Key facts
- The Senate passed the 21st Century ROAD to Housing Act with broad bipartisan support.
- The bill bans institutional investors that own 350 or more single-family homes from acquiring additional properties.
- Exceptions exist for homes requiring significant renovation and for new build-to-rent constructions.
- The legislation aims to increase housing supply through deregulation and program expansion.
- The bill seeks to make housing more affordable by limiting large investors' role in the single-family rental market.
The Senate has passed the 21st Century ROAD to Housing Act, a significant bipartisan piece of legislation aimed at addressing the nation's housing crisis. The bill, which passed with overwhelming support, seeks to improve housing affordability and availability through a combination of deregulation, expansion of existing programs, and a notable ban on large institutional investors purchasing single-family homes.
Co-sponsored by Senators Tim Scott and Elizabeth Warren, the bill's passage reflects a rare moment of bipartisan agreement on a critical issue. Warren emphasized the bill's strength lies in its bipartisan nature and its focus on ensuring homes are for families, not just investment vehicles for Wall Street. Scott highlighted the bill's potential to help families achieve homeownership.
A central tenet of the legislation is to boost the U.S. housing supply, which is estimated to be short by 4 million units, driving up costs. The bill includes over 40 provisions designed to encourage more housing construction. This includes relaxing regulations on manufactured homes and increasing FHA loan limits for multifamily properties to promote higher-density building.
The ban on institutional investors specifically targets entities that control 350 or more single-family homes, preventing them from acquiring additional properties. Violators face substantial fines. However, the bill includes exceptions, such as allowing investors to purchase homes in need of serious renovation to bring them up to code, and to acquire new homes built specifically for renting (build-to-rent). These investors would be required to sell such properties after seven years, with current renters having the first option to buy.
Research on the impact of large investors on housing prices presents mixed findings. Some studies suggest institutional investors own a small percentage of single-family rentals nationwide, while others indicate a higher concentration in certain urban areas. Experts also note that factors like limited building and migration to high-cost cities play a more significant role in price increases than institutional ownership alone.
The Senate bill largely mirrors legislation previously passed by the House, incorporating 84% of its provisions. The measure now proceeds to President Donald Trump's desk.