Wednesday’s Federal Reserve meeting was a bit like a Wes Anderson film: what mattered was not so much the ending as the way the story was told. The outcome came with a spoiler alert. More than 90% of analysts expected no change in interest rates, and they were right. The Fed left rates unchanged at 3.75% to 4%, less than a week before the U.S. midterm elections, which are being shaped by an affordability crisis fueled by persistent inflation.
Happy Tuesday, and welcome to another edition of Rent Free. This week's newsletter includes stories on:
The Treasury Department's proposed rule for restricting large investor ownership of single-family housing.
The land use angle in the Texas Senate race.
Salt Lake's middle housing reforms.
The Populism-to-Paperwork Pipeline
Last Thursday, the U.S. Treasury issued a proposed rule that restricts large institutional investors from acquiring new single-family rental homes.
The proposed regulations are intended to implement large investor restrictions passed by Congress as part of its bipartisan housing bill, the 21st Century ROAD to Housing Act, that generally bans entities that already own 350 single-family rentals from buying new ones.
As I covered last week, the new rule primarily proposes definitions left of the text of ROAD and adds additional details about when large corporate buyers' build-to-rent and renovate-to-rent projects are exempt from the new restrictions.
Wonks and interest groups are digging through the details of the sprawling proposed regulations, but there doesn't seem to be major new policy shifts in the rule. It's mostly a bunch of paperwork requirements.
That's not how the Trump administration has framed the new proposed rule.
Hear Vice President J.D. Vance tout the new rules as saving the American dream of homeownership from "private equity barons."
The American Dream doesn't belong to Wall Street. It belongs to the American people.
Thanks to President Trump and Scott Bessent, families don't have to worry about getting out-bid on their dream homes by private equity barons. And we're making those same big investors give…
Also chiming in was Sen. Elizabeth Warren (D–Mass.), who had proposed much more sweeping restrictions on institutional investors when the ROAD Act was still working its way through Congress.
Our bill to stop private equity from buying up homes is now law.
Despite Donald Trump's refusal to sign it, his Administration must now implement it.
Despite the implication in Warren's post, Trump's decision to not sign the ROAD Act was not because of his apathy about the investor restrictions in it. On the contrary, the president had urged Congress to enact institutional investor ownership of single-family homes.
(His decision had more to do with his displeasure at Congress not passing the SAVE Act.)
As housing policy watchers will know, the backlash to corporate ownership of single-family rental housing has been a bipartisan populist concern for a while now.
Both right-wing Republicans and left-wing Democrats have argued that Wall Street investors are a primary cause of high housing costs and low housing availability. They are allegedly outbidding individual owner-occupiers for homes, thus condemning ordinary families to a life of perpetual renting.
It was notable that perhaps the only thing that Minnesota Gov. Tim Walz and Vance agreed on in their 2024 vice presidential debate was that "Wall Street" needed to be kept out of owning single-family homes.
Criticisms of restricting institutional investor ownership of single-family rentals are legion. The arguments generally boil down to the assessment that they are a small but beneficial presence in the single-family market.
The vast majority of new home sales still go to owner-occupiers. Families that can't get, or don't want, a mortgage but do want to live in a single-family home have the option of renting from one of the big guys. And large investors also add to the housing stock through build-to-rent developments and their renovation of dilapidated existing units.
Those arguments were convincing enough to get a much more sweeping institutional investor ban initially included in ROAD (which would have required investors to proactively sell off their portfolios and effectively kill the build-to-rent sector in the process) pared back into something far more modest.
The final result is the paperwork requirements the Treasury released last Thursday.
One can see that as a positive development. The housing market would have been made much worse if Congress had decided to kill build-to-rent housing.
On the other hand, we're still left with a bunch of bureaucratic busywork requirements that will add compliance costs to the business of single-family rentals but don't make anyone better off.
Populist backlashes typically target large, seemingly alien institutions that are allegedly crushing ordinary people, big bureaucracies, large capitalists, etc.
It's a bit ironic then that the new investor restrictions informed by that populist backlash and outlined in the Treasury's proposed rule largely leave the capitalists and bureaucrats in place while requiring them to shuffle a lot of paperwork between themselves.
The Data Center Angle in the Texas Senate Race
A long-time electoral advantage for the Texas GOP has been the state's status as a growth machine under its rule.
Over the past three decades, Republicans have won every statewide race in the Lone Star State partially on the argument that they've delivered a remarkable degree of economic growth.
Yet this year, in a political environment that's exceptionally bad for Republicans, Democrat James Talarico appears poised to best Republican Ken Paxton in the Texas Senate race and finally turn the state blue.
There are a lot of reasons that could explain why the polls are giving Talarico a slight edge over Paxton. One that I explore in my new profile of Talarico (which was published today) is that a backlash to data center development is souring Texas voters on economic growth generally and the party that claims to have delivered it.
There's not much about housing in the profile. But there are a couple of interesting housing-adjacent themes explored in it that Rent Free readers might find interesting.
The first is that loose land use controls are a primary reason that Texas has become a major location for data center development. The second is that even places with very pro-growth political cultures and policy regimes can still experience sudden, sweeping anti-growth backlashes.
Public support for "abundance" of new housing or new commercial development can't ever be taken for granted.
Salt Lake City Waters Down Zoning Reforms
Last week, the City Council of Salt Lake City, Utah, proposed paring back a set of zoning reforms that are intended to allow more smaller homes to be built in existing single-family neighborhoods.
Under the original proposal, property owners would have been allowed to add accessory dwelling units on more parcels. Relaxed lot size, height, and setback requirements would have also allowed builders to add smaller homes and duplexes in single-family neighborhoods.
These are all pretty standard "middle housing" reforms. They provoked the standard criticism that quiet, tidy single-family neighborhoods would be swamped by out-of-scale development.
Now the city council is considering pairing the zoning liberalization with an owner-occupancy requirement. Anyone attempting to use the reforms to build new housing would also have to live on-site.
Owner-occupancy requirements often act as a major "poison pill." They effectively exclude professional developers from buying up parcels and adding new housing on them. Instead, homeowners (most of whom are not professional builders) will be the only ones who can make use of the new rules.
If the council does include an owner-occupancy requirement in its zoning reforms, it can expect a lot fewer units to be built.
Quick Links
President Donald Trump has issued a new housing affordability executive order, which largely attempts to make mortgages obtained or secured by federal programs cheaper for borrowers.
D.C. Councilmember Robert White has proposed a pilot program that would have delinquent tenants go to mediation with their landlords if they owe less than three months of rent.
Americans for Prosperity has a new analysis of a Massachusetts ballot initiative that would allow homes to be built on smaller lots.
On Wall Street, the question is no longer how much artificial intelligence will grow, but who will foot the bill. After years of market domination, tech companies have stopped being a safe bet, and the time has come to pick carefully, identifying which ones are going to fall prey to their own pharaonic investment plans and which ones are not.
Ricavi a 16,8 miliardi nel trimestre e valutazione da 1.500 miliardi: i conti sotto esame
Anthropic ha fatto ufficialmente richiesta di quotazione in borsa negli Stati Uniti, dove punta a raccogliere 100 miliardi di dollari. Una cifra astronomica, dato che Space X, a giugno, ne ha raccolti “solo” 75, più del doppio di quelli raccolti dall’ipotesi record di Saudi Aramco nel 2019. Il creatore dell’agente Ai Claude, concorrente di ChatGpt, punta dunque a un debutto storico destinato a mettere alla prova l’interesse degli investitori per il settore dell’intelligenza artificiale. Il calendario prevede l’inizio del road show per la presentazione agli investitori il 16 novembre e il debutto in Borsa del titolo il 24.
Anthropic, a giugno, aveva rivelato di aver presentato in via riservata la domanda per il collocamento negli Stati Uniti e, a fine maggio, aveva raccolto 65 miliardi di dollari con un round di finanziamento che aveva valutato la società circa mille miliardi di dollari.
Alcuni investitori potenziali valutano Anthropic a circa 1.500 miliardi di dollari, in calo rispetto ai circa 2mila miliardi ipotizzati precedentemente, dopo che la società aveva divulgato alcuni dettagli finanziari: fatturato in crescita del 45% nel terzo trimestre a 16 miliardi di dollari, in occasione di un evento dedicato agli investitori.
L’Ipo è comunque stata posticipata rispetto ai piani iniziali. Reuters aveva infatti riferito che l’inizio del road show era previsto per metà ottobre.
Anche OpenAI, che gestisce il chatbot ChatGpt, ha rivelato a giugno di aver presentato, in via riservata, una richiesta di collocamento negli Stati Uniti, ma non si quoterà prima nel 2026. L’ad e fondatore Sam Altman si è detto preoccupato circa la sicurezza dell’intelligenza artificiale, che rende “inaccettabile” l’ipotesi che l’Ai possa causare l’estinzione dell’umanità entro la fine del decennio, anche se il rischio è solo del 10%.
La società sta anche cercando di effettuare una raccolta fondi presso investitori istituzionali prima del previsto debutto in Borsa della rivale Anthropic, che potrebbe valutare, secondo Reuters, il produttore di ChatGpt oltre 1.400 miliardi di dollari.
Drops for stocks in the artificial-intelligence industry are dragging markets down worldwide on Thursday, while oil prices hit their highest levels since May amid the Iran war.
Drops for stocks in the artificial-intelligence industry are dragging markets down worldwide on Thursday, while oil prices hit their highest levels since May amid the Iran war.
A sell-off for artificial-intelligence stocks is hitting Wall Street again after whipping around the world on worries about how much longer the AI frenzy will last.
A sell-off for artificial-intelligence stocks is hitting Wall Street again after whipping around the world on worries about how much longer the AI frenzy will last.
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