Lots of really interesting things happened this week, which I'll put in the news round-up. There might actually be an end to the Iran conflict, the Trump White House worked with House Democrats to impose safety rules on railroads, and NextEra and Dominion Energy proposed the biggest utility merger of all time.
Before getting to all of that, I want to highlight something incredible that just happened. Based on a vote this week, it seems very likely Congress will ban corporate ownership of most existing single family homes. "People live in homes," said Trump in January. "Not corporations." While Trump has sometimes talked a big game on constraining Wall Street, he generally hasn't followed through. In this case, though, he did. And somehow, a very corporate-friendly legislature came through as well.
It's almost impossible to believe, but here's the relevant provision in the 21st Century ROAD to Housing Act that passed the U.S. House of Representatives on Wednesday, by a 396–13 margin.
And here's the White House's statement supporting the bill.
As called for during the State of the Union, this legislation includes the President's signature priority: banning large institutional investor purchases of single-family homes. Section 1001 delivers a framework that addresses Wall Street's dominance in the single family housing market and protects Main Street homebuyers.
And the House followed the Senate, which in March passed an even more stringent ban, led by Senator Elizabeth Warren. There are some important caveats here, which I'll go into. But it's still a remarkable accomplishment, and a shockingly weird Warren-Trump alliance, that no one would have predicted a year ago.
So what happened?
I wrote up the full account two months ago, when the Senate acted. The short story is that voters were mad about high housing costs in 2024, and voted against the Democrats as a result. In January, Trump realized voters were now mad at him for high housing costs. And so he wanted to do something. But what could he do? He was trying to impose his will on the Federal Reserve, which could lower rates for homeowners. But that wasn't working out because he couldn't get the Supreme Court or the Senate to go along.
And beyond that, mortgage rates aren't the only driver of costs. So what hiking housing prices? There is a split in both parties over that question. One theory comes from a group of Wall Street-friendly liberals and libertarians, known as the "Abundance movement," who argue the problem is that we're not friendly enough to capital, and the solution is to remove zoning limitations. Yet despite the removal of many such limitations in states like California, there hasn't been a spurt of homebuilding.
A different theory comes from anti-monopolists, who believe that the consolidation of financing power and homebuilding capacity led to supply restrictions. That group argued that Wall Street cash was pouring into single family housing as an asset class, driving up prices for ordinary people. And those buyers, as corporate landlords, didn't serve renters particularly well. There is substantial evidence behind this theory.
Institutional ownership is regionally concentrated, with investors buying up properties in particular cities. In Atlanta, for instance, large institutional investors have dominant shares of the market…
In 2024, the Federal Trade Commission under Lina Khan found that Invitation Homes, a spinoff of Blackstone, had engaged in rampant misbehavior. The CEO told one of his subordinates to "juice this hog" and they did so by deceiving renters, unfairly evicting people, charging junk fees, and so forth…
Congressional documents showed that "renters in institutionally-owned SFR homes often experience higher rent increases, inflated fees, and diminishing quality of housing over time." And Federal Reserve economists wrote a paper observing that such investors "raise rents at 60 percent higher rates than the average increase when first acquiring the property," and that rents overall go up.
Big builders are now working with Wall Street to construct single family homes that never go on the market, but instead are rented out from the beginning. This "Build to Rent" sector took off, doubling in market share from 2021-2024. And it is now where institutional capital is focused. Build to Rent allows Wall Street to augment an asset class, and it enables control of housing supply to keep prices up.
Trump usually has an intuitive understanding of where voters are, even if he often chooses other priorities. And on housing, he got that the public is quite populist. Here's the New York Times's latest poll, showing that Democrats by a more than two to one margin blame corporate monopolies over supply restrictions for the price of homes and energy. It's likely not that different among independents or the GOP.
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