“Starter Home is Dead” - Trump’s Housing Bill Limits BlackRock Type Institutions

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I am selling the building.

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The final season of FX is the Bear.

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**Jeff** (0:16)
or not.

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FX is the Bear, the final season.

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**Pat** (0:29)
The big passing, the bill that they talked about yesterday, House approves major housing affordability bill, sending bipartisan measure to Trump. This is important for a lot of people that are sitting there saying, how can I control housing? They're trying to do that in a different way, but let me read it to you. The House on Tuesday passed a landmark housing affordability bill marking a rate bipartisan legislative accomplishment as lawmakers seek to address rising costs ahead of midterm election. Tim Scott, Republican, Elizabeth Warren, Democrat, maybe Progressive Socialist, House GOP leaders fast-tracked the legislation after the Senate approved it with overwhelming support and passed the House in a 358 to 32 vote. And now it heads to President Trump to sign. By the way, some of the House that didn't vote against it, that voted against it, I think one is Massey, one is Donalds. There's a few people that are not for the like, I don't know if I like this. This questions free market capitalism. Leave it alone. And I think even on the Senate side, when they went through it, there was a handful of people. Rick Scott is one. Who else am I missing on the Senate side? Rick Scott was one. Mike Lee is another one. There was a couple of other big names. Rand Paul was one of them. Rand Paul was one of them as well. So these are some popular names that are saying, I don't know about it, but it was a majority that went through. And so I'll pause it right here. And the main thing with this, if I can share this side before I come to you guys, Tom, Snyder, and Elon, is the following. So this is the vision. Home for people, not for corporation. This provision legally bars large institution corporate investors from expanding their portfolios to own more than 350 single family homes nationwide. You may say, man, that's a lot.
That's not a lot.
When you're doing billions on top of billions, 350 is nothing. Some of these guys got tens of thousands that they're dealing with. Lawmakers designed this cap to explicitly curb corporate competition in suburban markets, while housing advocates argue, has artificially inflated home values and squeezed out middle class families during the ongoing cost of living crisis. California, New York has the lowest percentage of home ownership. I think it's at 47%, 48%.
California, the average home price, if I'm not mistaken, is $906,000. Are you kidding me? Like, I'm getting out of college. I'm getting married, having kids. First house, I want to buy a million-dollar home? How the hell am I going to do it on an $80,000 salary, $120,000 salary? So Jeff, how important is this bill here?

**Jeff** (3:00)
It's good because they're finally recognizing that this is a huge problem. I think people have realized this for quite some time.
But I'm not sure that it actually accomplishes what they want it to accomplish. Because what really happened here, and this is the legacy of the 2008 crisis, is that after 2008, banks pulled back and they didn't want to give mortgages to regular folks for a lot of really good reasons, because the ninja loans and everything that happened in subprime and middle 2000s, they pulled back, but they never came back. So in the 2010s, and it got even worse in the early 2020s, the only people who could get financing were big Wall Street firms. So if you have no lending and no liquidity for regular folks to be able to buy houses, by the way, they didn't have jobs either. So they weren't going to qualify for a mortgage. And the only people in the marketplace are large Wall Street firms.
BlackRock did what BlackRock is going to do. They essentially bought up huge chunks. You talk 350 limit, they're buying 10,000 houses at a time in single transactions. Because they were the only people in the marketplace. Money flowed to Wall Street rather than Main Street. And because it didn't flow to Main Street, Main Street was essentially increasingly priced out of the market to the point we got to the 2020s, where a flood of money went on Wall Street. Wall Street went crazy buying up properties in 2021 and 2022, and to a certain extent in 2023, which of course, housing prices absolutely soared ahead, pricing people, regular folks, out of the market even further. So in one sense, it's recognizing that there's an imbalance here. Wall Street has money, has the ability to buy, and therefore, to some people, make them a rent slave for the rest of their lives, and they have no hope of actually getting into a home loan.