The United States is in the midst of a housing crisis. Increases in the cost to buy or rent were the largest driver of inflation since 2020. But now, instead of taking the problem head on, lawmakers want to limit our options and exacerbate this crisis.
Across the nation, elected officials from both the right and the left have laid blame for the housing crisis onto single-family rental institutions, claiming that large Wall Street-backed companies are snapping up homes, inflating prices, blocking access to the American Dream, and creating a housing crisis. Their solution? Ban or cap how many properties these companies can own.
This solution feels good, and deflects blame, but the data says it is not just wrong, but perhaps actively harmful to American families.
Institutional investors are just a sliver of the housing market. John Burns Research & Consulting found that just 0.4 percent of single-family homes in the U.S. are owned by firms with portfolios of 1,000 homes or more. Instead, the vast majority of rental homes are owned by mom-and-pop landlords who own just one or at most a few properties. It is impossible that such a small market can be responsible for the dramatic increases in prices over the past few years.
In fact, single-family rental institutions might actually be a net benefit for Americans. A new paper from UC Berkeley economist Konhee Chang found that increasing the supply of single-family rentals reduces segregation by enabling lower income, particularly non-white renters to live in neighborhoods where they otherwise could not afford to buy by driving down the cost to rent.
There are other tangible benefits from single-family rental institutions as well. Research from the Urban Institute and Virginia Tech, and expanded on by the United States Government Accountability Office, shows that institutional rental opportunities provide low and middle-income families more opportunity to live in single-family neighborhoods – places that often are in better school districts, are in safer areas and offer more economic opportunity. Unlike smaller mom-and-pop landlords, single-family rental institutions often provide 24/7 maintenance and standardized leases. They also often build the housing that they rent, expanding supply that is desperately needed across the country.
The U.S. is not the first place to consider restrictions to single-family rentals either. In the Netherlands, a law in Rotterdam that restricted institutional ownership of housing actually led to rental inflation, displacement of low-income renters, and an influx of higher-income homeowners. Housing availability shrank, and rents rose as a result.
This is not to say that single-family rental institutions are perfect. They need to be required to meet the same expectations for transparency, maintenance, and tenant safeguards as every other landlord should. We still should aspire to give every American a path to home ownership. Arrangements such as credit-building programs, down payment assistance, and first-right-of-refusal agreements that that many single-family rental institutions already offer are a step in the right direction.
Lawmakers should instead focus on what actually moves the needle and produces results: expanding housing supply. A 2025 study by economists Edward L. Glaeser and Joseph Gyourko found the U.S. would have 15 million more homes today if we had simply kept building at pre-2000 rates. The IZA Institute of Labor Economics puts the current housing shortage even higher, at over 20 million units.
Structural barriers like restrictive NIMBY zoning laws, slow permitting processes, and insufficient infrastructure investments are the real culprits behind our lack of homes and skyrocketing housing costs, as they slow or even prevent new construction. But there are solutions.
Bills like Rep. Scott Peters’ (D-Calif.) Build More Housing Near Transit Act are steps in the right direction, encouraging density near jobs and transit. The SPEED Act, introduced by Bruce Westerman (R-Ark.) and Rep. Jared Golden (D-Maine), would shorten permitting timelines and reduce the frequency of frivolous litigation that currently make construction in America far too laborious and expensive. Embracing and expanding Joe Biden’s Infrastructure Investment and Jobs Act is also key to setting the foundation to allow new housing to thrive across the country.
Real solutions to the housing crisis might not always score big political points or make headlines. But we cannot afford to be distracted by easy outs. In the end, blaming single-family rental institutions in exchange for political points might feel cathartic, but it won’t build a single new home for the working Americans that need them. The housing crisis requires bold, thoughtful policy – not shortcuts.
Rebecca Smith is a fellow at the Progressive Policy Institute, where she focuses on housing and trade policy.