“Landlords are not the cause of the nation’s housing crisis, and any plan that reduces investment in housing is only going to make matters worse.”

“Large investors, those with over 100 properties, own 1 percent of U.S. homes. Yet, detractors on the left and right have made them into villains who are scooping up houses from hard-working families.

The problem with housing is that there isn’t enough of it. Government shouldn’t care who buys it. It should be looking for ways to make it easier to build more of it, which will mean getting out of the way. Scapegoating investment bankers is always politically popular, especially in an election year, but it won’t do anything to make housing more affordable.”

“Housing analysts, however, say the influence of institutional investors has been overstated, and that a longstanding shortage of homes is the primary reason why houses have become increasingly unaffordable.

‘The real problem is that we’ve added far more homeowners than we’ve built single-family homes,’ Jay Parsons, an analyst who tracks rental housing and development trends, tells CNBC Make It. ‘It’s all about supply and demand.’”

“The top two dozen single-family rental firms own about 520,000 homes in the U.S. combined. That’s less than 1% of the single-family housing stock

Institutional investors simply aren’t to blame for the more than 50% increase in housing prices since early 2020. The biggest culprit is inflation followed by the higher interest rates to contain it. Owners who locked in low mortgage rates are now reluctant to move, which means fewer homes for sale. The longstanding problems for housing supply are zoning regulations and permitting red tape that limit new construction.”

“Housing experts tend to agree with industry insiders in saying institutional investors are not the cause of the current affordability crisis in the nation, which has its roots in a chronic lack of inventory which can be traced back to underbuilding when compared with demand in the years following the subprime mortgage crisis.

‘Large corporate ownership is a red herring in the broader supply debate: most single-family rentals are owned by small landlords, and many of the markets where institutional investors have been most active are also places where inventory has already been rising and price growth has cooled over the past two years,’ [Economist Jake Krimmel] said.”

“At the same time, even as they account for a small share of homeowners, institutional homeowners have been useful in providing liquidity and market stability over the past 15 years. During the foreclosure crisis in the early 2010s, home prices were falling, unemployment was high, bank balance sheets were stressed, and demand for rentals outpaced demand for purchases. Institutional homebuyers played a crucial role by buying up homes and renting them out. More recently, when homebuying demand plunged in late 2022 after the Federal Reserve raised interest rates, homebuilders were able to offload new homes they were struggling to sell to individuals to institutional investors.

This ability to smooth out demand — selling homes primarily to households, a modest amount to build-to-rent operators, and then to institutional investors when market conditions turn challenging — is mutually beneficial. It helps de-risk an industry that’s inherently risky and cyclical, provides steady employment for construction workers and other tradespeople, and reduces the risk of homebuilder bankruptcies.”