When President Donald Trump signed an executive order in January proclaiming his intention to push large “institutional investors” out of the single-family housing market, it begged the question, “what is large?”
Washington finally has a definition, sort of, according to Realtor.com, which said lawmakers have begun to define those large property owners in several new bills. The executive order mandated the federal government to begin crafting policies that prevent large companies from buying up single-family homes.
That order didn’t create a definition of a large investor. But it ordered the Treasury Department to start formulating one.
The National Association of Realtors said it has supported the push, saying the organization shared a goal of unlocking housing supply.
“We share the goal of ensuring there are enough places for people to live and of expanding access to homeownership—especially for first-time buyers—and ensuring that housing policy strengthens communities rather than limiting opportunity,” said Shannon McGahn, Executive Vice President and Chief Advocacy Officer at NAR.
Realtor.com said that institutional investors own a relatively small share of the overall housing market, but they’re concentrated in certain cities, leaving some communities more affected than others.
It’s the Definition That Counts
“The central issue in all of these proposals comes down to definitions,” says Hannah Jones, Senior Economic Research Analyst at Realtor.com. “How policymakers define ‘large investor’ will determine who is actually affected and whether the policy meaningfully changes housing market outcomes.”
None of the bills is law yet, which means the definitions might change.
Realtor.com stated that two early metrics are common in the bills: Targeting investors by number of homes, and targeting investors by assets under management.
The Wall Street Journal reported that Trump circulated guidance that set the large investors at 100 homes. Trump has wanted to see that codified into the bipartisan housing package working through Congress, but without success.
Realtor.com reported that a new bipartisan effort in Congress to codify a ban defines large investors by assets under management. One bill, for example, targets companies with $150 million in assets under management, or connected to such an entity. Another bill imposes extra taxes on entities starting at $50 million in assets under management, to encourage divestment.
Democrats proposed a bill to reduce tax breaks for large real estate owners, Realtor.com noted. The language of their bill is aimed at those with 50 or more single-family homes.
A few states also moved to codify similar rules. Georgia lawmakers put forth a bipartisan bill targeting investors who have 100 homes and $375 million in assets under management, and also manage pooled investor funds.
Assets Under Management
Other lawmakers also pitched caps on owning 500 or 2,000 homes in the state.
Using assets under management is straightforward and a clear financial metric, but it risks pulling in diversified regional operators or family offices that aren’t really the kind of big landlords considered in the housing debate, Jones says.
“The challenge is that [assets under management] does not necessarily reflect exposure to the single-family housing market,” Jones said. “A firm could manage $150 million across apartments, commercial properties, or mixed portfolios and have only a small single-family footprint.”
Meantime, basing the metric on the number of homes has risks at all levels. Realtor.com noted that it’s not unusual for some small and midsized landlords to assemble a portfolio of over 50 homes, Jones said.
On the other end, a 500-home threshold might skip some institutional players, especially if ownership is structured across multiple LLCs, Jones noted.
Brookings Institution said in its own analysis that Trump’s pitch oversimplifies the role of institutional investors in rental markets. Though they’re a small part of the market, the investors create operational efficiencies that can translate to lower rent, Joe Gyourko, a nonresident fellow, wrote.
A blanket ban also risks a larger “ripple effect” on the market.
Gyourko noted how private equity was allowed into the market after the subprime mortgage crisis because it put a floor on housing price declines in the Great Recession.
“Banning purchases of single-family units by large rental companies will lead to a very small net increase in the number of homes available for purchase, and some families will benefit from living in them,” Gyourko said. “However, other families that would have benefited from renting that same house no longer can do so.”
The American Enterprise Institute said the smaller investors—mom-and-pop shops who own only a few properties—own about 11% of the single-family housing stock. It’s those entities that compete with the homebuyers, AEI said. They have the advantage of subsidized mortgage credits from Fannie Mae and Freddie Mac, Realtor.com said.
“Small investors using GSE financing can borrow at interest rates roughly 90 to 100 basis points lower than comparable private-market investor loans,” AEI said. “On a $250,000 home, that advantage translates into about $170 per month—more than enough to consistently outbid a first-time buyer without paying a dollar more upfront.”
Big Investors vs. Mom & Pop Operators
Realtor.com noted that understanding the realities of the investor market takes some nuance. It cited the city of Atlanta. Based on Cotality data, Atlanta is the capital of major investors, who hold an 11.4% share of the single-family market.
A Realtor.com analysis of deeds information shows investors with more than 100 homes made 4.1% of all single-family purchases since 2023.
Mom-and-pop investors with 10 homes accounted for roughly the same number of purchases there, Realtor.com Economist Jake Krimmel said.
Realtor.com noted that Quinn Residences owns about 5,100 units in build-for-rent communities, including a half-dozen in the Atlanta suburbs.
Quinn Residences CEO Richard Ross said he is looking for clarity and upping their appeals to the government, worried about the implications for their companies.
Realtor.com noted that build-for-rent units are constructed differently, featuring more hard-surface floors, appliances, and other features expecting added wear-and-tear from renters.
The president’s executive order exempts build-for-rent, but the pending bills largely do not. Ross says regulating investors in the space discourages them from building and operating communities, and that contributes to the supply-side problems the market faces.
“There’s going to be unintended consequences to housing supply,” Ross said. “And supply-side risks stifle upward mobility.”
Jones agreed.
“Unlike investors purchasing existing homes, build-for-rent developers are adding net new supply,” Jones said. “Absent a carve-out, there is a risk that policies aimed at curbing competition for existing homes could also dampen new single-family construction, which would work against longer-term affordability goals.”
The dynamic in Atlanta also is evident in other cities, Krimmel’s information stated. Over the past three years, institutional investors made 5.1% of single-family purchases in Charlotte, North Carolina, and 3.8% in Jacksonville, Florida. Mom-and-pop investors still accounted for a higher share of purchases in both cities.
“These proposals may shift behavior at the margin in certain metros, but they are unlikely on their own to materially change affordability nationwide,” Jones said.
NAR’s McGahn said that unlocking existing inventory, streamlining regulatory barriers, incentivizing new construction, and supporting responsible development are “all essential components of addressing housing affordability.
“That includes reforming outdated capital gains thresholds that have not been updated in decades and now discourage longtime homeowners from selling, reducing mobility and limiting the number of homes available for new buyers,” she said.
