Trump Issues Order Cracking Down on Corporate Homeownership
The president's order is not the comprehensive ban on large investor–owned housing that he promised. But it could still have a chilling effect on the single-family rental market.
Happy Tuesday, and welcome to another edition of Rent Free. This week's newsletter includes stories on:
- President Donald Trump's executive order cracking down on large corporate ownership of single-family housing.
- A conservative proposal for boosting housing supply.
- Los Angeles' transit agency voting against more housing near transit.
Trump Issues Executive Order Aimed at Corporate Buyers of Single-Family Homes
This past week, President Donald Trump at last issued his promised executive order attempting to exclude large institutional investors from the single-family home market.
In the years following the Great Recession, large investors purchased tens of thousands of single-family homes, which they then rented out to tenants. More recently, the country has seen a steady increase in the number of build-to-rent subdivisions financed by large investors.
Large buyers' entry into the single-family housing market has provoked a lot of bipartisan opposition from politicians who argue that corporations are snapping up homes that would otherwise have gone to individual families.
Rent Free Newsletter by Christian Britschgi. Get more of Christian's urban regulation, development, and zoning coverage.
In a Truth Social post earlier this month, Trump promised to issue an executive order banning large companies from owning single-family homes and called on Congress to codify that ban.
The president's full executive order falls short of a comprehensive ban.
It directs federal departments to issue guidance within 60 days to prevent agencies and government-sponsored enterprises from "providing for, approving, insuring, guaranteeing, securitizing, or facilitating the acquisition by a large institutional investor of a single-family home that could otherwise be purchased by an individual owner-occupant."
How much of a practical impact this order will have is difficult to say, in part because key terms are left undefined.
The administration's order attempting to crack down on large institutional investors' ownership of single-family homes does not immediately define either large institutional investor or single-family home. The Treasury Department has 30 days to define these terms.
Jay Parsons, a housing economist, says that large institutional investors (which are usually defined as corporate entities that own 1,000 or more homes) typically do not rely on the types of federal programs that might be affected by the order.
Nevertheless, he predicts the order will make large investors skittish about purchasing single-family homes.
In the past few years, large investors (who always owned an exceedingly small percentage of single-family homes in the country) have generally been net sellers of single-family homes. A vague threat of a federal regulatory crackdown could be enough to get them to accelerate their exit from the market.
"What [the Trump administration's order] does is it creates an enormous cloud of uncertainty and risk for investors," Parsons tells Reason. "There are so many question marks that it's going to put a freezing effect on capital's willingness to invest, even if it's not a full, outright ban."
Trump's order dabbles in the idea that large investors are purposefully holding homes off the market in order to raise housing prices.
The Biden administration had brought an antitrust suit against RealPage, which provides rent recommendation software to landlords and their clients, that was predicated on the theory that the software enabled landlords to collude on holding units vacant and charging above-market rents
The Trump administration settled that lawsuit against RealPage. It now threatens similar action against institutional investors.
The order directs the U.S. Attorney General and Federal Trade Commission to review corporate buyers' "substantial acquisitions" of single-family homes and prioritize enforcement "against coordinated vacancy and pricing strategies by large institutional investors."
The vacancy theory of high home prices never made much sense and is contradicted by the limited academic research on the effects of landlords' use of rent-recommendation software. This theory makes even less sense when applied to the very small number of homes owned by large investors.
One of the biggest concerns critics had of Trump's promised ban on large corporate ownership of single-family rentals is that it would kill the small but growing build-to-rent sector of the market.
The president's order explicitly excludes build-to-rent developments from its promised enforcement actions.
Even with that carve-out, the exclusion of large investors from the single-family housing market will have some negative effects, says Parsons.
Large investors "have brought some innovations into the market," he says, mentioning large owners' capacity to provide better emergency maintenance and customer service. Excluding corporate buyers from the market could see those benefits go away.
To the degree that Trump's order succeeds in converting more single-family rentals into owner-occupied housing, it would be a loss for renters.
Research from the Netherlands has found that when "buy-to-let" sales were banned in select neighborhoods in Rotterdam, the homeownership rate went up, but so too did neighborhood income.
Higher-income homebuyers benefited from the policy, but renters, who couldn't or didn't want to buy a home, lost out.
The MAGA Plan for Increasing Housing Supply
There's an increasingly bipartisan consensus that American home prices are unaffordable because of excessive local and state regulation.
That consensus has prompted politicians and policy wonks of all ideological persuasions to propose using federal incentives to encourage local- and state-level deregulation.
This past week, the America First Policy Institute (AFPI), a conservative think tank with close ties to the Trump administration, released a housing policy brief that includes a number of federal policy proposals aimed at encouraging states and localities to cut their own red tape.
"Excessive regulations that inhibit supply are one of the primary causes of the housing affordability crisis," reads the AFPI brief. While the federal government has limited authority to directly preempt local regulations, it can use federal funding as an incentive to deregulate, it says.
The AFPI brief suggests invoking the Fair Housing Act's requirement that federal housing programs "affirmatively further fair housing" to prioritize housing block grants to states that implement deregulatory practices such as reducing permitting times, paring back energy efficiency rules, and eliminating rent control and "inclusionary zoning" policies.
The first Trump administration similarly proposed amending Barack Obama–era fair housing regulations to do just that. This initial proposal was later scrapped in 2020 in favor of a much narrower fair housing rule that did not attempt to direct funds to states and localities that adopted deregulatory practices.
The AFPI brief proposes a more innovative revolving loan program that would provide financing to affordable housing projects in jurisdictions that adopted the aforementioned deregulatory policies.
Under the Joe Biden administration, the federal government launched a grant program intended to subsidize states and localities that removed barriers to new supply. (A lot of those grants ended up going to localities that had not, in fact, adopted pro-supply policies.)
A theme of the two bipartisan federal housing bills being considered by Congress currently is to shift awards from existing grant programs to jurisdictions that have managed to increase housing production through the removal of regulatory red tape.
The AFPI proposal is similar in spirit to these ideas, but has important differences.
Unlike the Biden-era grant program and many of the proposals included in the pending congressional legislation, it would loan money to private builders in deregulated markets, not subsidize governments to change their own rules.
Additionally, the AFPI proposal would not consider zoning codes' restrictions on use and density when determining whether a jurisdiction had implemented deregulatory policies.
"Many communities spend many, many years coming up with their master plan, working on their zoning," says Jill Homan, one of the authors of the AFPI report. "I'm not advocating at all taking agriculture [land] and turn it into housing."
The AFPI brief includes a number of other proposals for improving housing affordability, including expanding tax credit programs for homebuyers, encouraging more trade apprenticeship programs, and eliminating the federal regulation that requires manufactured homes to sit on a permanent steel chassis.
The white paper is yet more evidence that groups of all ideological stripes think that American home prices are too high because of excessive state and local regulation. It's also evidence that there's still a lot of disagreement over which particular regulations should be gotten rid of and what form federal incentives for deregulation should take.
Taking the Transit Out of Transit-Oriented Development
Last week, the board of the Los Angeles County Metropolitan Transportation Authority (Metro) voted to approve a staff report asking that L.A. County be exempted from a new state law, Senate Bill (S.B.) 79, that allows apartment buildings to be built near major transit stops.
S.B. 79 was one of the major housing bills passed by the California Legislature last year with support from legislators of both major parties.
The law uses a two-tiered system of upzonings to allow residential projects of up to nine stories by right within a quarter-mile of heavy rail and high-frequency commuter rail stations, and smaller midrise projects further away or near less heavily serviced rail and bus stops.
Supporters of the law argued that allowing more housing near transit was good for both housing affordability (more homes=lower prices) and transit systems (more homes near transit=more ridership).
In its staff report, Metro took the curious view that the law was actually bad for transit, as it gave anti-density activists cause to oppose the expansion of new transit lines.
"SB 79 has become a catalyst for local opposition to Metro's transit projects. By linking increased housing density to both existing and future transit investments, the law has intensified resistance from some cities and community groups that now view new transit projects as a trigger for state-mandated upzoning," reads the report.
The Legislature is currently considering a bill that would make some modest tweaks to S.B. 79. The Metro Board asked for more substantial changes to the law, including exempting Los Angeles completely and/or limiting the law's applicability to existing transit stops.
Los Angeles area politicians have been among S.B. 79's biggest critics. L.A. Mayor Karen Bass, who is also on the Metro Board of Directors, argued that the bill, by enabling more housing construction, creates more opposition to housing. Bass was one of the directors who voted in favor of asking for L.A. to be exempt from the new law.
Quick Links
- The trade association representing Washington manufactured home parks has sued the state over a new rent control law they claim is bankrupting their properties.
- The Trump administration's tariffs have had a minimal impact on residential construction costs, says large homebuilder D.R. Horton.
Tariffs still haven't had much impact on residential material costs, D.R. Horton says
"We still haven't taken any significant or noticeable increase in material [prices] due to tariffs" - Jessica Hansen, senior vice president at @DRHorton pic.twitter.com/SVAPG5CupS
— Lance Lambert (@NewsLambert) January 22, 2026
- A New Jersey town considers using its zoning code to block an Immigration and Customs Enforcement facility.
- Federal housing officials threaten sanctions against local housing authorities that fail to verify residents' citizenship status.
