Elizabeth Warren would rather fight Trump than fix housing

OPINION:

For millions of Americans, homeownership feels further out of reach than ever before. Starter homes disappear in days. Bidding wars shut out first-time buyers. In too many neighborhoods, families aren’t losing to other families; they are losing to hedge funds with cash.

That frustration is real. As President Trump made clear in his State of the Union address last week, it deserves a serious response.

The president’s January executive order takes direct aim at one of the most visible distortions in today’s housing market: large institutional investors buying up single-family homes at scale. When Wall Street firms accumulate entire portfolios of starter homes, they can crowd out buyers, inflate prices and convert owner-occupied neighborhoods into rental blocks.

Stopping that kind of excessive consolidation is common sense.

The president’s approach is targeted. Ban them from purchasing single-family homes. Prevent excessive accumulation. Protect families in bidding wars.

He wants to leave the rest of the housing system intact so new construction and responsible investment can continue.

That’s reform aimed at pro-consumer outcomes, ensuring lower prices and greater access for ordinary Americans. It has received bipartisan acclaim.

Naturally, however, the president’s receiving praise on anything is like nails on a chalkboard to congressional Democrats — so now, they are trying to suck the oxygen out of his proposal. Led by Sens. Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon, Senate Democrats introduced the “American Homeownership Act” on the morning of Mr. Trump’s State of the Union address.

From a quick glance, their bill appears to do the same thing, but their proposal goes much further. Instead of focusing narrowly on single-family home consolidation, it would overhaul the tax treatment of rental operators, making it nearly impossible for them to participate in the industry at all.

That isn’t a scalpel like Mr. Trump’s proposal. It’s a sledgehammer.

There is a real difference between stopping abusive behavior and stopping investors from partaking in the housing industry altogether. One is pro-consumer and will lower housing costs. The other is anti-capitalist and will hike them across the board.

The housing crisis is the product of years of underbuilding, restrictive zoning, high material costs and labor shortages. America simply does not have enough homes. Until supply increases, prices will remain sky-high.

Mr. Trump, a real estate mogul, knows we need investors. They finance large-scale development projects, including multifamily housing and new construction that expand the overall supply. More supply means less upward pressure on rents and home prices. That’s basic economics.

The problem is not people investing in housing. It’s when Wall Street investors intentionally bulk-buy, consolidating to control the market and raise prices. Mr. Trump’s executive action getting them out of single-family housing reflects that distinction. He is not anti-investor. He is anti-distortion.

He recognizes that we can stop investors from harming consumers and pricing families out of the market while retaining the investment we need to build more homes and ease the nation’s shortage.

The Democratic proposal collapses that distinction and risks chilling investment across the sector. When investment retreats, projects stall.

When projects stall, supply tightens. When supply tightens, prices rise.

That outcome would hit first-time buyers and renters the hardest.

This debate ultimately comes down to priorities. The goal should be to expand homeownership and lower costs.

Reform should expand ownership, not shrink supply. It should protect families without undermining construction. It should correct the excess without discouraging the capital needed to build more homes.

We have seen what happens when policy is driven more by hostility to scale than by practical results. Industries shrink. Supply contracts. Consumers pay more. Housing is too important to gamble on an ideological experiment.

If Democrats truly want to make homeownership attainable again, then they should work to refine and codify the president’s targeted reforms, not try to overshadow them with an ideological wish list that will make the affordability problem worse.

Mr. Trump is right: We must stop Wall Street from cornering the single-family home market while keeping the capital needed to build more of them. We need to address marketplace distortions while expanding overall home supply.

We need real reform, not political grandstanding.

Because the goal isn’t winning a political fight; it’s making homeownership possible again.

• Debbie Dooley is a nationally recognized conservative activist, a national co-founder of the tea party movement and one of President Trump’s earliest supporters.