The conservative Wall Street Journal editorial board, an increasingly vocal critic of President Donald Trump’s economic policies, is none too happy with his latest scheme to try to make homes cheaper.
Specifically, Trump has announced he will take action to ban institutional investors like Blackstone from buying single-family homes — an idea that is already quite popular on the left and that has been pushed by politicians like Sen. Elizabeth Warren (D-MA). And an idea, the board wrote, that is pointless market interference that won’t solve anything.
“Mr. Trump is searching for ways to lower housing costs and now he’s seizing on a favorite of the anti-business left,” wrote the board. “Progressives have long blamed high housing prices on large investors that buy properties to rent and thereby supposedly squeeze out middle-class families. But this doesn’t fit the facts of the housing market. 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.”
Indeed, the board noted, Blackstone itself has been selling off more homes than it has been buying for a decade. 87 percent of investor-owned single-family homes are held by smaller companies or individuals who only hold five or fewer properties, who wouldn’t be affected at all by Trump’s order.
In fact, the board pointed out, one of the main actual reasons why housing is so expensive is just being made worse by Trump’s other signature policies.
“The longstanding problems for housing supply are zoning regulations and permitting red tape that limit new construction. Mr. Trump’s tariffs and worker deportations are also raising costs and exacerbating labor shortages. Housing starts in August were down 6% from the prior year and permits were 11.1% lower, according to the Census Bureau’s latest data,” wrote the board. “By scapegoating investors, the President is playing into the hands of progressives who oppose permitting reforms that could boost supply. See California Gov. Gavin Newsom, who on Thursday announced plans to limit home purchases by large investors. Never mind the state’s environmental laws that consign building projects to purgatory.”
The bottom line, the board concluded, is that “Mr. Trump’s investor ban won’t expand the supply of housing or reduce housing prices, and we hope Congress rejects it.”
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