In a gross oversimplification of the housing affordability crisis, President Trump announced on Truth Social his plan to ban institutional investors from purchasing single-family homes. As satisfying as it would be to blame big, bad investment corporations for all our housing woes, they aren’t the problem keeping people from breaking into the housing market. The real barrier to new home ownership is overregulation at the local level.
Institutional investors own 1 percent of all single-family housing in the United States, according to the Associated Press. The remaining are owned by individuals or mom-and-pop landlords.
This doesn’t stop people from insisting that corporations should be excluded because they dominate the market and have an unfair advantage over individuals looking to purchase a home.
An article in The Hill said, “They buy up supply and basically corner the market — or at least control too much of the market.” This is not true when considering actual market share.
If you’re wondering why the president would propose such a ban on this proportionally insignificant part of the housing market, just look at a similar policy attempted by our neighbors to the north. Canada attempted a comparable strategy in 2023 with a bill that banned foreign buyers from purchasing Canadian residential property. Similarly, this part of buyers that Canada is attempting to prevent from buying homes is relatively small (2 percent to 6 percent).
Unsurprisingly, the ban had little to no effect on home prices, which remained unchanged year-over-year in the third quarter of 2025, according to Royal LePage. In an article by Radio Canada, the chief economist for the B.C. Real Estate Association said, “The foreign buyer ban was more political than economic policy or housing policy.”
The striking similarities could indicate the same strategy from Trump. This populist policy approach will attempt to ease negative sentiment toward the housing market, but Canada is a perfect example of why this doesn’t work.
If the administration wants to lower the costs for single-family units, it must attack the root of the problem: restrictive zoning laws and red tape from municipalities that shorten the supply of available homes.
Austin, Texas, is an example of what happens when cities loosen restrictions on housing construction. Over the last three years, the city adopted reforms to lower housing costs, including eliminating minimum parking requirements and reducing the minimum lot size for single-family homes. In December, it reported a 6.6 percent drop in the average home value from the year before. Last year, rent prices dropped for the 19th consecutive month. This shows that lowering housing costs is possible through deregulation at the local level.
It’s easy to look to Washington to solve the problems we’ve caused at home, but there is no quick fix to the housing shortage. State and local governments will have to reverse the bad policies they implemented. Unfortunately, a headline urging citizens to raise zoning and overregulation issues in their localities does not have the same effect as demonizing private equity firms and hedge funds. Addressing the underlying causes of higher home prices is the only strategy for a future with more homebuyers.