The United States has a growing housing affordability problem. Recently, U.S. Sens. Elizabeth Warren, of Massachusetts, and Tim Scott, of South Carolina, introduced the 21st Century ROAD to Housing Act, a bipartisan legislative package aimed at increasing housing supply and lowering costs. It has been described as the most significant federal housing legislation in decades.
In short, the bill seeks to boost housing supply by streamlining environmental reviews, reforming zoning and regulations, and increasing the production of manufactured homes. The bill also aims to lower costs by offering grants and loans for multifamily developments, as well as for homeowners and landlords trying to repair their homes.
One of the most talked-about aspects of the bill, though, is the provision that would restrict large institutional investors from purchasing additional single-family homes.
Targeting institutional investors may be politically expedient, but it will do little to address the underlying problems that are the true drivers of housing affordability in the U.S. today, according to Carol Camp Yeakey, the Marshall S. Snow Professor of Arts & Sciences at Washington University in St. Louis and co-author of the forthcoming book “When Wall Street is Your Landlord.”
“Economists across the political spectrum are in almost unanimous agreement that corporate investors are not the cause of the housing affordability crisis, but rather a symptom of the crisis,” said Camp Yeakey, who also serves as a professor of public health at the WashU School of Public Health.
That’s because large institutional investors only own 1-3% of single-family housing stock, according to the U.S. Government Accounting Office, the Urban Institute and other reputable sources. Smaller mom-and-pop investors own 11%. The other 87% of single-family housing is owned by individuals.
Additionally, an analysis of the largest 150 metropolitan areas found no correlation between the share of institutional investor-owned homes in a market and home price appreciation, Camp Yeakey said.
“It is simply misleading to attribute the housing affordability crisis to institutional investors given their small share of the housing market,” she said.
Still, the influx of corporate investors in the housing market remains a cause for concern. Camp Yeakey and her WashU colleagues Vetta Sanders Thompson, the E. Desmond Lee Professor of Racial and Ethnic Diversity at the Brown School, and Will Ross, MD, the Alumni Endowed Professor of Medicine at WashU Medicine, have spent nearly a decade studying the proliferation of corporate investors in U.S. neighborhoods and its broader impacts on public health, education, safety and neighborhood decline.
Camp Yeakey’s 2024 paper, “Corporate investors and the housing affordability crisis: Having Wall Street as your landlord,” published in the American Journal of Economics and Sociology, found corporate investors tend to concentrate their purchases in specific markets where a large share of renters are low-income racial minorities.
The forthcoming book offers a detailed look at three such neighborhoods in St. Louis, Cincinnati and Atlanta, where more than half of the housing is owned by corporate investors. Their research shows that corporate investors maximize profits at the expense of tenant safety and well-being, including massive rent increases, eviction filings, dangerous lack of maintenance, steep fines and more. Long-term, this limits tenants’ ability to build wealth through homeownership.
Corporate investors benefit from the tight housing supply. Addressing that shortage would alleviate both problems.
Econ 101: Supply and demand
Like other goods and services, housing prices increase when the demand is greater than the supply. High mortgage rates and years of underbuilding are unaddressed but persistent contributors to rising prices, Camp Yeakey said.
‘What the new housing bill provides is the perception of corrective action — void of concrete action — without dealing with the core structural issues in America that make housing too expensive in the first place.’
Carol Camp Yeakey
Last year, online real estate marketplace Zillow estimated that the U.S. had a national housing shortage of approximately 5 million homes. Unless policy addresses the measures that increase housing supply, any legislative impact on prices and affordability will be limited.
Housing affordability has hit a historic low. Whereas 50% of Americans could afford to purchase homes in 2013, just 21% are able to afford homes today, according to an analysis by real estate brokerage Redfin. Housing costs are now rising faster than incomes, and the median age of home buyers has skyrocketed to 53, the highest on record, Camp Yeakey said.
“What the new housing bill provides is the perception of corrective action — void of concrete action — without dealing with the core structural issues in America that make housing too expensive in the first place,” Camp Yeakey said.
Loosening exclusionary local zoning restrictions and building permit requirements to enable the construction of more multifamily housing units is essential to increasing the supply of affordable housing, Camp Yeakey said. The bill includes incentives and grant opportunities for local governments that implement zoning changes, streamlined permitting and density bonuses, which is a step in the right direction.
“It is almost conventional wisdom that the key reason for the housing shortage in America is overly restrictive land use policies and ‘Not in My Back Yard’ local legislative policies that prevent private developers from building types of housing people want and need, where they want it,” Camp Yeakey said.
“As early as the 1920s, segregation in housing began with explicit racial zoning, followed by years of racial profiling, redlining, racial covenants and blockbusting. It is common practice for local governments to severely restrict the types of housing that can be built in the community and where it can be built, using exclusionary zoning laws, often referred to as ‘snob zoning.’”
According to Camp Yeakey, these exclusionary zoning laws make it more difficult for builders to meet growing housing demand. These laws are so pervasive today that it is illegal to build multifamily housing in three-quarters of American cities, according to the Brookings Institution.
Looking forward
Despite receiving overwhelming support in the Senate, the housing legislation faces a less certain future in the House.
The housing affordability crisis is one of the most significant issues in America today. The continued lack of affordable housing is a major driver of inequality, poverty, poor quality of life and conditions that erode individual health and well-being, Camp Yeakey said.
“Failure to address the true drivers of housing affordability will mean more Americans will be less able to achieve the American dream of homeownership.
“Homeownership serves as an economic engine. It has a multiplier effect, and it generates and creates supportive conditions for humans to advance,” she said. “Affordable housing is the foundation from which other legal entitlements can be achieved and secured.”
“When Wall Street is Your Landlord” is published by Oxford University Press and will be released in July 2026.
