The White House has begun circulating draft legislative language to ban institutional investors such as Blackstone from purchasing single-family homes, which it hopes Congress will include in a larger bipartisan housing bill.
The Washington Examiner obtained a draft of the text on Thursday evening. The effort to share legislative text on Capitol Hill shows that the White House is serious about cutting off big firms from buying up single-family homes, despite concerns among many in the industry and free-market economists that doing so would reduce access to housing.
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The proposal, in which the Trump administration could try to have included in either the bipartisan bill in the Senate, the Road to Housing Act, or the House’s Housing for the 21st Century Act, is fairly straightforward. It defines a “large institutional investor” as any investment fund, corporation, or entity that controls over 100 single-family homes.
The draft language would exempt build-to-rent single-family homes.
Trump first announced the proposal earlier this year and later signed an executive order meant to effectuate it in part. But the administration’s goal has always been for Congress to pass such a restriction into law.
Proponents of banning firms from buying single-family homes, many of whom are on the Left and populist Right, argue that such investors are crowding out homebuyers. Others in the housing space, though, say that is not the case and that the policy could backfire by making housing more expensive for some.
At the heart of the matter is that some major institutional investors, such as Blackstone, have made headlines for purchasing large numbers of single-family homes and renting them out as an investment strategy.
Housing affordability has become a campaign topic in recent election cycles, and the purchases by these major firms have prompted lawmakers, particularly on the Left, to explore ways to stop, or at least dissuade, them from doing so.
Critics of the proposal point out that not only do these institutional investors purchase a tiny percentage of the total housing stock, but they might also make it easier for people with poor credit to rent homes they might not have been able to obtain a mortgage for.
There are two separate bipartisan housing bills in Congress. The House recently passed the Housing for the 21st Century Act, which followed another major bipartisan housing bill, the ROAD to Housing Act, that was cleared by the upper chamber but then excluded from the final text of the must-pass National Defense Authorization Act.
Both bills are meant to boost the supply of homes and lower housing prices, in part by lessening regulations on housing and encouraging state and local governments to ease land-use laws. It’s been unclear whether Trump supports the underlying House and Senate bills, after he said he doesn’t want to see people’s home prices fall.
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After the reporting, the White House said in a statement the Washington Examiner that the effort to ban large institutional investors from buying single-family homes has enough support within both major parties to become law.
“The White House is pleased with the collaboration coming from both chambers and both sides of the aisle as Congress works toward enactment of a housing package,” said White House spokesman Davis Ingle. “The President has made it clear that he is committed to signing legislation that truly makes purchasing a home affordable again, and a key ingredient is his popular proposal to ban large institutional investors from purchasing single-family homes.”
