The Regulatory Battle Over Institutional Landlords

Since the 2008 Recession, buying a first home has become substantially more difficult for many Americans. In this period, the median sales price of new houses sold nationwide increased by nearly 200 percent. Many first-time homebuyers struggle to make down payments in an increasingly competitive market, where down payments have increased by 7.5 percent in the past year alone. Renters, meanwhile, increasingly face corporate landlords whose scale and practices can shape eviction risk, housing quality, and tenants’ ability to organize. Against this backdrop, policymakers increasingly focus on whether large corporate landlords and other institutional investors contribute to making homeownership more expensive and less accessible by competing with families for entry-level homes.

Following the Recession, investors capitalized on increased foreclosures to purchase homes at discounted prices. Investor-owned properties represent a modest portion of the overall U.S. single-family home supply, with some analyses estimating that institutions own only one percent of such homes. Since the pandemic, however, institutional purchases increased dramatically, leading some analysts to contend that institutional investors are crowding out individual homebuyers.

That debate moved to the center of federal housing policy in January 2026, when the White House issued an executive order titled Stopping Wall Street from Competing with Main Street Homebuyers. The order frames homeownership as a core component of economic security and directs federal agencies to take steps to discourage or limit institutional purchases of single-family homes that could otherwise be purchased by families. Although the federal government influences housing markets through the programs it administers and the financing it supports, the order also highlights a practical constraint: housing markets remain intensely local, shaped by neighborhood-level supply, local permitting and land-use rules, and place-specific demand pressures.

Support for government intervention crosses traditional political lines. California Governor Gavin Newsom, for example, has signaled interest in a crackdown on corporate landlords, echoing themes that appear in federal efforts.

Nationwide, large investors own only a small share of single-family housing, however, their investments tend to be concentrated around select metropolitan areas and suburban corridors, thereby amplifying investors’ impact in those areas. This local concentration sharpens the central regulatory question: do large landlords primarily reduce access to homeownership by bidding up prices and changing neighborhood composition, or do they expand housing options by rehabilitating homes, professionalizing property management, and supporting new construction models such as build-to-rent? The answer matters for how regulators should proceed.

Some advocates argue that sweeping federal restrictions may relieve competition for prospective buyers. Others caution that, depending on local conditions, increased regulation could also reduce rental supply or foreclose a channel through which developers and smaller sellers exit. Critics further warn that investor-focused reforms risk treating a symptom rather than the underlying housing shortage, and may produce tradeoffs between renters and buyers or between affordability and housing quality.

In this week’s Saturday Seminar, scholars examine whether—and, if so, how—lawmakers should regulate institutional landlords in the single-family housing market.

• In a Federal Reserve working paper, Marco Giacoletti of the University of Notre Dame and several coauthors analyze the impacts of single-family home purchases and ownership by real estate investment trusts (REITs). They report that REIT holdings grew from near zero in 2010 to approximately 180,000 units in 2021—roughly 0.3 percent of U.S. single-family units. The authors attribute REIT expansion, in part, to tighter mortgage standards and higher post-Recession home rental demand. They find that REIT purchases cluster in select metropolitan areas, where economies of scale are feasible despite REITs’ modest ownership rates. The authors conclude that increased REIT ownership is associated with modestly higher home prices and greater supply, but leaves individual ownership rates and accessibility largely unchanged.
• In a comment responding to the Federal Trade Commission’s request for information on the large-scale ownership of single-family rentals by corporations written for the American Investment Council, Jean-Francoise Houde of the University of Wisconsin-Madison argues that the effects of institutional investors on single-family housing remain unsettled, and that conflicting variables make meaningful causal inference difficult. He emphasizes that housing competition is local rather than national and focuses on local data. Houde contends that institutional owners may benefit communities through economies of scale, new technology, quality improvements, expanded neighborhood access, and increased housing supply, including build-to-rent. He urges caution in attributing rent or price changes to investors and warns against regulation premised on incomplete data or analysis.
• In a paper, Joshua Coven of Baruch College argues that institutional homebuyers can reshape local markets, especially in the Sunbelt states where they are most active. He cites data indicating that institutional investors purchased approximately 5.4 percent of single-family homes in certain Georgia counties. Coven employs a novel economic model to simulate the entry of large landlords into a local market. In highly concentrated markets, he finds that institutional entry likely lowers rents by expanding rental supply, even as it raises home prices and crowds out smaller landlords. Coven estimates that in areas with the most corporate investment, corporate entry explains about 20 percent of observed home-price increases, while noting that new building and other supply responses limit homeownership impact.
• In a recent article in the Stanford Technology Law Review, Nadiya Humber of the University of Connecticut Law School recommends the creation of federal statutory protections for tenants with corporate landlords. Although landlord–tenant relationships have traditionally been regulated locally, Humber argues that this framework has become increasingly ineffective as corporate landlords scale their operations across state and municipal boundaries. She contends that these landlords’ routine use of automated property‑management systems and coordinated pricing technologies has left states ill‑equipped to respond to consolidation and monopolization in rental housing markets. As a result, Humber urges Congress to invoke its Commerce Clause authority to regulate this corporate landlordism as an interstate commercial activity.
• In an International Journal of Housing Policy article, Free University of Berlin doctoral candidate Mathilde Lind Gustavussen compares San Francisco and Los Angeles’ policy strategies for regulating tenant relationships with corporate landlords. She explains that Los Angeles’s Tenant Anti-Harassment Ordinance makes it easy for tenants to file complaints with the city, but that enforcement gaps limit the ordinance’s impact. San Francisco’s Tenant Right-to-Organize ordinance instead requires landlords to meet with tenant associations and encourages collective bargaining. Gustavussen argues that an organizational framework, like that of San Francisco, shifts agency onto tenants without requiring reliance on government enforcement, which may easily fall into underenforcement. She encourages other cities to develop similar ordinances to directly empower tenants.
• In an Urban Geography article, Alexander Ferrer of UCLA’s Luskin Institute on Inequality and Democracy analyzes Los Angeles eviction records, which suggest that corporate landlords strategically and disproportionately evict Black tenants from Black‑minority neighborhoods. Ferrer argues that racially patterned eviction practices contribute to neighborhood-level segregation in Los Angeles. He describes a self-reinforcing cycle of banishment whereby criminal records or prior evictions restrict access to future housing, placing displaced tenants in a recurring state of removal. Ferrer argues that evictions cut former tenants off from the physical spaces and communities—buildings and neighborhoods—needed to organize community action, giving eviction a sense of finality. Ferrer calls for community organization and regulations focused on unfair eviction practices rather than tenant screening practices.