Trump Criticizes ‘Nation of Renters’ While Advocating New Pro-Rental Policy
In a recent speech, former President Donald Trump criticized corporate investors for contributing to the housing crisis, labeling America a “nation of renters.” He argued that homes should be accessible to individuals rather than corporations. His remarks came during a gathering in Davos, Switzerland.
Executive Order and Build-to-Rent Exemption
Trump’s newly announced executive order seeks to prevent large corporate investors from buying single-family homes. However, it includes an exemption that allows the construction of homes dedicated to rentals, known as build-to-rent communities. This growing market segment has seen significant participation from major Wall Street landlords like Blackstone and homebuilders like Lennar and D.R. Horton.
Growth of Build-to-Rent Communities
Build-to-rent communities serve as a transitional option for families, especially those not ready to buy a home. In 2022, approximately 66,000 homes in these communities were completed, compared to just 11,000 in 2021. Analysts suggest that this trend may improve the availability of quality rental housing.
Impact on Home Builders
The executive order aims to support home builders as many Americans struggle to purchase single-family homes due to high mortgage rates and rising prices. Companies like D.R. Horton reported selling thousands of rental homes last year, underscoring a shift in the market.
- D.R. Horton: Sold 3,546 single-family rental homes.
- Lennar: Launched an online platform for investors to purchase new rental homes.
Wall Street Landlords and Market Dynamics
Major Wall Street investors, including Invitation Homes and American Homes 4 Rent, are adapting by collaborating with homebuilders or developing their own properties. Invitation Homes recently acquired a developer specializing in build-to-rent communities in the Southeastern United States.
Historically, these institutional investors gained prominence following the 2008 financial crisis, acquiring vast numbers of foreclosed homes. Although they once dominated the market, their influence has waned, now accounting for just 1 to 3 percent of single-family rentals nationwide.
Future of Rental Housing
With soaring home prices and low foreclosure rates, the current landscape presents challenges for traditional home buyers. Small-scale investors still dominate the market, and many are not expected to be impacted by Trump’s executive order. The market trends indicate a growing demand for rental properties as more Americans seek affordability.
As the situation evolves, the federal mandate prompts further exploration of what constitutes large institutional buyers in the rental market. Trump’s administration aims to balance the interests of average Americans with the complexities introduced by corporate landlords.
