On January 20, 2026, President Trump signed an executive order aiming to boost American homeownership rates by restricting large institutional investors from purchasing single-family homes for the rental market. There have been several leaders in Congress who have been pushing for more control of the SFR industry for years, but this is the 1st time the President has formally advocated for such.
What Is Driving This?
It’s no secret that for years now, it has been extremely challenging for aspiring 1st time home buyers to get on the property ladder. I chronicled reasons why in my 2023 article titled Housing Affordability Has Not Been Worse Over The Last 40 Years
Frustration that the traditional American Dream is out of reach has come to a boiling point and is now one of the primary political hot buttons.
Details Of The Government’s Proposed Involvement In SFR
In 2025, prior to the President’s Executive Order, Senators Tim Scott and Elizabeth Warren led the drafting of The Renewing Opportunity in the American Dream (ROAD) to Housing Act.
As of the 2nd week of March 2026, while not yet law, the bill has strong support in the Senate and among other provisions, asserts the following related to the SFR Industry:
- Entities that currently own 350 homes or more will be deemed institutional owners and will not be permitted to acquire more homes.
- Institutional owners of rental housing will have to sell homes that they build (BTR) within 7 years.
- Provides the Secretary of the Treasury rulemaking authority to address changing market conditions to ensure the housing ecosystem remains stable.
Will The SFR Provisions In The Bill Help Restore The American Dream?
Let’s start by looking at some numbers:
- According to John Burns Research & Consulting, there are 314 entities (institutional owners) that own 350 or more homes in the US.
- Institutional owners own 5% of the 14 million single family rental homes.
- Institutional owners own .7% of the 92 million homes in the US.
- The largest institutional SFR owners were net SELLERS of homes from 2023-2025.
- The largest institutional SFR owners have shifted their strategy from acquiring scattered site homes to either building new homes themselves or deploying capital to fund the building of new homes. AMH built almost 7,000 new homes between 2023 and 2025.
Politician’s Perspective
In an ideal world, a politician’s north star would be to act as a pure public servant. The reality is there are very few ideal world circumstances in any field of endeavor. Additionally, “public service” gets complicated because there are different segments of the public that have conflicting viewpoints on what being served means.
There are exceptions, but oftentimes the primary motivation of politicians range from self preservation to headline seeking to power seeking. No shade on any particular politician, it is the nature of politics. The 1st step in serving is getting elected to serve, and the 1st step in getting elected is to find a way to connect with voters on what is important to them.
It’s not sexy or attention grabbing for a politician to announce changes in zoning laws or removing regulations that promote the construction of new homes. Additionally, the construction of millions of homes (it is estimated that the US is under supplied by somewhere between 1 and 4 million homes) takes a long time.
In a climate where voters are conditioned to seek and receive instant gratification, these moves, while productive, simply don’t grab attention. Unfortunately, what does grab attention is creating a villain. In this case, institutional SFR owners have been deemed the villain.
The Consequences Of The SFR Provisions
The SFR provisions in the ROAD to Housing Act, have similarities to the concept of rent control. In the moment, the government announcing a cap on how much people’s rent can increase sounds great. It elicits emotion and grabs attention.
Rent control can benefit a small group of folks in the long run and others in the short run. But overall, as has been proven many times, rent control ends up disincentivizing investment, which limits supply and therefore makes rent unaffordable in the long run for the masses as new demand increases. Here is a list of 10 unintended consequences of rent control. More details about this dynamic can be found in this paper.
There will be 3 unintended consequences if the SFR provisions mentioned above become law:
1. Fewer homes will get built
Institutional capital always flows to investments where it can get the best risk adjusted return. With the government getting more involved in SFR, the risk profile is escalating. If Single Family Build To Rent projects are forced to be sold within 7 years to owner occupants, the money that would have otherwise gone to fund these projects will go elsewhere. The affordability problem is the result of a supply problem. The SFR provisions will further limit the overall supply of housing.
2. Renters will get displaced
Not all renters aspire to be homeowners. Homeownership comes with an advanced level of responsibility (maintenance/repairs/taxes/insurance) and significantly reduces flexibility. As of the end of Q4 2025, the home ownership rate in the US is 65.7% which is in line with the long term median. For context, France’s homeownership rate is 61%, Japan’s is 55% and Germany’s is 47%.
As institutional capital is divested from rental housing and rental homes are sold to owner occupants, what happens to the renters who were in those homes? What do people who either can’t qualify for a home or simply don’t want to own a home do?
What about that family that can’t qualify to buy who rents in a great school district because they want to give their children access to the best education?
3. Rental rates will go up
It is well known that the true solution to making housing more affordable is to build more supply. Look at what has happened in Austin, TX in the last few years. According to Zillow, both rents and home prices are down by double digit percentages. This happened simply because there has been a concerted effort to build more housing units.
Nationally, by simply proposing regulations, institutional investment in SFR got riskier. Promoting the conversion of scattered site rental homes to owner occupant homes further reduces the supply of available rental homes and discourages investment in such.
What happens when supply doesn’t keep up with demand? Prices (rents) will increase.
John Burns himself asks: Are elected officials about to pass the “Rental Inflation Bill?
Summary & What This Means For Mom & Pop Investors?
Calling any entity that owns 350 or more homes an institutional investor and discouraging them from investing to provide housing will have a negative effect on many of the affordability constrained citizens politicians are trying to help.
It will become less affordable for families seeking to rent single family homes.
With less supply from institutions, the non-institutional investor will see demand for their product increase. Non-institutional investors will see a commensurate increase in the amount they are able to charge for their product.
Not being subject to regulations, mom and pop rental property owners will benefit from increasing rents and ultimately become more profitable when they set their rents to the going market rate.