Building a Future: Why Blaming Landlords Misses the Mark

The Housing Crisis: A Misguided Target

As President Trump declared war against institutional investors, whom he blames for the housing crisis, a critical question arises: are landlords truly the problem? While it's easy to point fingers at large entities, the reality is far more complex. The truth is that America simply does not have enough housing.

Contrary to popular belief, most rental properties are owned by small landlords, not large corporations. In 2022, the Urban Institute reported that institutional investors owned merely 574,000 single-family homes, representing less than 1% of the nation's total. Therefore, scapegoating these investors diverts attention from the pressing need for more homes.

Building More Housing: The Only Viable Solution

The crux of the housing crisis lies in the stark reality that our population continues to grow, yet housing supply fails to keep pace. Various estimates suggest that the United States is in dire need of millions of new housing units. The think tank Up for Growth estimates that we require approximately 3.78 million new housing units to alleviate this shortage.

Simply discussing policies to block investors or impose rent controls conceals the more vital task at hand: increasing housing supply. Trump's vague promises of detailed plans remain unfulfilled nearly a year into his presidency. Rather than facilitating progress, the administration has merely proposed ideas that lack the necessary structure to be effective.

Is Banning Institutions the Answer?

The suggestion to ban institutional investment may resonate on the surface but is fundamentally flawed. If implemented, it would likely harm renters far more than it benefits potential homeowners. Institutional investors have stepped into the void left by stricter lending practices post-2008, providing much-needed options for those who cannot obtain loans.

While it might be tempting to view ownership as the ideal state of living, the reality of subprime mortgage lending demonstrates that it does not equal stability or equity. Expanding lending opportunities could be more effective. However, we must always ask ourselves: will these policies result in increased housing development?

“Political solutions that do not prioritize construction will do little to alleviate the housing crisis.”

Lessons from the Apartment Market

The cautionary tale presented by the apartment sector offers insight into potential pitfalls of over-regulation. Recent actions by the Justice Department to combat alleged anti-competitive practices among large apartment landlords remind us that enabling competition can be crucial. If institutional investors control enough single-family homes, the risk of similar monopolistic tendencies emerges.

We should remember that the institutional ownership of homes isn't a novel phenomenon. Major players in the apartment market, such as Greystar, provide valuable lessons about the balance between consumer needs and corporate presence.

The Path Forward

Moving forward, our focus must remain on increasing the housing supply, a principle that all politicians must adhere to when presenting their solutions. The ongoing conversation about the housing crisis cannot afford to get sidetracked by misplaced blame.

In the end, our societal objective should center around ensuring that more Americans have access to quality housing. Ignoring the complexity of this issue will only prolong hardships for millions. We must keep the primary goal in sight: to build more, not to blame.