DO CORPORATE RENTALS REALLY DRIVE UP HOME PRICES? A HOUSING EXPERT BREAKS IT DOWN

As housing affordability continues to dominate national headlines, one question keeps resurfacing: are corporations buying up homes and pushing prices beyond the reach of everyday buyers? The idea has gained enough traction that proposals to ban corporations from purchasing single-family homes are now being seriously discussed.

But according to developer and housing expert Jim Righeimer, the reality is far more complex—and the popular solution may be targeting the wrong problem.

Righeimer argues that lumping all corporate involvement in housing into one category oversimplifies a market that behaves very differently depending on location, supply, and timing.

To understand what’s really happening, he says, you have to separate emotion from structure.

Corporate involvement in housing didn’t start as a grand plan to edge out first-time buyers.

It emerged in the aftermath of the 2008 housing collapse.

When prices cratered and foreclosures flooded the market, individual buyers disappeared.

Someone had to step in, and eventually, insтιтutional investors did.

At first, it was small players buying distressed homes.

Then larger firms followed, purchasing portfolios of houses and, in many cases, stabilizing neighborhoods by putting a floor under falling prices.

That intervention, Righeimer notes, is often forgotten today.

Out of that period grew an entirely new segment of housing known as “build-to-rent.”

Instead of buying scattered resale homes, corporations began purchasing entire developments—hundreds of newly built houses at once—and operating them as rental communities.

This model thrives in regions with abundant land and population growth, such as parts of Arizona, Texas, and the Southeast.

Crucially, it does not dominate dense, fully built-out markets like coastal California or New York.

Righeimer makes a sharp distinction between build-to-rent communities and corporations competing directly with families for existing homes.

The latter did happen for a period, especially when companies like Zillow experimented with instant-buying models.

Those firms offered sellers fast, all-cash deals with no contingencies, which made them extremely attractive in a rising market.

But the model ultimately failed.

Zillow alone reportedly lost hundreds of millions of dollars when price appreciation slowed and margins vanished.

In other words, corporate buyers discovered the hard way that housing doesn’t only go up.

Today, Righeimer says, large corporations are far less active in resale markets, especially in high-cost urban areas.

Rising interest rates have fundamentally altered the math.

When borrowing costs double, the largest expense in real estate—interest—can overwhelm rental income.

Many corporate players have already pulled back, paused projects, or pivoted away from housing altogether.

So does banning corporations solve the affordability crisis? Righeimer is skeptical.

In markets where housing is already scarce and little new construction is possible, corporations aren’t the main problem.

The real issue is supply.

You simply cannot lower prices if there are not enough homes.

Cutting interest rates doesn’t fix this either—it often makes prices worse by allowing buyers to bid more for the same monthly payment.

What truly locks the market, Righeimer argues, is something less discussed: capital gains taxes on primary residences.

Millions of homeowners are sitting on low-interest mortgages—often around 3%—and mᴀssive paper equity.

They would like to downsize, relocate, or move closer to family, but selling comes with two painful consequences.

First, they lose their low-rate mortgage.

Second, they face a potentially enormous capital gains tax bill.

In high-cost coastal states, selling a longtime family home can trigger six-figure tax payments.

The result? People don’t move.

Large homes remain occupied by small households.

Inventory stays frozen.

Prices stay high because nothing is for sale.

Righeimer proposes a radical but targeted solution: eliminate capital gains taxes on the sale of a primary residence, at least temporarily.

Even a limited window—18 to 24 months—could unlock a flood of supply.

Homeowners who have been stuck for years would finally have a financial reason to sell.

More listings would mean more choice, less bidding pressure, and real downward movement in prices.

Critics argue such a policy would benefit wealthy homeowners, but Righeimer counters that in many coastal markets, high prices don’t mean high wealth—just high housing costs.

Selling a home doesn’t create freedom if taxes wipe out the ability to buy the next one.

As for fears of a 2008-style crash, Righeimer sees little resemblance.

Back then, excessive debt fueled forced selling.

Today, most homeowners are equity-rich and debt-light.

Corrections are already happening in places like Phoenix, where prices have fallen noticeably.

But broad collapse, he says, would require widespread forced sales—and that hasn’t happened yet.

Ultimately, Righeimer urges buyers to rethink long-held ᴀssumptions.

Homeownership should be about stability, not speculation.

Waiting forever for ultra-low interest rates may be unrealistic.

And being open to moving—to where housing is attainable—may be the most practical option left for many families.

The housing crisis, he concludes, won’t be solved by banning one type of buyer.

It will only be solved by unlocking supply.

Until that happens, the market remains stuck—expensive, divided, and increasingly out of reach.