Until the Iran war, the main political pressure on President Donald Trump was high prices, particularly on housing and food. So earlier this year, he announced an executive order on a popular policy - banning Wall Street investors from controlling housing. “I am immediately taking steps to ban large institutional investors from buying more single-family homes,” he said, “and I will be calling on Congress to codify it.” I didn’t believe Trump was serious, because he’s generally talked a big game on constraining Wall Street, but hasn’t followed through.
However, something unusual happened. Trump’s pledge meshed with a set of vibrant debates about housing happening in both parties, and it may end up turning into law.
To understand why, we have to start with how Trump’s arguments were received in Congress. After Biden lost in 2024, people on both sides of the aisle blamed high housing costs, particularly the spiraling prices and rents in the post-pandemic period, for the collapse of the Democratic Party. Trump inherited the problem, and hasn’t solved it.
The housing story was dominated by two different factions. One group, the “Abundance movement,” argued that zoning prohibitions prevented more housing supply, and thus kept prices high and unaffordable. This group generally blamed homeowners and bureaucrats for refusing to allow more multi-family housing.
The second group, anti-monopolists, argued the predominant problem was financial. After the Great Financial Crisis, went this argument, the number of builders fell by 60%, because smaller builders couldn’t get a loan while large ones could borrow cheaply from the capital markets. Moreover, large institutional buyers were taking existing supply off the market and engaging in various forms of soft monopolization to drive up rents. And big builders were engaged in land-hoarding to keep supply off the market.
On BIG, we got into a fight with Abundance co-author Derek Thompson, over the specific case of housing in Dallas. The passion is real, and exists for a reason. Here’s Thompson in 2021 calling allegations of private equity control of housing leading to higher prices something close to a conspiracy theory.
What’s going on is a debate over the nature of American society. For much of the 20th century, government support for homeownership was a foundational method of U.S. statecraft. As the founder of the post-WWII suburb, William Levitt, once said, “No man who owns his own house and lot can be a Communist. He has too much to do.” Every President supported homeownership, we anchor our schools and communities around it, and homeownership is associated with pretty much every socially beneficial health trend.
Wall Street was linked to Main Street through the housing finance channel, first through thrift loans, and then eventually through securitization. But from the 1980s onward, as wage growth flattened, Wall Street started lending too much to Americans, and the home became a financial asset as much and eventually even more than a place to live. This dynamic ultimately led to the great crisis of 2008, which snapped the spine of the American system.
In the post-crisis era, Obama decided that renting, not ownership, was a more suitable option for Americans. And he had his administration sell off large swaths of single family homes in foreclosure to large investors to turn them into rental properties. As Morgan Stanley put it, “[e]ach distressed single-family liquidation creates [not only] a potential renter household” but also “a potential single-family rental unit. That meant, for “the first time in history,” there was “an opportunity for institutions to own single-family rental properties as part of a larger asset allocation strategy.”
In other words, the rise of institutional ownership of single family housing is new, a result of Obama-era changes to try and move America from a society with high homeownership to one where people rent. This shift hasn’t been wholesale, a majority of Americans still owns their own home. But the age of the average homebuyer moved from 39 years old to 59 years old in the last 15 years.
Everyone else rents, and increasingly from corporate landlords. Institutional ownership is regionally concentrated, with investors buying up properties in particular cities. In Atlanta, for instance, large institutional investors have dominant shares of the market.
As homebuilding consolidated, and an institutional asset ownership class emerged, the big builders started working with Wall Street to craft single family homes from scratch that would never go on the market. This “Build to Rent” sector took off, doubling in market share from 2021-2024. Giants builders Lennar likely have market power, and may also be hoarding land as part of their strategy to work with big institutional investors to keep home prices up. After all, one way to keep supply off the market for normal buyers, and thus control prices, is to build housing for large institutional owners.
For a long time, most housing analysts and think tank types dismissed private equity buying up homes as some sort of conspiracy theory, even though it was a pretty common story to hear someone talk about how they couldn’t buy a home because of the all-cash purchase by some sort of investor. But over time, serious policymakers started to notice that the frustration was more than just a few dissatisfied anecdote tellers.
In 2024, the Federal Trade Commission under Lina Khan found that Invitation Homes, a spinoff of Blackstone, had engaged in rampant misbehavior. The CEO told one of his subordinates to “juice this hog” and they did so by deceiving renters, unfairly evicting people, charging junk fees, and so forth. Her successor, Trump FTC Chair Andrew Ferguson, is continuing her legacy in this area. Last year, Senator Jon Ossoff investigated and found that institutional purchases make it harder for Americans to buy homes.
Congressional documents showed that “renters in institutionally-owned SFR homes often experience higher rent increases, inflated fees, and diminishing quality of housing over time.” And Federal Reserve economists wrote a paper observing that such investors “raise rents at 60 percent higher rates than the average increase when first acquiring the property,” and that rents overall go up.
This information, and increasing frustration of Americans on high housing costs, led to Congressional action.
In July, Republican Senator Tim Scott and Democratic Senator Elizabeth Warren passed a bill out of the Senate Banking Committee doing meshing the Abundance and anti-monopoly framework. It encouraged more manufactured housing to lower costs, facilitated faster zoning approval, and loosened standards for financing for multi-family apartment construction, among other changes. There was more public money for homebuilding, and support for cities trying to speed up processes. It promised to be some of the most important housing legislation passed out of Congress in decades. It didn’t include anything on institutional bans, but drew support from both anti-monopolists and Abundance groups.
Then came Trump’s comments and executive order. And if anything, his rhetoric was even more heated than the policy he suggested; he criticized the big homebuilders for land hoarding and attacked them as similar to the oil cartel OPEC. As Dave Dayen notes, the White House pushed hard for Congress to bar institutional ownership, going so far as to criticize the House version of the bill for not including such a ban. So Senate Republicans, led by Scott, decided to negotiate one with Warren and add it to their July bill. And they did, which Trump approved in his statement of administrative policy on the Senate bill.
That part of the bill bans large institutional investors from buying up single-family homes, setting a limit of owning 350 homes. They can still build new construction, but must sell it after seven years, unless the renter wants to stay, in which case that gets extended by another three. There are a few other loopholes, such as allowing for institutional ownership of manufactured housing, which is designed to reduce costs. But it’s a pretty good package.
Yesterday, it passed by an overwhelming margin of 89-10. And the administration is encouraging the House of Representatives to pass it.
But if you’re thinking this story sounds too good to be true, well, you’re right. Now it heads to the House of Representatives, where there is opposition from the Republican head of the Financial Services Committee, French Hill. And his goal is to force the Senate to sit down and negotiate something different, likely remove the institutional ownership caps, and then jam a bunch of bank and crypto deregulatory policy in there to make the whole thing unpalatable to Democrats.
There are a couple of dangerous signals that Wall Street is rousing to back Hill’s opposition strategy. The first is that Senator Brian Schatz, who is set to take over as the Democratic Senate leader in a few years, opposed it to signal to private equity that he’s going to be a reliable ally. He gave an assertive speech against the provision preventing Build to Rent from owning large swaths of housing for more than seven years. Here’s Dayen.
Schatz called [the Build to Rent] particular measure “positively Soviet,” described it as “an effort to demonize people who want to build rental housing for folks,” and claimed it was a “drafting error,” presumably to embarrass its authors into a fix. “There is literally no reason to do it this way, and it would take like a two-line fix. But what we were told last week was, I’m sorry, the bill is closed,” he said.
The peroration got a lot of attaboys from the abundance folks, who have decided to magnify what Schatz even admits is a small part of the overall housing construction market and claim that this poisons the entire bill. But Schatz was, frankly, lying to his own supporters. He never filed an amendment to deal with this part of the bill, according to Senate aides, even though first-order amendments were open until this Monday and second-order amendments until this Wednesday. There was never an attempt to make that two-line fix or rally support around it. (Schatz’s office was asked about this and did not respond.)
Another signal is that, according to conservative Mike Cernovich, “a massive influencer contract to block this went out.” He continued, “Keep an eye out for ‘MAGA’ people who suddenly try derailing Trump’s plan to make home ownership more affordable. BIG MONEY is trying to stop this in the House.” So we’re going to see chatter online, especially among MAGA opinion leaders, on this legislation.
And finally, when Speaker Mike Johnson asked the President about whether he should push to pass the law in the House, sources claim that the President said “no one gives a fuck about housing.” I don’t know if that’s true. Trump may have said it, he also changes his mind a lot.
One interesting point is that a lot of the people who argue that supply constraints are the main factor limiting housing went aggressively to bat for Wall Street’s right to own homes, saying that such a limit overrides everything else that’s good in the bill. If that’s true, then much of the argument from the Abundance world isn’t credible. After all, the problem then can’t be zoning, it’s just a financing issue. But not all of the people in that world agree, many are sincere and wanted to see it pass. This bill split the Abundance types in a useful way.
So what happens now? I don’t know. It may move through the House, it may not. Trump is unpredictable, and the Iran situation has thrown all calculations out the window. Regardless, this legislation to make housing something ordinary families own, instead of an asset class for Wall Street, has moved further than I imagined possible.
That’s good news, in some dark times.
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cheers,
Matt Stoller






















