By: Caroline Nagy
This week, President Trump announced that he is “taking steps” to ban institutional investors from acquiring more single-family homes as part of a plan to deal with housing affordability. With no actual written proposal to evaluate, it is unclear what this new initiative means. There IS, however, something clear he could do if he wanted to take on the role hedge funds and private equity are playing in increasing the cost of housing: the President, and members of Congress could support a bill introduced in February 2025 to stop them. The question is, will he move past one liners to actually do something that helps families trying to buy a home?
The Homes Over Private Equity (HOPE) for Homeownership Act, introduced by Sen. Merkley and Sen. Kelly, along with Rep. Adam Smith and Rep. Sánchez in the House, would impose tax penalties on large investors who buy single family homes, strip them of tax breaks for depreciation and mortgage interest, and require them to sell off all the single-family homes they own over a 10-year period. Passing this bill into law, as AFR continues to call for, would be an excellent step.
A review of the Trump administration’s first year of actions on housing and on Wall Street and private funds strongly suggests, however, that the President is not going to make this happen. He has raised prices for homebuilding materials, gutted tenant protections, and abandoned consumer protection enforcement. For example, the DOJ under President Biden brought a case against Private Equity-owned rent tech company RealPage for facilitating price fixing, rent hikes, and abusive junk fees for tenants of the largest landlords in the country; the Trump administration offered a highly generous proposed settlement with no fines and no admission of guilt.
While the President has given some speeches about making private funds play fairly, no action has followed. He talked about closing the carried interest loophole that lets Wall Street executives pay lower tax rates than working people, but Wall Street objected, and he did not. In fact, his administration is making it easier for PE to evade the taxes they owe.
Despite rhetoric to the contrary, this administration has consistently sided with corporate landlords and their wealthy Wall Street backers against the interests of families struggling to afford their rent or buy a home. It will take something very different to actually help the record number of U.S. families struggling with our unprecedented cost-of-living crisis.