{"id":83474,"date":"2026-01-07T12:45:40","date_gmt":"2026-01-07T20:45:40","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=83474"},"modified":"2026-01-07T13:15:14","modified_gmt":"2026-01-07T21:15:14","slug":"banning-investors-pros-cons","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/banning-investors-pros-cons\/","title":{"rendered":"Banning Corporate Landlords Won&#8217;t Fix the Housing Affordability Crisis. Building More Homes Just Might."},"content":{"rendered":"<p><i><span style=\"font-weight: 400;\">This piece was originally published to <\/span><\/i><a href=\"https:\/\/www.forbes.com\/sites\/darylfairweather\/2024\/03\/05\/ban-corporate-landlords-a-housing-crisis-solution-or-a-distraction\/\"><i><span style=\"font-weight: 400;\">Forbes<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> on March 4, 2024.\u00a0<\/span><\/i><\/p>\n<p><i><span style=\"font-weight: 400;\">President Trump has <\/span><\/i><a href=\"https:\/\/www.cnn.com\/2026\/01\/07\/economy\/trump-institutional-investors-homebuying\"><i><span style=\"font-weight: 400;\">proposed a ban<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> on big institutional investors buying single-family homes. A policy move like that may sound good on paper, but as noted below, there are drawbacks to such a move, and other solutions\u2013like building more homes\u2013would have a bigger impact. Still, it\u2019s a hopeful move in a year when affordability is at the forefront of society and politics; <\/span><\/i><a href=\"https:\/\/www.redfin.com\/news\/housing-market-predictions-2026\/\"><i><span style=\"font-weight: 400;\">we expect policymakers<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> across party lines to make additional moves, including zoning changes and tax reforms, to start lowering housing costs as we enter midterm season.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Bills recently proposed to curb corporate ownership of single-family homes seem well intentioned in the face of a housing affordability crisis. In 2023, <\/span><a href=\"https:\/\/www.redfin.com\/news\/investor-home-purchases-q4-2023\/\"><span style=\"font-weight: 400;\">investors purchased a record-high share of homes<\/span><\/a><span style=\"font-weight: 400;\"> in the same year that housing became the least affordable it\u2019s ever been to middle-class buyers. Given the already intense inventory shortage, first-time homebuyers are shut out as investors buy more of the limited number of single-family homes for sale.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">New Bills Limit Corporate Ownership of Homes<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Multiple bills at the state and federal level have been proposed to curb corporate ownership of homes. A California <\/span><a href=\"https:\/\/sfstandard.com\/2024\/02\/20\/alex-lee-proposes-corporate-landlord-ban-single-family\/\"><span style=\"font-weight: 400;\">proposal<\/span><\/a><span style=\"font-weight: 400;\"> aims to prevent large corporate landlords from expanding their rental portfolios aligns with the sentiment that profiting off the housing shortage is immoral. A <\/span><a href=\"https:\/\/www.usnews.com\/news\/us\/articles\/2024-02-15\/nebraska-lawmaker-seeks-to-ban-corporations-from-buying-up-single-family-homes\"><span style=\"font-weight: 400;\">Nebraska bill would ban out-of-state corporations<\/span><\/a><span style=\"font-weight: 400;\"> from buying single-family homes. Two congressional bills, <\/span><a href=\"https:\/\/www.congress.gov\/bill\/117th-congress\/house-bill\/9246?s=1&amp;r=2\"><span style=\"font-weight: 400;\">the Stop Wall Street Landlords Act<\/span><\/a><span style=\"font-weight: 400;\"> and the <\/span><a href=\"https:\/\/www.congress.gov\/bill\/118th-congress\/senate-bill\/3402?s=1&amp;r=14\"><span style=\"font-weight: 400;\">End Hedge Fund Control of American Homes Act<\/span><\/a><span style=\"font-weight: 400;\">, would target large corporations, imposing taxes and outright bans to address the issue. But unfortunately, on close inspection, these bills wouldn\u2019t do much to improve housing affordability.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The Self Contradiction<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The bills proposed range in severity from excluding large investors from real estate tax breaks to outright banning corporations from single-family home ownership. But there is a self-contradiction: if the goal is to address the housing shortage, shouldn&#8217;t the focus be on any entity profiting from it, regardless of size?\u00a0 If it is considered immoral for large corporations and hedge funds to profit from the housing shortage, why is it acceptable for anyone to profit from the housing shortage? Why do we offer tax breaks to small corporations and wealthy individuals owning multiple single-family homes during a housing shortage?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While the bills aim to level the playing field between large investors and regular people, it&#8217;s essential to recognize that corporations owning single-family homes can&#8211;and does&#8211; benefit the housing market. <\/span><a href=\"https:\/\/www.redfin.com\/news\/gen-z-millennial-affordability-barrier-to-homeownership\/\"><span style=\"font-weight: 400;\">Not everyone wants to own a home<\/span><\/a><span style=\"font-weight: 400;\">. Many people prefer to rent and renters require landlords, whether corporate or individual, whether of apartments or single-family homes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The problem is that landlords profit off of the housing affordability crisis. The higher rents go, the better off landlords are, and the worse off renters are. However, the way to address this inequity is not to ban one type of landlord; the solution is to tax landlord profits.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Mom-and-Pop Landlords Versus Corporations<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">One might argue that mom-and-pop landlords are more virtuous and treat their tenants better than corporations, and should therefore be given preferential treatment over corporate landlords. But there are many reasons a tenant might prefer a corporate landlord. Corporations are better able to manage and address tenant repairs. Furthermore, it is easier for law enforcement to monitor and hold big corporate landlords accountable to fair housing and pro-tenant laws.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, instead of debating what type of landlord is better, lawmakers should focus on solving the underlying problem: the shortage of homes. Fewer-single family homes were built in the 2010s than in any decade going back to the 1960s. Moving forward, we need to build more homes of all types.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The Focus Should be Building More Housing<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A ban on corporate landlords might hurt development of new affordable housing units. For example, in California every <\/span><a href=\"https:\/\/www.ezplans.com\/blog\/2024\/01\/05\/2024-guide-to-the-new-adu-laws-in-california\/#:~:text=Assembly%20Bill%2068%20allows%20landlords,2024%20ADU%20laws%20in%20California.\"><span style=\"font-weight: 400;\">single-family home is now zoned for up to two <\/span><span style=\"font-weight: 400;\">accessory dwelling units<\/span><span style=\"font-weight: 400;\"> (ADUs<\/span><\/a><span style=\"font-weight: 400;\">). If a corporation intends to buy a single-family home to convert into a three-family triplex, lawmakers shouldn\u2019t get in the way.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Banning large corporations from owning single-family homes may have negative unintended consequences, or it may have no real effect at all. These bans would likely shift home purchases from large corporations to medium and small corporations, without a noticeable impact on the existing dynamics of the housing market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It&#8217;s disheartening that political leaders spend their energy fighting a problem that has nothing to do with the root of the housing crisis: the shortage of homes. Potential first-time homeowners are shut out of the housing market because there aren&#8217;t enough homes for everyone who wants to buy them. The scarcity of homes drives up the value of homes; it gives speculators (including large corporations and hedge funds) a way to profit from a basic human need: shelter. Laws supporting the development of more homes, like eliminating single-family zoning and subsidizing new construction of affordable housing, will solve the housing shortage; anything else is a distraction.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This piece was originally published to Forbes on March 4, 2024.\u00a0 President Trump has proposed a ban on big institutional investors buying single-family homes. A policy move like that may sound good on paper, but as noted below, there are drawbacks to such a move, and other solutions\u2013like building more homes\u2013would have a bigger impact. [&hellip;]<\/p>\n","protected":false},"author":13160,"featured_media":83475,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[632],"tags":[758],"dashboard":[],"coauthors":[119],"class_list":["post-83474","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-from-our-economists","tag-investors"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v27.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Banning Corporate Landlords Won&#039;t Fix the Housing Affordability Crisis. 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