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Housing Roundup #15: The War Against Renters
Brief
Commenters push back on different fronts: some economists (Tabarrok, Yglesias, Cass) argue institutional investors represent a small share of total stock but a meaningful share of new builds and can stabilize markets or expand rental options, while others (Vassar, public‑choice voices) caution that concentrated owners might become NIMBYs who limit supply. Zvi emphasizes the net effect of recent policy as supply‑reducing and exclusionary toward poorer or more mobile renters. One thread commenter (habryka) recommends embedding direct quotes from opponents for clarity and calls Zvi’s post a largely decent response, albeit noting some risk of straw‑manning. Overall the discussion fractures between supply‑side concerns about banning build‑to‑rent and normative opposition to corporate landlords, with Zvi siding strongly against restrictions that reduce rental supply.
Why it matters
Zvi (May 4, 2026) argues U.S. housing policy heavily subsidizes homeownership and punishes renting, turning rent control and other rules into de facto long-term ownership for incumbent tenants and excluding people who lack down payments.
Key details
- The ROAD Act’s Section 901 (“Homes are for People, Not Corporations”) would bar institutional ownership of newly built single‑family rental homes; Zvi warns this could eliminate roughly 10% of new single‑family construction. Senator Schatz called related language a “drafting error,” while Elizabeth Warren said it was intentional and had bipartisan support from ~90 senators; Treasury reportedly flagged concerns.
- Empirical harms and policy effects cited: Stackman & Moszkowski find rent‑floor covenants raised Manhattan vacancy rates by ~14% (2016–2020); Los Angeles’ rent stabilization covers ~651,000 apartments and 1.5M residents, and the City Council set annual increases at 90% of CPI with a 1% floor and 4% ceiling, which critics (e.g., Megan McArdle) say locks in below‑cost rents.
- Zvi highlights rent control’s practical effects: long indefinite tenancies that make apartments resemble inherited assets (example: one NYC rent‑controlled unit at $436/month for occupants with combined $650k income), ~30,000 “ghost” vacant NYC apartments, and legal questions about takings doctrine (Yee vs. City of Escondido, Cedar Point precedents).
- Community responses split: commentators like Alex Tabarrok, Matthew Yglesias, and Oren Cass argue institutional investors can stabilize markets and expand rental supply (especially in new builds), while others (Michael Vassar, public‑choice concerns) warn concentrated owners could become politically influential NIMBYs. A commenter (habryka) recommends adding direct quotes/sources and overall finds Zvi’s rebuttal broadly reasonable.