Chicago's Housing Market May Not Benefit from White House Executive Order on Institutional Investors
A recent executive order signed by President Donald Trump may not bring significant relief to Chicago's struggling housing market, despite its intention to curb institutional investors' purchases of single-family homes. The move, aimed at making homeownership more affordable, will only partially address the root causes of the issue.
While the order defines institutional investors and sets guidelines for government agencies to promote sales to individual owner-occupants, some experts argue that it falls short in its scope. Private equity firms, which own thousands of rental units, are not directly addressed by the executive order, as they often finance their purchases through private sources rather than government-backed loans.
According to Frank Manzo, an economist at the Illinois Economic Policy Institute, these investors have been a major contributor to Chicago's housing shortage. By purchasing homes in cash or using private financing, they reduce the availability of properties on the market, thereby increasing home prices and limiting affordability for individual buyers.
The issue is particularly pronounced in trendy neighborhoods like those on the North and West sides, where young people are seeking starter homes but are often priced out by investor-owned rentals. Manzo notes that these investors often raise rents, cut corners on maintenance, and convert homes into vacation rentals – reducing housing options even further.
While some argue that institutional landlords have a positive impact by rehabbing properties that might otherwise fall into foreclosure, the research suggests a different story. A study published in 2024 found that investor activity degrades affordability for young households, particularly those seeking starter homes.
To address this issue, Manzo advocates for congressional laws to spur new construction and buy backs of homes from investors. He also believes that more needs to be done to promote homeownership among Illinois residents, who have a consistently higher homeownership rate than the national average – despite high property taxes.
Ultimately, the impact of the executive order on Chicago's housing market will likely be limited, and addressing the root causes of the shortage will require more comprehensive solutions.
A recent executive order signed by President Donald Trump may not bring significant relief to Chicago's struggling housing market, despite its intention to curb institutional investors' purchases of single-family homes. The move, aimed at making homeownership more affordable, will only partially address the root causes of the issue.
While the order defines institutional investors and sets guidelines for government agencies to promote sales to individual owner-occupants, some experts argue that it falls short in its scope. Private equity firms, which own thousands of rental units, are not directly addressed by the executive order, as they often finance their purchases through private sources rather than government-backed loans.
According to Frank Manzo, an economist at the Illinois Economic Policy Institute, these investors have been a major contributor to Chicago's housing shortage. By purchasing homes in cash or using private financing, they reduce the availability of properties on the market, thereby increasing home prices and limiting affordability for individual buyers.
The issue is particularly pronounced in trendy neighborhoods like those on the North and West sides, where young people are seeking starter homes but are often priced out by investor-owned rentals. Manzo notes that these investors often raise rents, cut corners on maintenance, and convert homes into vacation rentals – reducing housing options even further.
While some argue that institutional landlords have a positive impact by rehabbing properties that might otherwise fall into foreclosure, the research suggests a different story. A study published in 2024 found that investor activity degrades affordability for young households, particularly those seeking starter homes.
To address this issue, Manzo advocates for congressional laws to spur new construction and buy backs of homes from investors. He also believes that more needs to be done to promote homeownership among Illinois residents, who have a consistently higher homeownership rate than the national average – despite high property taxes.
Ultimately, the impact of the executive order on Chicago's housing market will likely be limited, and addressing the root causes of the shortage will require more comprehensive solutions.
. I mean, isn't it like they already own thousands of homes? It feels like they're not really doing anything to help regular people get a foothold in the market 
. I don't think this executive order is gonna magically make housing prices go down or something... it's just tweaking the rules, you know? And what about all these private equity firms that aren't even affected by the order? That's like playing a game of whack-a-mole – you try to fix one hole, but another one pops up somewhere else 
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. It's all about finding a balance between affordability and making homes more attractive to individual buyers 
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... I get it, you want to own a home and start a family, but it feels like no one is listening 
. These investors are basically sucking the life out of your community, raising rents and pricing people out 
. It's not just about the numbers, it's about what this means for your dreams and future 
. I'm really rooting for you to find a way to make this work 
... maybe there's a way to get more support from local politicians or non-profit orgs? 
. And then they just sit on 'em, collecting rent & not really contributing to the community 
. I mean, what's the point of promoting sales to individual owner-occupants if investors are just gonna buy 'em up in the first place? And it's not like they're even contributing to the community or anything... just profiteering off people who want a starter home 
I mean, sure, it's good that they're trying to promote sales to individual owner-occupants and all, but come on... these private equity firms are like a giant vacuum sucking up properties left and right 
We need more than just a partial fix here 
! like, we need some real solutions to fix chicago's housing market and help people afford homes, not just a half-baked executive order that only affects institutional investors 
. what about the private equity firms that are literally buying up all these rentals and driving up prices? shouldn't they be addressed too?! 
. we need more construction, more affordable housing options, and more support for individual buyers, not just a band-aid on the institutional investor issue 
. Institutional investors are definitely part of the issue, but what about private equity firms? They're basically playing the same game, just using different financing options 
. The fact that Illinois residents already have a higher homeownership rate than the national average is wild 
Institutional investors are still gonna own thousands of rental units and drive up prices 
The fact that Illinois residents already have a higher homeownership rate than the national average is like, what's the point if they can't afford homes? 
It's all about addressing the root causes of the issue not just slapping on some new regulations 
illinois has the 2nd highest housing prices in the country already 
We need to focus on creating a comprehensive solution to address the root causes of Chicago's housing shortage, rather than just patching up the symptoms with an executive order. We need more investment in new construction and buy backs of homes from investors, as well as initiatives to promote homeownership among Illinois residents. Anything less would be like "putting off until tomorrow what can be done today". 
I mean, what about people who need affordable housing? We need solutions that actually work 
. We need some serious reform if we want to make housing more affordable for everyone 
. And what's up with these private equity firms owning thousands of rental units and financing them through private sources? It's like they're above the law 
To me, the real solution is promoting homeownership among Illinois residents - they've got the highest homeownership rate nationally, for crying out loud!