It's official: Trump signs order to block Wall Street investors from buying single-family homes
U.S. President Donald Trump signed a sweeping executive order on Tuesday in a bid to block Wall Street-backed investors from buying single-family homes. Arguing that the practice of institutional investors buying up real estate inventory has priced most Americans, especially first-time buyers, out of homeownership, the order called upon both the Justice Department and the Federal Trade Commission to use legal provisions to limit it. Trump announced such a measure two weeks ago and is expected to talk about it further at the World Economic Forum at Davos.
"To preserve the supply of single-family homes for American families and increase the paths to homeownership, it is the policy of my administration that large institutional investors should not buy single-family homes that could otherwise be purchased by families," the White House fact sheet said of the order. The Trump administration has been under pressure to address affordability concerns ahead of the midterm elections. Recently, the president pushed several policies aimed at controlling living costs and home affordability. Tuesday's order is one such measure that directs the administration to promote homeownership and restrict federal programs from facilitating large-scale acquisitions of single-family homes by institutional investors.
The executive order directs the DOJ and the FTC to "review substantial acquisitions, including series of acquisitions, by large institutional investors of single-family homes in local single-family housing markets." The rules and guidance for investors holding or acquiring single-family homes may also be revised by the Treasury Secretary as per the order. The guidance and restrictions on the purchasing must be issued within 60 days, as per the White House. Furthermore, the order directs multiple federal agencies to limit federal support for such acquisitions and step up antitrust scrutiny of large institutional investors in the housing market. The president even ordered the attorney general and the chairman of the FTC to review large-scale purchases for potential anti-competitive effects.
The Department of Housing and Urban Development (HUD) has been directed to require landlords participating in federal housing assistance programs to disclose ownership and management information and identify "any involvement of large institutional investors." However, the order does allow "appropriate, narrowly tailored exceptions" for the establishment of build-to-rent communities, given they are "planned, permitted, financed, and constructed as rental communities."
As per Fox Business, Trump also signalled the action is intended as a temporary measure, and he has directed senior White House staff to prepare legislation to make the policy into law in the meantime. The president framed the issue as both economic and moral, adding that his administration "will take decisive action to stop Wall Street from treating America’s neighborhoods like a trading floor and empower American families to own their homes." The order mentioned that buying and owning a home is considered the "pinnacle of the American dream and a way for families to invest and build lifetime wealth," but that dream has become increasingly out of reach for many Americans.
The president argued that individual buyers are incapable of competing with institutional capital, saying, "Hardworking young families cannot effectively compete for starter homes with Wall Street firms and their vast resources," before adding, "People live in homes, not corporations." Thus, the policy aims to "preserve the supply of single-family homes for American families" and increase pathways to homeownership.
More on Market Realist:
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Trump wants to block Wall Street investors from buying single-family homes — here's why
