The housing paradox: why banning institutional investors could make affordability worse

There are few issues more important in the United States than housing. It’s a crucial part of the American Dream, representing a path to security, community, and mobility. But in the attempt to make this complex challenge easier, there’s a dangerous policy idea gaining traction in Washington: restricting large institutional investors from purchasing single-family homes and offering them as rentals. The proposal is cloaked in language about expanding homeownership and curbing rising housing costs.

While it may look good in a press release, this policy would be a disaster for vulnerable American families. Restricting institutional investment in high-quality single-family rentals (SFR) would limit housing options for the communities fueling America’s population growth: Black, Hispanic, and economically challenged families in their 20s and 30s. Although framed as taking on private equity, this proposal would instead represent an attack on renters, disproportionately harming underserved communities.

I’ve been working in the housing market for over 30 years and currently lead The Amherst Group, a private real estate investment firm. Since the Great Financial Crisis, I’ve worked to provide affordability in this notoriously stretched space, with tightening credit standards shutting many would-be homeowners out of the market. This isn’t just about business or statistics to me; I know this from my personal story. My family chose to rent because it gave us access to better jobs, better schools, and a better life. I attribute my success to this decision—and I don’t want the door to be closed on the thousands of renters we serve and the millions of single-family renters across America.

Who Are Single-Family Renters?

The U.S. housing market is in the midst of a generational transition. White, non-Hispanic households, which have historically accounted for the majority single-family homeowners and the bulk of housing-driven generational wealth, are aging out of their prime buying years. Meanwhile, racially and ethnically diverse populations are expanding rapidly, especially in the 26-40 age range, the peak years for household formation.

These younger cohorts are more likely to rent, limiting their ability to build equity and participate in wealth creation through homeownership. Income disparities, student debt burdens, tighter credit conditions, and down payment constraints continue to restrict access to ownership and, by extension, intergenerational wealth-building. Within the broader renter population, single-family rentals serve a distinct and growing demographic.

Nationally, single-family renters are meaningfully younger than homeowners, averaging 43 years old compared to 54. Black and Hispanic households represent 40% of single-family renters but only 20% of homeowners, highlighting a clear divide in who rents versus who owns. 

These patterns are reinforced across several high-growth states such as Arizona, Florida, Georgia, Nevada, North Carolina, Ohio, and Texas. In these markets, single-family renters are roughly 10 years younger than homeowners (46 vs. 56) and have about 60% more children per household (0.8 vs. 0.5). Black and Hispanic households account for 43% of single-family renters but just 25% of homeowners.

Income disparities further underscore the structural gap. Homeowners earn, on average, roughly 61% more than renters ($131,492 vs. $81,644), with some states showing gaps exceeding 100%.

The implication is clear: restricting single-family rental supply does not eliminate financial barriers to ownership. It reduces housing options for families who are structurally constrained from buying. 

Rentership Rates Tell the Story

These disparities exist across the broader housing market, not just within single-family rentals. Nationally, White non-Hispanic households maintain homeownership rates near 70%, while Black households remain closer to the mid-40% range. Hispanic households sit just above 50%. In other words, racially diverse households are structurally more likely to rent across all housing types, reflecting income gaps, credit access barriers, and down payment constraints that persist across generations.

Within that renter population, Black non-Hispanic households have a single-family rentership rate more than double that of White non-Hispanic households (27% compared to 13%). Hispanic households follow at 23%. 

Single-family homes represent a meaningful, rational, and oftentimes necessary housing choice, particularly for younger families seeking neighborhood stability, access to schools, and space for children. Policies that constrain the supply of these homes will fall hardest on the groups most likely to rely on them.

Disproportionate Consequences

Restricting single-family rental supply would compound inequality. Younger families would be pushed toward smaller multifamily units, longer commutes, or overcrowded living conditions.  

This would be a real crisis. According to The Center of Generational Kinetics National Renter Study, more than 1 in 10 home renters would need to live in a shelter, car, motel, or other type of temporary housing if they couldn’t live in their current single-family rental home. Further, a quarter would most likely live with family or friends and 1 in 3 would most likely rent an apartment. Reducing supply would bring real-world implications for countless American families. 

Eliminating or restricting that option does not make ownership more attainable. It narrows pathways to stable housing and upward mobility.

A Better Path Forward

Encouraging responsible investment in single-family rentals offers one way to meet the needs of a changing population. Restricting that investment will produce unintended consequences that undermine the very communities policymakers seek to protect. 

America’s housing challenge is fundamentally one of supply. Policymakers serious about affordability and equity should focus on increasing housing production across tenure types, ownership and rentership alike, while responsibly widening mortgage credit to increase access to homeownership. This policy doesn’t expand ownership,  it simply favors one family over another, privileging owners over renters and pushing hard working Americans out to make room for the preferred few.

If the goal is equity and affordability, expanding housing options—not constraining them—needs to be the priority. 

Sources:
United States Census Bureau, American Community Survey 1-Year Data (Data: 2024, Pub: 2026).
Building Families in an Era of Housing (Un)Affordability, The Center of Generational Kinetics National Renter Study (Data: Q4 2025, Pub: 2026).

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