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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. President Trump says he

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Speaker 1: wants to ban institutional investors from buying single family homes.

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Speaker 1: In a truth social post yesterday, he said that housing

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Speaker 1: should be for people and not corporations. His proposal sparked

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Speaker 1: market reaction, of course, on homebuilder stocks and landlords of

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Speaker 1: single family homes. Let's bring in Jonathan Miller. He is president, CEO,

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Speaker 1: and co founder of the real estate appraisal and consulting

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Speaker 1: firm Miller, Samuel and Jonathan. You and other experts in

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Speaker 1: this space have made the point that institutional investors are

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Speaker 1: not a big player in the single family rental market,

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Speaker 1: yet they make for a convenience gapegoat.

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Speaker 2: Why is that, Well, I think that you know, they're

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Speaker 2: very much in the public eye, very visible. They only

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Speaker 2: account for about one percent of the single family housing stock,

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Speaker 2: and it's so banning them from purchasing. I think the

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Speaker 2: perception with the public is that they dominate inventory. They basically,

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Speaker 2: you know, one of the most challenging aspects of housing

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Speaker 2: and why there were in an affordability crisis is because

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Speaker 2: there's been inadequate supply. However, there are very tiny a

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Speaker 2: one percent sort of number. And then on top of it,

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Speaker 2: the highest concentration of institutional investors Wall Street per se

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Speaker 2: is in the South, the Sun Belt, which has excess

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Speaker 2: supply right now. So I'm having a hard time connecting

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Speaker 2: the dots on how this will help improve affordability. I

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Speaker 2: think it's a non issue generally. For solving that problem.

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Speaker 1: You make a lot of important points, and it's a

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Speaker 1: reminder of how at the end of the day, real

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Speaker 1: estate is very local. Housing supply and housing demand is

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Speaker 1: very local to each specific market. Yet when it comes

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Speaker 1: to perceptions, there is this sense that these institutional investors

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Speaker 1: Wall Street type of firms like a Blackstone, play this

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Speaker 1: outsize role. And part of it is because they came

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Speaker 1: in during the financial crisis, or in the week of

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Speaker 1: the financial crisis, and did swoop in and buy a

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Speaker 1: lot of single family homes at a time when Americans

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Speaker 1: were losing their homes, So that looms large in the

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Speaker 1: public consciousness.

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Speaker 2: Absolutely, the perception perception is value, and so they were

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Speaker 2: highly visible coming in and sort of you know, scooping

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Speaker 2: up twenty twelve, twenty thirteen, a tremendous volume of foreclosed

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Speaker 2: homes after the financial crisis and have made it work,

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Speaker 2: and some of the firms have even sold off part

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Speaker 2: of their portfolios. As you know, the market has peaked

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Speaker 2: in the last couple of years. So I don't see

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Speaker 2: I see this as disconnected from what the actual problem is.

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Speaker 2: The problem is to enhance affordability, and I don't think

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Speaker 2: the institutional aspect of the housing market has much to

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Speaker 2: do with it right.

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Speaker 1: Well, to be fair, President Trump is not the only

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Speaker 1: one who has suggested something like this. Elizabeth Warren, the

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Speaker 1: Massachusetts Senator, has also said something similar. So this is

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Speaker 1: a bipartisan kind of approach to trying to tackle affordability

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Speaker 1: in the housing market. You say the solution is to

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Speaker 1: build more housing, but that takes a long time. That's

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Speaker 1: not something that happens overnight. What kind of timeline are

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Speaker 1: we talking about, even if you could open this figure

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Speaker 1: and just allow builders to start building more homes.

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Speaker 2: Yeah, and also too, you know, a lot of the

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Speaker 2: housing that we're building is skewing to the higher end

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Speaker 2: because of land costs, because of product cost because of

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Speaker 2: labor costs. All those things make it very difficult. But

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Speaker 2: if you create over supply or modest oversupply, you place

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Speaker 2: pressure on housing prices and that sort of melts into

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Speaker 2: the next layer below that and then below that. It

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Speaker 2: is not a surefire solution, but it's just one of

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Speaker 2: those things. The other thing is, you know, a lot

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Speaker 2: of the challenge of single family affordability has been zoning,

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Speaker 2: and cities like Minneapolis have banned single family zoning new

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Speaker 2: construction within the municipality and trying to move towards multifamily

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Speaker 2: and high density areas. There's many things that can be done.

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Speaker 2: I think to your point that both sides of the

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Speaker 2: aisle are disconnected from the actual problem in this idea

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Speaker 2: that you know, inventory is inventory is very local, very regional,

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Speaker 2: and when we look at markets like the Northeast or

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Speaker 2: the Midwest very tight in terms of supply. We look

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Speaker 2: at Sunbelt very soft because they were able to create

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Speaker 2: and build more housing during the migration pattern that we

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Speaker 2: saw during COVID, where people left the Northeast and the

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Speaker 2: West coast to go to more affordable housing, and that

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Speaker 2: soon ended because the demand was so high. You have

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Speaker 2: to remember that mortgage rates are double what they were

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Speaker 2: and still housing prices are rising, right, so it is

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Speaker 2: all about supply