10× the ROI of the S&P 500 - which is really only true because we allow massive leverage on real estate that we'd not on stocks themselves.
And leverage brings all the problems associated with it; if you own your house outright and it goes down %10 you're out 10%; if you only have 10% equity and the same happens you're down 100%. The gains, of course, work similarly which is why for so long it's been a heads I win, tails I win.
>China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy.
That's not really a bad thing unless you believe real estate should be a vehicle for investment. However, in T1 and T2 cities asset prices are roughly on par with western major metro areas. However, property management fees tend to be lower. I suspect the Hukou system contributes significantly to keep housing affordable, and it's not just the massive supply.
The window-dressing is great. You get the votes from the renters because you are doing ”something”, and you get the votes from the landlords because property values remain high
Right, and the large corporations just buy up all the service companies in the area and squeeze both the landlords and renters at once. The only way to achieve fairness is straight socialism.
Don't be a coward, and talk about demand for housing, which in Australia is driven by sustained mass migration.
The inevitable outcome of this is increasing homelessness, and likely slums when homeless just start building themselves make shift shelter in such large numbers that authorities can't stamp down on it.
We're not supposed to notice that the best thing about migrants (especially the illegal ones!) is that you can cram them 10+ to a house in squalid living conditions that would be abhorrent to most.
It's a price we're willing to pay since we're not paying it.
It will make a _small_ difference, and then also banning individuals from owning multiple homes would be a bigger difference (and then building enough supply, the biggest). We can do all three.
I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers?
I remember watching some video of tenants being priced out of their rental apartments so when they tried to contact the property owner, they found layers upon layers of managers and companies. It just seems better when there are more thousands of owners than just a handful of corporations.
Small businesses are often just as ruthless as large ones, just less competent. In any case, most rental properties are managed through agencies, who are soulless profit-optimisers.
It's the opposite in the UK. Most landlords are individuals, own one or maybe a couple of properties.
It's awful, rogue landlords who do everything they can to not do repairs or improvements and when they do it often comes after a long time. Often as they have underestimated all the expenses they're liable for and find that the profit is not very much.
Give me a company that owns a whole block every day, they've modelled the risk better, have economies of scale, and you have more recourse against them.
> I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers?
Do we want to trade crazy high prices in the American real estate market for absolutely crazier high prices in the Australian real estate market?
That is a bit simplistic though, there could be other things going on in Australia, and all the other rich countries (e.g. Switzerland, England, China) where American prices look like a good value. I'm sure at the end of the day supply is the main factor, and not having a hot economy also helps, so I'm sure the USA will get there fairly quickly.
Increased supply comes in majority black and/or low-income neighborhoods here and it's "luxury" units all the way down. Gentrification is the name of the game, while simultaneously reducing social services.
"Real estate investors, both individual and institutional, bought one-third of all single-family residential properties sold in the second quarter of 2025"
As long as we have this focus on using homes as investment and rent prices are kept high through collusion, the industry refusing to build "non-luxury" units, and regulation hurdles stopping new entrants, we will be stuck with this problem.
> the industry refusing to build "non-luxury" units
This is a government policy failure. Because no one is allowed to build fast enough, there is always a demand for luxury (higher profit) and thus that is what gets built.
You have to completely satiate the demand for luxury housing before it becomes "desirable" to build new standard housing. In years past the "starter home" market has completely been reselling past housing, even what was lux at the time of building.
Why would you spend your time and effort building a house that earns you $50k when for the same time and effort you could build a house that earns you $150k?
You'd only do the first if the second wasn't available.
One additional important detail: if this gets implemented at all, hopefully it does not affect the common practice of having a self-owned LLC owning your home. This is common for the purposes of keeping your personal name out of public records; it is far too easy to link someone's name and address, and people at risk of doxing can do this to protect themselves.
Personally I feel people and especially corporations/REITs do not have the right to hide what real estate they own. Sure put it in a trust, but the public has the right to know who controls it.
Where do you stand on encryption? Do you feel like the "I have nothing to hide" argument has any merit? If you think people have the right to privacy, why should real estate be an exception? I personally find the fact that real estate ownership is public in the US to be quite bizarre.
I have a friend who has someone who has repeatedly threatened to assault her, and her primary protection is keeping her address hidden from him. Should she never be allowed to own a house at risk of being assaulted?
People who have been stalked or are uncomfortable having their details published for the world to find need privacy.
Privacy mechanisms aren't just what applies to your or my perspectives, there are millions of other situations. For example, most counties in Texas identify the full legal name(s), phone number(s), and mailing address(es) of every single property owner and their tax payment amount and status. That'd get really weird, real quick for celebrities if there weren't any concealment mechanism.
Privacy isn't a binary or continuous thing, but is possible to varying degrees and requires navigating government and business processes carefully.
Trusts are in the same boat. If you're using the LLC as a pass-through, these restrictions won't apply to you unless an orange cat is charged with drafting.
Owning your family home through an LLC, depending on your state, is often a bad idea.
There are generous protections in most states for your personal home that you lose if it's owned by an LLC. This includes things like a homestead exemption in bankruptcy protection.
In Florida, for example, there are better options to keep yourself anonymous. Florida has something called a land trust [1].
I feel like mortgage lenders should legitimately wonder why they’re lending to an LLC or a trust rather than an individual. I’m not sure there’s a good answer.
There has to be some nuance. Companies are known to either rent of sometimes own housing for personnel who travel to other offices. Universities typically own housing as well. So maybe it’s something like it can’t be one of the main businesses of the corp to buy up residential housing as an investment tool.
I mean, the ideal amount of nuance is to not ban this in the first place"; right now we're talking about damage control for particularly critical subsets of uses.
> Universities typically own housing as well.
I'd expect that argument to carry negative weight with the folks trying to do this, given the hate they have for universities in general, and the love of privatization.
Ideally, it should not be possible for random hateful people to easily get name/address records from local governments, but that's unfortunately not the world we live in yet.
There are lots of benefits to putting your home into a living trust. It just has one side effect of hiding your name on public GIS of tax parcels. One reason to do a trust is so that you can alter who benefits from it without amending a will.
You are right, it is completely absurd. And it's great! Anonymous companies and tax havens (domestic and international) are something completely contrary to how society at large is organized. And it is the best thing which has ever been invented. They are accessible to any person who has about a thousand dollars, no matter your race, sex, age, ethnicity, family name, political affiliation, or any other factors except that tiny sum. If you're not born into wealth or into a politically connected family, making an LLC is the only opportunity you have in life to not be a human battery in the Matrix. And it's easily accessible to anyone. Incredible.
It costs relatively little to create an LLC. This is not an uncommon pattern for people in groups commonly targeted by hate-motivated doxing and similar attacks. This is not a "rich-person trick", and if you can afford a house, the cost of an LLC is a very tiny expense by comparison.
> I'd be fine with a policy of "you can rent housing you build" for American corporations
Builders are more concentrated than landlords in pretty much any geography. A concentration that scales with the amount of bureaucracy and bullshit required to get permits.
Need to think about this some...
Would this end up being another way for MegaCorp to extract wealth from the rest of us (similar to student loans)? All new housing ends up rentals, and a generation+ of Americans are unable to use homes for storing/building wealth?
We know using housing as an investment, at an individual level, is problematic (NIMBYism and failure to infill/redevelop/etc). Not sure how incentivizing MegaCorp to do the same on a massive scale fixes anything?
"The key is increasing supply" assumes the goal of new housing laws should be to increase supply and bring house prices down. But a lot of people do not agree with that goal. Many people are homeowners who will get tens of thousands of dollars richer if there is less supply and prices rise. And in America at least, homeowners have more votes than renters or builders or landlords or the homeless or other groups. So new housing law tends to favor the goals of homeowners, not the goals of other groups who want more supply.
This will help out home prices in a lot of lower priced markets, but do little in higher priced markets. In the Bay Area, many houses are bought up by non-occupying internationals. I've been in a couple of such houses. It's bizarre walking into a $5M+ hilltop mansion that's completely bare inside except for a token "student" living out of one room.
"From" other countries is overly broad and I assume not what you intended. I am actually interested though in the idea of legislating how frequently home owners have to actually be within range of the home, for example. A friend has had a hell of a time with a landlord in Malaysia who's never seen the property.
Do the math of what it costs a city per resident - napkin math it, total tax intake divided by population. Now compare that to the additional taxes and money that person (who is wealthy) is not injecting into your city.
So out of touch to think the net spend of a gov directly on an individual would be worth sacrificing all of that additional capital injected to your other neighbors and their businesses.
It's the same in Southern California. When I sold my first starter home it was bought by internationals to rent. There were already multiple homes on the block owned by foreign interests.
And at the new home I moved into, the house next door is owned by foreign interests and rented out to the highest bidder. It makes it extremely difficult to get anything done that involves shared areas (like common fence or overhanging trees) because the owner is essentially unavailable and doesn't speak english. Not to mention that every year or so we have to deal with renters who are minimally vetted. We've had a group of 5 college kids turn the place into a frat house once. There is also a property management company involved, but they can't get in contact with the owner either.
In my experience, this seems to be a bigger issue than wall street investors.
- Whether this is needed or helps depends not on percentage of owners or buyer/sellers, but on the effect in the market of such players. REIT's have an outsize effect because they are repeat players, and thus lucrative clients for brokers, who qualify themselves by skewing local markets accordingly.
- Policy-wise, it's hard to distinguish by size: second homes, mom-and-pop with a few rentals, REIT, private equity. (This is how corporations get free-speech rights.)
- Politically, it's a shame that a real problem is addressed via scapegoating
- Practically, it will have little effect since REIT's and home builders are sitting on a lot of inventory that they can't sell, so they've stopped accumulating (and they're resorting to secondary offerings to pay off the original investors). Indeed, to the extent this stimulates buying, they're all for it.
- Ethically, the US has been a magnet for money laundering, much of it via real estate, which has pushed up asset prices and de-conditioned professionals. Scapegoating only delays reform.
None of this has anything to do with "affordability", which is not about shifting rentals to owner-occupied properties, but rather reducing the monthly cost of residing in areas with opportunity. The notion of home ownership as an absolute good is a driver of unaffordability.
Right. There are good financial reasons to own a home even if you don't think it's going to be a great investment, just as there are very good reasons not to own a home even if you have the means. It's the absolute, which is the premise of this policy proposal, that's the problem.
I agree philosophically though there is a lot that can be done short of upending the entire American wealth structure like removing barriers to housing construction (to dramatically increase supply) as well as subsidizing first time buyers eg with preferential mortgage rates and tax write offs.
Housing prices are rising due to inflation, and specifically inflation on the raw input for houses - lumber, building materials, and labor. Granted, this is not the only reason in all regions, places like California have much more complex, systematic reasons for increased housing prices. But the bulk of the US has housing prices that are somewhat in line with the cost of building, since there's no limit on land to throw cookie cutter subdivisions on.
They don't want to admit that their abhorrent policies are hitting the pocket books of their supporters, so they latch onto popular sentiment instead of solving the problem. Typical of this administration.
I built a house in 2018 for $350k. To build the same house again today would be $650k (and it would probably take twice as long). Surprisingly, the cost of land is not much more than it was 8 years ago. All of that cost increase is in materials and labor.
The problem is, the market value of my house is $550k, at the most. Meaning it's not profitable to build new houses as the market can't sustain them. And who is going to sell their house at less than they can get another one for? Only people who are forced to move, which is probably why the there is such low inventory in the historically cheaper markets.
Being in the lumber industry myself, I can tell you that lumber prices have not kept up with inflation. There was a major run up in price in 2021 and 2022, but prices have returned to pre-covid levels accounting for inflation. I have our own sales data, but this chart makes the case relatively well: https://tradingeconomics.com/commodity/lumber.
Speaking as someone who just sold a house in the Bay Area (Dec!), house prices here are very much "buying the payment".
The valuation of the property goes up and down directly with the interest rate.
The ROI of the house (we bought in 2016) was ~8% on the down payment over the past 10 years, excluding maintenance and interest charges. As an investment, property is not a very good one.
To get that 8% on the down payment, I spent 4% on the remainder. It really doesn't net positive after the mortgage interest (with a 20% down payment). It's about "forced savings" and having control over your environment.
As an aside, since people are stuck in houses (mortgage rates and prop-13), there is a definite lack of starter homes. Everyone adds the second bathroom, meaning there aren't any single bathroom homes to be found. That increases the market floor.
What counts as "Wall Street" here. Is it any investment property? After some threshold of owning many homes? If so, how many? 10? 10,000? Something else? Is it net worth? Maximum number of beneficial owners? You must title them in a natural person's name instead of a corporate entity? Your service address for your corporation is on wall street in NYC?
Which option is being proposed vastly changes the merits and problems of this policy, so it's a poor choice that this isn't made abundantly clear.
You mean like apartments/condos in Trump Tower? Ha. I wonder if banning them from buying SFHs actually decreases the supply of SFHs and shifts people to build more, guess what, apartments/condos that Trump can put his name on and sell to institutional investors.
The vast majority of home purchases aren't from speculators or institutional investors.
Institutional investors only own about 0.5% of homes. If they're forced to stop buying, nothing will really change in a noticeable way. At best, small landlords and investors will scoop attractive properties up for slightly less.
Nonsense. Do you think these landlords intentionally overpaid for the properties? They are sophisticated entities who like to pay at or below fair value.
IF it results in dramatic reduction of home prices, this sounds great at first, but in actuality, it throws the market into disarray, since many sellers and also buyers, and it may trap home owners who need to sell into bankruptcy.
God forbid someone not sell out of their home. /s Home ownership isn't exactly a crappy life milestone to be stuck at. Yeah it would suck for a select few people who need to get out of one and into another RFN due to life reasons and surely some municipalities would leverage that to really screw people but I think the upside is orders of magnitude higher than the downside.
Come to think of it, I bet making homes less liquid would knock the divorce rate down more than anyone wants to believe it would, lol
I'm not sure if they could be forced to sell those, the government could, but then that would fall under just compensation seizure. I'm not a lawyer, but it would seem under basic legal theory that you couldn't take those homes.
Not that I expect this particular strategy from this administration, but there's 'forced' as in "you WILL sell this property", and there's 'forced' as in "any corporate owned housing unit will see its property tax rate increase by 25% per year until it is sold to a person". I don't think your description could apply to the latter.
These homes going back on the market wouldn't make a dent in housing prices. As much as we'd like to think that corporations are to blame, that's not reality. Plenty of middle class families own homes and vote for local politicians to keep their investment safe (and for it to increase in value) by making it hard to build.
We’ll try everything except for a land value tax, so that we can eventually prove once and for all that LVT is the right thing to do! :)
But actually, it’s good to see movement on the underlying problem (affordability of home ownership). This is The Domestic American Problem of our times, and it deserves to be closer to the center of the Overton window of our politics and policy-making.
Even if we think this step is kind of meaningless, it draws more attention to the problem, which is a good thing.
Can someone please explain to me a practical way to apply the LVT? Vancouver used to have an LVT, it was too low and there was a housing speculation bubble in the early 1900s, since property was appreciating much faster than the tax rate. And if the LVT is too high, then you will have very little new development. This isn't even mentioning how you determine the value of the land.
Denmark has an LVT and copenhagen affordability is... not good.
As far as I can tell, LVT only achieves what it sets out to do if it’s equivalent to market rent.
As in, you never really “own” your land, you’re just renting it from the sovereign. If you can’t make good enough use out of it to afford that rent, you should move on. You can find comments on this thread that make this argument explicitly in terms of “maximizing land use efficiency”.
This was the economic structure of feudalism. It … wasn’t great. Private ownership of land has its own tradeoffs but a few centuries of historical experimentation in both directions has been fairly decisive.
LVT is a tax on the value of the land specifically, not a traditional property tax. This encourages development on valuable land that is currently being put to unproductive uses.
For example, if you own a lot in a downtown metro which is a parking lot you pay low property taxes because parking lots have low property values. You are disincentivised to develop it because your property tax would go up. Opposite incentives with a LVT.
This is largely a good move. There are plenty of whales, once those 5% disappeared, price should slowly come down. ( The Hong Kong Housing market is the one worth studying ) Next would be increase supply, and may be if needed, additional tax for individuals owning more than one home or when they buy 2nd home. Largely making housing as an asset not attractive for certain group of investment.
Housing continues to be the biggest problem in modern world and yet it is a problem not resolved.
> There are plenty of whales, once those 5% disappeared, price should slowly come down
But by how much? ~3-4% of housing has to be sold, some amount of it will still be bought for renting (as many people still want to rent). Surely this can’t have a very big effect on house price
It could be substantial just by increasing the number of occupied dwelling units - if institutional investors are willing to let housing sit empty for 6 months or a year (because it doesn't hit them where it hurts) and the average vacancy rate in a city is hovering around 10%, dropping that down to 5% will really shake up prices.
Given how inexorably tied the US economy is to SFH prices, a drop may do more harm than good.
Many families have the majority of their wealth tied up in their home, and another significant portion of it (knowingly or not) in the SFH MBS market via their retirement investments. If prices fall quickly enough to impact the MBS market, a large number of households could suddenly see big dips their two biggest sources of wealth.
A gradual drop may be fine, but the financialization of housing at the national is a big mess. Sadly it makes the market dynamics of giving people places to live way more complex than it should be.
Aren't they just fixing the symptom rather than the cause? I.e, people buy hard assets because holding dollars loses value. Make dollar hold its value instead, thus will individuals and companies stop buying up property they don't actually need.
Actually, not a bad policy idea. But it is not enough to solve the set of problems that arise when you take a basic human need (housing) and subject it to market forces--inexorably the ability to profit from the need drives costs higher than is affordable for some "market participants," leading to death.
Small investor ownership in single-family homes (for both short- and long-term rentals) have been devastating to communities. What is the right number of single-family homes to permit individuals/trusts to own and how do you disincentivize small empires?
Wall Street investor monopoly ownership of dense housing in urban areas remains a major cause of rents outstripping income (see Blackrock's 2020-2025 market takeover and subsequent market manipulation of apartment rental rates in San Diego). Simple policy solution: trust-bust apartment ownership. Harder, more effective policy solution: municipality ownership of apartment blocks a la European cities.
If regulators allow the same behaviors with water, you can expect a similar set of harms.
It's not going to solve the housing issue and is mostly for press (and it's not even getting into ulterior motives), but it might help with preventing a longer term issue of large investors becoming a major issue. Additionally, I wonder about the choice in properties as properties aren't fungible.
Interesting to see that he did not issue an executive order to ban this but called on congress to do so. This is just pandering to the base and election signaling and nothing else, at least for now.
He's issued plenty of other executive orders that aren't legal in order to continue to bullshit his base. The reason why he's deferring to congress now (instead of trying to take credit) is because he knows it's not possible and can use that as leverage against members of Congress.
Just think of the shit he's going to throw against the wall when it's only a few months away. I bet he'll wade into "Cancelling all student loans" or "Legalizing Marijuana" knowing his base is too stupid to understand his intentions.
It seems like the root cause is to increase the supply by all means possible. Ban NIMBY instead, support more building, both with already existing infrastructure and with creation of the new one.
idk how this would work effectively. There's lots of affordable homes they're just located where no one wants to live. You'd have to focus on HCOL locations and make them not so high cost which seems something that should be done at the local level.
You can increase supply but investors would just snatch them up. Maybe the feds could put a cap on the value of a single-family home that an institution can own and then make ownership very tedious. For example, no institution can own a home valued at more than $500k and for each home owned a quarterly filing must be made in person at the county the home is located. I'm sure these organizations would rather own very high value homes than lots of low value ones out in BFE.
>There's lots of affordable homes they're just located where no one wants to live
It's probably more accurate to say "they're just located where no one can get a job." You can give up you SWE job or whatever and move to a small town/rural area, but you're not going to convince anyone to give you a mortgage off your income from the subway at the local truck stop, or whatever labor gig you can get at the local industrial concern. Although if you're in medicine there is probably hope.
If only technology had progressed to an extent that we don't psychically need to be concentrated in 15-20 HCOL major metro areas to do most (if not all) office jobs.
> You can give up you SWE job or whatever and move to a small town/rural area, but you're not going to convince anyone to give you a mortgage off your income from the subway at the local truck stop, or whatever labor gig you can get at the local industrial concern
There's certainly SWE jobs in LCOL places but even if there weren't, one's savings from a HCOL area should go pretty far in a LCOL one. Also, thinking that you can't get a mortgage off working at Subway in a small town is just out of touch. You'd probably have to work a lot longer than a cushy SWE job, but it's still possible.
> You can give up you SWE job or whatever and move to a small town/rural area, but you're not going to convince anyone to give you a mortgage off your income from
It's strange to me that moving to LCOL wasn't a much bigger thing during the period when everyone was working remotely.
I think that it should be a ramping rate, the idea being that a 1x landlord should be able to outbid a 2x landlord and so on.
In theory this encourages a sort of spreading effect where at some point the Nth property is too expensive to buy to rent or speculate on, which naturally stops the exponential effect of making land lording your full time gig by continuously expanding the portfolio.
If I were renting a house, I would much rather deal with a business than an individual landlord.
On another note, it’s amazing that in only a year, we accept a dictatorship where we are okay with the President setting policy that should require a law to be passed.
I've dealt with both; anecdotal but I had a much better experience with the individual landlord than corporate. Ex: AC went out in both cases; Individual land lord showed up with a replacement window unit the next day after I reported it. Corpo landleech ignored my ticket and calls for 3 days while I slept in a house that was nearly 90F inside past midnight.
Corpo landleeches nickle and dime you (base rent + rent payment fee + pest control fee + trash fee + valet trash fee + fee for the service that bills water/sewage + mail room fee + others I'm no doubt forgetting) (but they only advertise the base rent), and they like to push straight up scams ( such as forcing mandatory renters insurance at 3x the market rate, expensive "benefits" packages with everything from HVAC filter delivery to credit monitoring, all heavily marked up.). The individual land lord? just a flat rent every month, no surprises.
I'm sure there are plenty of horror stories about individual landlords though; the same greed drives both to cut corners and maximize profits.
The two times I’ve stayed in an apartment complex, they had staff onsite and repairmen and someone on call. The individual landlord doing this on the side is likely undercapitalized and operating on thin margins and not budgeting for repairs
If I were a business whose interest in owning houses was banned by legislation, I'd sell my "services" to the individual landlords who now owned the rental property. Blackrock manages the financial part (taking rent, scheduled repairs) and the silent partner gets a cut.
That’s already a thing. Property Management companies charge landlords around 50% of the first month rent for a new tenant and 10% of the rent to manage the property for the landlord.
> On another note, it’s amazing that in only a year, we accept a dictatorship where we are okay with the President setting policy that should require a law to be passed.
Did you read the article? The impetus was a tweet where he called on congress to write and pass a law to this effect.
So close to realizing the issues with the 2018 tax bill.
- 20% maximum corporate tax
- Personal Salt cap
Made it less expensive for an llc to buy a home than for most individuals.
To make individual ownership on par with corporate, individuals need to be in a lower tax bracket, be able to deduct taxes
, interest, and insurance. And the $10k cap really hurt the ability for local property taxes to make it better for the individual. The new $40k cap may put it slightly towards the individual in some jurisdictions.
But raising corporate rates or reducing corporate deductible expense re real estate is the most efficient policy to encourage individual ownership.
I recently worked on an MVP for a Zillow-for-wholesale startup. As a curveball, our state passed a law restricting where and how these contract-to-buy sellers operate. So their workaround, after consulting lots of lawyers, was to provide a standardized LLC / Contract flow such that you’re no longer marketing a house for sale. You’re marketing a stake in an LLC, only that LLC has a sole purpose (a contract to option out a specific house).
I didn't know about this use-case. But this is also what investors do with real estate in California because Prop 13 resets the taxable value on a real estate sales, but not on buying an LLC that holes the real estate.
Then expand the definition and scope to make it more painful to circumvent. Describe the structure such that it’s hard to not be able an individual non-investing homeowner.
Of course that’s unpopular to those who want to freely commit to bad practices.
This will absolutely help. It’s easy for these institutional players to downplay their involvement with select stats, to play PR defense, but platforms like Zillow work with institutional funds to sell them an information advantage that means they are at the end of the market that does the most upward impact on pricing.
People don’t have a natural feel for how little you need to alter flow to cause liquidity in a system to collapse.
There are a few markets like Jacksonville and Atlanta where there is a lot of institutional ownership, but outside of those few cases impact of Blackrock et al on housing markets is effectively nil.
Zero chance this moves housing costs an iota. Most of those wall street owned houses are rentals. If they are forced to sell them, that is a net zero change to housing supply, because they are taking a rental unit off the market.
How is Wall Street defined? How would they enforce it? What is preventing a large corporation from registering a new company to buy every house? Also this is just a call to action, nothing written up in a law yet. We will see how it goes, if at all it's implemented.
The root cause for the low affordability seems to be that most people don't want to sell a house purchased at 3% interest and have to pay for a new one at 6%.
That and zoning restrictions too contribute for the lack of supply.
There was a huge affordability problem 4 years ago when the rates were 3% too, so that’s clearly not the “root cause”. In fact, at the time HN was filled with people blaming the “free money” 3% rates for the lack of affordability…
LOL, you live in California? The past affordability you are talking about was not universal.
There were plenty of people happily buying homes after moving out of CA to other states.
Anyhow, interest rates are the root cause now.
Who in their right mind would do the trade I've described?
In my area the zoning is ludicrous. Need to walk 4 blocks to visit my corner store. Tall skinny townhomes that nobody wants and go unsold for months are the only allowed high density option - with no stacked flats.
I don't actually know anything, but I've been wondering lately: is higher house prices simply a consequence of Baumol's cost disease? If so, then there is kinda nothing we can do about it, right?. Higher house prices is simply a consequence of improved productivity elsewhere, and thus it is necessary to spend a larger fraction of one's income on housing.
Higher house prices in the US are a consequence of literally every major US metro area having a shortage of housing (https://www.fanniemae.com/research-and-insights/perspectives...). There's no mystery here, just that a lot of people decided to shoot themselves in the foot starting in the 1970s by putting more and more zoning and permitting limits on new housing construction.
There's no bubble, there's a massive housing shortage. The only "peak" will be when prices are so high that even the rich can't pay any more, which point it'll just stay there.
One of rare instances I'll say it: make owning a second home a major tax liability and 0 takes breaks for building or ownership.
Not that because "we have a right to housing" or other catchphrases, but because getting rid of the government sponsored local monopolies is impossible.
The actual headline is “Trump says he will ban Wall Street investments in single-family homes,” which is a more accurate description of what happened: one social media post by the president, asking Congress to do something. Nothing has actually changed yet.
There's a service called Arrived (I believe Jeff Bezos invested) that lets people buy fractional shares of single-family homes and earn a proportional share of the rent. If you sell, you're effectively selling your percentage of the property.
As a renter, I was drawn to this as a way to get some exposure to real estate, and I ended up investing in a vacation rental. At the same time, I'm pretty conflicted about it. Profiting from vacation housing feels different to me than profiting from people’s primary shelter, which is a basic necessity.
More broadly, I think as long as the incentives of property owners and renters are fundamentally misaligned, it will remain extremely difficult for middle-class folks who don't already own property to break into the market. The system optimizes for extracting rent, not for creating new owners.
> Profiting from vacation housing feels different to me than profiting from people’s primary shelter, which is a basic necessity.
If you believe that nobody should profit from providing housing, what do you propose as the incentives for people to build, capitalize, and maintain said housing?
Wow this is exciting. I tend liberal, but I think this sounds like a bad policy lol. My understanding of the existing research is that rent control tends to decreases the motivation to increase supply, and I think this should do the same
Yeah if investors are no longer buying from home developers then it'll definitely limit the demand, the price homes sell for, and the motivation to build new homes. I believe that metropolitan areas are the problem and my unpopular opinion is that people have to get used to the idea of moving to sparser areas for affordable housing.
More specifically, the current zoning of metropolitan areas is the problem. US cities have plenty of potential for more housing, they just won't allow it to be built.
The most absurd example is here in SF, where... okay, context. A recently-passed state law overriding local zoning means that there's a high-rise building project in the Marina district (https://sfyimby.com/2025/12/preliminary-permits-filed-for-fo...) that will almost certainly get built, despite people endlessly protesting it. It will add 790 apartments, 86 of which will be required to be affordable housing.
Before this, in 2024, there were 7 net housing units added for the entire year in the Marina District. No typo there, literally just 7, in the most expensive neighborhood in the city, in the most expensive city in the country.
This one building, only possible because the state overrode local zoning, will be adding by itself more than 100 years worth of new housing to the neighborhood. That's how fucked the approval process is.
This mentioning of 'Wall Street' with investors if typical for the kind of populist argument that is used to argue that banning investors from buying houses is a good thing.
What would this 'Wall Street' even mean? Would it mean that companies listed on the stock exchange are banned but privately owned companies not?
Anyhow, I argue that investors are positive for the the house market. They shouldn't be banned. Investors provide enough liquidity to the market so that the building companies have enough certainty to invest in large housing projects, because they know that their properties will be sold quickly.
If investors would be banned they would sell their houses eventually as well but it would take much longer.
Similarly, investors improve mobility and throughput. An individual putting his house for sale will find a buyer much faster when investors are in the buying market, who are willing to buy up a house when nobody else takes it and sell it for a better price later.
So: sellers sell faster, so they can move out and buy a new home faster as well: mobility in the house market increases.
Even if this goes through without a mountain of loopholes and exceptions, I doubt it will have a significant impact. "Wall Street Investors" implies they're targeting large institutional ownership, which is only around 0.5% of housing ownership as cited in the article. That number is also flat-ish or maybe decreasing depending on the chart you look at, from what I recall.
Outside of a few metro areas where institutional ownership is very high, I don't think this would change anything. As long as houses remain an attractive investment, non-institutional smaller investors will happily buy the properties for a few thousand dollars less than the institutions would.
Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
I agree with the first half of what you posted, but immediately jumping to blaming tariffs in your last paragraph seems weak (and a slight attempt at a gotcha).
Concrete, gypsum and steel are primarily domestically produced. Similar goes for wood (although a substantial amount is imported, e.g. from Canada - the tariffs range from 25% to 50%). Labour & Materials may make up say 60% of the cost of a house, but only 50% of this is likely materials, with likely a minority of the materials tariffed.
What is likely to actually reduce rent and house prices is making development permission and laws more lax, as well as preventing rent control.
Tariffs on products like lumber and cabinetry were introduced or raise on January 1st of this year. It's an additional factor that will make a bad situation worse.
You can't tell me that increasing the pricing of construction materials won't have negative pressure on home construction.
> Materials may make up say 60% of the cost of a house, but only 50% of this is likely materials, with likely a minority of the materials tariffed.
And where does the construction equipment come from? The parts to repair that construction equipment? The parts that go into the trucks that the workers drive to the job site?
Focusing on a single input is myopic when the tariffs are so widespread that they touch everything.
> Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
And just in general reducing the restrictions on building in places with high rent to income ratios.
> because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
Oh I thought the one extremely obvious way was to fix local policy roadblocks. After all, it's not like a lacking supply of housing is a new issue they suddenly appeared out of nowhere within the last dozen months.
> After all, it's not like a lacking supply of housing is a new issue they suddenly appeared out of nowhere within the last dozen months.
The main lumber and building materials tariffs went into effect January 1st 2026.
If you thought the current situation was bad, it's only going to get worse.
This announcement is a distraction to get people blaming Wall Street. It's a "look over there!" announcement literally days after they raised tariffs to make a bad situation worse.
Yeah, all the politicians talking housing— the actual net governmental effect on housing is to massively constrain supply (quantity) in service of rather arbitrary qualitative standards. I’m all for “the building shouldn’t spontaneously collapse” standards, but … two acre lots? Restrictions on casting shadows? Accessory dwelling units? Nah. If the government wants to make a difference it should ban Euclidian zoning as it currently is practiced, full stop.
Making this decision as a politician in this country is death to your career though; how could we incentivize our leaders to bite the hand that elects them?
The material costs are high too because of regulations that require specific lumber for framing etc.
It’s more complex than just reducing tariffs and inviting cheap labor. It’s systemic red tape put in by the large builders to prevent anyone but them to be able to build. When they do build, it’s never to code. The code they themselves help write. Ryan Homes for example…
> The material costs are high too because of regulations that require specific lumber for framing etc.
Having done some extensive remodeling and building work in recent years and going to great lengths to follow building codes, this just isn't it. The type of lumber you can use for most framing jobs isn't that special. Having walked through a number of new construction properties and seeing what passes code, I don't think relaxing lumber standards would be a good idea, nor buy us anything.
When lumber, cabinetry, and other building products have tariffs in the range of 10-50%, you can't tell me that tariffs are not the primary problem driving costs up right now. There just isn't a secret stash of lesser grade lumber lying around that would also be perfectly good for building homes.
This. They don't want the local septic man and the local roofer partnering up to GC a development of a dozen houses or even worse, an individual doing the bulk of the work of building anything, so they get it all saddled with requirements that amortize away nicely when vertically integrated but absolutely crush anyone else.
Encouraging the creation of new housing is the way to go. One thought— what percentage of new home purchases are made by large investors and is it growing? This seems like the most important metric to look at rather than existing ownership.
Zoning laws are the number one obstacle to building housing. They need to be regulated into oblivion. Then we need to incentivize building dense housing.
The tariffs are a bit of a new phenomenon so I think that may be motivated reasoning. Construction productivity has also been stagnant for about 60 years. I think the most important factor is that housing prices, in the United States at least, are governed by how much a bank will lend. Very small but affordable houses will never be built because a bank will not finance a $10,000 loan over 30 years. In the same vein, it’s technically feasible for automobiles to be built for just a few thousand dollars, but, again, they will not finance $2500 over five years. So cars and houses are just built to the price point which will satisfy the lenders. You may not hate financialization nearly as much as it deserves.
> The tariffs are a bit of a new phenomenon so I think that may be motivated reasoning. Construction productivity has also been stagnant for about 60 years.
If construction was stagnant for 60 years, adding 10-50% tariffs on lumber and building materials would only make it worse. Not motivated reasoning, just basic economics.
The new tariffs went into effect January 1st, by the way. If you thought things were bad now, they're about to get worse.
This announcement is just another distraction. They want you mad at Wall St, not tariffs.
> In the same vein, it’s technically feasible for automobiles to be built for just a few thousand dollars,
No it's not.
If this was true you'd see it in some other countries. It's not happening anywhere in the world. Unless you redefine automobile to mean a tiny cart with a 5HP motor and some seats.
> governed by how much a bank will lend [...] Very small but affordable houses will never be built because a bank will not finance a $10,000 loan over 30 years.
Banks typically won't hold onto to your loan for 30 years. Mortgages in the US have been thoroughly fiscalized: your typical bank/mortgage lender bundles up a bunch of loans and sells them to another servicing party as soon as the ink dries on the closing documents. The specialized servicer package them, and offer them as securities to investors who in turn will get a monthly return based on aggregate mortgage installments.
All this to say: lending banks would be happy to finance thousands upon thousands of 5-digit mortgages, and sell those to securitization specialists.
New houses aren't built in existing neighborhoods because dense housing is unpopular, as is a distaste of having "poorer" people as neighbors. Static zoning, terrible transport networks and no funding for new public infrastructure tag-team to discourage new developments on undeveloped farmland.
Not sure about $10,000 houses (that would be pretty spartan, even Tiny Homes usually cost more than that), but the $2500 car thing being due to lenders is completely off base. The reason there are no $2500 cars is that it's impossible to make one and meet current US safety regulations. Once you meet all of those, then you're already well beyond $2500, but it's still a pretty crappy car. Might as well add a few extra creature comforts that most consumers demand (power locks, power windows, bluetooth/stereo, disc brakes, more than 100HP engine, etc.) and you're never going to be below ~$15K with current parts and labor pricing.
Those "few metro areas" are on the scale of 10s of millions of houses. Remember that the top 10 largest cities have a third of the US population in it.
>because there's one extremely obvious way to lower the price of building new housing:
Cheaper housing doesn't mean that institutions won't still try to buy it up.
It also seems like it might be important to determine what share of _new_ development is being created for investment. The share of existing homes being owned isn't as important.
There's also the 2nd order effect. The price of property might go down if there weren't investors with tons of money to spend on a property.
All housing is investment due to the way it's owned, regardless of who owns it. For most people, it's by far their biggest investment, resulting in extreme political activity.
We must confront that fact, or negate it, for example by taxing away the investment opportunity.
Investors buy housing to rent it out to others, that's the investment. People who own their own home implicitly pay themselves rent, by choosing to live in what they own versus renting instead.
Getting non-resident owners out of housing only means that renters have been banned from an area.
This is pretty far down in the list of consequences we should be thinking about but building more housing in desirable, coastal areas of the US will only serve to exacerbate the political and cultural divide between the two Americas.
I know we all hate on the electoral college, but it exists and it isn't going away anytime soon.
I'm not saying the answer is to force folks to move to "flyover country", but that's what you'd do if you wanted to avoid another presidential victory by a trump-like character.
Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
That's quite an extreme political take.
A more humble basic economic theory question would be:
If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good? Sure homes would be cheap, but very shortly after that the supply of new housing would drop dramatically, as there's no one to finance building homes, maybe the ultra rich will just invest in their own mansions or yachts?
Just very basic economics is the discussion here, not tariffs and china politics, but just a variant of the highschool/red-scare question of, "will anti-wealth laws have a positive effect on the economy"? in the past it was determined that no, and that you were a communist for suggesting it, but maybe there's a nuanced take like making a difference between some type of "institutional" investors and other types of investors?
We're in a weird timeline when pointing out that dramatic tax increases on the inputs to home building will increase the price of homes.
> A more humble basic economic theory question would be:
> If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good?
There's nothing humble or basic about this question because it's so unrealistic that it could never possibly happen. Ban renting? What?
Why would you need institutions to finance building new homes? You think the cost of building a home is more than the cost of buying a home? (Obviously not.) Normal people have been building their own homes using their own money for thousands of years.
Not sure. But I’ve been hearing of this being an issue from both progressives, leftists as well as conservatives and rightists. Maybe they’re all misinformed by their bubbles, but there seems to be some smoke…
It's a populist issue because it sounds vaguely correct and being angry at Wall Street is ever popular. That's also why this idea is being floated before the mid terms.
Left-populists and right-populists like to frame issues as being a conflict between the elites and the common man. Banning big banks from owning homes is a perfect example of this.
It's fine to ban big banks from buying homes and wont do damage to the nation, but don't expect it to solve the problem.
High housing prices are due to zoning-based supply restrictions. These are entrenched due to politically active NIMBY voters.
Actually fixing the housing crisis means addressing zoning, but that doesn't fit the elite vs common man narrative so gets ignored by the populists.
It's because of emotionally charged response. Leftists largely don't want corporations owning houses, because it's "impure" and capitalist. Rightists largely don't want renters to live in homes that used to be exclusionary on the basis of being able to buy a home. Though there's crossover on the reasons, of course.
You’d think he’d want his name on a bunch of homes. Similarly, some salesman on the golf course has surely already pitched his name on a bunch of homes. I bet there’s a reason he’s been uninterested for so long.
The title change here is editorializing. It’s not a given that this will be implemented and the original title reflects that: “Trump threatens to ban Wall Street investments in single-family homes”.
It needs to be illegal for anyone to buy a single-family home that already owns one, and who won't agree to live in it, full-time and exclusively for at least one year. They must also agree to sell it ONLY to someone who also accepts the same terms. The penalty should be a criminal fraud charge with minimum jailtime -and- a hefty penalty.
Investor owned housing is a bit of a sensationalist scapegoat. Publicly traded companies account for a tiny, tiny fraction of available single family homes in the US. And so long as the tax code doesn't change, it strongly favors private/individual homeowners, and corporations only account for the margins where housing appreciates so fast or rental incomes are disproportionate to asset values.
This is an easy thing for Trump to promise (after all, little family-owned real-estate developer operations like his would never be affected). But who owns the homes is not going to change the problem that Americans have underdeveloped housing supply by over a million homes.
regarding public reits focusing on blackrock misses the Vancouver Model dynamic which is absolutely happening in major us markets.
the issue isn't just yield-seeking corps, it's opaque shell companies (llc) using real estate as a store of value aka money laundering vehicle. vancouver showed how this decouples prices from local wages completely. the us has this exact vulnerability—anonymous delaware/wyoming llcs buying in cash, specifically in supply-constrained cities like ny or miami.
this only works because of zoning. if nimbys didn't artificially cap supply, housing would be a depreciating consumer good (like in Japan) rather than a deflation-proof asset class. zoning is what turns a house into a safe deposit box for offshore capital.
if the corporate transparency act that Trump vetoed is successful then I expect to see the real estate become US's top source of GDP like it is for Canada.
Yeah, this move is maybe a net positive, but will have a tiny impact on actual home prices. It is absolute red meat for the internet conspiracy machine though. Especially on the left.
I also have no idea what statutory authority he has to enforce this. Surely it requires Congress or at least the FTC chair. And if there's enough vested opposition it's going to be challenged in court pretty quickly.
my first reaction was that the counter in the top right seemed like a really low number, but i think i was interpreting it wrong - that's the number of rides in progress, not a cumulative counter for the day, right?
Corporations are people under the current SCOTUS interpretation. Which means they have the same rights under the US Constitution, so this should be struck down in no time in the courts. Another nothing burger likely to end up just manipulating the equity market and the derivative markets in the short term for large investors to capitalize.
Utilizing vacant properties is easier and cheaper than building new ones, by a massive margin. We should do both, but ignoring perfectly good homes in desirable locations being used by nobody is silly.
If the goal is to reduce the number of vacant homes, then why not create a tax on those specifically. Corporate owned homes and vacant homes are not the same thing at all.
I feel the numbers that show investment groups that own X number of homes is highly misleading. More than likely these investment groups form multiple companies when they buy up the homes. Likely state or regional. From there the larger parent company is invested. So I wonder if there are hundreds or thousands of "small" investment groups that are essentially a shell for a larger private equity group.
So my big worry is that the Trump admin will say they are going to only eliminate the most obvious cases and the problem will remain. The LLCs and shell corps, etc.
EDIT: Also it does not address the massive amount of housing stock that is foreign owned by people that don't even live in the country.
Seems reasonable to me, a very anti Trump individual. Now deliver.
And which of his buddies does this benefit?
I'm trying to think if there will be ramifications to this...
- Obviously forced divestment of all Wall St owned single family homes could impact housing prices which is both the point, but of course... also hurts many families borrowing power and net worth
- I guess that crash could potentially have people paying lots of money for homes that aren't worth that much anymore, which sounds pretty negative
- Of course... wow, would it be nice to be able to afford something in the city I love (which I doubt will be impacted by this)
Of course, no clear plan here. Just Trump saying something, why wasn't the "Trump says" part kept in the headline here?
> also hurts many families borrowing power and net worth
This is part of the crux, isn't it? It's a backbone of families' wealth and positioned as an investment. So there seems to be no winning: either choke off the young trying to buy or crack the nest egg of the old
See also: Bitcoin and the like (wild value fluctuations are the hallmark of a good currency)
> either choke off the young trying to buy or crack the nest egg of the old
The simple fact is, housing can either be affordable xor an investment[0].
Affordable means the prices are flat relative to inflation, which makes it a terrible investment. If it's a good investment, that means the price is going up faster than inflation, which quickly makes it unaffordable.
[0] I want to be clear that I'm referring to housing as an investment to mean buying a house purely for profit purposes, ie, to flip or to rent out. Buying a house to live in, rather than renting the house you live in, can be considered an "investment", but I mean to explicitly exclude that usage of "investment" in this comment.
It's mostly a made-up issue to begin with - so this would be a popular policy, easy to pass because there won't be much opposition, and it'll be easy to point to and say "We fixed that problem."
The R party has changed so radically that it's hardly recognizable any more. As a result, "not republican" is no longer a very meaningful description.
I think the most likely explanation is pretty simple. Whenever people are unhappy with their economic situation, at the ballot box they take it out on whoever is currently in power, logic be damned. Politicians know this.
Well, there's no explanation for how this will affect any currently owned properties. So maybe it won't do much of anything. And something important to understand about private equity owning homes, is that they tend to descend on specific geos where the supply allows buying in scale. If they are forced to divest, it very well could crash a few cities or towns. And given that the aforementioned supply was heavily bent towards distressed areas, the crash could be brutal.
It will likely have close to zero impact on high-demand areas.
Hopefully this happens so people can stop blaming institutional investors for high home prices once this fails to work. Then maybe we can work on actually building homes.
Why is it as a soon as a politician announces they will start in the future to have a concept of a plan at tackling an issue, many people react as if it’s already done?
No actual implementation steps have been taken or explained. Will this happen before or after the health care plans are released? Before or after the still pending infrastructure bill?
“ Trump said he was immediately taking steps to implement the ban, which he would also call on Congress to codify in law. *It was not clear what steps he would take*”
It was not immediately clear what legal authority Trump would draw upon to impose such a ban on the private market purchases of houses. Trump did not detail the policy, the form it would take or the legal changes he was seeking from Congress.
The White House did not immediately respond to a request for comment. The U.S. president was due to sign unspecified executive orders later on Wednesday.
Anyways, I thought that issues with Americans being able to afford things like housing was all a hoax made up by Democrats?
It's extremely likely that the president doesn't have that power. He can disallow corporations from buying houses on a whim? I don't think so. But PR goodness has already been coming his way from the policy if there is any.
Trump will get the boss call from Jamie Diamond or any of his other donors and quietly drop this, or sneak in a loophole big enough to walk an elephant through.
I have this idea where we pick a desert road as long as possible (maybe road 50 Nevada) then build a 50 000 metric ton machine that makes large rammed earth houses. Perhaps make a mold the shape of a Ferris wheel. Have it stamp out 200 homes per week (2 miles) Road 50 is 400 miles so 200 weeks.
Rammed earth is a very decent building material but if you make the walls thick and compress it hard enough (maybe add steam?) it will last hundreds of years. Other building methods should be considered ofc domed roofs are perhaps not cool enough.
Disassemble the machine, ship the containers and deploy it some place else.
Add some killer features to the homes so that people cant wait to live there. For the first 400 miles at least $30 billion comes out (over 30 years) or $15 bl per year for each year of construction. Should be good enough for investors.
If it works, build additional improved versions. Aim for a factory that makes these machines.
The reasons people do chose to live some place are mostly man made. The reason to buy a property somewhat overlaps but not entirely. The giant machine alone delivers enough hype for some to just buy one. Take care of the boring things and lure them in with killer features. The line is/was planned to have way to many of them. In Japan real estate people already get excited if there is a subway station planned.
Houses are horrifically boring all over the world. There are so many data points that people building stuff are happy when all the boxes are checked. As you've pointed out they usually follow demand but it's not a rule, it doesn't have to be that way. We do living room, kitchen, dining, bathroom, bedroom but you could do many different rooms. Say a proper office with all the trimmings perhaps a network connecting coworkers. You could do a space for home manufacturing. If you could just dock a truck properly and roll pallets in and out it would go a long way. Could do a district cooling system and/or a centralized pool pumping station. Could have a fee to gradually green the desert behind the homes.
That's true, but to play devils advocate for a second, just because he says something doesn't make it wrong or bad. Banning Wall Street from buying single-family homes is a great thing that I completely support, and I don't really care which president makes it happen.
The policy would be great! You aren't playing devil's advocate for what I said. I wasn't talking about the merits of the policy at all. Him saying it just doesn't have any connection to whether the policy will ever exist. The headline without that detail is wrongly implying certainly that isn't warranted.
It also doesn't mean he can actually do it. There's no obvious mechanism by which this can be enforced without a law from Congress, and it's not entirely clear such a law would be Constitutional (they'd have to base it in the right of the federal government to regulate interstate commerce if they're going to base it in anything, which presupposes an interstate market for shelter, and there's a reasonable argument to be made that maybe that's not a thing; housing is a local concern, and home prices in Topeka don't impact me, a buyer in Boston, if I want to live in Boston).
What baffles me is why people still take it all seriously, we've had well over a decade to examine his patterns of behavior and the takeaway is that fully 99.999% of his utterances are worthless. In the rare case that his promises are turned into some shambling semblance of reality there's always plenty of warning; in the case of VZ and Maduro you had significant troop movements for months for example.
Unfortunately by treating his every utterance as requiring attention he gets what he wants, the media gets clicks, bloggers get clicks, and people get to use it as part of an eternal argument over "what comes next".
People here at least should be more adept at recognizing and responding to patterns.
There is a conservative case for this in that the 30 year fixed mortgage, combined with all of the foreclosure protections both old and new, amount to a government benefits program. Historically, this type of mortgage was developed to promote family homeownership. The mortgage systems have continually blown up in "crises" in part because it's a product of policy more than it is a market product. This is partly why investors both corporate and small flipper types actually do cause serious distortions: the US housing market is a welfare program first and a market for bundled land and houses second.
No one wants to abolish this welfare program (you would have an easier time abolishing Social Security), but also the government wants to keep the trappings of a market price system. It is easier to have serial crises and to blame some guys for the predictable explosions every time, adjust the laws to create enormous numbers of lawyer billable hours nationwide, and then set the stage for the next crisis and the next round of patsies to be blamed. Fortunately, this time we have AI to write all the think pieces about what it really means.
I mostly agree with your comment except the part where flipper types and corps cause distortion because they have 30-year mortgages at their disposal. A fixed rate, 30-year is distortionary on its own; it's a uniquely American "product" and banks in other countries would look at you crazy for requesting such a thing.
Anyone want to bet that this will cause the Second Order effect of no more new single-family homes being built and instead move more and more future development into co-living dwellings.
Given this, it’s inevitable - the New American Dream will be communal living.
Individual owners drive far more NIMBY policy than corporations. The rent of land exclusivity should accrue to the public rather than to private individuals or corporations.
This is not surprising at all. I'm not sure why people keep making this mistake thinking that good 'ol Republicans are flipping their script all of a sudden. MAGA is a populist movement and has a lot in common with the far left types.
the carve outs will be insane and defeat the whole point
absolutely, easily predictable
what should be a one page bill will have riders of insanity
they'll probably do it like they do with corporations having more than 15 employees, so every little business just has 15 people contracting out to the next business with 15 people etc., there will be a corporation for every 15 houses etc.
Or it won't materially impact Blackstone's business because single-family homes are a tiny sideline for them and not where they make most of their money.
Headline is very misleading. Reuters prefaces this with "Trump says" which is weaselly enough.
Quote from the article: "In a post on Truth Social, Trump said he was immediately taking steps to implement the ban which he would also call on Congress to codify in law."
The president can't do this. His EO will likely be some kind of statement of intent or request to the FTC to see what can be done. Really, this is an exhortation for Congress to do something. A bill has yet to be written.
I guess they didn't link it because it changes the meaning of the article, his post reads more like he's going to discuss it and wants to do something about it.
Even if they do it's a little late at this point, plus I don't believe it, since Trump and most people in the admin are too friendly (borderline controlled) by the people who are friendly/control entities like Blackrock, it's either beneficial to them to stop the competition from doing it since they bought enough for now or there is a big gotcha in there.
I know how that paragraph reads, but the past couple of years have made me too cynical to trust anything they say they're going to do.
Yet again the Trump admin identifies an issue but misses the nuance. We want investors to encourage more homebuilding, the problem is more regional concentration - in regions where PE owns a big enough % of the homes that they can monopolize and control the rents. Or NIMBY policies (where the federal government could dock funding to states that don't build to match population growth).
So there are (at least) six important aspects to the housing crisis.
1. Politically, this issue is a winner and it's crazy that the Democratic Party has refused to bang the drum on this, basically because it potentially upsets corporate donors. They have instead ceded this poopulist political ground to the Republican Party. The Democratic Party does not want to win elections and this should never have been more obvious than the 2024 presidential election;
2. Hoarding housing is state-sanctioned violence. You need housing to live. Housing affordability is the number one factor in homelessness [1]. That then subjects people to violence and danger that we, as a society, are allowing to happen. There is no reason that the wealthiest country on Earth can't provide a roof over the head of every man, woman and child within our borders;
3. The private sector will never solve the housing crisis because solving the housing crisis involves devaluing, definancializing and decommodifying housing. Wealthy people and large corporations who own a lot of real estate won't on their devalue their holdings. Things like Ezra Klein's Abundance claptrap are simply putting a Democratic bow on Reagan era trickle down economics and deregulation. This requires state action. That means the state needs to build significant amounts of housing to provide to people to regulate the housing market. The poster child for this policy is Vienna, Austria;
4. Voters have fooled themselves into thinking that increasing house prices are good for them. They're not. They're bad in virtually every way. There are people who bought a house for $100k in 1990 where that house is now worth $2M. Are you $1.9M richer? No. Because if you sell it what happens? You have to buy another house. And if every other equivalent house costs $2M you still only own one housing unit's worth of wealth;
5. Increasing house prices are simply stealing from the next generation and suppressing wages. Why suppressing wages? Because if you're laden with debt, you'll be a complaint little worker bee. You need that paycheck to not be homeless. You are in effect a debt-slave, particularly combined with student and possibly medical debt; and
6. The next wave of antitrust action will involve the use of AI as a means for market collusion and manipulation. A great and relevant example is RealPage [2]. If all the landlords use the same software and that software is designed to algorithmically increase rents, then that's market collusion. Honestly, dynamic pricing in general needs to be banned.
> There are people who bought a house for $100k in 1990 where that house is now worth $2M. Are you $1.9M richer? No.
This is often repeated but not 100% correct.
You are in fact richer, and you can leverage this $2m in equity to take on debt and buy more houses. This is what has been happening here in Australia, and it's a major factor in the continued rise in prices.
When you've done this, hung on a handful of years and all of your houses have gone up 20-50%, you can cash out for a very nice sum indeed. AFAICT this is now a pretty mainstream middle-class retirement plan in this country, and it's terrible because, as you point out -
> Increasing house prices are simply stealing from the next generation
The money is coming from people, usually younger people, who are funding the insane market with ever larger mortgages and staying in rental properties longer, both of which benefit the equity-holder.
In the US you can often buy houses with no money down.
Also, if you're taking the equity out of your $2M house, how are you servicing that debt?
My point is that it's an awful lot easier to buy 6 $100k houses than it is to buy 6 $2M houses and if houses weren't speculative assets, maybe we wouldn't get those buyers driving up prices.
They should go all out and nationalize zoning. Let it be challenged all the way to Supreme Court. Trumps developer buddies get paid, the grift continues and the housing crisis is eliminated.
It might help in the long term, as it can force cities to stop densifying. And as we all know by now, densification is the leading cause of unaffordability. The US has more houses than households, but people are forced by economic forces to move into denser and denser areas.
But short-term it'll hurt availability. One of the most common ways to enshittify cities is buying an SFH, demolishing it, and plopping a 3-4 apartment complex in its place.
This sounds backwards? Density means more units available, which should lower costs. Supply and demand. Rentals in a dense complex are cheaper than standalone rentals or duplexes, townhomes are cheaper than SFH, etc.
I don’t think cities should force density, but there’s no reason to go the other way either as long as growth is managed properly in terms of traffic, transit, and infrastructure.
i can see what they mean. Another way to think about it is like how adding a lane to a highway doesn't decrease traffic it increases it. There's no shortage of demand in densely populated areas otherwise they wouldn't be densely populated. Adding more units will be met with more demand like adding a lane to a highway is met with more cars on that highway. Fix it by making the area less dense and prices will drop like how the way to fix a busy highway is to decrease the cars on it and traffic will lighten up.
Nope. The ONLY way to get cheaper housing is by reducing the city population.
> Supply and demand.
Sigh. No. You assume that the demand is fixed. It's not. By building new housing, you _increase_ the demand. And always faster than you can satisfy it.
I just love this example:
Forbes 2016 - "Tokyo's Affordable Housing Strategy: Build, Build, Build", "The Great Urban Myth: 'Cities Can't Build Their Way To Affordable Housing'"
Reuters 2023 - "Surging Tokyo property prices squeeze out young professionals",
It's a simple observation. No large city in the US or Europe reduced the housing prices by increasing density. I gave an example of Tokyo in the other comment in this thread as an absolutely illustrative case.
The only price decreases happened only during the 2008 crisis and during the pandemic lockdowns, due to local population decreasing.
People want the value of their house to go up after they buy it, but stay low before they buy it. This is all nonsense. If people in an area keep breeding, housing costs will go up. It's that simple. Increasing housing prices are actually one of the only checks that keep humans from overbreeding and ruining large swaths of desirable places to live.
This is another non-solution from Trump. Similar to the "no taxes on tips" nonsense that applies to almost no one since the cap is so high. It's a populist move that doesn't address the problem but appears to be a good thing for working class people at first sight.
Until congress actually does something all of this is simply hot air. I do not see how this could be implemented (other than some kind of tax) and pass muster with a conservative SCOTUS.
Like so many other big promises, it will appease a lot of people, but there will be no real follow through.
Any regulation that prevents unrestrained capitalism is immediately decried as socialism and therefore evil.
These kinds of promises are made which temporarily create market volatility, and once it later (usually quite soon) becomes clear that the big thing will not actually happen, the markets snap back. At this point, it’s incredibly likely that these situations are manufactured to both look good AND create large short term investment gains for people in the know - without actually changing anything.
There will be no way to enforce this such that “Wall Street” can’t easily get around it, so it is clearly for show and not an actual attempt to solve a problem.
This is a good thing, the next step however is to block the guys that use sites like BiggerPockets.com from buying up more then 5 single family homes. I know a whole bunch of guys who own 10 or more houses. That is excessive. We need to limit all investment of single family housing. Apartment complexes? Be my guest buy all you want, build all you want. But lets keep our neighborhoods full of people who can actually live in them.
The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses.
There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties.
Here's an article on the topic from 2023[0], a bit old but my understanding is large institutional investment in residential real estate was already starting to cool down.
Black rock isn't buying up all the housing, your neighbors are.
I suspect this statement, and even if it becomes an actual ban, is largely to gain wider popular support around a largely imaginary concern people have.
0. https://www.housingwire.com/articles/no-wall-street-investor...
It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing.
The things that they do have massively outsized downstream impact contrasted against their relatively tiny overall participation in the market, and they can afford to behave in ways that manipulate the behavior of the majority.
If you can decouple them from the housing markets, you also decouple the interests of the donor class, and you allow for policy that doesn't maximize the cost of real estate over the interests of the majority of the population.
> They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing.
Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's another house for less.
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I assume that you are already aware that regular home buyers use debt, and, thus lots(!) of leverage to buy their homes. The average down payment for first time buyers in the US is about 10%. That is a lot of leverage! Probably much more than corporate buyers of residential homes.
What does this term mean? I have never seen it before. My spell checker does recognize it as a word.
Regular home buyers almost always enter into borrowing agreements with their bank that fit loan buying programmes with Fannie Mae and Freddie Mac. This allows for most of these loans to be securitized into MBS.
Can you give an example scenario / product? Else, this feels like handwaving. CDS on MBS is an absolutely tiny market these days.
There is already plenty of speculation from regular home buyers in the US. Do you have any suggestions to reduce the existing speculation by these regular buyers?
The vast majority of land in the country has been owned by capitalistic profit motivated players since 1776 - individual home owner occupiers.
If you doubt they will lobby to increase their profit, try proposing anything that has a 0.1% risk of their property value going down and see how they react.
An article making that case: https://www.thebignewsletter.com/p/messing-with-texas-how-bi...
A rebuttal to that article from Derek Thompson: https://www.derekthompson.org/p/the-anti-abundance-critique-...
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“properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives”
Spoken like someone has no clue what they are talking about and just throwing out jargon
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Why doesn't your explanation apply to every commodity? Gold, cocoa, mustard seed, electricity? These are also essential products subject to the influence of markets and market makers.
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I somehow doubt these institutions are market makers in the housing market, if they had been ones then they'd be offering to sell and buy houses all the time, this is a market maker's function.
Not buying this. Have you seen studies that support this line of arguments?
A “market maker” provides liquidity that allows trades to clear and keeps prices stable. They make money on the bid-ask spread. They don’t have leverage to raise or lower prices.
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The majority of the US population (65% https://fred.stlouisfed.org/series/RHORUSQ156N) are home owners. I agree that high home prices are not in the interest of the majority of the population, but I bet the majority think so.
If you have a model where you can do price manipulation of something while owning 1% of it, I understand why you wouldn’t share it. Where are you on the Forbes Billionaire List, out of curiosity?
If what you say is true, wouldn't the same argument apply to practically every market these institutions are in? Oil, timber, steel, AI stuff, cars, you name it.
> you allow for policy that doesn't maximize the cost of real estate over the interests of the majority of the population.
How do you think homeowners would feel about a policy that doesn't maximize the value of their homes. That's just another way to phrase "maximizing the cost of real estate"?
Supply and demand sets prices.
The gobbledygook you posted, “ properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing”, is just that, gobbledygook.
Just because a buyer as Inc. behind its name doesn’t give it magical powers to set market prices.
If you think it does, then please explain it to us like we are really slow.
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Based on the data I've seen, respectfully, you are wrong. No, I can't share it. The data is publicly available, however. Feel free to dig it up and aggregate it. The data is publicly available, the effort to dig into it, finding meaning, and sell it to folks, however, is not.
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Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.
This is basically a maximum wage for landlords, bound to start a secret society.
IMO it's a crooked notion that landlords are rent seeking and nothing else - they do create supply and maintain housing.
Issue is when they want to politically and artificially raise the value of their property by preventing more housing from being built, so, if you're going to ban something, ban artificial regulations on construction!
North Carolina has done some good by loosening up code around tiny homes, but, a lot of municipalities want to enforce big homes only because they like the property tax of high value houses, 4 bedroom and all. Small town I'm in basically won't allow expansion of housing because the people that live here don't want the village to get any bigger, but if it's democratic like that I'm mostly OK with it, it's when there's demand for housing and someone with a perverse incentive to block it that we should want to solve for.
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> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals.
Here in Norway the solution, as with so many other things, is taxing. Your home is evaluated at some "market rate", but if it's your primary residence the effective tax value is just 25% up to $1 million (70% on value above $1 million). For reference, a typical 3-room apartment in Oslo, the capital, is around $400-500k.
However, if it's not your primary residence, then you pay tax on 100% of the "market rate". The tax rate is 1%, so not insignificant.
Until a few years ago, tax on non-primary residences was much lower, and hence we had a lot more people buying to rent if they inherited money or similar. Some even had a dozen or more properties. These have now exited, so policy is working as intended.
One thing of course politicians for some reason didn't think of is that if most of the landlords suddenly sell, rental market will shrink. So now it's super-expensive to rent, and those who rent usually do so because they can't buy for one reason or another (no stable income to support a loan for example).
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Landlord, or property management, is a job, same as any other job you might have. The problem is not owning multiple properties, but not paying enough taxes on land. Otherwise, landlords benefit from the free lunch that comes with economic growth and real estate price appreciation, which is true for every homeowners in this country.
IF you want affordability? Tax land.
Doesn't matter who owns them. Your grandma or wall street.
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For affordability reasons, just build more housing. It doesn't matter how many houses anyone owns if you just build. more. housing.
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> there even should be a cap on how many homes an individual can own for rentals
India still has this in some states [1]. You wind up with everyone in the family owning a house. After that, other people own it and pass on most of the rent.
Better: progressive capital-gains taxes.
[1] https://en.wikipedia.org/wiki/Urban_Land_(Ceiling_and_Regula...
This would certainly drive down prices - how much is an open question. But I think its a fair compromise, UNTIL we actually do have enough homes for everyone. Until then something has to give - right now its people who can't own a single home that are yielding, but IMO it would be much more fair to ask people who already own a home to yield (not buy more than one). Ultimately that's the tradeoff to discuss.
Why would this help affordability? If you restrict who can operate rentals, that will inevitably shrink the supply of rentals, which will raise rents.
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> there even should be a cap on how many homes an individual can own for rentals
Many people wish to rent, not buy. If we make it so each landlord can own fewer homes, but renting demand stays similar we just incentivise more people becoming landlords
Corporations are people and states aren't legally entitled to know the composition of a foreign corporation's membership.
That's a surefire way to make sure that all rental properties are controlled by people who are able to de facto own a lot of properties with family members (or "family" members) on the paperwork, and who are able to enforce their ownership with extrajudicial means.
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I'm in favor of a property tax multiplier that increases with the number of properties owned.
> Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals
Price controls and limits like this rarely work out in history.
Around here, many landlords renovate or build new high density construction. Put a cap on how many properties they can own and they'll switch from building/renting as many units as possible to maximizing the rent on the limited number of properties they can own.
Restricting the market in one dimension rarely has the desire effect.
Should this apply to multi-family homes or just single family?
The purpose of people putting money into stocks or real estate is to allow for a simple, fairly 'hands-off' way to make money (real estate is not totally hands off, but is pretty close to a set-it-and-forget-it business).
Real estate works for this because you can really put in as much as you want into it.
Other business activities do not work because the entrance cost for non-rent-seeking business is extremely high and the risk is way too high compared to real estate. This is due to American regulation and labor laws.
This is a 'first-world problem', but now that I have capital, the question is 'what to do with it'?. Yeah, you could throw it in the stock market, but that's also rent-seeking in a sense because you're not really able to invest in primary rounds (I mean you can, but it's hard to find deals), so basically you're just providing liquidity to people, which is rent-seeking of a different kind.
So then the question becomes what else to do with it? I've given a ton away, but that's useless for the most part since it barely creates any economic value.
In my ideal world, I'd start a factory and hire a manager, but the capital cost of that is high, not because of the material or the rental cost, but because of the labor cost. So then, what's the option? I could easily outsource it all to China or India, but that's completely useless for the United States.
Then the question becomes, why start your own, when you could invest in others. Great! I would love to do that. It would be even better if I could simply invest in a local enterprise... Except, that's not easy either. Regulation over investments means that even investing in this is fraught with difficulty unless you want to establish some sort of 'fund'.
So basically, there's nothing to do with the money, which is sad, since I end up giving most of the money I make away anyway, and would prefer to have more of it to give away.
Until America figures out what it wants to be, it's going to be real estate for me... consistent incomes, fairly uncorrelated with equities (which I have a lot of too), etc. There's really not many other options here. There's barely any 'productive' activities taking place in the United States.
That would not be useful. A far better solution would be to drive up rates to make/force landlords unload properties they could only afford at lower rates and also deport the roughly 30 million foreign nationals that are currently in the USA driving up costs of everything. It’s basic supply and demand, but ironically the immigrant supporters are allied with the billionaires and generally wealthy who profit from piling in ever more people into the same supply of housing and amenities and resources.
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This is treating a problem symptom, not a root cause.
Landlords owning property is not a problem. Some people prefer to rent - they may be students, or they may not anticipate being somewhere for long, they might not want the risk of owning a home, lots of valid reasons. Having housing available for these people is good and landlords are a necessary and valid part of this market.
The problem is when people who want to own houses can't afford them, even when they contribute meaningfully to society. The root cause of this is not landlords existing. It is wealth inequality. A vanishingly tiny number of people own almost all the wealth in the system, to a point that the additional wealth gives them no real benefit, but serves only to remove that wealth from the vast majority of otherwise middle class people.
If you want to fix this problem return the top tax tiers to what they were 50, 75, 100 years ago and the problem will be severely reduced. It's not sufficient to solve it, but its low hanging fruit.
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I propose two changes to (try) and broadly solve this: - Additional property tax if you do not live in your home fulltime. This includes vacation homes. - First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate.
If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the entire cost of the property to a bank in the form of interest payments.
Rich investors and companies effectively get to buy homes at a discount vs average joes.
> Additional property tax if you do not live in your home fulltime.
In states I've lived in with property tax there is a homestead exemption for the house you live in. In my current state that's about twice the tax.
The effect: Rent goes up to cover the tax and margin is added, so the rent goes up more than the tax.
>Rich investors and companies effectively get to buy homes at a discount vs average joes.
Usually the difference is that the big investor bought the property at lower price, and your rent is based on the lower valuation. Annual rent increases are usually are much lower than market increases - there's a lot of value in keeping a tenant year over year.
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> Rich investors and companies effectively get to buy homes at a discount vs average joes.
Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return.
So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money.
The rich person is not getting a discount.
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It depends on the state, but that is largely kind of already the case. At least in my state you get a significant deduction to your property taxes if it is your primary residence.
That sounds nice, but I think that increased tax will just be passed down as higher rent.
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With today requirements for accounting, somebody with economics background could tell what would be wrong with following solution?:
If you house owned by commercial entity - taxes are payed from full value, but the valuation to any collateral/derivative goes by something like (0.75x)^l, where l how many levels deep (counting ownership levels). For example it house is in some sort collateral/derivate/indirect ownership mix with 4 levels deep, it can only valuated as 0.31x value (you can only account as it is worth 1/3). In my mind it should reduce attractiveness for speculative buying.
Additional property tax? Do you have any idea what property taxes are like in places like NJ, NY? It's 2-3% of the value, sometimes assessed at sales value. People buy despite this because they like an area or a school system. If you raise it more, rest assured that only the rich will have the right to buy. It's as regressive as it gets, your proposal.
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But you'd have an asset you own at the end of that period, and your mortgage payments wouldn't go up over time whereas rent likely would.
Key adjustment to your first proposal: the additional property tax should also be waived when having long-term renters/occupants.
Property taxes are directly and immediately translate into higher rent.
Making rent more expensive doesn't make ownership cheaper, just makes it more attractive relative to renting.
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> If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per mo
... and you would be building equity.
So you pay less and get less, right?
You're thinking this is a sign that you are being cheated. It seems to me that it's a sign you're getting a better deal by renting so that's beneficial to you.
You lumped a bunch of factors together (interest rates, HOA, taxes) that don't do much for your argument. You would pay less taxes than the landlord in most jurisdictions, because the unit would be owner-occupied. Do you think the landlord isn't paying HOA assessments? Sure they are. The landlord has a loan at 3% because they bought in 2021. You're offered 6.5% because you're buying in 2026. I'm not convinced it's worth my pity.
It'd be simpler to just have a high LVT and treat it as a credit instead of deductible.
Opportunity cost means makes purchasing with a mortgage wiser than buying cash. $1000/month more for a few years is nothing compared to the property value increase of a $1M property
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1) Is already how things work. Every single municipality I've ever seen in the US offers an owner-occupancy tax abatement.
2) Would just inflate home prices.
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Depends where you are
https://www.wsbtv.com/news/local/henry-county/3-companies-ow...
|“I’d say at least 60 percent of the homes around here are owned by corporations,” Clark said.
"Corporations" is meaningless in this context. If you want to own a rental home in the US, you should set up an LLC, both for liability reasons and because it makes it easier to deal with taxes and expenses.
In the parts of the country I lived in, I've never seen big corporations own single-family rentals en masse. They usually go for apartment complexes, which are far more profitable if you have the capital to buy / build one. Commercial real estate too.
If you click around your neighborhood, a lot of single-family homes are owned by living trusts and "Bob & Kate" LLCs, but that doesn't mean there's any hedge fund money involved.
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But is that Big Money Private Equity or "took a class from that Rich Dad, Poor Dad guy who said we should create a company and invest in real estate" corporation?
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Many people register houses they purchase in LLCs for privacy protection purposes
"Clark" is an arbitrary commenter.
The actual data provided was:
> For example, corporate landlords own more than 12,000 homes in Paulding and Henry County, accounting for 11.2% and 9.9% of all single-family homes in the counties.
> Black rock isn't buying up all the housing, your neighbors are.
I'm pretty naive to the issue, but awhile back I took a look at property records for my neighborhood. In fact, equity firms, including BlackRock, were buying up a bunch of houses in my neighborhood.
A tiny datapoint, I know.
Edit: It might've been Blackstone. It's been about a year since I looked it up.
Edit 2: Looking up records now, it looks like most of these equity firm purchases are back to actual people owners! Interesting. What does this mean? Firm bought property and resold at a profit?
> Looking up records now, it looks like most of these equity firm purchases are back to actual people owners! Interesting. What does this mean? Firm bought property and resold at a profit?
I never went far enough to get all the details back when I was considering a move, but my impression is a lot of these "buy your home and close fast" corporate purchasers were offering just enough to make the speed and ability to not have to make a lot of major improvements worth the lost money from selling on the market. Then they do just enough work to clean up any "show stopper" problems and re-sell at market prices.
So (very simplified) if you have a home that might sell for 200k on the market if you put 10k of work into it, but you need to move in a few months, and you need to pay off 100k on the loan, the company offers you something like 180k. You walk away with 80k (instead of 90k) in your pocket and avoid the various real estate agent fees and the need to do any of the fix up work or deal with trying to sell and move at the same time. The company puts the $10k of work into it and sells for the 200k, pocketing the $10k you gave up.
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Where I live, in the fastest growing big city in the US, it is absolutely commercial investment firms buying up all the homes. I used to get calls several times a week from these guys want to buy my house in cash. I stopped taking their calls and now it has slowed to only a few calls per month.
The last call I took, last year, they were ready to buy my house in cash at market value without looking at the property.
The majority of the houses in my neighborhood are rentals, and there are thousands of houses in my neighborhood under the same HOA.
> But most of the "investors" buying up property are individuals purchasing investment properties.
Maybe they should clamp down on that as well, especially individuals who are only purchasing SFH in residential neighborhoods as a way to park their overseas cash.
Exactly. Nobody wants to hear this, because we're all Temporarily Embarrassed Landlords, but if a corporation buying 100 houses to sit on and extract rent is bad (or good), then 100 individuals each buying 1 house to sit on and extract rent must be equally bad (or good).
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Once you try to clamp down on investment properties, you have couples getting divorces so they can own two homes (this happened in China), and all your kids are going to have their own home as well.
It isn't a bad idea, people will game whatever. A singapore public housing system might work better, but I doubt it would work for SFHs.
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> Black rock isn't buying up all the housing, your neighbors are.
This is a common trope.
"It's not big conglomerates that buy and hodl the homes where families are supposed to live, its mom and pop investors so please be nice."
Having a home is not something to speculate with or leave it to the supposed "market forces".
Housing projects and regulation is what this country needs, yesterday.
A better example than Blackrock is Arrived:
"The Arrived team is cracked, and I love the audacity of their vision: a stock market for real estate," said Ali Partovi, CEO of Neo, in a release. "I'm betting on them to democratize and digitize access to America's $50 trillion in residential real estate." [0]
Should housing be a “$50 trillion” market for fractional ownership, bundled with its own secondary/speculative market to turn around and flip like penny stocks?
Lovely knowing I can have “access” to that platform and own a 0.004% share in a house someone somewhere out there lives in (rents). While I’ll probably never own a house again.
[0] https://www.cnbc.com/amp/2025/11/13/arrived-launches-trading...
I can only provide anecdotal information. In my HOA community we had to make a rule that you need to live in your home for two years before you can rent it. This effectively stopped the companies like Innovation Homes from buying up properties in our neighborhood. Post housing crisis-2015 it was getting pretty bad with the investors purchasing the single family homes. I don’t know if places like Innovation Homes qualifies as “Wall Street” or not.
I thought one of the big problem with Wall Street buying housing inventory is that they were turning them into AirBnbs because that is more profitable (generally) than renting. This pressure takes a lot of units off of the market for normal people to rent or buy and makes holding on to your last house a lot more profitable as a rental. I think if we get rid of these (basically) unregulated hotel exception and forced people who who AirBnb to live in that property as a primary residence 180 days a year, then the inventory could correct.
Obviously, the other factor in home prices is zoning and people who own wanting to keep supply down so their house is guaranteed to appreciate. Affordable housing (just like homelessness) in the US is only a problem because we lack the political will to solve it.
> "Resident experience is hurting as a result," said Jeff Holzmann, COO of RREAF Holdings, a Dallas-based real estate investment firm with over $5 billion in assets. "Instead of you calling your landlord to discuss a problem, you're calling a call center that gives you the runaround."
I'm not sure I understand the difference between "Wall Street" buying up all the property and real estate investment firms like RREAF doing the same, or come to that the guy down the street buying a few properties to rent out.
A small company or single investor can buy up a large percentage of local available property and be just as bad a landlord.
> But most of the "investors" buying up property are individuals...
I think the relevant quantity we'd want to look at is what constitutes most of the property being bought-up by investors. Counting investors is going to bias the count towards multitudes of little-guys.
And part of the problem may be people like my cousin, who bought a house without selling the old one, choosing to rent it instead.
Why isn't it your cousin's tenant who is the problem?
https://econofact.org/factbrief/do-private-equity-firms-own-...
> "Large institutional investors, defined as those owning over 100 homes (which includes private equity firms), own 3 percent of the single-family rental stock nationwide according to Brookings. This share is higher in some local markets — in the 20 Metropolitan Statistical Areas where these investors are most present, they own 12.4 percent"
I personally believe that its problematic that large institutional investors own 12.4% of single family properties in the 20 main metro areas of the US.
I feel like this article is littered with suspicious statements
Like this one:
> In fact, institutional homebuyers (those who bought 100+ homes in a 12-month period) didn’t even reach 2.5% market share at the peak level in this data line, which goes back to the start of the century.
I don’t know how to evaluate this. I doubt this analysis rolls up subsidiaries. So what does it really mean for an entity to own 100+ units? Is that actually something we care about?
Imo only thing people need to give a shit about is whether a house is being bought to be lived in.
While that’s true, even if “Wall Street” is only holding a few percent of homes, those being released to the markets (and future ones not being purchased) might help.
Corporate entity creation in America is such that I don’t think this will be enforceable (“we don’t buy homes, our Gibraltar office’s subsidiary invested in its CEO’s LLC that bought the home”) but if I’m wrong, it could help somewhat.
It’s binary thinking to assume that just because it isn’t a one step solution it won’t make a meaningful impact. But still, I think it won’t yet hope I’m wrong.
Why do you think they aren't on the market right now? These companies buy them so that they can rent them. They are on the rental market!
Not really, because the problem isn't investors buying homes, its a lack of supply of new homes. Big investors don't buy homes to keep them empty, they buy them to rent them out. An exception to this might be short term rentals but that is going to be significant in only a few markets and the problem there is still fundamentally a supply problem.
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This is meaningless, even with "Wall Street", as you've said. Several companies raise funds, to buy these homes. Institutions the like of Blackrock and REITs invest in these funds, all the time. This isn't new at all, and has been happening for years. It's just been accelerating. Add to that startups like Arrived, and there's simply more pressure on this market then ever before, sadly.
They do seem to have a significant impact on prices though: https://www.reri.org/research/files/big_ltrs_and_housing_mar...
I would be very against individual investors not being allowed to buy property for investment. I think most people can agree that corporations like blackstone/rock shouldn't be manipulating markets. It would be very bad to force blackrock to liquidate its current holdings of 230k homes. It could crater the entire industry and it runs into ex-post-facto issues. Assets need to maintain value or banks will fail.
It really depends on the market. The institutional investors are common in the South and Southwest. I think the fact that they exist at all is a problem.
You are correct however that smaller private investors are more common. I live in a small city. Small property management companies from NYC and NJ are pretty commonly buying up 2-4 family houses. I suspect that some of these "small" players aren't small at all, but hiding in a maze of LLCs.
I know a couple of dudes from way back that have leveraged their way to a real estate empire with >2000 homes in the region.
You're right. It doesn't matter though. People love 'big fixes', the reality of systemic change is hard to present in a 2 minute sound bite or Instagram reel. This is the kind of 'fix' that gets implemented, then when things don't magically improve people will just give up.
I think it depends on the market.
Atlanta specifically when I was flipping houses in 2012-2015 had a lot of corporate investors buying up low income properties, fixing them up, then renting them out.
> was already starting to cool down.
You seem to want it both ways. It was a misconception, but it apparently did happen, and apparently "cooled down?" I don't think all these things can be true.
It's highly possible they were heavily investing and were planning on continuing but people noticing and the social pushback it created caused them to change their minds about the strategy.
> Black rock isn't buying up all the housing, your neighbors are.
People may or may not be. They may or may not be my neighbors. You seem to be pushing a set of ideals rather than a set of facts.
In raw numbers of ownership, sure.
But make no mistake, during the housing boom post 2019, in a lot of 'hot' metro areas, "wall street" was buying way more homes than individuals. Especially in the south. In the area I lived in, Invitation Homes, some weird shell company of Blackstone, was buying up every piece of tract housing they could get their hands on. At one point, they were making agreements with builders building out new neighborhoods to not sell to individuals since they wanted them all.
So no, I care far less about what my neighbor is doing because he or she isn't attempting to price out an entire city.
Here's a report where you can see which areas have a high percentage of big investors (not just people who own 2-3 homes):
https://go.lincolninst.edu/whoa-mapping-corp-ownership-repor...
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Exactly, absolute ownership numbers matter less for housing prices than the proportion of corporate buyers in the market.
It might not solve the problem but we also have other countries buying up homes for pension accounts. Take AU for example doing this. Should be illegal regardless of the size.
Pension funds like Ontario Teacher's are institutional investors who would be barred as well according to this proposal.
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> Black rock isn't buying up all the housing, your neighbors are
To a degree, but there's a whole tranche of investment vehicles that accredited investors use to invest in single-family homes that is not securitized at all, and not on Wall Street. The whole fix-and-flip industry feeds into this now, loaning out money to turn houses into rentals that some LLC holds.
If so, then we can at least put that myth to rest and move closer to a real solution. The only potential downside I see here is that maybe it pushes the real solution a bit further down the road.
Perfect for a big splashy press release. Populist policy with no practical benefit to the average American.
I worked with these firms for several years when the business concept was in its earlier stages. The money coming in to buy these homes quickly went from family offices (2013-2019) to state pension funds (2019-present) to sovereign funds (2020-present).
Things like the largest pension fund in Sweden is invested in buying SFR. Or the sovereign fund of the UAE.
I’m not sure if that changed your opinion on this not having practical benefit for the average American.
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Also, the headline on HN is downright wrong.
"US will ban Wall Street investors" != "Trump says he will ban Wall Street investments..."
This a Truth Social post from the President. It doesn't mean it has happened, will happen or will happen in the form that either Trump says it will or is being implied here.
This is a very difficult issue to properly address for lots of legal/logistical reasons. For example - many legitimate homeowners have their homes registered as LLCs and most home legislation is governed by states.
After a decade of national politics, and many decades of his "business", too many people still take "Trump says" as anything more than a piece of a con.
It has definitely cooled dramatically; even reasonable interest rates make the numbers pretty meh.
This feels very similar to the Canadian narrative that foreign (read: Chinese) investors are buying all the houses in Vancouver & Toronto. Does it happen? absolutely, but it's also a nice way to blame a segment that has no voice or recourse. It also allows us to turn a blind eye to the impact of a generation of essentially zero % interest rates and a country that holds twice as much of their wealth in houses as the US. Other popular targets: out-of-province home owners, vacation property owners, multi-generational properties.
Are my neighbors the ones sending me unsolicited text messages and letters about how they'd like to buy my property?
Its true that its a small number, but when you look at the statistics as a function of "percentage of homes purchased in 2024" instead of "total percentage ownership of homes", it is a bit more substantial: My understanding is the number is closer to 2% for Institutional investors, and as high as 4% for major markets like Phoenix and Dallas.
What it will come down to is the exact wording of what Trump means by "large institutional investors" (his exact words on Truth).
(forgive me if I don my aluminum chapeau going forward)
> Black rock isn't buying up all the housing, your neighbors are.
So in '08 we saw the veil drop on the mortgage folks. For a brief moment the sort of advantage they were taking of individual homeowners (I'm including landlords here) was plain for all to see, because the systems they had built to extract that value had been pushed too far and started to break.
The really clever/evil/nasty thing that happened next was that they all said "we're sowwy" and pretended to close up shop on the Mortgage Backed Securities markets, while sowing the seeds for a resurgence in mortgage lending by having Fannie run REO-to-Rental programs that sold foreclosed homes in bulk to investors. It would have been too obvious in the numbers if large institutional investors had bought those directly, so they let mom and pop go into business as landlords, effectively buying obfuscation of the stream of finances for the cost of whatever margins they had to take a hit on to allow for low interest rates to pump housing prices up to a place where, like in 07, they could go back to fucking around with mortages.
In less word salady terms, the plan looked like so:
- "oh fuck we pushed it too far and here come the torches and pitchforks"
- Stop making money on mortgages, but we're investment banks as well as mortgage lenders, so we can make up for the loss of mortgage money by buying a more significant fraction of the housing market at near-zero interest rates
- Wait for low interest rates to pump housing prices over time
- Okay cool, people have forgotten about the whole 08 thing and we've peeled back all the subsequent regulation so we can go back to making our money bundling risky ass mortgage securities again <--- we are here>
The essence of the problem as I see it is that finance has gotten so byzantine and complicated that the only people who understand it in real time are the people who are actively trying to manipulate it to maximize their profits, and by the time it becomes clear what dirty tricks they're pulling they've moved on to the next grift so it looks like they're innocent.
The (now somehow) political position that blackrock is not the reason a house in Seattle is $1,000,000 is somehow the most hated position in America. Both my left wing friends and right wing family believe blackrock owns something like 30% of houses in America, and saying otherwise is heresy.
Correct. More specifically, your upper middle class neighbors whose incomes have grown far more than middle earners over the past few decades: https://marginalrevolution.com/marginalrevolution/2018/03/cb...
The people responsible for the cost crunch middle class people feel isn’t billionaires. Bezos isn’t using his money to buy up houses or daycare spots in your neighborhood or Disney Word tickets. It’s upper quantile white collar workers. They are competing with the middle class for the same goods and services, but make much more money relatively than they did in past decades.
Unless your neighbor happens to be named Mr. Black Rock, private equity and wall street investors are indeed the #1 buyers of residential housing stock right now.
I love these professional lawyers running defense for large corporations.
This doesn't match what's been going on in my area. A local newspaper reported about a year ago that Black Rock owns 40% of the rental units.
Moreover, the fundamental problem is lack of supply.
Building has not kept pace with growth in households.
Random private equity newspaper isn't the most convincing source.
If "Black rock isn't buying up all the housing" then how do you explain why Blackrock lost $17 billion in capital today?
https://xcancel.com/KobeissiLetter/status/200899449445747946...
It matters, you just dont want to know it matters.
I don't think a stock market reaction is a good way to measure their impact on the housing market. It's not that they aren't involved in the market, it's that their impact is questionable given the relative size of their participation.
The tweet says blackstone. Thats a separate firm from blackrock. And the tweets misleading in the first place, it's looking at the bottom of a candle which wasn't even the current price at the time of the photograph? And the stock closed at about 154.
Besides all this says is that it matters for blackstone...not for the housing market at large.
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A hit in the stock price doesn't prove or disprove their claims. What would disprove their claims is the number of properties Blackrock is buying and if it is affecting pricing at the margin.
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Now explain Tesla stock.
That sounds right. And, I have to admit, it's pretty good politics to ban a mostly imaginary thing that is a popular talking point. Since it's barely going to affect anyone, it'll be easy to pass.
And it may win votes for Republicans in swing districts, since the "BlackRock bought all the houses!" line is heard much more often from the Left, meaning this is something you can show an on-the-fence voter to signal how you are against those evil Wall Street guys.
I wonder if he'll be able to resist slipping in some kind of small-time grift for a family member or campaign donor, though.
He's in real estate. Of course he has an angle. Hopefully they can get something worthwhile into the eventual bill anyways.
I would hard cap how many houses anybody can own to something like 4 - whether through an LLC or otherwise. Many countries do not or did not allow foreign ownership of residential real estate. It's definitely not in the interest of any people to have their very land taken from them. In the current climate that would likely take an extremely nasty turn so it's not the best time for it, but I would be very supportive of such a measure with an exception for permanent residents and spouses of US citizens.
People are always looking for an outside villain in this story. Over the years it's been "Chinese buyers", AirBnBs, private equity, or "the rich" generally, but the thing is that the system is working exactly as it is supposed to. Middle class homeowners demand that their homes go up in value every year and they get what they want. Homes are explicitly called investments my every mainstream organization with any stake in the game. The ones responsible are indeed your neighbors, but not just the ones with investment properties. Talk to these people and between complaints about the price of eggs going up a buck or two you'll hear them mention "property values" frequently in casual conversation and beam with pride as they show you their Zillow Zestimate. Your government is happy for the increase in tax revenue (even as they carve out exemptions for their voter base). The ever increasing prices are all going to be paid by future generations, so there is no need to worry.
If Black Rock is guilty of anything here above all else, it's taking advantage of a situation deliberately created for someone else. If government policy wasn't already going balls to the wall trying to constantly pump up property values, there'd be no investment returns to be had.
Give me the levers of federal, state, and local government and I promise you I can completely tank property values in 48 hours or less.
Daily reminder that the largest purchasers of residential real estate through these intermediary firms (since that's all they are... they own them in trust for others) are public employee pension plans.
I agree, but besides the fact that people overlook that the “C” in LLC is “Corporate” and most private rental investors will have put their real estate in an LLC; is that the real problem at the core is cheap, i.e., devalued money and low lending standards, that has made inefficient and reckless lending and investing possible, essentially the inverse of the BNPL ticking time bomb and the cousin of the housing bubble, i.e., fraud.
With house prices being driven up by reckless lending through a debased currency, you enter a feedback loop where every inflating currencies drive prices higher, which only fuels a further frenzy of lending (including through FOMO) to driver prices higher once again.
Cover those individual investors too.
Agreed, I think the simple answer is the tax rate is one thing for a primary residence and another for non-primary residences regardless of who owns it. For example in CA, Prop 13 stays in place for your primary residence, but properties are re-assessed every year like in Texas if it's not your primary residence. In addition, take away some (or all) of the tax deductions for SFH that aren't primary residences.
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There is no key word here. It's an aspirational assertion on social media. Everyone asking about how it will be implemented is asking questions Trump has spent zero seconds considering. He will maybe sign some EO that will have very limited scope but mostly he is asking Congress to figure it out. Given the makeup of the Senate it will require bipartisan support which means at least months of haggling if they even consider his request. So we really have no idea what the policy will be or when we'll see it.
This is absolutely, violently, incorrect.
Private equity has absolutely been buying up (and building) U.S. residential stock, and this is addressing a real problem. The fact that Trump's doing it doesn't change my opinion at all, but it's absolutely the right thing to do and hopefully will be bipartisan.
Private equity has absolutely been buying up (and building) U.S. residential stock, and this is addressing a real problem.
Building more housing is the opposite of a problem.
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Do you have any source? Googling it tells me otherwise.
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Black rock shouldn't buy any family homes. Not a single one.
I'm sick of the arguments that rely on the meaning of "most/many/some/not all". The arguments are irrefutable because you can always weasel your way through the meaning of the quantifier, or the false implication that only the "biggest" of something needs redress before the next in line.
A person owning a second home is fine, that's one of the paths towards financial independence: small business ownership. Someone starting out in a tiny money making operation is a good thing, and they do not need to compete with a trillion dollar empire!
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Yeah, that's why Blackstone's stock fell 9% on this news. It doesn't affect them at all.
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From the moment I saw this in the WSJ this morning, I was wondering what people were going to come up with in order to be against this obviously-good idea, just because Trump said it.
Now I know.
I don’t read this as being against it at all. They’re simply pointing out it doesn’t have that big of an impact because of a bigger problem that remains.
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I'm not against the idea per se, but "institutional investors are buying up homes" is an effect, not a cause. Boomers demanded that "house values are never allowed to go down, only up" and put all manner of construction-preventing policy in place to make sure this happened, so of course institutional investors showed up. If there's an asset class which is only allowed to go up, why wouldn't they?
Banning institutional investment doesn't remove the "can only go up" laws and mindset, so I think (assuming this even happens, which it probably won't: TACO) the actual effect on prices will be minimal.
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Too much TDS man. Not everything is about Trump.
Yes, It should be expanded that no company can own residential property, and more importantly, each person can only own one property.
People should go find something else to invest their savings in.
each person can only own one property.
You're going to need some exceptions. What happens when someone dies and leaves their house to their kids? What if someone's home is temporarily unlivable (say due to a fire or flood which requires extensive renovation) -- do they have to live on the streets?
And that's not even addressing the obvious question of what happens to tenants if there are no landlords.
The problem is supply, not distribution.
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Would that not make rental properties entirely illegal? That seems... complicated
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It will make very little difference in the end.
Australia's land tax system makes it effectively impossible for large corporations to own large chunks of residential property, but our real estate is amongst the world's most expensive and landlords are still awful - it's just that the landlords are hundreds of thousands of dentists and, yes, software engineers rather than corporate entities.
If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing.
In Australia we've treated the family home as an investment, a primary mechanism for wealth creation (rather than an essential for life) for far too long. I fully agree that supply is the #1 driver for housing affordability, but like many things it's mult-factorial. Tax incentives, market forces, town planning, land use regulation, etc. all play their role.
I'm hopeful that successive governments over here show the courage of their convictions and enact enough change that my kids have a chance of getting into their own places, same as I did.
Tangent: how should we approach changing the housing mix in a city like Perth where 95% of new homes are large four-bedroom detached houses? It's all very well saying "That's what the market wants" when that's also all the market supplies. How do we bootstrap the idea of smaller, denser, affordable, more-diverse housing options?
Current government has explicitly said that they will not lower hose prices:
"We're not trying to bring down house prices," Housing Minister Clare O'Neil declared on ABC's youth radio station triple j.
"That may be the view of young people, [but] it's not the view of our government."
https://www.abc.net.au/news/2024-12-14/housing-minister-says...
YIMBYs would argue (and in my view rightly) that if you allow townhouses and apartments to be built, the market will build them where there is a demand.
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It's the same in New Zealand - property is the primary mechanism for wealth creation, and you have boomers with 10+ properties that they use for rental income for their retirement.
The issue is exacerbated by the tax structures not incentivizing investments in other assets - e.g. in NZ if you invest over $50k in offshore equities, there is an annual FIF tax that must be paid, even for unrealized gains.
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> In Australia we've treated the family home as an investment
That's true of most of the Western world, unfortunately.
> a primary mechanism for wealth creation
I don't disagree but this needs to be correctly framed publicly as simply stealing from the next generation because that's what it is.
> Tax incentives
For anyone unfamiliar, Australia has a system called negative gearing. In the mid-2010s the then Labor party proposed scrapping it and lost the election. It really is the third rail of Australian politics. This is a shame because it needs to be scrapped.
It allows you to deduct losses on property against your ordinary income. So if you have a mortgage payment of $3000/month but only earn $2000/month in rent then your income is reduced by $1000/month. That's waht drives a lot of small investors to essentially speculate on property.
The US actually has a better system than this, which is that if you earn over a certain income level, you cannot deduct passive losses (like the above situation) against ordinary income. That would be better but still not enough.
So many upper income Australians essentially end up just hoarding property. They'll call it "investment properties" but really it's speculation. Historically, property was treated as an income producing asset, not a speculative capitals gains asset.
Oh and capital gains on non-primary residences should be like 70%. If you want to stop rampant speculation, that's how you do it.
> Tangent: how should we approach changing the housing mix in a city like Perth where 95% of new homes are large four-bedroom detached houses?
Perth like every Australian city is an urban planning disaster. It's just endless sprawl up and down the coast and inland to the hills. A generation or two ago it was a quarter acre block. Those days are long gone unless you're wealthy or you're 50km+ from the city (less if you go east).
So it's a car-dependent soulless hellhole. I say this as someone who knows Perth well. So even now if you build higher-density housing along transit routes, as they're doing, you still need a car (or 4) to go anywhere but work. And high land values make infrastructure projects incredibly expensive. Like imagine trying to build the Perth to Mandurah train line now instead of 30+ years ago when it was actually built. I guess they could utilize the Freeway they already had but what about the fremantle or Midland lines?
What you should do as you build out is reserve space for future infrastructure. AFAIK no Australian city, especially Perth, has never done. So Guildford Road or Great Eastern Highway should really be a freeway. Same with Albany Highway.
In 2024 Western Australia did really relax ADU (granny flat) development rules. The rules used to be really strict. Now you can basically always build one with normal building approval if you meet the minimum lot size requirements (generally 450sqm, sometimes as low as 350sqm, depending on the council).
Single family home zoning is really cancer to any decently sized city.
Anyway, the truth is, I'm not sure it can be fixed now. Big infrastructure projects are prohibitively expensive even with tools like eminent domain. We need to look at why it's so expensive to build apartments.
I think the only thing you can do now is for the government to become a significant suplier of housing to increase supply and stabilize rents.
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The problem with "increase supply" is that existing property owners rarely want that.
In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments.
The "American Dream" is a single-family-home, surrounded by other single-family homes, but even with urban sprawl we simply run into the limits of a commute and prices skyrocket.
Ironically we actually solved this problem: Indefinite Telecommuting. But then decided to take our solution that reduces property prices, reduces air pollution, and improves quality of life and then just threw it away because commercial property owners were losing money.
I think it's possible to make apartment/condo living more attractive in the US, but you'd need a few changes. For example:
* American apartment complexes are typically ugly as hell. They're little building islands in a sea of asphalt, disconnected from the wider street grid too. They'd be more attractive if they were more like the complexes I saw while living in Munich: more green up front, car parking basically all underground.
* Require substantial backyards/courtyards for said complexes.
* More tenant protections that prevent landlords from arbitrarily non-renewing a lease, so that people in apartments can have long-term stability. If you break the rules repeatedly or severely, then sure, landlords should be able to remove you, but otherwise you should be left alone to live your life.
While in Munich, we lived in the Solln neighborhood. It's mostly apartments of some kind (we lived in an apartment, and then a backyard duplex), but they just look a lot less ugly than they typically do in the US. Example area: https://www.google.com/maps/place/Munich,+Germany/@48.081098...
> The problem with "increase supply" is that existing property owners rarely want that.
Yup. I'm a weirdo who owns his home but wants a shit-ton more housing built in his city, even if it means my home value goes down. I do know some like-minded folks here, but I would be very surprised if we weren't in the minority.
And it makes sense. We're taught (in the US) to treat our primary residence as an investment, and for most US homeowners it's the most expensive asset they'll ever own, and will be their main vehicle for maintaining their wealth through their later years, and for transferring the remainder of that wealth to their children.
Given that, you'd either have to be self-sabotaging-ly altruistic, or otherwise wealthy enough (outside of your home) that a significant dip in your property's value doesn't tank your finances. I expect that describes a small number of people.
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> In almost all cities land has run out, so the only way to actually increase supply is to increase density. That means fewer single-family-homes, and more townhomes, multi-family, condos, and apartments.
Existing property owners can only afford to hold this opinion because land rents are insufficiently taxed. Through some sort of monumental stupidity we decided to tax labor instead of land. In this sense the SFH, “Americans like suburbia” problem is just a function of poor tax strategy. If homeowners were faced with the economic reality of their choices then markets would fix land use by themselves.
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That means the American Dream is unsustainable, and until people can break through the entrenched interests and do something rational, American cities will continue to decline.
Where else do we simply accept that incumbents get to have full protection from loss at the expense of literally everyone else? Certainly other examples exist but we certainly wouldn’t tolerate wheat farmers stopping their neighbors from growing wheat.
> In almost all cities land has run out
That's incredibly untrue. There are numerous cities, even in CA and NY, that have plenty of room for new single family homes.
The response to that is usually some variant of "eww, gross".
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No, we threw it away because executives wanted their control fantasy of being able to push people around like little chess pieces, as opposed to setting a vision, hiring professionals, and then giving them the tools to achieve the vision and staying the hell out of their way.
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It's a good start. Would be nice to add a gradually increasing tax on multiple home purchases, e.g. buying a third home has a 5% tax, 4th 15% tax, fifth 25%, and if you want a sixth home you have to build it yourself. Would prevent regular people from buying up dozens of homes to rent.
Changing the excessively huge (and probably financially needed) capital gains deduction for selling a home and buying a new one to only work if you literally buy new construction - would probably spur something.
Existing stock would be depressed in value as the pool of buyers would be smaller, but they'd be more likely to be first time buyers anyway (no capital gains to deal with) and demand for new would increase.
But you could end up with insane inversions where existing stock was pulled down to build new to take advantage of the gains exclusion.
It should be much more punishing from the 4th home like 45%. One can understand 2/3 homes, e.g., one to live in and the rest as investment for retirement income. More than that is just greed. Also, if you don't live in one of your properties, either sell one to keep the total number within 3 or pay additional tax.
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We have a significant number of problems related to housing; generally I would call it a demand side issue not a supply side however.
My reasoning is we have a massive construction sector compared to other nations, with a relatively high productivity in terms of dwellings built per capita. We also have pretty slack standards, with even weaker enforcement.
In addition to that, we have a very weak growth in productivity per capita; and since we are trying to rapidly grow, we have to play catch up to provide the same level of services. This needs to happen while our construction sector is stressed, so the same amount of wealth goes a shorter distance again.
You can also see this in rental prices; negative gearing should allow the capital price to decouple from the rental yield to a larger extent than without it; but we still see high rents...
>It will make very little difference in the end.
It will make very little difference if Wall Street investors hold very little property.
Putting a finger on the scale of how much real estate is individually owned definitely makes a difference though. It makes it worse.
100,000 individuals who own 100,000 properties have far more political power than 10 companies who own 100,000 properties.
>If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing.
Yes. However supply is artificially restricted by government, to the approval of the average property owning voter. So more specifically, that is what needs to be changed. Everything else is window-dressing.
This is a country sliding further towards being us, with their housing being more restricted and more expensive.
> 100,000 individuals who own 100,000 properties have far more political power than 10 companies who own 100,000 properties.
Is that really true in the US?
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As long as houses are treated as an investment, there will be all kind of incentives to make them go up in value.
China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy.
If buying a house delivers 5–10× the ROI of the S&P 500, that’s not “smart investing” then there is a huge problem to be addressed ... (preferably by building more)
5–10× the ROI of the S&P 500 - which is really only true because we allow massive leverage on real estate that we'd not on stocks themselves.
And leverage brings all the problems associated with it; if you own your house outright and it goes down %10 you're out 10%; if you only have 10% equity and the same happens you're down 100%. The gains, of course, work similarly which is why for so long it's been a heads I win, tails I win.
>China did "over" solve it by building loads of houses, so everyone's house value just crippled down like crazy.
That's not really a bad thing unless you believe real estate should be a vehicle for investment. However, in T1 and T2 cities asset prices are roughly on par with western major metro areas. However, property management fees tend to be lower. I suspect the Hukou system contributes significantly to keep housing affordable, and it's not just the massive supply.
Well said. A solution so simple and obvious it’s clear why Americans haven’t gotten there yet
I've heard that japan has a system that keeps real estate dynamic with lower prices.
Have you read anything on this you could point me to?
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>>If you want housing to be cheaper and renters to be better treated, increase supply. Everything else is window-dressing.
You can also look at reducing demand due to mass migration.
Yeah, start wars with NATO allies and people will flee your country like it's 1940.
Certainly this is better than nothing though, right?
> increase supply
There's a counterpart to supply in supply-demand. I wonder if we could also adjust that.
> increase supply.
THIS. If Supply & Demand just feels too complex, then spend a day watching kids play musical chairs.
The window-dressing is great. You get the votes from the renters because you are doing ”something”, and you get the votes from the landlords because property values remain high
And reduce demand, by not importing 3% year on year, where we can't keep up
Right, and the large corporations just buy up all the service companies in the area and squeeze both the landlords and renters at once. The only way to achieve fairness is straight socialism.
Don't be a coward, and talk about demand for housing, which in Australia is driven by sustained mass migration.
The inevitable outcome of this is increasing homelessness, and likely slums when homeless just start building themselves make shift shelter in such large numbers that authorities can't stamp down on it.
We're not supposed to notice that the best thing about migrants (especially the illegal ones!) is that you can cram them 10+ to a house in squalid living conditions that would be abhorrent to most.
It's a price we're willing to pay since we're not paying it.
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It will make a _small_ difference, and then also banning individuals from owning multiple homes would be a bigger difference (and then building enough supply, the biggest). We can do all three.
> It will make very little difference in the end.
I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers?
I remember watching some video of tenants being priced out of their rental apartments so when they tried to contact the property owner, they found layers upon layers of managers and companies. It just seems better when there are more thousands of owners than just a handful of corporations.
You would feel that, but you would be wrong.
Small businesses are often just as ruthless as large ones, just less competent. In any case, most rental properties are managed through agencies, who are soulless profit-optimisers.
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It's the opposite in the UK. Most landlords are individuals, own one or maybe a couple of properties.
It's awful, rogue landlords who do everything they can to not do repairs or improvements and when they do it often comes after a long time. Often as they have underestimated all the expenses they're liable for and find that the profit is not very much.
Give me a company that owns a whole block every day, they've modelled the risk better, have economies of scale, and you have more recourse against them.
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> I feel like there will be a difference between a handful of large corporations owning a majority of properties vs thousands of dentists and software engineers. Are you saying that all of these property owners are also soulless profit-optimizers?
Do we want to trade crazy high prices in the American real estate market for absolutely crazier high prices in the Australian real estate market?
That is a bit simplistic though, there could be other things going on in Australia, and all the other rich countries (e.g. Switzerland, England, China) where American prices look like a good value. I'm sure at the end of the day supply is the main factor, and not having a hot economy also helps, so I'm sure the USA will get there fairly quickly.
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Increased supply comes in majority black and/or low-income neighborhoods here and it's "luxury" units all the way down. Gentrification is the name of the game, while simultaneously reducing social services.
In that light, this move is A-OK with me.
"Real estate investors, both individual and institutional, bought one-third of all single-family residential properties sold in the second quarter of 2025"
https://www.cnbc.com/2025/10/07/home-sales-investors-make-up...
As long as we have this focus on using homes as investment and rent prices are kept high through collusion, the industry refusing to build "non-luxury" units, and regulation hurdles stopping new entrants, we will be stuck with this problem.
Rent is high because you aren’t allowed to build in high-demand areas, and it takes a huge amount of capital with limited return.
If your rentoid decides to rip the copper wiring out, or not pay their rent for a year, then you’ve wiped out 10 years of profit.
> the industry refusing to build "non-luxury" units
This is a government policy failure. Because no one is allowed to build fast enough, there is always a demand for luxury (higher profit) and thus that is what gets built.
You have to completely satiate the demand for luxury housing before it becomes "desirable" to build new standard housing. In years past the "starter home" market has completely been reselling past housing, even what was lux at the time of building.
Why would you spend your time and effort building a house that earns you $50k when for the same time and effort you could build a house that earns you $150k?
You'd only do the first if the second wasn't available.
The government in this case being your city council
One additional important detail: if this gets implemented at all, hopefully it does not affect the common practice of having a self-owned LLC owning your home. This is common for the purposes of keeping your personal name out of public records; it is far too easy to link someone's name and address, and people at risk of doxing can do this to protect themselves.
Personally I feel people and especially corporations/REITs do not have the right to hide what real estate they own. Sure put it in a trust, but the public has the right to know who controls it.
Where do you stand on encryption? Do you feel like the "I have nothing to hide" argument has any merit? If you think people have the right to privacy, why should real estate be an exception? I personally find the fact that real estate ownership is public in the US to be quite bizarre.
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I have a friend who has someone who has repeatedly threatened to assault her, and her primary protection is keeping her address hidden from him. Should she never be allowed to own a house at risk of being assaulted?
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> common practice of having a self-owned LLC owning your home. This is common for the purposes of keeping your personal name out of public records
I have a hard time believing lots of people care to do that - not many take steps for privacy - or have the resources or time to setup an LLC.
> or have the resources or time to setup an LLC.
Costs about 200$ at most places and can be done online.
People who have been stalked or are uncomfortable having their details published for the world to find need privacy.
Privacy mechanisms aren't just what applies to your or my perspectives, there are millions of other situations. For example, most counties in Texas identify the full legal name(s), phone number(s), and mailing address(es) of every single property owner and their tax payment amount and status. That'd get really weird, real quick for celebrities if there weren't any concealment mechanism.
Privacy isn't a binary or continuous thing, but is possible to varying degrees and requires navigating government and business processes carefully.
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Houses are also put into revocable living trust to avoid probate when kicking the bucket.
> a self-owned LLC owning your home
Trusts are in the same boat. If you're using the LLC as a pass-through, these restrictions won't apply to you unless an orange cat is charged with drafting.
Owning your family home through an LLC, depending on your state, is often a bad idea.
There are generous protections in most states for your personal home that you lose if it's owned by an LLC. This includes things like a homestead exemption in bankruptcy protection.
In Florida, for example, there are better options to keep yourself anonymous. Florida has something called a land trust [1].
[1]: https://www.jimersonfirm.com/blog/2024/04/understanding-the-...
I feel like mortgage lenders should legitimately wonder why they’re lending to an LLC or a trust rather than an individual. I’m not sure there’s a good answer.
Is it not public in the US who owns a company?
https://legalclarity.org/how-can-you-find-out-who-owns-a-bus...
There has to be some nuance. Companies are known to either rent of sometimes own housing for personnel who travel to other offices. Universities typically own housing as well. So maybe it’s something like it can’t be one of the main businesses of the corp to buy up residential housing as an investment tool.
I agree in principle, but companies (and individual very rich people) are amazingly inventive when it comes to finding loopholes in the "nuance".
I mean, the ideal amount of nuance is to not ban this in the first place"; right now we're talking about damage control for particularly critical subsets of uses.
> Universities typically own housing as well.
I'd expect that argument to carry negative weight with the folks trying to do this, given the hate they have for universities in general, and the love of privatization.
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Maybe they can just own one?
Why should you be allowed to create a corporation that has no actual purpose other than a shield for your own private concerns?
Ideally, it should not be possible for random hateful people to easily get name/address records from local governments, but that's unfortunately not the world we live in yet.
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You should be allowed to do whatever you want, by default. Preventing things only make sense if there's good reason to.
Otherwise everything you do, you have to first think about whether you are allowed to, like a slave.
There are lots of benefits to putting your home into a living trust. It just has one side effect of hiding your name on public GIS of tax parcels. One reason to do a trust is so that you can alter who benefits from it without amending a will.
You are right, it is completely absurd. And it's great! Anonymous companies and tax havens (domestic and international) are something completely contrary to how society at large is organized. And it is the best thing which has ever been invented. They are accessible to any person who has about a thousand dollars, no matter your race, sex, age, ethnicity, family name, political affiliation, or any other factors except that tiny sum. If you're not born into wealth or into a politically connected family, making an LLC is the only opportunity you have in life to not be a human battery in the Matrix. And it's easily accessible to anyone. Incredible.
So basically you want to give a loophole for Wall Street to cosplay as regular people.
No thanks.
https://news.ycombinator.com/item?id=46532004
It costs relatively little to create an LLC. This is not an uncommon pattern for people in groups commonly targeted by hate-motivated doxing and similar attacks. This is not a "rich-person trick", and if you can afford a house, the cost of an LLC is a very tiny expense by comparison.
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I'd be fine with a policy of "you can rent housing you build" for American corporations.
If a corporation thinks there is demand in some city, goes and build housing for that demand and then rents that housing, that is good for the world.
Would be a better policy than letting corporations use their access to capital markets to outcompete individuals trying to buy a house.
> I'd be fine with a policy of "you can rent housing you build" for American corporations
Builders are more concentrated than landlords in pretty much any geography. A concentration that scales with the amount of bureaucracy and bullshit required to get permits.
You can rent a home after you’ve personally owned it and lived in it for 10 years? That would cap any individual to 3-4 rentals in a lifetime
We need more rental units, and it isn't clear how that policy would help the situation.
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Need to think about this some... Would this end up being another way for MegaCorp to extract wealth from the rest of us (similar to student loans)? All new housing ends up rentals, and a generation+ of Americans are unable to use homes for storing/building wealth?
We know using housing as an investment, at an individual level, is problematic (NIMBYism and failure to infill/redevelop/etc). Not sure how incentivizing MegaCorp to do the same on a massive scale fixes anything?
Simply greatly reducing loans available to small investors for non-built rental properties would do that.
The key is increasing supply, and we should directly target that issue (or decrease demand, but people don't like that side).
"The key is increasing supply" assumes the goal of new housing laws should be to increase supply and bring house prices down. But a lot of people do not agree with that goal. Many people are homeowners who will get tens of thousands of dollars richer if there is less supply and prices rise. And in America at least, homeowners have more votes than renters or builders or landlords or the homeless or other groups. So new housing law tends to favor the goals of homeowners, not the goals of other groups who want more supply.
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Then it would be lucrative to buy up land and sit on it to hold a monopoly on the competition. Can’t build or rent what you can’t buy.
I suppose that depends on the way the property tax system works. Paying 1-2% property tax each year on empty land does not seem like a path to riches.
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Maybe if it doesn't include property with existing homes that you tear down.
This will help out home prices in a lot of lower priced markets, but do little in higher priced markets. In the Bay Area, many houses are bought up by non-occupying internationals. I've been in a couple of such houses. It's bizarre walking into a $5M+ hilltop mansion that's completely bare inside except for a token "student" living out of one room.
Banning people from other countries buying home is both more sensible and more practical than this, which is why very many countries do it.
"From" other countries is overly broad and I assume not what you intended. I am actually interested though in the idea of legislating how frequently home owners have to actually be within range of the home, for example. A friend has had a hell of a time with a landlord in Malaysia who's never seen the property.
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I'm not sure we'll get china to buy our debt if we do this
related to: Warren Buffett's Thriftville
Its even done in some US territories!
Kind of great to have someone paying property taxes and using minimal city resources.
Feel like that would be cancelled out by the opportunity cost of high network individuals not spending in the area.
Do the math of what it costs a city per resident - napkin math it, total tax intake divided by population. Now compare that to the additional taxes and money that person (who is wealthy) is not injecting into your city.
So out of touch to think the net spend of a gov directly on an individual would be worth sacrificing all of that additional capital injected to your other neighbors and their businesses.
Except land is one of a city's most important resources, and they often aren't paying much property tax (https://en.wikipedia.org/wiki/1978_California_Proposition_13).
Yes but the area would collect far more revenue overall if an individual of commensurate means was actually dwelling within the dwelling.
It's the same in Southern California. When I sold my first starter home it was bought by internationals to rent. There were already multiple homes on the block owned by foreign interests.
And at the new home I moved into, the house next door is owned by foreign interests and rented out to the highest bidder. It makes it extremely difficult to get anything done that involves shared areas (like common fence or overhanging trees) because the owner is essentially unavailable and doesn't speak english. Not to mention that every year or so we have to deal with renters who are minimally vetted. We've had a group of 5 college kids turn the place into a frat house once. There is also a property management company involved, but they can't get in contact with the owner either.
In my experience, this seems to be a bigger issue than wall street investors.
What is the mechanism that you believe would cause this to lower home prices? Early signals are that the announcement alone will increase prices
> many houses are bought up by non-occupying internationals.
Maybe they are next?
As others have noted:
- Whether this is needed or helps depends not on percentage of owners or buyer/sellers, but on the effect in the market of such players. REIT's have an outsize effect because they are repeat players, and thus lucrative clients for brokers, who qualify themselves by skewing local markets accordingly.
- Policy-wise, it's hard to distinguish by size: second homes, mom-and-pop with a few rentals, REIT, private equity. (This is how corporations get free-speech rights.)
- Politically, it's a shame that a real problem is addressed via scapegoating
- Practically, it will have little effect since REIT's and home builders are sitting on a lot of inventory that they can't sell, so they've stopped accumulating (and they're resorting to secondary offerings to pay off the original investors). Indeed, to the extent this stimulates buying, they're all for it.
- Ethically, the US has been a magnet for money laundering, much of it via real estate, which has pushed up asset prices and de-conditioned professionals. Scapegoating only delays reform.
None of this has anything to do with "affordability", which is not about shifting rentals to owner-occupied properties, but rather reducing the monthly cost of residing in areas with opportunity. The notion of home ownership as an absolute good is a driver of unaffordability.
Yup. Building wealth through home ownership directly implies homes becoming unaffordable for new buyers.
Right. There are good financial reasons to own a home even if you don't think it's going to be a great investment, just as there are very good reasons not to own a home even if you have the means. It's the absolute, which is the premise of this policy proposal, that's the problem.
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I agree philosophically though there is a lot that can be done short of upending the entire American wealth structure like removing barriers to housing construction (to dramatically increase supply) as well as subsidizing first time buyers eg with preferential mortgage rates and tax write offs.
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Housing prices are rising due to inflation, and specifically inflation on the raw input for houses - lumber, building materials, and labor. Granted, this is not the only reason in all regions, places like California have much more complex, systematic reasons for increased housing prices. But the bulk of the US has housing prices that are somewhat in line with the cost of building, since there's no limit on land to throw cookie cutter subdivisions on.
They don't want to admit that their abhorrent policies are hitting the pocket books of their supporters, so they latch onto popular sentiment instead of solving the problem. Typical of this administration.
I built a house in 2018 for $350k. To build the same house again today would be $650k (and it would probably take twice as long). Surprisingly, the cost of land is not much more than it was 8 years ago. All of that cost increase is in materials and labor.
The problem is, the market value of my house is $550k, at the most. Meaning it's not profitable to build new houses as the market can't sustain them. And who is going to sell their house at less than they can get another one for? Only people who are forced to move, which is probably why the there is such low inventory in the historically cheaper markets.
Being in the lumber industry myself, I can tell you that lumber prices have not kept up with inflation. There was a major run up in price in 2021 and 2022, but prices have returned to pre-covid levels accounting for inflation. I have our own sales data, but this chart makes the case relatively well: https://tradingeconomics.com/commodity/lumber.
Speaking as someone who just sold a house in the Bay Area (Dec!), house prices here are very much "buying the payment".
The valuation of the property goes up and down directly with the interest rate.
The ROI of the house (we bought in 2016) was ~8% on the down payment over the past 10 years, excluding maintenance and interest charges. As an investment, property is not a very good one.
To get that 8% on the down payment, I spent 4% on the remainder. It really doesn't net positive after the mortgage interest (with a 20% down payment). It's about "forced savings" and having control over your environment.
As an aside, since people are stuck in houses (mortgage rates and prop-13), there is a definite lack of starter homes. Everyone adds the second bathroom, meaning there aren't any single bathroom homes to be found. That increases the market floor.
What counts as "Wall Street" here. Is it any investment property? After some threshold of owning many homes? If so, how many? 10? 10,000? Something else? Is it net worth? Maximum number of beneficial owners? You must title them in a natural person's name instead of a corporate entity? Your service address for your corporation is on wall street in NYC?
Which option is being proposed vastly changes the merits and problems of this policy, so it's a poor choice that this isn't made abundantly clear.
Pure populism.
If you believe that banning investors from buying SFHs will decrease the price of SFHs, why not also ban investors from buying apartments/condos?
You mean like apartments/condos in Trump Tower? Ha. I wonder if banning them from buying SFHs actually decreases the supply of SFHs and shifts people to build more, guess what, apartments/condos that Trump can put his name on and sell to institutional investors.
Look into Trump Ocean Club in Panama. Openly popular for drug cartel money.
What about the many, many thousands of homes that have already been bought up?
If they cannot be resold to other speculators their price can go waaay down
The vast majority of home purchases aren't from speculators or institutional investors.
Institutional investors only own about 0.5% of homes. If they're forced to stop buying, nothing will really change in a noticeable way. At best, small landlords and investors will scoop attractive properties up for slightly less.
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The only way that prices could go waaay down is if the supply of new homes increases or demand decreases (or some combination of both).
Which of those do you think is likely as a result of the proposed action, and why?
Nonsense. Do you think these landlords intentionally overpaid for the properties? They are sophisticated entities who like to pay at or below fair value.
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IF it results in dramatic reduction of home prices, this sounds great at first, but in actuality, it throws the market into disarray, since many sellers and also buyers, and it may trap home owners who need to sell into bankruptcy.
God forbid someone not sell out of their home. /s Home ownership isn't exactly a crappy life milestone to be stuck at. Yeah it would suck for a select few people who need to get out of one and into another RFN due to life reasons and surely some municipalities would leverage that to really screw people but I think the upside is orders of magnitude higher than the downside.
Come to think of it, I bet making homes less liquid would knock the divorce rate down more than anyone wants to believe it would, lol
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I'm not sure if they could be forced to sell those, the government could, but then that would fall under just compensation seizure. I'm not a lawyer, but it would seem under basic legal theory that you couldn't take those homes.
Not that I expect this particular strategy from this administration, but there's 'forced' as in "you WILL sell this property", and there's 'forced' as in "any corporate owned housing unit will see its property tax rate increase by 25% per year until it is sold to a person". I don't think your description could apply to the latter.
The Comrade Trump memes would go crazy
Tax vacant properties. To high heaven.
Great point. Those homes need to be back on the market for housing prices to come down.
These homes going back on the market wouldn't make a dent in housing prices. As much as we'd like to think that corporations are to blame, that's not reality. Plenty of middle class families own homes and vote for local politicians to keep their investment safe (and for it to increase in value) by making it hard to build.
Your housing affordability plan is that everyone who rents from a corporation gets evicted?
Churchill was right!
We’ll try everything except for a land value tax, so that we can eventually prove once and for all that LVT is the right thing to do! :)
But actually, it’s good to see movement on the underlying problem (affordability of home ownership). This is The Domestic American Problem of our times, and it deserves to be closer to the center of the Overton window of our politics and policy-making.
Even if we think this step is kind of meaningless, it draws more attention to the problem, which is a good thing.
Can someone please explain to me a practical way to apply the LVT? Vancouver used to have an LVT, it was too low and there was a housing speculation bubble in the early 1900s, since property was appreciating much faster than the tax rate. And if the LVT is too high, then you will have very little new development. This isn't even mentioning how you determine the value of the land.
Denmark has an LVT and copenhagen affordability is... not good.
As far as I can tell, LVT only achieves what it sets out to do if it’s equivalent to market rent.
As in, you never really “own” your land, you’re just renting it from the sovereign. If you can’t make good enough use out of it to afford that rent, you should move on. You can find comments on this thread that make this argument explicitly in terms of “maximizing land use efficiency”.
This was the economic structure of feudalism. It … wasn’t great. Private ownership of land has its own tradeoffs but a few centuries of historical experimentation in both directions has been fairly decisive.
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LVT is a tax on the value of the land specifically, not a traditional property tax. This encourages development on valuable land that is currently being put to unproductive uses.
For example, if you own a lot in a downtown metro which is a parking lot you pay low property taxes because parking lots have low property values. You are disincentivised to develop it because your property tax would go up. Opposite incentives with a LVT.
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This is largely a good move. There are plenty of whales, once those 5% disappeared, price should slowly come down. ( The Hong Kong Housing market is the one worth studying ) Next would be increase supply, and may be if needed, additional tax for individuals owning more than one home or when they buy 2nd home. Largely making housing as an asset not attractive for certain group of investment.
Housing continues to be the biggest problem in modern world and yet it is a problem not resolved.
> There are plenty of whales, once those 5% disappeared, price should slowly come down
But by how much? ~3-4% of housing has to be sold, some amount of it will still be bought for renting (as many people still want to rent). Surely this can’t have a very big effect on house price
It could be substantial just by increasing the number of occupied dwelling units - if institutional investors are willing to let housing sit empty for 6 months or a year (because it doesn't hit them where it hurts) and the average vacancy rate in a city is hovering around 10%, dropping that down to 5% will really shake up prices.
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Given how inexorably tied the US economy is to SFH prices, a drop may do more harm than good.
Many families have the majority of their wealth tied up in their home, and another significant portion of it (knowingly or not) in the SFH MBS market via their retirement investments. If prices fall quickly enough to impact the MBS market, a large number of households could suddenly see big dips their two biggest sources of wealth.
A gradual drop may be fine, but the financialization of housing at the national is a big mess. Sadly it makes the market dynamics of giving people places to live way more complex than it should be.
You don't even need a drop; you just need prices to stay stable for a decade or so, and inflation will "drop" the real cost of new ownership.
Aren't they just fixing the symptom rather than the cause? I.e, people buy hard assets because holding dollars loses value. Make dollar hold its value instead, thus will individuals and companies stop buying up property they don't actually need.
Actually, not a bad policy idea. But it is not enough to solve the set of problems that arise when you take a basic human need (housing) and subject it to market forces--inexorably the ability to profit from the need drives costs higher than is affordable for some "market participants," leading to death.
Small investor ownership in single-family homes (for both short- and long-term rentals) have been devastating to communities. What is the right number of single-family homes to permit individuals/trusts to own and how do you disincentivize small empires?
Wall Street investor monopoly ownership of dense housing in urban areas remains a major cause of rents outstripping income (see Blackrock's 2020-2025 market takeover and subsequent market manipulation of apartment rental rates in San Diego). Simple policy solution: trust-bust apartment ownership. Harder, more effective policy solution: municipality ownership of apartment blocks a la European cities.
If regulators allow the same behaviors with water, you can expect a similar set of harms.
It's not going to solve the housing issue and is mostly for press (and it's not even getting into ulterior motives), but it might help with preventing a longer term issue of large investors becoming a major issue. Additionally, I wonder about the choice in properties as properties aren't fungible.
Interesting to see that he did not issue an executive order to ban this but called on congress to do so. This is just pandering to the base and election signaling and nothing else, at least for now.
This cannot be done by Executive Order anyway.
That's not the point.
He's issued plenty of other executive orders that aren't legal in order to continue to bullshit his base. The reason why he's deferring to congress now (instead of trying to take credit) is because he knows it's not possible and can use that as leverage against members of Congress.
Midterm pandering, for sure
Just think of the shit he's going to throw against the wall when it's only a few months away. I bet he'll wade into "Cancelling all student loans" or "Legalizing Marijuana" knowing his base is too stupid to understand his intentions.
It seems like the root cause is to increase the supply by all means possible. Ban NIMBY instead, support more building, both with already existing infrastructure and with creation of the new one.
idk how this would work effectively. There's lots of affordable homes they're just located where no one wants to live. You'd have to focus on HCOL locations and make them not so high cost which seems something that should be done at the local level.
You can increase supply but investors would just snatch them up. Maybe the feds could put a cap on the value of a single-family home that an institution can own and then make ownership very tedious. For example, no institution can own a home valued at more than $500k and for each home owned a quarterly filing must be made in person at the county the home is located. I'm sure these organizations would rather own very high value homes than lots of low value ones out in BFE.
>There's lots of affordable homes they're just located where no one wants to live
It's probably more accurate to say "they're just located where no one can get a job." You can give up you SWE job or whatever and move to a small town/rural area, but you're not going to convince anyone to give you a mortgage off your income from the subway at the local truck stop, or whatever labor gig you can get at the local industrial concern. Although if you're in medicine there is probably hope.
If only technology had progressed to an extent that we don't psychically need to be concentrated in 15-20 HCOL major metro areas to do most (if not all) office jobs.
> You can give up you SWE job or whatever and move to a small town/rural area, but you're not going to convince anyone to give you a mortgage off your income from the subway at the local truck stop, or whatever labor gig you can get at the local industrial concern
There's certainly SWE jobs in LCOL places but even if there weren't, one's savings from a HCOL area should go pretty far in a LCOL one. Also, thinking that you can't get a mortgage off working at Subway in a small town is just out of touch. You'd probably have to work a lot longer than a cushy SWE job, but it's still possible.
> You can give up you SWE job or whatever and move to a small town/rural area, but you're not going to convince anyone to give you a mortgage off your income from
It's strange to me that moving to LCOL wasn't a much bigger thing during the period when everyone was working remotely.
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Just tax non primary residences at a much higher rate. Housing crisis solved.
I think that it should be a ramping rate, the idea being that a 1x landlord should be able to outbid a 2x landlord and so on.
In theory this encourages a sort of spreading effect where at some point the Nth property is too expensive to buy to rent or speculate on, which naturally stops the exponential effect of making land lording your full time gig by continuously expanding the portfolio.
They already are.
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As someone who generally hates taxes I support this. Taxes at best should be used to discourage externalities and rent seeking.
However, California even tried to repeal prop13 for non primary residence and it failed! So i'm not sure how popular this idea is.
Capitalists hate him! Use this one weird trick to...
If I were renting a house, I would much rather deal with a business than an individual landlord.
On another note, it’s amazing that in only a year, we accept a dictatorship where we are okay with the President setting policy that should require a law to be passed.
I've dealt with both; anecdotal but I had a much better experience with the individual landlord than corporate. Ex: AC went out in both cases; Individual land lord showed up with a replacement window unit the next day after I reported it. Corpo landleech ignored my ticket and calls for 3 days while I slept in a house that was nearly 90F inside past midnight.
Corpo landleeches nickle and dime you (base rent + rent payment fee + pest control fee + trash fee + valet trash fee + fee for the service that bills water/sewage + mail room fee + others I'm no doubt forgetting) (but they only advertise the base rent), and they like to push straight up scams ( such as forcing mandatory renters insurance at 3x the market rate, expensive "benefits" packages with everything from HVAC filter delivery to credit monitoring, all heavily marked up.). The individual land lord? just a flat rent every month, no surprises.
I'm sure there are plenty of horror stories about individual landlords though; the same greed drives both to cut corners and maximize profits.
The two times I’ve stayed in an apartment complex, they had staff onsite and repairmen and someone on call. The individual landlord doing this on the side is likely undercapitalized and operating on thin margins and not budgeting for repairs
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If I were a business whose interest in owning houses was banned by legislation, I'd sell my "services" to the individual landlords who now owned the rental property. Blackrock manages the financial part (taking rent, scheduled repairs) and the silent partner gets a cut.
That’s already a thing. Property Management companies charge landlords around 50% of the first month rent for a new tenant and 10% of the rent to manage the property for the landlord.
They also charge a lease renewal fee.
Then expand the scope to include all interested parties in the chain, whether owners or service providers.
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> On another note, it’s amazing that in only a year, we accept a dictatorship where we are okay with the President setting policy that should require a law to be passed.
Did you read the article? The impetus was a tweet where he called on congress to write and pass a law to this effect.
I think the point is that he said he’d do it, and he’ll campaign that it’s done, even if nothing happens.
This is not how the law works. The president shouldn’t be able to do stuff and ask Congress to sign off on afterwards
> In a post on Truth Social, Trump said he was immediately taking steps to implement the ban,
So close to realizing the issues with the 2018 tax bill.
- 20% maximum corporate tax
- Personal Salt cap
Made it less expensive for an llc to buy a home than for most individuals.
To make individual ownership on par with corporate, individuals need to be in a lower tax bracket, be able to deduct taxes , interest, and insurance. And the $10k cap really hurt the ability for local property taxes to make it better for the individual. The new $40k cap may put it slightly towards the individual in some jurisdictions.
But raising corporate rates or reducing corporate deductible expense re real estate is the most efficient policy to encourage individual ownership.
They will continue trading the ones they have as LLC holding companies.
This guy wholesales ;)
I recently worked on an MVP for a Zillow-for-wholesale startup. As a curveball, our state passed a law restricting where and how these contract-to-buy sellers operate. So their workaround, after consulting lots of lawyers, was to provide a standardized LLC / Contract flow such that you’re no longer marketing a house for sale. You’re marketing a stake in an LLC, only that LLC has a sole purpose (a contract to option out a specific house).
I didn't know about this use-case. But this is also what investors do with real estate in California because Prop 13 resets the taxable value on a real estate sales, but not on buying an LLC that holes the real estate.
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Then expand the definition and scope to make it more painful to circumvent. Describe the structure such that it’s hard to not be able an individual non-investing homeowner.
Of course that’s unpopular to those who want to freely commit to bad practices.
This will absolutely help. It’s easy for these institutional players to downplay their involvement with select stats, to play PR defense, but platforms like Zillow work with institutional funds to sell them an information advantage that means they are at the end of the market that does the most upward impact on pricing.
People don’t have a natural feel for how little you need to alter flow to cause liquidity in a system to collapse.
Help who exactly?
This will be good for existing homeowners because it will increase home prices and increase rents.
It's bad for renters.
There are a few markets like Jacksonville and Atlanta where there is a lot of institutional ownership, but outside of those few cases impact of Blackrock et al on housing markets is effectively nil.
I also think this will help. There's no one size fits all solution. I hope it goes through.
Zero chance this moves housing costs an iota. Most of those wall street owned houses are rentals. If they are forced to sell them, that is a net zero change to housing supply, because they are taking a rental unit off the market.
I wonder if this would include the real estate investment startup that Jared Kushner co-founded.
How is Wall Street defined? How would they enforce it? What is preventing a large corporation from registering a new company to buy every house? Also this is just a call to action, nothing written up in a law yet. We will see how it goes, if at all it's implemented.
The modern US government runs on vibes, not definitions and enforceability!
(And no, this is not a Trump thing. This has been the case for a while now.)
So if you aren't staying long enough to want to deal with a mortgage, you'll be stuck with an apartment only?
If you don't want to own, you rent, is that what you're saying?
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It is going to be fascinating to see how the impacts of this will ripple through the housing market.
Two areas I'm particularly curious about are a) the financing of new construction, and b) the sale prices of SFHs.
The root cause for the low affordability seems to be that most people don't want to sell a house purchased at 3% interest and have to pay for a new one at 6%. That and zoning restrictions too contribute for the lack of supply.
There was a huge affordability problem 4 years ago when the rates were 3% too, so that’s clearly not the “root cause”. In fact, at the time HN was filled with people blaming the “free money” 3% rates for the lack of affordability…
LOL, you live in California? The past affordability you are talking about was not universal. There were plenty of people happily buying homes after moving out of CA to other states.
Anyhow, interest rates are the root cause now. Who in their right mind would do the trade I've described?
In my area the zoning is ludicrous. Need to walk 4 blocks to visit my corner store. Tall skinny townhomes that nobody wants and go unsold for months are the only allowed high density option - with no stacked flats.
Sounds like federal outreach over what is probably within states' jurisdiction.
What about investors from other stock exchanges and locales? I don't understand why the phrase "Wall Street" is being included in this.
I wonder if we will one day look back and wonder at the morality of a society that considered homes suitable targets for investors of any stripe.
Not unless we decide that personal mobility is evil, and start just assigning people to plots of land when they reach adulthood.
Eh? I'm not talking about investing in your own home, but buying them simply as profit vehicles with no intention of living in them.
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I don't actually know anything, but I've been wondering lately: is higher house prices simply a consequence of Baumol's cost disease? If so, then there is kinda nothing we can do about it, right?. Higher house prices is simply a consequence of improved productivity elsewhere, and thus it is necessary to spend a larger fraction of one's income on housing.
Higher house prices in the US are a consequence of literally every major US metro area having a shortage of housing (https://www.fanniemae.com/research-and-insights/perspectives...). There's no mystery here, just that a lot of people decided to shoot themselves in the foot starting in the 1970s by putting more and more zoning and permitting limits on new housing construction.
It figures that by the time I can finally afford a vacation home, somebody is going to yank up the ladder.
More like the housing bubble peaked and with this fund managers have a way to save face while fleecing investors.
There's no bubble, there's a massive housing shortage. The only "peak" will be when prices are so high that even the rich can't pay any more, which point it'll just stay there.
One of rare instances I'll say it: make owning a second home a major tax liability and 0 takes breaks for building or ownership.
Not that because "we have a right to housing" or other catchphrases, but because getting rid of the government sponsored local monopolies is impossible.
The actual headline is “Trump says he will ban Wall Street investments in single-family homes,” which is a more accurate description of what happened: one social media post by the president, asking Congress to do something. Nothing has actually changed yet.
Well that's going to do nothing.
But at least people eating the chaff of property owners will celebrate it, I guess.
There's a service called Arrived (I believe Jeff Bezos invested) that lets people buy fractional shares of single-family homes and earn a proportional share of the rent. If you sell, you're effectively selling your percentage of the property.
As a renter, I was drawn to this as a way to get some exposure to real estate, and I ended up investing in a vacation rental. At the same time, I'm pretty conflicted about it. Profiting from vacation housing feels different to me than profiting from people’s primary shelter, which is a basic necessity.
More broadly, I think as long as the incentives of property owners and renters are fundamentally misaligned, it will remain extremely difficult for middle-class folks who don't already own property to break into the market. The system optimizes for extracting rent, not for creating new owners.
> Profiting from vacation housing feels different to me than profiting from people’s primary shelter, which is a basic necessity.
If you believe that nobody should profit from providing housing, what do you propose as the incentives for people to build, capitalize, and maintain said housing?
Well, the primary incentive today, for most people, is a place to live. Profit just skews the preference on how that is accomplished.
Wow this is exciting. I tend liberal, but I think this sounds like a bad policy lol. My understanding of the existing research is that rent control tends to decreases the motivation to increase supply, and I think this should do the same
Yeah if investors are no longer buying from home developers then it'll definitely limit the demand, the price homes sell for, and the motivation to build new homes. I believe that metropolitan areas are the problem and my unpopular opinion is that people have to get used to the idea of moving to sparser areas for affordable housing.
More specifically, the current zoning of metropolitan areas is the problem. US cities have plenty of potential for more housing, they just won't allow it to be built.
The most absurd example is here in SF, where... okay, context. A recently-passed state law overriding local zoning means that there's a high-rise building project in the Marina district (https://sfyimby.com/2025/12/preliminary-permits-filed-for-fo...) that will almost certainly get built, despite people endlessly protesting it. It will add 790 apartments, 86 of which will be required to be affordable housing.
Before this, in 2024, there were 7 net housing units added for the entire year in the Marina District. No typo there, literally just 7, in the most expensive neighborhood in the city, in the most expensive city in the country.
This one building, only possible because the state overrode local zoning, will be adding by itself more than 100 years worth of new housing to the neighborhood. That's how fucked the approval process is.
This mentioning of 'Wall Street' with investors if typical for the kind of populist argument that is used to argue that banning investors from buying houses is a good thing. What would this 'Wall Street' even mean? Would it mean that companies listed on the stock exchange are banned but privately owned companies not?
Anyhow, I argue that investors are positive for the the house market. They shouldn't be banned. Investors provide enough liquidity to the market so that the building companies have enough certainty to invest in large housing projects, because they know that their properties will be sold quickly. If investors would be banned they would sell their houses eventually as well but it would take much longer.
Similarly, investors improve mobility and throughput. An individual putting his house for sale will find a buyer much faster when investors are in the buying market, who are willing to buy up a house when nobody else takes it and sell it for a better price later. So: sellers sell faster, so they can move out and buy a new home faster as well: mobility in the house market increases.
In IT terms: investors function as a buffer.
Crowd pleasing policy that will not make any difference to the problem.
Even if this goes through without a mountain of loopholes and exceptions, I doubt it will have a significant impact. "Wall Street Investors" implies they're targeting large institutional ownership, which is only around 0.5% of housing ownership as cited in the article. That number is also flat-ish or maybe decreasing depending on the chart you look at, from what I recall.
Outside of a few metro areas where institutional ownership is very high, I don't think this would change anything. As long as houses remain an attractive investment, non-institutional smaller investors will happily buy the properties for a few thousand dollars less than the institutions would.
Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
I agree with the first half of what you posted, but immediately jumping to blaming tariffs in your last paragraph seems weak (and a slight attempt at a gotcha).
Concrete, gypsum and steel are primarily domestically produced. Similar goes for wood (although a substantial amount is imported, e.g. from Canada - the tariffs range from 25% to 50%). Labour & Materials may make up say 60% of the cost of a house, but only 50% of this is likely materials, with likely a minority of the materials tariffed.
What is likely to actually reduce rent and house prices is making development permission and laws more lax, as well as preventing rent control.
Tariffs on products like lumber and cabinetry were introduced or raise on January 1st of this year. It's an additional factor that will make a bad situation worse.
You can't tell me that increasing the pricing of construction materials won't have negative pressure on home construction.
> Materials may make up say 60% of the cost of a house, but only 50% of this is likely materials, with likely a minority of the materials tariffed.
And where does the construction equipment come from? The parts to repair that construction equipment? The parts that go into the trucks that the workers drive to the job site?
Focusing on a single input is myopic when the tariffs are so widespread that they touch everything.
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> Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
And just in general reducing the restrictions on building in places with high rent to income ratios.
> because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
Oh I thought the one extremely obvious way was to fix local policy roadblocks. After all, it's not like a lacking supply of housing is a new issue they suddenly appeared out of nowhere within the last dozen months.
> After all, it's not like a lacking supply of housing is a new issue they suddenly appeared out of nowhere within the last dozen months.
The main lumber and building materials tariffs went into effect January 1st 2026.
If you thought the current situation was bad, it's only going to get worse.
This announcement is a distraction to get people blaming Wall Street. It's a "look over there!" announcement literally days after they raised tariffs to make a bad situation worse.
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Making it hard for cities to deny all permission to build new housing through impossible zoning laws should also be on the cards.
Yeah, all the politicians talking housing— the actual net governmental effect on housing is to massively constrain supply (quantity) in service of rather arbitrary qualitative standards. I’m all for “the building shouldn’t spontaneously collapse” standards, but … two acre lots? Restrictions on casting shadows? Accessory dwelling units? Nah. If the government wants to make a difference it should ban Euclidian zoning as it currently is practiced, full stop.
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Making this decision as a politician in this country is death to your career though; how could we incentivize our leaders to bite the hand that elects them?
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The material costs are high too because of regulations that require specific lumber for framing etc.
It’s more complex than just reducing tariffs and inviting cheap labor. It’s systemic red tape put in by the large builders to prevent anyone but them to be able to build. When they do build, it’s never to code. The code they themselves help write. Ryan Homes for example…
> The material costs are high too because of regulations that require specific lumber for framing etc.
Having done some extensive remodeling and building work in recent years and going to great lengths to follow building codes, this just isn't it. The type of lumber you can use for most framing jobs isn't that special. Having walked through a number of new construction properties and seeing what passes code, I don't think relaxing lumber standards would be a good idea, nor buy us anything.
When lumber, cabinetry, and other building products have tariffs in the range of 10-50%, you can't tell me that tariffs are not the primary problem driving costs up right now. There just isn't a secret stash of lesser grade lumber lying around that would also be perfectly good for building homes.
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This. They don't want the local septic man and the local roofer partnering up to GC a development of a dozen houses or even worse, an individual doing the bulk of the work of building anything, so they get it all saddled with requirements that amortize away nicely when vertically integrated but absolutely crush anyone else.
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Encouraging the creation of new housing is the way to go. One thought— what percentage of new home purchases are made by large investors and is it growing? This seems like the most important metric to look at rather than existing ownership.
There are examples of entire subdivisions being built to order for private investors to rent out. It’s called “built to rent.”
https://www.nar.realtor/magazine/real-estate-news/commercial...
Corporate ownership mapped:
https://www.lincolninst.edu/publications/other/who-owns-amer...
https://storage.pardot.com/153411/17634993251KmjZ4d2/whoa_ma...
Zoning laws are the number one obstacle to building housing. They need to be regulated into oblivion. Then we need to incentivize building dense housing.
The tariffs are a bit of a new phenomenon so I think that may be motivated reasoning. Construction productivity has also been stagnant for about 60 years. I think the most important factor is that housing prices, in the United States at least, are governed by how much a bank will lend. Very small but affordable houses will never be built because a bank will not finance a $10,000 loan over 30 years. In the same vein, it’s technically feasible for automobiles to be built for just a few thousand dollars, but, again, they will not finance $2500 over five years. So cars and houses are just built to the price point which will satisfy the lenders. You may not hate financialization nearly as much as it deserves.
> The tariffs are a bit of a new phenomenon so I think that may be motivated reasoning. Construction productivity has also been stagnant for about 60 years.
If construction was stagnant for 60 years, adding 10-50% tariffs on lumber and building materials would only make it worse. Not motivated reasoning, just basic economics.
The new tariffs went into effect January 1st, by the way. If you thought things were bad now, they're about to get worse.
This announcement is just another distraction. They want you mad at Wall St, not tariffs.
> In the same vein, it’s technically feasible for automobiles to be built for just a few thousand dollars,
No it's not.
If this was true you'd see it in some other countries. It's not happening anywhere in the world. Unless you redefine automobile to mean a tiny cart with a 5HP motor and some seats.
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> governed by how much a bank will lend [...] Very small but affordable houses will never be built because a bank will not finance a $10,000 loan over 30 years.
Banks typically won't hold onto to your loan for 30 years. Mortgages in the US have been thoroughly fiscalized: your typical bank/mortgage lender bundles up a bunch of loans and sells them to another servicing party as soon as the ink dries on the closing documents. The specialized servicer package them, and offer them as securities to investors who in turn will get a monthly return based on aggregate mortgage installments.
All this to say: lending banks would be happy to finance thousands upon thousands of 5-digit mortgages, and sell those to securitization specialists.
New houses aren't built in existing neighborhoods because dense housing is unpopular, as is a distaste of having "poorer" people as neighbors. Static zoning, terrible transport networks and no funding for new public infrastructure tag-team to discourage new developments on undeveloped farmland.
Not sure about $10,000 houses (that would be pretty spartan, even Tiny Homes usually cost more than that), but the $2500 car thing being due to lenders is completely off base. The reason there are no $2500 cars is that it's impossible to make one and meet current US safety regulations. Once you meet all of those, then you're already well beyond $2500, but it's still a pretty crappy car. Might as well add a few extra creature comforts that most consumers demand (power locks, power windows, bluetooth/stereo, disc brakes, more than 100HP engine, etc.) and you're never going to be below ~$15K with current parts and labor pricing.
$2,500 cars? $10,000 houses? I found the time traveler from 1960!
Source that cars are buildable for a few thousand dollars to the existing laws?
Even the Slate truck is $25,000 because safety features are required.
Those "few metro areas" are on the scale of 10s of millions of houses. Remember that the top 10 largest cities have a third of the US population in it.
>because there's one extremely obvious way to lower the price of building new housing:
Cheaper housing doesn't mean that institutions won't still try to buy it up.
It seems like in some areas (the good ones) its much higher (12%): https://econofact.org/factbrief/do-private-equity-firms-own-...
It also seems like it might be important to determine what share of _new_ development is being created for investment. The share of existing homes being owned isn't as important.
There's also the 2nd order effect. The price of property might go down if there weren't investors with tons of money to spend on a property.
All housing is investment due to the way it's owned, regardless of who owns it. For most people, it's by far their biggest investment, resulting in extreme political activity.
We must confront that fact, or negate it, for example by taxing away the investment opportunity.
Investors buy housing to rent it out to others, that's the investment. People who own their own home implicitly pay themselves rent, by choosing to live in what they own versus renting instead.
Getting non-resident owners out of housing only means that renters have been banned from an area.
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Even if it is only 0.5% I would prefer that large institutional investment firms not be allowed into the housing market.
actually, they are actively beneficial owners. They can do things more efficiently than small time owners.
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Everything you stated is speculation.
Well as soon as you find someone who can speak about the future of the housing market without speculating, let me know.
This is pretty far down in the list of consequences we should be thinking about but building more housing in desirable, coastal areas of the US will only serve to exacerbate the political and cultural divide between the two Americas.
I know we all hate on the electoral college, but it exists and it isn't going away anytime soon.
I'm not saying the answer is to force folks to move to "flyover country", but that's what you'd do if you wanted to avoid another presidential victory by a trump-like character.
“Built to rent” lately occurs in the sun belt and Midwest, in which fall most of the swing states.
It's also what you'd do if you wanted to buy an inexpensive house and have a low cost of living.
they don't even have affordable housing in the country all those tarriffed materials and equipment come from.
Anyone familiar with basic economics is pulling their hair out reading this, because there's one extremely obvious way to lower the price of building new housing: Reducing or eliminating tariffs on construction equipment and materials and ensuring a robust supply of low-cost labor.
That's quite an extreme political take.
A more humble basic economic theory question would be:
If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good? Sure homes would be cheap, but very shortly after that the supply of new housing would drop dramatically, as there's no one to finance building homes, maybe the ultra rich will just invest in their own mansions or yachts?
Just very basic economics is the discussion here, not tariffs and china politics, but just a variant of the highschool/red-scare question of, "will anti-wealth laws have a positive effect on the economy"? in the past it was determined that no, and that you were a communist for suggesting it, but maybe there's a nuanced take like making a difference between some type of "institutional" investors and other types of investors?
> That's quite an extreme political take.
We're in a weird timeline when pointing out that dramatic tax increases on the inputs to home building will increase the price of homes.
> A more humble basic economic theory question would be:
> If you ban large institutional investors from buying homes, and then you ban small institutional investors from buying homes. And only owners directly can buy homes, no renting. Would that be good?
There's nothing humble or basic about this question because it's so unrealistic that it could never possibly happen. Ban renting? What?
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Why would you need institutions to finance building new homes? You think the cost of building a home is more than the cost of buying a home? (Obviously not.) Normal people have been building their own homes using their own money for thousands of years.
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Not sure. But I’ve been hearing of this being an issue from both progressives, leftists as well as conservatives and rightists. Maybe they’re all misinformed by their bubbles, but there seems to be some smoke…
It's a populist issue because it sounds vaguely correct and being angry at Wall Street is ever popular. That's also why this idea is being floated before the mid terms.
That doesn't make it correct.
Left-populists and right-populists like to frame issues as being a conflict between the elites and the common man. Banning big banks from owning homes is a perfect example of this.
It's fine to ban big banks from buying homes and wont do damage to the nation, but don't expect it to solve the problem.
High housing prices are due to zoning-based supply restrictions. These are entrenched due to politically active NIMBY voters.
Actually fixing the housing crisis means addressing zoning, but that doesn't fit the elite vs common man narrative so gets ignored by the populists.
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It's because of emotionally charged response. Leftists largely don't want corporations owning houses, because it's "impure" and capitalist. Rightists largely don't want renters to live in homes that used to be exclusionary on the basis of being able to buy a home. Though there's crossover on the reasons, of course.
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"Trump says" is not the same as "US will"
Trump says a ton of things that he never ends up doing.
You’d think he’d want his name on a bunch of homes. Similarly, some salesman on the golf course has surely already pitched his name on a bunch of homes. I bet there’s a reason he’s been uninterested for so long.
Ban predatory private equity altogether.
The title change here is editorializing. It’s not a given that this will be implemented and the original title reflects that: “Trump threatens to ban Wall Street investments in single-family homes”.
Don't hold your breath.
It needs to be illegal for anyone to buy a single-family home that already owns one, and who won't agree to live in it, full-time and exclusively for at least one year. They must also agree to sell it ONLY to someone who also accepts the same terms. The penalty should be a criminal fraud charge with minimum jailtime -and- a hefty penalty.
Wouldn't that most likely lead to less rather than more construction of single family homes?
How about we stop companies from buying up properties to turn into airbnb/short term rentals, unless its a company that flips homes. Those we need.
Why the exception for companies that flip homes? In my area, those typically have really poor workmanship and it’s a good idea to avoid them.
This is excellent news if it can actually be enforced.
So, REITs? There is so much money there I expect some immediate pushback or a built in loophole.
Can’t buy a single home but an entire community is okay.
Investor owned housing is a bit of a sensationalist scapegoat. Publicly traded companies account for a tiny, tiny fraction of available single family homes in the US. And so long as the tax code doesn't change, it strongly favors private/individual homeowners, and corporations only account for the margins where housing appreciates so fast or rental incomes are disproportionate to asset values.
This is an easy thing for Trump to promise (after all, little family-owned real-estate developer operations like his would never be affected). But who owns the homes is not going to change the problem that Americans have underdeveloped housing supply by over a million homes.
regarding public reits focusing on blackrock misses the Vancouver Model dynamic which is absolutely happening in major us markets.
the issue isn't just yield-seeking corps, it's opaque shell companies (llc) using real estate as a store of value aka money laundering vehicle. vancouver showed how this decouples prices from local wages completely. the us has this exact vulnerability—anonymous delaware/wyoming llcs buying in cash, specifically in supply-constrained cities like ny or miami.
this only works because of zoning. if nimbys didn't artificially cap supply, housing would be a depreciating consumer good (like in Japan) rather than a deflation-proof asset class. zoning is what turns a house into a safe deposit box for offshore capital.
if the corporate transparency act that Trump vetoed is successful then I expect to see the real estate become US's top source of GDP like it is for Canada.
> this only works because of zoning
The dynamics in the countries that don't have zoning is exactly the same. Price bubble and misery for everyone in dense cities.
There will be no affordable housing in cities, whatever you do, short of nuking everything from the orbit.
Yeah, this move is maybe a net positive, but will have a tiny impact on actual home prices. It is absolute red meat for the internet conspiracy machine though. Especially on the left.
I also have no idea what statutory authority he has to enforce this. Surely it requires Congress or at least the FTC chair. And if there's enough vested opposition it's going to be challenged in court pretty quickly.
my first reaction was that the counter in the top right seemed like a really low number, but i think i was interpreting it wrong - that's the number of rides in progress, not a cumulative counter for the day, right?
Actual title: "US will ban Wall Street investors from buying single-family homes, Trump says"
Trump, notoriously, says all sorts of things.
I'm sure this'll come right after he finishes his healthcare plans in "two weeks".
Im sure this will be rolled back 2 days after mid-terms.
I see the Democrats are right back in their 'wildly overconfident' phase again.
This is good for homeowners. Bad for renters.
Why? Housing prices will rise, rents will rise.
"Houses are for living, not for speculation" spreads to the Imperial Core
A lot of people live in apartment complexes and this won't cover those.
Corporations are people under the current SCOTUS interpretation. Which means they have the same rights under the US Constitution, so this should be struck down in no time in the courts. Another nothing burger likely to end up just manipulating the equity market and the derivative markets in the short term for large investors to capitalize.
Just build more housing, the whole "let's make rules to avoid the easy and obvious solution" trend annoys me.
Utilizing vacant properties is easier and cheaper than building new ones, by a massive margin. We should do both, but ignoring perfectly good homes in desirable locations being used by nobody is silly.
If the goal is to reduce the number of vacant homes, then why not create a tax on those specifically. Corporate owned homes and vacant homes are not the same thing at all.
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I mean converting vacant is fine, to me it's the same category basically - increasing housing supply.
I feel the numbers that show investment groups that own X number of homes is highly misleading. More than likely these investment groups form multiple companies when they buy up the homes. Likely state or regional. From there the larger parent company is invested. So I wonder if there are hundreds or thousands of "small" investment groups that are essentially a shell for a larger private equity group.
So my big worry is that the Trump admin will say they are going to only eliminate the most obvious cases and the problem will remain. The LLCs and shell corps, etc.
EDIT: Also it does not address the massive amount of housing stock that is foreign owned by people that don't even live in the country.
Stupid populism. Homeownership is bad policy, and I welcome private equity buying it all so we are finally disabused of it.
(Of course, they were not buying it all.)
Seems reasonable to me, a very anti Trump individual. Now deliver.
And which of his buddies does this benefit?
I'm trying to think if there will be ramifications to this...
- Obviously forced divestment of all Wall St owned single family homes could impact housing prices which is both the point, but of course... also hurts many families borrowing power and net worth
- I guess that crash could potentially have people paying lots of money for homes that aren't worth that much anymore, which sounds pretty negative
- Of course... wow, would it be nice to be able to afford something in the city I love (which I doubt will be impacted by this)
Of course, no clear plan here. Just Trump saying something, why wasn't the "Trump says" part kept in the headline here?
> also hurts many families borrowing power and net worth
This is part of the crux, isn't it? It's a backbone of families' wealth and positioned as an investment. So there seems to be no winning: either choke off the young trying to buy or crack the nest egg of the old
See also: Bitcoin and the like (wild value fluctuations are the hallmark of a good currency)
Related article of interest: https://archinect.com/news/article/150496266/is-this-swiss-h...
> either choke off the young trying to buy or crack the nest egg of the old
The simple fact is, housing can either be affordable xor an investment[0].
Affordable means the prices are flat relative to inflation, which makes it a terrible investment. If it's a good investment, that means the price is going up faster than inflation, which quickly makes it unaffordable.
[0] I want to be clear that I'm referring to housing as an investment to mean buying a house purely for profit purposes, ie, to flip or to rent out. Buying a house to live in, rather than renting the house you live in, can be considered an "investment", but I mean to explicitly exclude that usage of "investment" in this comment.
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I am also trying to think of what else could actually be fueling this, since it sounds very... not republican. Quite literally the opposite.
Like you said that also assumes it actually happens and isn't another incoherent ramble that is conveniently forgotten about or claimed he never said.
I mean if its legit I will cheer it on... but I remain skeptical.
It's mostly a made-up issue to begin with - so this would be a popular policy, easy to pass because there won't be much opposition, and it'll be easy to point to and say "We fixed that problem."
The R party has changed so radically that it's hardly recognizable any more. As a result, "not republican" is no longer a very meaningful description.
I think the most likely explanation is pretty simple. Whenever people are unhappy with their economic situation, at the ballot box they take it out on whoever is currently in power, logic be damned. Politicians know this.
Well, there's no explanation for how this will affect any currently owned properties. So maybe it won't do much of anything. And something important to understand about private equity owning homes, is that they tend to descend on specific geos where the supply allows buying in scale. If they are forced to divest, it very well could crash a few cities or towns. And given that the aforementioned supply was heavily bent towards distressed areas, the crash could be brutal.
It will likely have close to zero impact on high-demand areas.
[dead]
Hopefully this happens so people can stop blaming institutional investors for high home prices once this fails to work. Then maybe we can work on actually building homes.
Why is it as a soon as a politician announces they will start in the future to have a concept of a plan at tackling an issue, many people react as if it’s already done?
No actual implementation steps have been taken or explained. Will this happen before or after the health care plans are released? Before or after the still pending infrastructure bill?
“ Trump said he was immediately taking steps to implement the ban, which he would also call on Congress to codify in law. *It was not clear what steps he would take*”
Wow. Usually everything is about the money.
Now its about elections, which are about power. And subsequently money
Housing simply cannot be both an investment AND affordable.
It was not immediately clear what legal authority Trump would draw upon to impose such a ban on the private market purchases of houses. Trump did not detail the policy, the form it would take or the legal changes he was seeking from Congress.
The White House did not immediately respond to a request for comment. The U.S. president was due to sign unspecified executive orders later on Wednesday.
Anyways, I thought that issues with Americans being able to afford things like housing was all a hoax made up by Democrats?
Why craft policies to address a made up issue?
It's extremely likely that the president doesn't have that power. He can disallow corporations from buying houses on a whim? I don't think so. But PR goodness has already been coming his way from the policy if there is any.
because he doesn't run mid-terms - states do. He's desperate.
As usual, the US continues to do everything possible about the housing shortage except actually building enough housing.
They should just increase the taxes on rental income to make it less profitable. It's too easy to be a bum landlord.
The landlords would raise the rent to pass the tax along? If all landlords have this tax, all landlords will be raising rents.
Great news!
Trump will get the boss call from Jamie Diamond or any of his other donors and quietly drop this, or sneak in a loophole big enough to walk an elephant through.
Seems like a good start. Then ban this as an asset class for scale investors so they have to release existing inventory.
I have this idea where we pick a desert road as long as possible (maybe road 50 Nevada) then build a 50 000 metric ton machine that makes large rammed earth houses. Perhaps make a mold the shape of a Ferris wheel. Have it stamp out 200 homes per week (2 miles) Road 50 is 400 miles so 200 weeks.
Rammed earth is a very decent building material but if you make the walls thick and compress it hard enough (maybe add steam?) it will last hundreds of years. Other building methods should be considered ofc domed roofs are perhaps not cool enough.
Disassemble the machine, ship the containers and deploy it some place else.
Add some killer features to the homes so that people cant wait to live there. For the first 400 miles at least $30 billion comes out (over 30 years) or $15 bl per year for each year of construction. Should be good enough for investors.
If it works, build additional improved versions. Aim for a factory that makes these machines.
Something like a sane version of the line.
Something like this only 20 times larger.
https://www.youtube.com/watch?v=cKi8VWRDA_c
Something like this but moving.
https://www.youtube.com/watch?v=gn0g68XE3Ds
There's a reason people don't live in that part of the world and it's not because there aren't any houses.
The reasons people do chose to live some place are mostly man made. The reason to buy a property somewhat overlaps but not entirely. The giant machine alone delivers enough hype for some to just buy one. Take care of the boring things and lure them in with killer features. The line is/was planned to have way to many of them. In Japan real estate people already get excited if there is a subway station planned.
Houses are horrifically boring all over the world. There are so many data points that people building stuff are happy when all the boxes are checked. As you've pointed out they usually follow demand but it's not a rule, it doesn't have to be that way. We do living room, kitchen, dining, bathroom, bedroom but you could do many different rooms. Say a proper office with all the trimmings perhaps a network connecting coworkers. You could do a space for home manufacturing. If you could just dock a truck properly and roll pallets in and out it would go a long way. Could do a district cooling system and/or a centralized pool pumping station. Could have a fee to gradually green the desert behind the homes.
But the true killer feature is lack of red tape.
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I get that title length is limited, but the "Trump Says" in the title is a pretty significant detail. He "says" things all the time.
That's true, but to play devils advocate for a second, just because he says something doesn't make it wrong or bad. Banning Wall Street from buying single-family homes is a great thing that I completely support, and I don't really care which president makes it happen.
The policy would be great! You aren't playing devil's advocate for what I said. I wasn't talking about the merits of the policy at all. Him saying it just doesn't have any connection to whether the policy will ever exist. The headline without that detail is wrongly implying certainly that isn't warranted.
It also doesn't mean he can actually do it. There's no obvious mechanism by which this can be enforced without a law from Congress, and it's not entirely clear such a law would be Constitutional (they'd have to base it in the right of the federal government to regulate interstate commerce if they're going to base it in anything, which presupposes an interstate market for shelter, and there's a reasonable argument to be made that maybe that's not a thing; housing is a local concern, and home prices in Topeka don't impact me, a buyer in Boston, if I want to live in Boston).
The point is that leaving off “Trump says” makes it sound like something that will actually happen.
What baffles me is why people still take it all seriously, we've had well over a decade to examine his patterns of behavior and the takeaway is that fully 99.999% of his utterances are worthless. In the rare case that his promises are turned into some shambling semblance of reality there's always plenty of warning; in the case of VZ and Maduro you had significant troop movements for months for example.
Unfortunately by treating his every utterance as requiring attention he gets what he wants, the media gets clicks, bloggers get clicks, and people get to use it as part of an eternal argument over "what comes next".
People here at least should be more adept at recognizing and responding to patterns.
Um… banned by what authority? I fail to see how this is legal. Same as banning obese people from buying cookies
How does this affect Arrived?
What about REITs!? They are a crucial source of portfolio diversification!
"US will ban" More like Trump said today that he will try to ban...TACO and all
Believe it when you see it folks. No sooner.
There goes my home value
This headline is wrong. It’s just something Trump said and any mechanism to do this seems dubious at best. The entire idea is likely unconstitutional.
There is a conservative case for this in that the 30 year fixed mortgage, combined with all of the foreclosure protections both old and new, amount to a government benefits program. Historically, this type of mortgage was developed to promote family homeownership. The mortgage systems have continually blown up in "crises" in part because it's a product of policy more than it is a market product. This is partly why investors both corporate and small flipper types actually do cause serious distortions: the US housing market is a welfare program first and a market for bundled land and houses second.
No one wants to abolish this welfare program (you would have an easier time abolishing Social Security), but also the government wants to keep the trappings of a market price system. It is easier to have serial crises and to blame some guys for the predictable explosions every time, adjust the laws to create enormous numbers of lawyer billable hours nationwide, and then set the stage for the next crisis and the next round of patsies to be blamed. Fortunately, this time we have AI to write all the think pieces about what it really means.
I mostly agree with your comment except the part where flipper types and corps cause distortion because they have 30-year mortgages at their disposal. A fixed rate, 30-year is distortionary on its own; it's a uniquely American "product" and banks in other countries would look at you crazy for requesting such a thing.
Anyone want to bet that this will cause the Second Order effect of no more new single-family homes being built and instead move more and more future development into co-living dwellings.
Given this, it’s inevitable - the New American Dream will be communal living.
The TechBros currently run the country, so I don't buy into anything the current government does in regards to Average Joe, including family homes.
Just build more homes. JUST BUILD MORE HOMES.
Ironic this coming from the king of scummy landlords
Corporations can build their own buildings and rent them out, keep them out of the second hand market.
They are already doing this. They build entire SFH communities exclusively for rent. Nobody even has an opportunity to buy them. Build to rent, etc.
Does wall street investors include private equity? i thought i was pretty sure that is most of the problem, but maybe i am wrong.
Either a) this is window dressing and nothing material will change or b) there's a housing crash coming.
Even if their negative impact is a fantasy, they provide no benefit. There is no reason we shouldn't ban them.
> "People live in homes, not corporations," Trump said.
Very surprisingly progressive opinions from Trump.
I do completely agree though, the consumer surplus of housing should be captured by people. Not investors looking to profit.
It's extremely toxic to society when investors get to eat the utility of housing.
Individual owners drive far more NIMBY policy than corporations. The rent of land exclusivity should accrue to the public rather than to private individuals or corporations.
This is not surprising at all. I'm not sure why people keep making this mistake thinking that good 'ol Republicans are flipping their script all of a sudden. MAGA is a populist movement and has a lot in common with the far left types.
> Very surprisingly progressive opinions from Trump.
Trump does not possess many "locked-in" opinions. He can be persuaded to support anything if you are charismatic enough.
Oh come on. There are plenty of uncharismatic rich people who have still managed to persuade him.
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the carve outs will be insane and defeat the whole point
absolutely, easily predictable
what should be a one page bill will have riders of insanity
they'll probably do it like they do with corporations having more than 15 employees, so every little business just has 15 people contracting out to the next business with 15 people etc., there will be a corporation for every 15 houses etc.
how is this going to help when they already own it and new housing is built at a snail's pace? investors pulling up the ladder behind them
not that I expect it to even happen at all
title of post is "US will ban", title of article is "Trump threatens to ban". OP why are you misleading people?
Reuters taking the regime seriously is weird.
Interesting that Blackstone stock is the same as a week ago. Either this can't be done, or it can be done and they're exempt, or it will be reversed.
Or it won't materially impact Blackstone's business because single-family homes are a tiny sideline for them and not where they make most of their money.
Headline is very misleading. Reuters prefaces this with "Trump says" which is weaselly enough.
Quote from the article: "In a post on Truth Social, Trump said he was immediately taking steps to implement the ban which he would also call on Congress to codify in law."
The president can't do this. His EO will likely be some kind of statement of intent or request to the FTC to see what can be done. Really, this is an exhortation for Congress to do something. A bill has yet to be written.
Why do they not link Trumps posts? I would really rather be able to see what he said, and this was something he posted online to truth social
Edit: I think this was the post https://truthsocial.com/@realDonaldTrump/posts/1158550595275...
I guess they didn't link it because it changes the meaning of the article, his post reads more like he's going to discuss it and wants to do something about it.
Even if they do it's a little late at this point, plus I don't believe it, since Trump and most people in the admin are too friendly (borderline controlled) by the people who are friendly/control entities like Blackrock, it's either beneficial to them to stop the competition from doing it since they bought enough for now or there is a big gotcha in there.
I know how that paragraph reads, but the past couple of years have made me too cynical to trust anything they say they're going to do.
Yet again the Trump admin identifies an issue but misses the nuance. We want investors to encourage more homebuilding, the problem is more regional concentration - in regions where PE owns a big enough % of the homes that they can monopolize and control the rents. Or NIMBY policies (where the federal government could dock funding to states that don't build to match population growth).
Yea, right. "Wall Street" has publicized lashings and rules, but there's also a backdoor. And they obviously have a strangle-hold on rentals.
The end game for capitalism is for everyone to rent everything: healthcare, cars, software, music, physical items, roads, etc.
So there are (at least) six important aspects to the housing crisis.
1. Politically, this issue is a winner and it's crazy that the Democratic Party has refused to bang the drum on this, basically because it potentially upsets corporate donors. They have instead ceded this poopulist political ground to the Republican Party. The Democratic Party does not want to win elections and this should never have been more obvious than the 2024 presidential election;
2. Hoarding housing is state-sanctioned violence. You need housing to live. Housing affordability is the number one factor in homelessness [1]. That then subjects people to violence and danger that we, as a society, are allowing to happen. There is no reason that the wealthiest country on Earth can't provide a roof over the head of every man, woman and child within our borders;
3. The private sector will never solve the housing crisis because solving the housing crisis involves devaluing, definancializing and decommodifying housing. Wealthy people and large corporations who own a lot of real estate won't on their devalue their holdings. Things like Ezra Klein's Abundance claptrap are simply putting a Democratic bow on Reagan era trickle down economics and deregulation. This requires state action. That means the state needs to build significant amounts of housing to provide to people to regulate the housing market. The poster child for this policy is Vienna, Austria;
4. Voters have fooled themselves into thinking that increasing house prices are good for them. They're not. They're bad in virtually every way. There are people who bought a house for $100k in 1990 where that house is now worth $2M. Are you $1.9M richer? No. Because if you sell it what happens? You have to buy another house. And if every other equivalent house costs $2M you still only own one housing unit's worth of wealth;
5. Increasing house prices are simply stealing from the next generation and suppressing wages. Why suppressing wages? Because if you're laden with debt, you'll be a complaint little worker bee. You need that paycheck to not be homeless. You are in effect a debt-slave, particularly combined with student and possibly medical debt; and
6. The next wave of antitrust action will involve the use of AI as a means for market collusion and manipulation. A great and relevant example is RealPage [2]. If all the landlords use the same software and that software is designed to algorithmically increase rents, then that's market collusion. Honestly, dynamic pricing in general needs to be banned.
[1]: https://www.pew.org/en/research-and-analysis/articles/2023/0...
[2]: https://www.justice.gov/archives/opa/pr/justice-department-s...
> There are people who bought a house for $100k in 1990 where that house is now worth $2M. Are you $1.9M richer? No.
This is often repeated but not 100% correct.
You are in fact richer, and you can leverage this $2m in equity to take on debt and buy more houses. This is what has been happening here in Australia, and it's a major factor in the continued rise in prices.
When you've done this, hung on a handful of years and all of your houses have gone up 20-50%, you can cash out for a very nice sum indeed. AFAICT this is now a pretty mainstream middle-class retirement plan in this country, and it's terrible because, as you point out -
> Increasing house prices are simply stealing from the next generation
The money is coming from people, usually younger people, who are funding the insane market with ever larger mortgages and staying in rental properties longer, both of which benefit the equity-holder.
In the US you can often buy houses with no money down.
Also, if you're taking the equity out of your $2M house, how are you servicing that debt?
My point is that it's an awful lot easier to buy 6 $100k houses than it is to buy 6 $2M houses and if houses weren't speculative assets, maybe we wouldn't get those buyers driving up prices.
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They should go all out and nationalize zoning. Let it be challenged all the way to Supreme Court. Trumps developer buddies get paid, the grift continues and the housing crisis is eliminated.
Do it. Do it now.
Submitted editorialized title in a misleading way.
Correct title is: "Trump says he will ban Wall Street investments in single-family homes"
I'll believe it when I see it in action.
It might help in the long term, as it can force cities to stop densifying. And as we all know by now, densification is the leading cause of unaffordability. The US has more houses than households, but people are forced by economic forces to move into denser and denser areas.
But short-term it'll hurt availability. One of the most common ways to enshittify cities is buying an SFH, demolishing it, and plopping a 3-4 apartment complex in its place.
This sounds backwards? Density means more units available, which should lower costs. Supply and demand. Rentals in a dense complex are cheaper than standalone rentals or duplexes, townhomes are cheaper than SFH, etc.
I don’t think cities should force density, but there’s no reason to go the other way either as long as growth is managed properly in terms of traffic, transit, and infrastructure.
i can see what they mean. Another way to think about it is like how adding a lane to a highway doesn't decrease traffic it increases it. There's no shortage of demand in densely populated areas otherwise they wouldn't be densely populated. Adding more units will be met with more demand like adding a lane to a highway is met with more cars on that highway. Fix it by making the area less dense and prices will drop like how the way to fix a busy highway is to decrease the cars on it and traffic will lighten up.
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> This sounds backwards?
Nope. The ONLY way to get cheaper housing is by reducing the city population.
> Supply and demand.
Sigh. No. You assume that the demand is fixed. It's not. By building new housing, you _increase_ the demand. And always faster than you can satisfy it.
I just love this example:
Forbes 2016 - "Tokyo's Affordable Housing Strategy: Build, Build, Build", "The Great Urban Myth: 'Cities Can't Build Their Way To Affordable Housing'"
Reuters 2023 - "Surging Tokyo property prices squeeze out young professionals",
Japandaily 2025: "Housing Crisis: Families Struggle to Buy Homes in Tokyo" ( https://japandaily.jp/housing-crisis-families-struggle-to-bu... )
> Rentals in a dense complex are cheaper than standalone rentals or duplexes, townhomes are cheaper than SFH, etc.
Try to find a city where dense housing made it cheaper.
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> And as we all know by now, densification is the leading cause of unaffordability.
This is the first time I see this bold claim, what evidence do you have to prove it?
It's a simple observation. No large city in the US or Europe reduced the housing prices by increasing density. I gave an example of Tokyo in the other comment in this thread as an absolutely illustrative case.
The only price decreases happened only during the 2008 crisis and during the pandemic lockdowns, due to local population decreasing.
People want the value of their house to go up after they buy it, but stay low before they buy it. This is all nonsense. If people in an area keep breeding, housing costs will go up. It's that simple. Increasing housing prices are actually one of the only checks that keep humans from overbreeding and ruining large swaths of desirable places to live.
Now ban everyone from buying them :P Tax the land
This is another non-solution from Trump. Similar to the "no taxes on tips" nonsense that applies to almost no one since the cap is so high. It's a populist move that doesn't address the problem but appears to be a good thing for working class people at first sight.
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Agreed. It's important to evaluate policies regardless of the party promoting them.
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So what should be done instead?
Until congress actually does something all of this is simply hot air. I do not see how this could be implemented (other than some kind of tax) and pass muster with a conservative SCOTUS.
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"This is gonna happen... unless..."
Manufacture a crisis only you can solve, for the right price.
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Simple test
If anyone thinks this is not a problem, why would they comment, it would be irrelevant as banning salmon from participating in taikwondo
Instead everyone says how it's so false and this is just silly. This tells me - they are liars and it isn't silly at all
Will not happen with the current administration.
Like so many other big promises, it will appease a lot of people, but there will be no real follow through.
Any regulation that prevents unrestrained capitalism is immediately decried as socialism and therefore evil.
These kinds of promises are made which temporarily create market volatility, and once it later (usually quite soon) becomes clear that the big thing will not actually happen, the markets snap back. At this point, it’s incredibly likely that these situations are manufactured to both look good AND create large short term investment gains for people in the know - without actually changing anything.
There is hope for humanity.
A clock is right twice a day
At least
I’m from the government and I’m hear to help!
How about stopping all non-occupants from buying properties.
I don’t want to purchase property, so where do I live?
Apartments, sorry I should have been more clear - all SFH should be owner-occupied
Sounds like a terrible idea. Have you heard otherwise?
Anything bad for Wall Street is generally good for the rest of us.
Just ban corporate ownership of private homes. Ban second homes altogether.
There will be no way to enforce this such that “Wall Street” can’t easily get around it, so it is clearly for show and not an actual attempt to solve a problem.
This is a good thing, the next step however is to block the guys that use sites like BiggerPockets.com from buying up more then 5 single family homes. I know a whole bunch of guys who own 10 or more houses. That is excessive. We need to limit all investment of single family housing. Apartment complexes? Be my guest buy all you want, build all you want. But lets keep our neighborhoods full of people who can actually live in them.