Presidential Candidates Find Common Ground on Housing Crisis Origins
The struggle regarding investment highlights a larger political context, as both parties seek remedies for the escalating housing costs.
TroibNews 
Vice President Kamala Harris and Sen. JD Vance have found common ground in their criticism of large corporate investors, asserting that these entities are exacerbating the country's housing affordability crisis and should be discouraged from acquiring homes.
This rare bipartisan agreement, however, has been challenged by economists and housing analysts, who argue that both Harris and Vance are mistaken in their assessments.
Over the past few years, investors have bought up to 30 percent of available homes, predominantly converting them into rental properties. Although the majority of these buyers are smaller investors, Harris, Vance, and others, including Sen. Sherrod Brown, have targeted larger firms—particularly private equity firms that purchase 100 homes or more—claiming that they are driving homebuyers out of the market and inflating rental prices.
Experts in the housing industry contend that removing investors from the market would be counterproductive. They argue that these businesses inject essential capital into the housing market, often revitalizing neglected properties that others disregard; that rentals of single-family homes fulfill a vital need; and that build-to-rent projects contribute to a housing supply that is insufficient to meet demand.
Jenny Schuetz, a senior fellow at the Brookings Institution’s Metro program, commented, “For some segments of both the left and the right politically, big faceless corporations buying up homes and driving people out of homeownership is a very nice scapegoat, which doesn’t get at the actual problem. Nobody wants to run for office saying the reason young people can’t buy their first homes is old people are staying in them too long or paying all cash — that would be politically suicidal.”
This debate highlights a larger political challenge, as both parties search for solutions to a pressing issue for constituents: the soaring cost of housing. Many of the factors contributing to increased prices, like restrictive zoning laws, are decided at the local level, limiting federal intervention. Consequently, politicians are seeking new strategies to address the problem, such as selling surplus federal land for affordable housing development and launching grant initiatives to incentivize local governments to facilitate construction.
Harris has urged Congress to approve legislation put forward by Brown, who chairs the Senate Banking Committee, aimed at prohibiting investors with 50 or more single-family rental homes from claiming interest or depreciation deductions on those properties. According to her campaign, “Community after community feels taken advantage of by Wall Street investors and distant landlords,” and Harris pledged to “take on …corporate landlords who are hiking rental prices.”
In his Senate campaign announcement three years ago, Vance identified investor ownership of single-family homes as harmful to middle-class Ohioans and has consistently addressed this issue in subsequent interviews. He stated, “Institutional investors completely crowd out the availability for homes for people who want to just buy a piece of their community,” during a local news conversation last year.
Rep. Ro Khanna has introduced a similar bill in the House. “Homes should be owned by people, not institutional investors who are drastically increasing the cost of rent and owning a home,” he expressed in an email to PMG. “We need to address the housing shortage and build more, but giving handouts to Wall Street investors is not the solution.”
Consumer Financial Protection Bureau Director Rohit Chopra echoed these sentiments during a recent event in Salt Lake City. He remarked, “The role of big investors and especially private equity firms in purchasing so much rental housing — there’s a lot of evidence that this is creating in some ways artificial scarcity and higher rents.”
Both the Harris and Trump-Vance campaigns have yet to respond to inquiries about their strategies.
As of 2022, large institutional investors owning at least 1,000 properties accounted for approximately 3 percent of the 14 million single-family rental homes in the U.S., equivalent to around 450,000 homes. The five largest institutions controlled 2 percent of that total.
Institutional investors began acquiring foreclosed homes in bulk following the 2008 financial crisis. With tightened lending standards, these larger entities had financial advantages over smaller investors, while individuals with lower credit scores were increasingly forced to rent, further pushing up demand for single-family rentals.
Investor activity surged post-pandemic when skyrocketing home values and low interest rates made single-family homes attractive assets. By January of this year, investors represented nearly 30 percent of single-family home purchases, a notable increase from an average of 16 percent in the three years preceding the pandemic, according to CoreLogic.
Jim Parrott, a nonresident fellow at the Urban Institute and former senior economic adviser in the Obama administration, remarked on the complex role investors play in the housing market. “There’s nothing per se wrong with the model, especially because some of them are creating supply,” he noted. “What’s problematic is they have tax incentives that make purchasing property in some sense easier to do than it is for individual homebuyers.”
There is speculation that legislation aimed at limiting depreciation write-offs for large investors could create additional revenue during next year’s tax code revisions related to expiring cuts from 2017. Jaret Seiberg, managing director at TD Cowen’s Washington Research Group, suggested, “The need to enact a tax package in 2025 would give Vance a unique opportunity to deliver on his pledge to force institutional owners to sell these properties” if Donald Trump emerges victorious in November. This could result in “as many as 570,000 additional single-family housing units hitting the market in 2026 or 2027.”
However, Schuetz cautioned about the practical challenges of enacting legislation to restrict purchases by specific corporate entities. “On a practical level, how the federal government could write regulations that limit purchases by a particular kind of corporate entity — I don’t know how you do that,” she remarked, emphasizing the difficulty of crafting transparent regulations that hold up against legal challenges.
Additionally, there is a risk of unintended consequences for market liquidity, as evidenced by a 2022 study which found that a tax on short-term speculation in Hong Kong reduced investor purchases of homes but also curtailed liquidity for homeowners looking to sell.
Amid these discussions, build-to-rent construction—a model where investors actively contribute to housing supply—has risen from 5 percent of housing starts in 2021 to 10 percent in 2023, as reported by the National Association of Realtors, indicating the highest numbers and proportions since the organization began tracking this data in 1974.
A spokesperson for Brown mentioned that his proposed legislation would not affect new construction, meaning it would not limit housing supply. “What we’re doing is responding to the demand that’s out there that clearly is not being met, and we’re trying to fill a void — there just isn’t enough housing,” stated David Howard, CEO of the National Rental Home Council, which represents single-family rental owners.
Howard highlighted that 3 percent of single-family rentals amounts to just 0.4 percent of the nation’s total housing stock, indicating that “someone other than institutional investors account for 99.6 percent of the country’s housing.” He also pointed out that the average single-family home in the U.S. is nearing 40 years old, necessitating investment in current inventory. “Our large member companies invested $2 billion in things like renovations and upgrades and rehabilitations in 2023,” he said.
Still, significant concerns persist regarding large investors concentrating housing in specific areas and potentially exploiting their position to elevate prices. Notably, these investors make up substantial portions of the single-family rental market in various Southern cities, including Atlanta, Jacksonville, and Charlotte.
Schuetz suggested that “requiring the big corporate entities to be more transparent about how many homes they own within a city or county, that seems to be useful.” However, she pointed out the current lack of accessible information on this issue.
Jessica Kline for TROIB News
This rare bipartisan agreement, however, has been challenged by economists and housing analysts, who argue that both Harris and Vance are mistaken in their assessments.
Over the past few years, investors have bought up to 30 percent of available homes, predominantly converting them into rental properties. Although the majority of these buyers are smaller investors, Harris, Vance, and others, including Sen. Sherrod Brown, have targeted larger firms—particularly private equity firms that purchase 100 homes or more—claiming that they are driving homebuyers out of the market and inflating rental prices.
Experts in the housing industry contend that removing investors from the market would be counterproductive. They argue that these businesses inject essential capital into the housing market, often revitalizing neglected properties that others disregard; that rentals of single-family homes fulfill a vital need; and that build-to-rent projects contribute to a housing supply that is insufficient to meet demand.
Jenny Schuetz, a senior fellow at the Brookings Institution’s Metro program, commented, “For some segments of both the left and the right politically, big faceless corporations buying up homes and driving people out of homeownership is a very nice scapegoat, which doesn’t get at the actual problem. Nobody wants to run for office saying the reason young people can’t buy their first homes is old people are staying in them too long or paying all cash — that would be politically suicidal.”
This debate highlights a larger political challenge, as both parties search for solutions to a pressing issue for constituents: the soaring cost of housing. Many of the factors contributing to increased prices, like restrictive zoning laws, are decided at the local level, limiting federal intervention. Consequently, politicians are seeking new strategies to address the problem, such as selling surplus federal land for affordable housing development and launching grant initiatives to incentivize local governments to facilitate construction.
Harris has urged Congress to approve legislation put forward by Brown, who chairs the Senate Banking Committee, aimed at prohibiting investors with 50 or more single-family rental homes from claiming interest or depreciation deductions on those properties. According to her campaign, “Community after community feels taken advantage of by Wall Street investors and distant landlords,” and Harris pledged to “take on …corporate landlords who are hiking rental prices.”
In his Senate campaign announcement three years ago, Vance identified investor ownership of single-family homes as harmful to middle-class Ohioans and has consistently addressed this issue in subsequent interviews. He stated, “Institutional investors completely crowd out the availability for homes for people who want to just buy a piece of their community,” during a local news conversation last year.
Rep. Ro Khanna has introduced a similar bill in the House. “Homes should be owned by people, not institutional investors who are drastically increasing the cost of rent and owning a home,” he expressed in an email to PMG. “We need to address the housing shortage and build more, but giving handouts to Wall Street investors is not the solution.”
Consumer Financial Protection Bureau Director Rohit Chopra echoed these sentiments during a recent event in Salt Lake City. He remarked, “The role of big investors and especially private equity firms in purchasing so much rental housing — there’s a lot of evidence that this is creating in some ways artificial scarcity and higher rents.”
Both the Harris and Trump-Vance campaigns have yet to respond to inquiries about their strategies.
As of 2022, large institutional investors owning at least 1,000 properties accounted for approximately 3 percent of the 14 million single-family rental homes in the U.S., equivalent to around 450,000 homes. The five largest institutions controlled 2 percent of that total.
Institutional investors began acquiring foreclosed homes in bulk following the 2008 financial crisis. With tightened lending standards, these larger entities had financial advantages over smaller investors, while individuals with lower credit scores were increasingly forced to rent, further pushing up demand for single-family rentals.
Investor activity surged post-pandemic when skyrocketing home values and low interest rates made single-family homes attractive assets. By January of this year, investors represented nearly 30 percent of single-family home purchases, a notable increase from an average of 16 percent in the three years preceding the pandemic, according to CoreLogic.
Jim Parrott, a nonresident fellow at the Urban Institute and former senior economic adviser in the Obama administration, remarked on the complex role investors play in the housing market. “There’s nothing per se wrong with the model, especially because some of them are creating supply,” he noted. “What’s problematic is they have tax incentives that make purchasing property in some sense easier to do than it is for individual homebuyers.”
There is speculation that legislation aimed at limiting depreciation write-offs for large investors could create additional revenue during next year’s tax code revisions related to expiring cuts from 2017. Jaret Seiberg, managing director at TD Cowen’s Washington Research Group, suggested, “The need to enact a tax package in 2025 would give Vance a unique opportunity to deliver on his pledge to force institutional owners to sell these properties” if Donald Trump emerges victorious in November. This could result in “as many as 570,000 additional single-family housing units hitting the market in 2026 or 2027.”
However, Schuetz cautioned about the practical challenges of enacting legislation to restrict purchases by specific corporate entities. “On a practical level, how the federal government could write regulations that limit purchases by a particular kind of corporate entity — I don’t know how you do that,” she remarked, emphasizing the difficulty of crafting transparent regulations that hold up against legal challenges.
Additionally, there is a risk of unintended consequences for market liquidity, as evidenced by a 2022 study which found that a tax on short-term speculation in Hong Kong reduced investor purchases of homes but also curtailed liquidity for homeowners looking to sell.
Amid these discussions, build-to-rent construction—a model where investors actively contribute to housing supply—has risen from 5 percent of housing starts in 2021 to 10 percent in 2023, as reported by the National Association of Realtors, indicating the highest numbers and proportions since the organization began tracking this data in 1974.
A spokesperson for Brown mentioned that his proposed legislation would not affect new construction, meaning it would not limit housing supply. “What we’re doing is responding to the demand that’s out there that clearly is not being met, and we’re trying to fill a void — there just isn’t enough housing,” stated David Howard, CEO of the National Rental Home Council, which represents single-family rental owners.
Howard highlighted that 3 percent of single-family rentals amounts to just 0.4 percent of the nation’s total housing stock, indicating that “someone other than institutional investors account for 99.6 percent of the country’s housing.” He also pointed out that the average single-family home in the U.S. is nearing 40 years old, necessitating investment in current inventory. “Our large member companies invested $2 billion in things like renovations and upgrades and rehabilitations in 2023,” he said.
Still, significant concerns persist regarding large investors concentrating housing in specific areas and potentially exploiting their position to elevate prices. Notably, these investors make up substantial portions of the single-family rental market in various Southern cities, including Atlanta, Jacksonville, and Charlotte.
Schuetz suggested that “requiring the big corporate entities to be more transparent about how many homes they own within a city or county, that seems to be useful.” However, she pointed out the current lack of accessible information on this issue.
Jessica Kline for TROIB News
