Republicans are split over President Donald Trump’s push to ban large institutional investors from buying single-family homes, even as the White House pushes for the provision to be included in bipartisan housing legislation.
Trump has advanced such a ban as a key plank of his housing agenda, even though it is at odds with traditional Republican free-market economics. Fiscal conservatives argue that such firms aren’t crowding out homebuying and the policy change could backfire by making housing more expensive for some.
TRUMP STATE OF THE UNION WISH LIST FACES LONG ODDS IN CONGRESS
Sen. Jim Banks (R-IN), a member of the Banking, Housing, and Urban Affairs Committee, told the Washington Examiner that Trump got a great response to his push during the State of the Union. He also said that Sen. Bernie Moreno (R-OH) is one of the Republicans leading the charge to include it and said “he’s building some support.”
“I support doing something on it, President Trump does too,” Banks said.
Trump first announced the proposal earlier this year and later signed an executive order meant to effectuate it in part. But the administration’s goal has always been for Congress to pass such a restriction into law. He mentioned the executive order during his speech Tuesday and called on Congress to codify a ban.
“I’m asking Congress to make that ban permanent, because all this for, people, really, that’s what we want,” the president said. “We want homes for people, not for corporations. Corporations are doing just fine.”
But some Republicans in the conference are flatly opposed to the Trump proposal, such as outgoing Sen. Thom Tillis (R-NC), another member of the banking committee and someone who has not shied away from breaking with the president. Tillis noted that the policy has been proposed by liberal Democrats.
“To me, I think it’s masking the underlying problem of not enough housing starts,” Tillis told the Washington Examiner. “So if we view that as a solution to that problem, I don’t see how it fits. I’ve been against it when Bernie Sanders first proposed it, or Elizabeth Warren, I’m still against it.”
Senate Majority Leader John Thune (R-SD) on Wednesday acknowledged some intraparty challenges on the housing front related to the proposed ban.
“Those are issues that, on our side, obviously are — they’re not unanimous,” Thune told the Washington Examiner.
The Washington Examiner first reported last week that the White House had begun circulating draft legislative language to ban major firms such as Blackstone from purchasing single-family homes.
The proposal, in which the Trump administration could try to have included in either the bipartisan bill in the Senate, the Road to Housing Act, or the House’s Housing for the 21st Century Act, is fairly straightforward. It defines a “large institutional investor” as any investment fund, corporation, or entity that controls over 100 single-family homes.
Sen. Markwayne Mullin (R-OK) said he thinks some of the details, such as what constitutes a large institutional investor, in the Trump proposal that the White House circulated on Capitol Hill could end up changing.
“I think the numbers may change a little bit, I mean, like 100 to maybe 500 or 1,000, or something like that, but I think there’s definitely a path forward,” Mullin said.
Meanwhile, Sen. Rick Scott (R-FL) said he would “be surprised” if a ban on institutional investors purchasing single-family homes isn’t included in the housing legislation, although he said he hasn’t been a part of the process.
Sen. Mike Rounds (R-SD), a member of the banking committee, was a little more circumspect about an outright ban on such purchases. Rounds said he doesn’t know what the appetite within the conference is for the move, “but I think that there are areas to be explored with regard to tax policy and so forth,” he told the Washington Examiner.
“I would rather see us go after additional incentives for home ownership and maybe some tax incentives to decrease investment companies might be the alternative, or might be the option,” Rounds later said to a group of reporters.
Proponents of banning firms such as Blackstone from buying single-family homes, many of whom are on the Left and populist Right, argue that those investors are crowding out the market for homebuyers.
Critics of the proposal make the point that not only do these institutional investors purchase a very tiny percentage of the country’s total housing stock, but they might make it easier for people to rent homes that they might not have been able to receive a mortgage to buy.
Many Democrats support banning such firms from purchasing single-family homes, so any housing legislation could bleed Republican votes as long as a lot of Democrats sign on.
But even some Democrats aren’t the biggest fans of such a move.
TOP DEMOCRAT CHALLENGES TRUMP ON BAN OF BIG INVESTORS FROM SINGLE-FAMILY HOUSES
During a recent interview with the Washington Examiner, Rep. Emanuel Cleaver (D-MO), the ranking member of the Financial Services Subcommittee on Housing and Insurance, expressed skepticism about the policy proposal.
“I don’t know whether or not we should get into telling who can buy single-family or multi-family housing, you know?” Cleaver said. “I mean, I probably sound like a Republican, but … I don’t want to get into trying to dictate who can buy what in the United States.”