California Democratic Rep. Ro Khanna reintroduced a bill last week that would curb institutional investors from buying up housing.
With the move, Khanna leveraged a similar call recently made by President Donald Trump.
In a statement to CNBC, Khanna invoked Trump’s support for blocking institutional investors from buying up housing. Trump said Jan. 7 in a Truth Social post that he would be “immediately taking steps to ban large institutional investors from buying more single-family homes.”
“If President Trump is serious about taking on Wall Street landlords, Congress should pass my bill and he should sign it into law,” Khanna said. “Homes should be owned by people, not wealthy corporate landlords who are buying up single-family homes and pushing the dream of homeownership out of reach for too many Americans.”
CNBC said that Trump’s remark was one of a flurry of populist economic moves as he seeks to address voter concerns about affordability ahead of the 2026 midterm elections.
Bill Would Remove Tax Breaks
A Marist poll recently found that 36% of Americans approved of Trump’s handling of the economy, while 57% disapproved. CNBC said that is a significant headwind for Trump’s fellow Republicans in Congress as they work to retain their razor-thin majorities in the House of Representatives and Senate.
While bill’s text wasn’t immediately available, Khanna’s office told CNBC that the Stop Wall Street Landlords Act would prohibit large institutional investors from taking advantage of home-related tax breaks, including mortgage interest, insurance and depreciation deductions.
The bill also would require federal and government-backed agencies such as Freddie Mac and Fannie Mae to prohibit large institutional investors from purchasing mortgages on single-family homes. Under the bill, large institutional investors who sell single-family homes more than 18 months after the bill’s enactment would be hit with a real estate transfer tax equal to 100% of the home’s sale value.
In previous versions of the bill, including one introduced in late 2024, CNBC noted that a large institutional investor was defined as a person or firm with assets exceeding $100 million.
Khanna has 13 cosponsors on the bill so far, all of whom are Democrats. CNBC said that it’s possible that Trump’s call for an end to large investors in the single-family home market might prompt some House GOP members to join Khanna’s effort.
Willing to Work With Trump
In an interview with CNBC, Khanna said he is willing to work with Trump on legislation “if it’s actually going to help the working class.”
“If he calls me up, I’ll help lead the bill,” Khanna said.
Trump is scheduled to speak at the World Economic Forum Wednesday in Davos, Switzerland, and he is expected to address his housing proposal.
“I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos,” Trump said on Truth Social.
Realtor.com took a look at the potential impact of Trump’s proposal.
“Institutional investor impact on the overall housing market (both the rented and owned space) is highly exaggerated by politicians on both sides of the aisle,” said Jake Krimmel, Senior Economist at Realtor.com.
As of November, institutional investors owned only about 1% of America’s single-family rental stock, according to an analysis of Parcl Labs data by the American Enterprise Institute.
Other estimates put that figure slightly higher at around 2% to 3%, Realtor.com said.
“Wall Street investors sound sinister but they’re a red herring when it comes to the housing affordability crisis,” Krimmel said. “Nationally and in the vast, vast majority of neighborhoods, they simply are not big players, so preventing them from buying single-family homes going forward won’t actually free up that much inventory for traditional buyers.”
Are Institutional Investors a Scapegoat?
Alex Blackwood, CEO of real estate platform Mogul, put it bluntly: “Honestly, I think it’s more of a scapegoat than anything else.”
Still, the politics are potent, Realtor.com said. In a recent Realtor.com survey, a majority Americans said they view homeownership as part of the American dream, yet far fewer believe that dream is within reach.
While investors have played a role in the housing market, their influence is overwhelmingly driven by small, mom-and-pop buyers.
In mid-2025, investors accounted for 10.8% of home purchases, and more than 60% of that activity came from small investors (defined as those with 10 or fewer purchases since 2001), according to the most recent Investor Report from Realtor.com.
Even with generously defining “large investor” as those with 51 or more lifetime purchases, they still made up less than 20% of investor purchases in the first half of 2025, Realtor.com said. Their share has been steadily shrinking since 2022, while smaller investors have grown more active, reaching their highest share since 2007.
“In other words,” Krimmel said, “the segment this policy targets is an already narrow and shrinking slice of the market.”
The post Khanna Refloats Bill to Block Investors from Buying Up Homes After Trump Proposal first appeared on The MortgagePoint.
