Bloomberg Audio Studios, podcasts, radio news. President Trump says he wants to ban institutional investors from buying single family homes. In a truth social post yesterday, he said that housing should be for people and not corporations. His proposal sparked market reaction, of course, on homebuilder stocks and landlords of single family homes. Let's bring in Jonathan Miller. He is president, CEO, and co founder of the real estate appraisal and consulting
firm Miller, Samuel and Jonathan. You and other experts in this space have made the point that institutional investors are not a big player in the single family rental market, yet they make for a convenience gapegoat.
Why is that, Well, I think that you know, they're very much in the public eye, very visible. They only account for about one percent of the single family housing stock, and it's so banning them from purchasing. I think the perception with the public is that they dominate inventory. They basically, you know, one of the most challenging aspects of housing and why there were in an affordability crisis is because there's been inadequate supply. However, there are very tiny a
one percent sort of number. And then on top of it, the highest concentration of institutional investors Wall Street per se is in the South, the Sun Belt, which has excess supply right now. So I'm having a hard time connecting the dots on how this will help improve affordability. I think it's a non issue generally. For solving that problem.
You make a lot of important points, and it's a reminder of how at the end of the day, real estate is very local. Housing supply and housing demand is very local to each specific market. Yet when it comes to perceptions, there is this sense that these institutional investors Wall Street type of firms like a Blackstone, play this
outsize role. And part of it is because they came in during the financial crisis, or in the week of the financial crisis, and did swoop in and buy a lot of single family homes at a time when Americans were losing their homes, So that looms large in the public consciousness.
Absolutely, the perception perception is value, and so they were highly visible coming in and sort of you know, scooping up twenty twelve, twenty thirteen, a tremendous volume of foreclosed homes after the financial crisis and have made it work, and some of the firms have even sold off part of their portfolios. As you know, the market has peaked in the last couple of years. So I don't see I see this as disconnected from what the actual problem is.
The problem is to enhance affordability, and I don't think the institutional aspect of the housing market has much to do with it right.
Well, to be fair, President Trump is not the only one who has suggested something like this. Elizabeth Warren, the Massachusetts Senator, has also said something similar. So this is a bipartisan kind of approach to trying to tackle affordability in the housing market. You say the solution is to build more housing, but that takes a long time. That's
not something that happens overnight. What kind of timeline are we talking about, even if you could open this figure and just allow builders to start building more homes.
Yeah, and also too, you know, a lot of the housing that we're building is skewing to the higher end because of land costs, because of product cost because of labor costs. All those things make it very difficult. But if you create over supply or modest oversupply, you place pressure on housing prices and that sort of melts into the next layer below that and then below that. It is not a surefire solution, but it's just one of
those things. The other thing is, you know, a lot of the challenge of single family affordability has been zoning, and cities like Minneapolis have banned single family zoning new construction within the municipality and trying to move towards multifamily and high density areas. There's many things that can be done.
I think to your point that both sides of the aisle are disconnected from the actual problem in this idea that you know, inventory is inventory is very local, very regional, and when we look at markets like the Northeast or the Midwest very tight in terms of supply. We look at Sunbelt very soft because they were able to create and build more housing during the migration pattern that we saw during COVID, where people left the Northeast and the West coast to go to more affordable housing, and that
soon ended because the demand was so high. You have to remember that mortgage rates are double what they were and still housing prices are rising, right, so it is all about supply