After years of backlash against Wall Street landlords, the federal government is taking its first step to limit large investors’ ownership of single-family homes.
A new housing affordability law bars the biggest institutional investors from buying more houses. The provision was added to the 21st Century Road to Housing Act after President Donald Trump signed an executive order to “stop Wall Street from competing with Main Street homebuyers.”
Lawmakers on both sides of the aisle have applauded the limit on mega-investors, such as private equity. But those mega-investors own just 0.66% of the nation’s single-family homes – making it unlikely the measure will make housing much more affordable.
In fact, most landlords are smaller mom-and-pop investors who aren’t impacted by the law at all, according to property data firm Cotality.
Large institutional investors own few, if any, single-family homes in most of the United States. Their ownership is concentrated in a handful of Sun Belt metropolitan areas. But even in Atlanta, which has the highest concentration in the country, large-scale investors own only about 4% of single-family housing stock.
