Chicago's Housing Market May Not Benefit from Trump's Executive Order on Institutional Investors
In an effort to curb institutional investors' grip on Chicago's single-family home market, President Donald Trump recently signed an executive order that aims to restrict government agencies from approving purchases by these entities. The move is part of the president's broader push to make homeownership more affordable, as rising home prices and median age of first-time buyers continue to trend upwards.
However, experts warn that this measure may not have a significant impact on Chicago's housing shortage. According to economist Frank Manzo, institutional investors - often private equity firms with large portfolios - purchase properties in cash or through private financing sources, which falls outside the scope of the executive order.
"It's a bit like trying to hold back a tide," Manzo said. "The fact is that these investors are still playing a major role in reducing the supply of homes available for individuals and families."
In Chicago, the share of single-family homes owned by institutional investors is below the national average, with 13% according to Redfin data. However, investors purchased nearly 2,400 homes in the city during the third quarter last year.
Manzo points out that while investor purchases have declined nationally over the past two years, this trend does not apply to Chicago and Illinois, where home prices continue to rise above the national average. Investors are still driving up costs by purchasing homes in "trendy" neighborhoods on the North and West sides, making it harder for young people to access affordable housing.
The issue is complex, with several factors contributing to the state's housing shortage, including investor ownership of properties. Manzo's study found that these investors raise home prices by reducing the number of available properties and often skimp on maintenance, turning homes into vacation rentals that further reduce housing options.
"While some argue that institutional landlords do good by rehabbing properties, the reality is that they degrade affordability for young households," Manzo said. "The data is clear that people in Illinois want to own their homes, but we need to find ways to give them more options."
Elected officials in the Greater Chicago region have expressed similar concerns about institutional landlords, citing challenges such as reaching property owners about maintenance issues and code violations, declining homeownership rates, and limited government resources for regulating these entities.
Ultimately, Manzo believes that more comprehensive solutions are needed to address the issue of institutional investors in Illinois. Congress could take steps to spur new construction and buy backs of homes from investors, which would help increase the supply of affordable housing options.
In an effort to curb institutional investors' grip on Chicago's single-family home market, President Donald Trump recently signed an executive order that aims to restrict government agencies from approving purchases by these entities. The move is part of the president's broader push to make homeownership more affordable, as rising home prices and median age of first-time buyers continue to trend upwards.
However, experts warn that this measure may not have a significant impact on Chicago's housing shortage. According to economist Frank Manzo, institutional investors - often private equity firms with large portfolios - purchase properties in cash or through private financing sources, which falls outside the scope of the executive order.
"It's a bit like trying to hold back a tide," Manzo said. "The fact is that these investors are still playing a major role in reducing the supply of homes available for individuals and families."
In Chicago, the share of single-family homes owned by institutional investors is below the national average, with 13% according to Redfin data. However, investors purchased nearly 2,400 homes in the city during the third quarter last year.
Manzo points out that while investor purchases have declined nationally over the past two years, this trend does not apply to Chicago and Illinois, where home prices continue to rise above the national average. Investors are still driving up costs by purchasing homes in "trendy" neighborhoods on the North and West sides, making it harder for young people to access affordable housing.
The issue is complex, with several factors contributing to the state's housing shortage, including investor ownership of properties. Manzo's study found that these investors raise home prices by reducing the number of available properties and often skimp on maintenance, turning homes into vacation rentals that further reduce housing options.
"While some argue that institutional landlords do good by rehabbing properties, the reality is that they degrade affordability for young households," Manzo said. "The data is clear that people in Illinois want to own their homes, but we need to find ways to give them more options."
Elected officials in the Greater Chicago region have expressed similar concerns about institutional landlords, citing challenges such as reaching property owners about maintenance issues and code violations, declining homeownership rates, and limited government resources for regulating these entities.
Ultimately, Manzo believes that more comprehensive solutions are needed to address the issue of institutional investors in Illinois. Congress could take steps to spur new construction and buy backs of homes from investors, which would help increase the supply of affordable housing options.
Like, what even is a 'housing market' anymore? It's all just a reflection of our values as a society, right? We're living in an era where people are more interested in buying and flipping homes than actually living in them. And that's where the problem lies.
They're like the ultimate 'short-term thinkers', only looking at how they can make a quick buck, without considering the long-term effects on the community. And let's not forget about the issue of maintenance - if investors are just going to buy up properties and leave them abandoned or turned into vacation rentals, that's just exacerbating the problem.
We should be looking at ways to increase affordable housing options, not just trying to restrict the flow of capital into it. It's a complex issue, but I think that's what makes it so important to keep having these conversations... 
, and she's struggling to find a place that fits her budget. She said it's hard because all the trendy neighborhoods are getting more and more expensive. I'm like, "yeah, I've heard of that too". It's crazy how institutional investors are making it harder for people to own homes. Like, they're not even buying houses from regular people anymore, just taking them off the market altogether 
. My friend's sister said she's had to look in other states because she can't afford to live in Chicago anymore. That's a shame, 'cause I love the city 
. We need to do something about this housing shortage, 'fore it gets any worse 
. Maybe we need some more community programs or incentives for people to build affordable homes 
. Who knows, maybe one day we'll have enough housing options that everyone can afford a place to call home 