The Federal Trade Commission launched an inquiry seeking to understand how large institutional single-family home rental investors have affected home prices and rents. In a new insight, Director of Competition Policy Fred Ashton walks through a wealth of evidence showing that institutional investment increases rental supply and lowers rental prices while adding liquidity to an under-supplied housing market.

Ashton concludes:

Federal, state, and local policymakers have accused large investors of pushing up rental rates and contributing to decreased home affordability and have offered several legislative proposals – often with bipartisan support – to curb or halt such investment.

Yet the evidence shows that large institutional investors have expanded the much-needed supply of rental homes, thus driving down rents, while enabling the financially constrained to move into neighborhoods that previously had few rental units. Finally, institutional investors tend to improve the quality of the existing housing stock, while also adding liquidity to an under-supplied housing market.

Read the analysis