US President Donald Trump has been talking about improving housing affordability for awhile and he might finally be taking steps in that direction.
He wrote on Truth Social:
For a very long time, buying and owning a home was considered the pinnacle of the American Dream. It was the reward for working hard, and doing the right thing, but now, because of the Record High Inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans. It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations. I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks.
This is something that housing advocates and young people have been incresingly agitated by. Imaging trying to buy a home to start a family and finding out you were outbid by private equity.
Blackstone has been piling into this business and shares initially fell 8% on the headlines but have recovered to -4.5%.
Part of the reason for the recovery is that this is likely another case of smoke and mirrors. The President has very limited authority to do this unilaterally.
Property law is largely state based so even badgering Congress would have limited effects. So the idea of ‘banning’ corporate ownership is fanciful.
On the regulatory side, he could tighten rules of federally-backed mortgages or work with Fannie/Freddie. That might make it more expensive for institutions to buy single family homes but it’s certainly not a ban. Congress could try for some tax laws but it would be tough constitutionally to do anything with securities laws or interstate commerce.
In short, BTD.
