By Targeting Investors, Washington Could Trigger the Next Housing Bust

American Enterprise Institute ^ | 03/10/2026 | Tobias Peter

[millenial4freedom]

The Senate will today debate the 21st Century ROAD to Housing Act. Buried in the sprawling legislation is a section reportedly written by Sen. Elizabeth Warren titled “Homes Are for People, Not Corporations.” It has the backing of the White House and broad support in the Senate. The idea sounds politically appealing. In practice, it could sow the seeds of the next housing crash.

The provision targets large institutional investors that own single-family rental homes. It effectively blocks investors that own more than 350 homes from buying additional single-family houses except under narrow circumstances. Even those purchases must generally be sold to individual buyers within seven years. The Treasury secretary would also have broad discretion to rewrite the regulatory framework governing these investments.

The political message is clear: Washington wants fewer investors in single-family rental housing. That message is already chilling investment.

The irony is that institutional investors represent a tiny share of the housing market. Large institutional investors own roughly six-tenths of one percent of the nation’s single-family housing stock. Yet Congress is poised to treat this small segment as if it were the central cause of the housing shortage.

These investors have done something Washington has struggled to accomplish: deploy private capital to renovate distressed housing and build new rental homes without government subsidy. Many purchased older properties that needed repair and invested tens of thousands of dollars per home to make them livable. Others helped finance the growing build-to-rent sector, which adds newly constructed single-family homes specifically intended for renters.

Driving this capital away will not create more housing. It will reduce investment, deteriorate the housing stock, and shrink supply. It will also be costly for renters living in these homes, whose lives may be uprooted as investors divest.

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TOPICS: Business/Economy; Computers/Internet; Miscellaneous
KEYWORDS: economy; housing; inflation; trump

[millenial4freedom]

I largely agree with the author here, but I'm still waiting for a proposal to ban foreign buyers/foreign governments from purchase residential property here...isn't that America First?

[proxy_user]

Individual house flippers will invest more aggressively than large corporations ever will, because they are eternal optimists who don’t just go by the numbers. No flippable house will go unflipped.

[Mariner]

Last year I was looking to buy in Reno.

Every time we found a house we liked, it was sold for cash. Usually within 3 days of listing.

I don’t know if it was large REITs or flush individuals, but we didn’t stand a chance...and we had $200k and VA.

[ClearCase_guy]

It seems to me that in 2008 or so, interest rates were extremely low. And many people bough Adjustable Rate Mortages — because, of course, interest rates would always be low. And house values were going up. So, a poor person with no income, and no job, might buy 3 or 4 houses so that they could sell these investments in a few years and be fabulously rich.

Then it all turned to crap, interest rates went up, people couldn’t pay their mortgage, no one wanted to buy a house, prices plummeted, and people lost everything.

Seems like times are different now. If the housing market “crashed” today I don’t know how many people would be ruined. I think the number would be relatively small. But if housing prices came down, a lot of people might benefit. In my area, a “starter home” is pretty close to a million dollars. I don’t consider that sustainable, so I figure a “crash” is a pretty inevitable correction.

[Thank You Rush]

“”reportedly written by Sen. Elizabeth Warren””

She’s a disaster. I believe the author is correct about so many points in the article. The only reason it appeals to senators who will vote for it is ~~REELECTION~~ - relying on voters who rent!!!!!

[Opinionated Blowhard]

I’m usually all for letting institutional investors invest in anything they want. I usually think that private equity firms provide a valuable service to the economy. But institutional investors buying up single family homes is not a good idea. “Creates a Housing Bust” is this article’s way of saying that housing will remain affordable for individuals. Single family home prices started becoming out of reach for the average American. When that happens, we have a huge problem. The American Dream is dead. People become serfs.

[Bobbyvotes]

Cash is king when buying a house. I always use cash to buy a house and the builder throws in bunch of upgrades for free.

[Georgia Girl 2]

Doubtful that would get past a SCOTUS challenge.

[Brian Griffin]

The problem is a lot of people have a lot more green matter than educated grey matter.

Mortgage lending officers and homebuyers with more than $200,000 in assets should have to take courses in construction estimating.

[Brian Griffin]

Large builder margins can easily be 15% ~ $50,000 on a $350,000 house.

[mewzilla]

In states woth property taxes, you don’t own your own.

You rent it from your government masters.

Check out NYS’s real estate market to see how that’s working out for the citizenry.

[PeterPrinciple]

These investors have done something Washington has struggled to accomplish: deploy private capital to renovate distressed housing and build new rental homes without government subsidy. Many purchased older properties that needed repair and invested tens of thousands of dollars per home to make them livable. Others helped finance the growing build-to-rent sector, which adds newly constructed single-family homes specifically intended for renters.

Driving this capital away will not create more housing. It will reduce investment, deteriorate the housing stock, and shrink supply. It will also be costly for renters living in these homes, whose lives may be uprooted as investors divest.

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Everything has pros and cons.

Every law has unintended consequences.

[ClearCase_guy]

Absolutely. Cash is the way to go. As I mentioned in my previous post, starter homes in my area are close to a million. And there are many, many people who just dip into their checking account, write a million dollar check and scoop up a house for themselves.

My only concern is that I feel there are a lot of young working people who can’t actually pay cash for a house today (they probably buy too much coffee at Starbucks).

I think we need to find a way to push the institutional investors out and somehow find a way for ordinary working Americans to reach for that American Dream. Or we could just totally screw our children and grandchildren and tell ‘em “Screw you. I got mine.”

[Brian Griffin]

To build a house much larger isn’t that much more expensive.

Many costs go up by the square root and not linearly.

To double the size of a house:
1. ~40% more studs
2. ~40% more wall OSB & siding
3. ~40% longer interior electric wire & horizontal plumbing runs
4. ~40% more cabinets
5. 100% more roof & floor plywood, flooring, shingles & roofing membrane
6. ~100% more for trusses & joists
7. ~60% drywall & paint

The onsite labor costs goes up by about 40%.

The offsite labor costs goes up by very little.

[Harpotoo]

housing? what about our food supply?

[Harpotoo]

so does this law stop corporations from buiiding housing?

[rlmorel]

If Elizabeth Warren has anything at all to do with this legislation,, it’s no good. Full Stop. Period.

[millenial4freedom]

yeah, that’s honestly a good rule of thumb...especially any legislation passed that’s ‘bipartisan’

[AuntB]

“Every time we found a house we liked, it was sold for cash. Usually within 3 days of listing.

I don’t know if it was large REITs or flush individuals, but we didn’t stand a chance...and we had $200k and”

After the Alameda fire, investors bought up everything.. prices doubled on mobile homes and space rent.

5 years later and I still can’t afford to go back to my community.
Then the government bought up the rest for cheap housing for first time buyers, usually migrants.

[Brian Griffin]

“to reach for that American Dream”

2027 $300,000
....
2030 $270,000
....
2033 $240,000

To buy the American Dream in 2027 might turn into a nightmare.

Homebuyers might only be buying trouble.

Unless they are buying at or close to the lowest likely price, they are only buying problems.

Potential homebuyers need to learn what things can and should cost - the trusses, the windows, the concrete, etc.