San Diego, CA
Should Congress bar big investors from buying single-family homes?
President Donald Trump said recently on social media he would ask Congress to stop large investors and private equity firms from buying single-family homes.
His plan did not have many details but echoed a common refrain across the U.S. that investors should not own homes and that they drive up prices.
Critics have argued the issue is overstated, with an estimated 4% of single-family rentals owned by institutional investors. Studies over the years have routinely shown San Diego County as having one of the lowest rates of institutional investors.
Still, the move is likely to be popular with voters and even stopping some big firms, like Blackstone, from buying properties could make a small difference in the real estate market.
Question: Should Congress bar big investors from buying single-family homes?
Economists
Ray Major, economist
YES: Institutional investors should be banned from owning single-family homes. The American dream is built on homeownership, and every person in the United States should be able to work hard and afford a home. Institutional investors reduce the supply and increase home prices turning potential homeowners into lifelong renters. This, in the long run, will eliminate the average American’s ability to build generational wealth and pass it on to their children.
Caroline Freund, UC San Diego School of Global Policy and Strategy
NO: Investors have mixed effects on housing affordability. Families who cannot afford to buy benefit from renting in neighborhoods with strong schools. Investors can also stabilize markets during downturns, as they did after the financial crisis when prices collapsed. To improve affordability, limiting ownership by large investors in markets where they have pricing power would make more sense than an all-out ban. And if the goal is to increase housing supply and improve affordability, there are far better tools than investment restrictions.
Kelly Cunningham, San Diego Institute for Economic Research
NO: The vast majority of single-family rental homes are owned by small to mid-size landlords, less than 5% by large investors. Blaming big firms seems a populous desire to make the administration look like caring about home prices and doing something about affordability, but ignoring real drivers of housing costs and actual problems caused by overregulation, development restrictions and compounding fees. Blaming investors could end up with policies having adverse consequences on home markets altogether.
Alan Gin, University of San Diego
YES: Even though institutional investors are a small part of the market, their influence is growing. They are important at the margin, which can have big implications for some communities. By increasing the demand for housing, they cause prices to go up, which leads to housing price inflation as one of the biggest contributors to the elevated overall inflation rate. They can also squeeze out individual buyers, who may have difficulty competing with all-cash offers in a high-interest-rate environment.
James Hamilton, UC San Diego
NO: If an investor buys a home and rents it out, that is one less home occupied by an owner and one more home occupied by a renter. This does not change the overall cost of housing. Moreover, the Constitution does not give Congress or the president the power to impose such a rule. This is a local problem, not a national issue. The real solution is to reduce local fees and restrictions on home building.
Norm Miller, University of San Diego
NO: This limit on institutional ownership is symbolic of populous-driven interference in the housing market, and just like rent controls, it is harmful in the long run, inhibiting capital allocation and new supply in the housing market. Home prices and rent levels are overwhelmingly driven by supply-demand fundamentals: i.e. job growth, migration, zoning constraints, NIMBYs and construction levels. Institutions may manage rents more systematically, using dynamic pricing tools and standardized operating procedures — but they do not set the market. They respond to it.
David Ely, San Diego State University
NO: The shortage of affordable single-family homes is primarily due to insufficient new construction. Existing homeowners choosing not to upgrade because they do not want to give up their low-rate mortgage is a contributing factor. Given the relatively small share of single-family homes owned by institutional investors, restricting their purchase of homes will not materially expand the stock of housing available to households or slow price appreciation.
Executives
Phil Blair, Manpower
NO: The issue is not who owns rental properties, but how few there are available. The private sector has found a real estate investment niche and deserves to be able to exploit it. The law of supply and demand says build more housing and the rental prices will collapse. The administration could be opening up thousands of acres of underutilized land across the country for much-needed housing.
Chris Van Gorder, Scripps Health
YES: The percentages might be low in terms of numbers of homes purchased by large investors, private equity or other corporate investors. But their purchases do escalate the price of homes by reducing the inventory available for those wishing to purchase homes for their own personal use by private assets. I think this could modestly control the price of homes by increasing availability for private purchasers.
Jamie Moraga, Franklin Revere
NO: President Trump proposed banning large institutional investors from buying more single-family homes. The key word “more” suggests a limit, not a sell-off. Instead of an outright ban, Congress could find bipartisan support for assessing a cap on institutional single-family homeownership. A cap could ease competition for first-time buyers, help protect tenants from “mega-landlords” and reduce market concentration. It could also help balance housing affordability, rental supply, and homebuilding impacts.
Gary London, London Moeder Advisors
YES: But this is a bit of economic dodgeball because there are relatively few homes held in institutional portfolios in San Diego. I propose legislation that focuses on 1) zoning and land use policies to encourage new housing construction, 2) incentivize senior citizen downsizing by eliminating capital gains tax and 3) allow a one-time pass-through of existing property taxes for new transactions. Then a more robust resale market would emerge, coupled with demand for new housing.
Bob Rauch, R.A. Rauch & Associates
NO: Institutional investors represent a small share of the housing market, so banning them would do little to lower prices. They also supply rental housing for people who can’t or don’t want to buy. Proposals to restrict who can purchase property mirror the kinds of policies pushed in New York City by Mayor Mamdani. We need to reduce regulations, taxes, and fees that constrain supply. Limiting who can buy homes shrinks the market and discourages construction.
Austin Neudecker, Weave Growth
YES: While institutional ownership currently only represents 4% of the market, funds with increasing algorithmic targeting, cash bids and conversion to rentals can drive prices and create negative externalities, especially impacting first-time buyers. First, run market-specific trials with short sunsets and analyze the impact on prices, supply and rental affordability before broader implementation or allow them to lapse.
Have an idea for an Econometer question? Email me at phillip.molnar@sduniontribune.com. Follow me on Threads: @phillip020
By Dave Rice
Is Measure A going to affect a significant number of properties? Is it going to affect affordable housing in any meaningful way? Come now, let’s not be dense – this hits a handful of rich people who can absolutely afford to drop $10K in the city coffers if they’re leaving a vacation home vacant on purpose – let’s say that’s their civic contribution that would be realized in other ways if they actually lived, worked, and shopped here full-time.
Or it hits STVR hosts, who can either factor the cost into their business model or give it up if margins are really that thin (maybe not everyone needs to fancy themselves an amateur hotelier). But let’s not kid ourselves and believe the kind of housing this will free up will be plentiful or affordable.
In the exceedingly rare instances where someone might be eligible for an exemption, will it be too hard to apply for? That’s something we can argue and refine but that’s the bathwater, or just the little bit of it that splashes out of the tub, not the baby. An argument that the whole proposal is DOA because military members are too stupid to file for an exemption is either dismissive of or telling tales out of school about what we really think of military intelligence.
Poor, poor grandma who needs a home near her doctor? If she’s really poor why does she have multiple houses, and if she’s not does this really affect her? I live in a neighborhood where “aren’t you afraid you’re going to get shot?” is the first thing outsiders ask me about where I’m from, and if Grandma has owned her mostly-unoccupied vacation house for any significant time I probably pay a lot more property tax than she does. You couldn’t trip over the limbo bar to gain my sympathy, it’s buried a few feet deep.
This is a tiny nod toward taxing the rich, but that’s all. It’s not significant or meaningful, it won’t do a lot, most of the housing stock in question even if returned to actual residents won’t make a dent in the astronomical cost of living in or anywhere near this city. But it’s a tiny step in the right direction – and watching how hysterical the moneyed class is about the rest of us asking for even the tiniest drop in the goddamned bucket we’re trying to fill without their help is telling.
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This is the first installment in a series of stories on the history of dining out in La Jolla, how it’s changed and how it continues to evolve.
It’s hard to imagine La Jolla without its restaurants, from the lines stretching down the block at The Taco Stand to the iconic views at George’s at the Cove.
But the way La Jollans eat and where has changed dramatically since the area’s founding in the 1800s.
In this first part of the new month-long series “Dining Out,” the La Jolla Light looks at local restaurants from the 1880s (when La Jolla was first developed and settled) to the early 1920s.
“La Jolla had very few people at that time,” according to local historian Carol Olten. “There weren’t a lot of restaurants, as far as we know.”
Olten said she gets information about La Jolla’s earliest days from the diaries of local pioneer Anson Mills.
“He kept track of where he went and what he did … but he did a lot of home cooking,” she said. “So when they went to a restaurant for dinner, it was a big occasion. It was something people mainly did on holidays or … a social occasion.”
One restaurant Mills would go to — believed to be one of the first in La Jolla — was Montezuma Cottage. Olten said it is believed to have opened in 1895 near the intersection of Prospect and Jenner streets.
Mills described the restaurant as a popular eating and gathering spot for locals and tourists, Olten said. He wrote an entry about a Thanksgiving dinner there with about 60 people.
Montezuma Cottage later became known as the Seaside Inn and Ocean View restaurant. It was torn down in 1931.
Culturally, eating at a restaurant was a more formal occasion at the time, Olten said.
“You didn’t go to a restaurant just to hang out with friends like you would today. It was purposeful then,” she said.
Around 1900, a restaurant known as the White Rabbit opened near the corner of Girard Avenue and Prospect Street. In addition to a rooftop garden, it featured a tea room, joining a national trend.
“Tea rooms went with the suffragette movement because in those days, [women] didn’t have a place to gather without an escort, so tea rooms started opening in hotels and women could go there and sit down and have a social tea or lunch,” Olten said. “La Jolla got in on the tail end of that thanks to [Green Dragon Colony founder] Anna Held and [La Jolla philanthropist] Ellen Browning Scripps.”
One of them, called The Cricket, opened in the early 1900s with white tablecloths. Olten said it was near what it is now Eddie V’s restaurant.
“It was originally part of the Green Dragon Colony … and was sold to a British woman named Daisy Mitchell,” she said. “It stayed a tea room for many years, and she kept a guest book that was decorated with reds and greens and had a medieval theme. So it was very British.”
Joining a trend toward more upscale dining, one of La Jolla’s “most well-established and well-known restaurants” opened in 1912 at 1227 Prospect St. The Brown Bear had “stylish, fashionable service and a menu to please the gods,” Olten said.
A house specialty was Welsh rabbit served in a silver chafing dish. The restaurant was in operation until 1941.
Several restaurants opened around 1915, about the same time as the Panama-California Exposition, a world’s fair-type event held in 1915-16 that brought 3.7 million people to San Diego.
One of La Jolla’s new restaurants, the Spindrift Inn, opened in 1916 and was considered a “last stop” out of town.
“Most restaurants at that time were located in the immediate Village area,” Olten said. “The one that was astray would have been the Spindrift Inn [in La Jolla Shores]. This was in the very early days of automobiles, so not very many people had cars, but those that did would … drive their cars and the last stop before you got out of town was Spindrift Inn.”
The Spindrift Inn later became The Marine Room, which still stands.
Olten said the restaurant was operated by the Hannay family for about 20 years. Their “rambunctious” fox terrier, Jiggs, would roam the dining room.
Another Expo-era restaurant was the Dining Car, which operated in an old trolley car parked near Goldfish Point. Dinner was $2 per person. It burned down on Halloween night in 1923.
Next installment: With new hotels being built in La Jolla in the 1920s came new hotel restaurants. But later, World War II would have an impact on La Jollans and San Diegans in general and on where and how they ate. ♦
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