WASHINGTON — In the debate over rising U.S. housing costs, large institutional investors are frequently cast as the primary culprits. Indeed, President Donald Trump is threatening to derail bipartisan legislation unless it includes a ban on institutional investors. Against this backdrop, a new report from the Progressive Policy Institute (PPI) finds that institutional investors — large entities such as pension funds, insurance companies, and private equity firms — account for just 1% of single-family home purchases and recommends that policymakers improve affordability by other means.
The report, titled “Institutional Investment in Single-Family Housing: Separating Fact from Fiction,” shows that while politicians claim that institutional investors are driving the housing crisis, their footprint in the single-family market remains small. Authored by Richard Kahlenberg, PPI’s Director of Housing Policy and the American Identity Project, and Colin Mortimer, PPI’s Senior Director of Partnerships, the report calls on lawmakers to address the real issues impacting the housing crisis, including zoning reform, expanding housing supply, and reducing restrictive “Not In My Backyard” (NIMBY) barriers.
“Housing is unaffordable because we haven’t built enough homes, not because institutional investors are buying them up and pricing out Americans,” said Kahlenberg. “Blaming Wall Street may be politically convenient, but it distracts from the real problem: decades of restrictive zoning and supply constraints.”
To address the housing crisis effectively, the report recommends lawmakers enact legislation that:
The report also assesses that institutional investors can play a constructive role in expanding housing opportunities for working class families. Unlike many small landlords, institutional investors bring professional management, renovate older homes, and add new single-family rental homes to the market.
“Institutional investors, in their small capacity, provide working Americans opportunities to live in better neighborhoods that they couldn’t access before, including better schools, safer streets, and greater economic opportunity,” said Mortimer. “Lawmakers cannot ignore those very real benefits in favor of political posturing.”
Read and download the report here.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
