Trump Targets Corporate Landlords When Zoning Laws Are The Real Problem

America’s housing problem has the wrong scapegoat. President Trump’s pledge this week to ban institutional investors from buying single-family homes jolted markets, briefly sending Invitation HomesAMH

and BlackstoneBX

tumbling as much as 10%. The catch is that corporate landlords own less than 1% of America’s single-family housing stock, so forcing them out won’t meaningfully move prices. The real culprit is the web of zoning restrictions, land-use regulations, and construction bottlenecks that have left the country short 3M to 4M homes.

Scapegoating the wrong villain: The proposed ban would prevent large institutional players from acquiring additional properties — but institutional purchases have already plunged since mid-2022, as rising interest rates drove up the cost of owning these properties. The top 24 owners of single-family rentals combined hold just over 520K homes — equal to roughly 3.5% of the 15M rental homes in the US and only a fraction of the total single-family housing stock.

• Institutional buyers served as buyers of last resort in late 2022, stepping in as individual demand dried up after the Federal Reserve’s rate hikes.
• Homebuilders face higher risk with fewer buyers, while Blackstone has been a net seller for years, cutting its housing portfolio by over 20%.

The Real Supply Crisis Nobody Wants to Fix

America’s affordability crisis traces back to a long failure to build enough homes. Median mortgage payments now eat up more than 30% of buyer income, up from under 20% pre-pandemic, while rent-to-income ratios are at their highest since 1980. Vacancy rates for both rentals and for-sale homes sit below pre-2008 levels, leaving inventory tight. According to Goldman Sachs Research, restoring 1990s-era affordability would require up to 4M extra homes beyond normal construction — about 2.6% of today’s housing stock. And regulations have become the biggest roadblock.

• Height restrictions limit construction to two or three stories on ~60% of residential land in the 240 largest metro areas, with buildings allowed to rise five stories or higher on just 7% of land.
• Local government regulations now add $93.9K to the price of a new single-family home — a 45% increase over the past decade that gets passed directly to buyers.

Forever renters: The median age of a first-time homebuyer hit 40 years old for the first time on record, with new buyers making up only 21% of purchases — another sign of how badly affordability has slipped. Compared to first-time buyers in 2007, the decade-long delay in buying a typical first home can mean losing more than $150K in potential equity growth. Yet instead of tackling zoning laws, construction labor shortages, and regulatory costs that actually constrain supply, policymakers are targeting a convenient scapegoat that controls less market share than rounding errors. As Realtor.com senior economist Jake Krimmel bluntly put it. “The affordability crisis is fundamentally a supply problem. Large corporate ownership is a red herring in the broader supply debate.”