Trump’s war on Wall Street landlords could raise your rent

Wall Street is “gobbling up” America’s homes. Firms with names like BlackRock (or Blackstone or SablePebble) are shouldering their way into every suburban open house and offering 50 percent above asking price — in a bid to consolidate control of local markets and then jack up rents with impunity. As a result, America’s young families have been locked out of homeownership, while its renters have been price-gouged into poverty. If we want to make housing affordable again, we must ban Big Finance from buying single-family homes.

This is one of the most influential accounts of America’s housing crisis. 

The narrative has spread virally for years on social media. More nuanced versions of the tale have appeared in major publications and congressional press releases. Earlier this month, President Donald Trump pledged to “ban large institutional investors from buying more single-family homes,” then signed an executive order Tuesday that heavily restricts such purchases. And progressive Democrats in the Senate are cheering him on.

Unfortunately, the story spurring these policies is largely false. Corporate investment in single-family homes is not a major driver of Americans’ high housing costs. To the contrary, that investment has likely made housing in the United States more affordable. The “BlackRock ate our homes” narrative owes its popularity to its ideological convenience, not empirical validity.

Wall Street greed didn’t cause America’s housing crisis

Housing is unquestionably too expensive in the United States. 

In 2024, the median price of a single family home hit a record $412,500 — five times the median US income. Back in the 1990s, such a property cost only about three times as much as the typical family earned.

Meanwhile, roughly one-third of Americans — and one half of renters — spend more than 30 percent of their earnings on housing. And this cost crunch is especially severe in vibrant coastal cities, where economic opportunity is concentrated. 

Given these facts, if we want to explain America’s housing crisis, we need to identify forces that have:

• Exerted a large influence on housing markets nationally.
• Impacted high-cost areas more than lower-cost ones.

Wall Street investment in single-family homes meets neither of these criteria.

At the national level, such investment is miniscule. As of 2022, institutional investors owned 0.55 percent of single-family homes in the United States, and only 3 percent of single-family rentals. That year, the largest of these investors, Invitation Homes, held just 0.6 percent of America’s rental houses. 

We lack comprehensive data for more recent years. But we know the picture has not radically changed. The property intelligence company Cotality tracks all home purchases by investor size. And mega-investors have never accounted for as much as 4 percent of annual home sales (and that is including sales of multifamily homes, which large investors are more likely to own). 

What’s more, these sales have been concentrated in relatively affordable cities. 

Institutional investors own a negligible share of single-family homes in New York City, Boston, San Francisco, and Los Angeles, where housing costs are exceptionally high. Meanwhile, they hold 27 percent of all single-family rental properties in Atlanta, 20 percent in Charlotte, and 22 percent in Jacksonville — all cities where rent-to-income ratios are close to the national average. 

Thus, even if we stipulated that Wall Street investment reduces affordability, there simply wouldn’t be enough of it — either at the national level or in America’s highest-cost cities — for it to explain more than a tiny fraction of our housing problem. 

How institutional investors increase housing affordability

A supporter of Trump’s ban might reply: So what?

Perhaps institutional investors aren’t the primary cause of high costs nationwide. But they are buying a lot of houses in some cities. And that surely nudges prices up in those places. So why not stop Wall Street from doing that? Why let Big Finance increase ordinary Americans’ cost of living even a little?

These are reasonable questions. And there is indeed evidence that institutional investment in single-family homes has marginally increased home prices in some markets. 

Nonetheless, such investment has likely done more to reduce rents than to increase prices — and thus, been net-positive for affordability.

All else equal, the more rental homes on the market, the lower rents will be. In theory, institutional investment in single-family homes should expand the rental stock through (at least) three mechanisms.

First, this investment often finances the construction of new houses. In the third quarter of 2025, the real estate trust American Homes 4 Rent acquired 92 percent of its new properties from its own in-house builder. America’s largest landlord, Invitation Homes, has embraced similar practices: Of the 526 single-family homes it purchased last summer, 81 percent were new units that had been built to rent.

This investment expands the total stock of homes in the United States, increasing options for renters without reducing options for homebuyers by a commensurate amount. (To its credit, the Trump administration has exempted build-to-rent properties from its ban.)

Second, large landlords can increase the rental sector’s productivity through economies of scale. Unlike a small-time landlord, a company that owns 1,000 houses in Atlanta can afford to employ full-time maintenance teams. As a result, when a resident moves out of one of their properties, they will be able to rapidly refurbish that unit and lease it out again — minimizing the amount of time their home lies vacant. 

Through these sorts of efficiencies, institutional investors achieve lower operating costs than small landlords. And the less it costs a landlord to provide a single unit of housing, the more units they can profitably produce at any given level of rent. For this reason, large investors can expand rental supply more quickly in response to surges in demand. 

Finally, and most controversially, institutional investors redistribute homes from the for-sale market to the rental market. Although Wall Street has shifted towards buying newly built homes in recent years, it does still compete with ordinary homebuyers for some existing houses. And that competition can nudge up prices. 

But Big Finance isn’t buying these homes because it needs places to store its gold. It’s buying them to lease out. Every time Invitation Homes takes a house off the sales market, it adds one to America’s rental inventory. 

Ideally, we would make housing more affordable for both renters and prospective homebuyers. But Americans who can’t qualify for a mortgage tend to be more cost-burdened and economically vulnerable than those who can. For this reason, if we want to minimize the number of Americans who cannot afford decent housing, reducing rents is more urgent than cutting prices.

And empirical research confirms that institutional investment lowers prices in practice, not just in theory. According to a 2025 paper from economists at Dartmouth College and the Department of Justice, rents in Atlanta would be 2.4 percent higher today, in the absence of Wall Street investment in its single-family housing stock.  

A separate study from Baruch College’s Joshua Coven reports similar findings. He estimates that, for every one percentage point increase in institutional investors’ share of an area’s single-family rental market, rents fall by 0.7 percent.

Notably, Coven’s study accounts for the concern that large landlords may drive up rents by cornering rental markets. His paper suggests that concentrated ownership does lift rents at the margin. But this effect is swamped by institutional investment’s positive impact on supply.

And this finding is intuitive. Even in cities like Atlanta — where institutional investment is exceptionally high — no single investor owns more than 5 percent of all single-family rentals. And it is difficult for any business to dictate prices when its rivals own 95 percent of the market. 

In any case, Coven’s study suggests that — at the national level — institutional investment in houses has reduced rents by a bit more than it has increased home prices. And this is likely to be even more true in the future: In the time period examined by Coven, Wall Street had yet to shift its focus away from buying up existing homes and toward financing new ones. 

Corporate investment in single-family homes is good for integration 

From a progressive standpoint, institutional investment in single-family homes has an additional benefit: It reduces racial and socioeconomic segregation.

Much of America’s working-class lacks the credit necessary to qualify for a mortgage. They therefore cannot live in an area unless it hosts a lot of rental housing. Historically, most affluent suburbs have not fit the bill. 

Only single-family housing is allowed on most of America’s suburban land. And although large investors have always bought and rented out apartment buildings, they traditionally did not traffic in single-family homes.

Wall Street’s entrance into the latter market has therefore opened up many previously class-segregated communities to less well-off Americans. A recent study from Federal Reserve economist Konhee Chang found that institutional investment in Southern suburbs reduced segregation by enabling lower-income, disproportionately nonwhite renters to move into neighborhoods where they couldn’t afford to buy. 

Likewise, Coven’s paper shows that people who rent institutionally owned, single-family homes usually moved there from a poorer neighborhood with worse schools. And that can make a big difference in working-class kids’ lives. According to research from Harvard University’s Raj Chetty, children who move from impoverished areas to affluent ones are more likely to attend college and earn middle-class incomes as adults. 

Of course, not everyone wants more integration. In Chang’s study, when institutional landlords made an area more accessible to disproportionately nonwhite, working-class renters, homeowners nearby became more likely to move out, evidently “perceiving renters as a disamenity.”

It’s hard not to suspect that this is, in part, what the backlash to Wall Street investment in single-family homes is really about. After all, there’s relatively little complaint (outside socialist circles) about large investors buying and renting out apartments. It was only when they began purchasing houses — and thus, undermining the ability of affluent localities to keep out the hoi polloi through single-family zoning — that concern about Wall Street ownership of housing went mainstream.

The inconvenient truth 

In truth, housing in the US is expensive because it is scarce. And it is scarce because zoning restrictions outlaw apartment buildings on most residential land, red tape needlessly inflates the cost of housing production, and the government doesn’t do enough to channel capital toward the real estate sector, either through subsidies or direct public investment. 

Combine these shortage-inducing policies with income inequality, and you end up with homelessness, displacement, and lackluster wage growth. 

We can escape this fate. But doing so will require Americans to accept some trade-offs. For housing to become abundant, many middle-class homeowners will need to tolerate more construction noise, traffic, and competition for parking in their neighborhoods. Taxpayers will need to swallow greater public investment in housing construction. Green groups will need to stomach restrictions on environmental review. 

And of course, any successful effort to constrain housing prices will, by definition, make most American families’ chief financial asset — their homes — less valuable than they otherwise would be. 

Given the inconvenience of these truths, it’s not surprising that politicians have gravitated toward myths. If you blame the housing crisis on a few conniving corporations, then you don’t need to ask your constituents to contribute anything to its resolution. And taking this tack may also endear you to your party’s populist activists, many of whom are spoiling for a fight with Big Finance.

The downside is just that your demagogy is liable to make housing even more expensive. Before backing Trump’s ban, officials should ask themselves whether that is a price they’re willing to pay.