Why Trump is going after institutional investors on rental housing

President Donald Trump’s renewed focus on housing affordability has found a clear villain: institutional investors that own large swaths of single-family homes in fast-growing Sun Belt cities, where would-be homeowners increasingly find themselves bidding against Wall Street.

Trump argued in a social media post Wednesday that corporate ownership has helped push housing further out of reach for everyday Americans, saying he’s immediately taking steps to ban large institutional investors from buying more single-family homes.

The message may be aimed at places like Atlanta and Jacksonville, metropolitan areas where investor ownership is far higher than the national average.

While institutional investors only own roughly 2% of the nation’s single-family rental housing stock, their presence is far more concentrated in parts of the Southeast. The U.S. Government Accountability Office estimates, for example, that investors control about a quarter of Atlanta’s single-family rental market, more than a fifth of Jacksonville’s and sizable shares in Charlotte and Tampa.

Those concentrations trace back to the aftermath of the financial crisis, when large investors moved aggressively into housing markets flooded with foreclosures. By buying homes in bulk, they helped stabilize prices in hard-hit regions experiencing sharp declines, particularly across the Sun Belt, according to Wolfe Research.

“While their overall footprint is limited, ownership is heavily concentrated in Sun Belt cities, likely reflecting expectations of stronger home price appreciation,” analysts at Wolfe said in a recent note to clients.

The idea of curbing Wall Street’s role in housing isn’t new. Analysts at BTIG note that Congress has seen multiple efforts in recent years to rein in institutional homeownership, ranging from tighter regulations and financing limits to outright ownership bans and even forced liquidations.

“Bureaucratic limitations have historically hindered the legislation in Congress, and as it stands now most bills remain in the ‘Introduced’ phase,” BTIG said in a note.

Trump did not provide details on how such a ban would be implemented. The president said he plans to outline additional housing and affordability proposals in a speech at the World Economic Forum in Davos in two weeks.

— CNBC’s Michael Bloom contributed reporting.