SouthernWorldwide.com – A new bipartisan bill, the 21st Century ROAD to Housing Act, has passed the Senate with the aim of increasing homeownership by making housing more affordable and accessible. The legislation seeks to achieve this by addressing the nation’s housing supply shortage and curbing the influence of institutional investors.
The proposed act includes several key provisions. It aims to restrict large investors from purchasing single-family homes, a move intended to level the playing field for individual buyers. Additionally, the bill seeks to dismantle regulatory hurdles that hinder new home construction.
This legislation now moves to the House of Representatives for a final vote. President Trump has indicated his support, expressing his expectation to sign the bill into law if it receives congressional approval. Earlier in June, in a presidential proclamation, he had urged Congress to pass what he described as “the most comprehensive and consequential housing legislation in the history of our country.”
The President had previously voiced his concerns about institutional investors acquiring single-family homes during his State of the Union address in January, advocating for a ban on such practices.
Beyond limiting investor ownership, the ROAD Act is designed to stimulate housing supply through various measures. These include the establishment of pre-approved home designs and the streamlining of environmental review processes. The act also encourages zoning reforms to expedite the pace of homebuilding.
A significant component of the bill is the creation of an “Innovation Fund.” This grant program will allocate $200 million annually for five years to local communities that demonstrate a consistent effort in expanding their housing supply.
Furthermore, the bill proposes a pilot program to assist local governments in converting underutilized commercial buildings into affordable housing units. It also aims to unlock more federal funding for the construction of factory-built homes. A specific rule requiring homes to be built on a chassis, a steel framework for transportation, would be eliminated.
Why have home prices soared?
A primary driver behind the dramatic increase in home prices, following the downturn of the 2007-09 financial crisis, is the significant imbalance between housing demand and supply across the United States. Experts widely acknowledge this issue.
“There’s a general recognition that a big part of the reason why home sale prices and rents have gone up significantly is that we have under-built housing by millions of homes since the Great Recession,” stated Dennis Shea, executive vice president at the Bipartisan Policy Center. This Washington, D.C.-based think tank has publicly supported the ROAD Act.
Current data from the Federal Reserve Bank of St. Louis indicates that the median home price in the U.S. is now approximately $403,000. This represents a substantial 77% increase from the roughly $227,000 recorded in 2011. According to real estate firm Redfin, Americans now require an annual household income of $116,780 to afford the average home.
A key provision within the bill is a cap on the number of single-family homes that institutional investors can purchase nationwide, setting the limit at 350 properties. The objective is to curb the ability of well-funded investors, such as private equity firms and real estate investment trusts, from dominating the residential real estate market through large-scale acquisitions.
During the housing crash of 2007-08, these types of investors leveraged low-cost financing to acquire vast numbers of foreclosed properties. While this action helped stabilize the housing market at the time, financial firms have continued to expand their real estate holdings in the subsequent years.
It is important to note, however, that investment firms whose current residential real estate portfolios exceed the proposed 350-home threshold would not be mandated to divest any of their existing properties should the bill become law.
Investor ownership higher in some cities
A Senate aide informed CBS News that the proposed regulations for institutional investors are specifically designed to mitigate their control over the housing market, particularly in metropolitan areas where their influence is disproportionately large. These restrictions are applicable to existing single-family homes, with new construction being an exception. This carve-out is intended to maintain incentives for financial firms to invest in building new housing.
As of 2025, large institutional investors—defined as those owning over 1,000 homes—collectively owned approximately 500,000 properties. This figure represents 0.34% of the total U.S. housing stock and about 3% of the single-family rental market, according to analyses by BofA Global Research.
However, the presence of such investors is significantly more pronounced in certain cities. For instance, in Jacksonville, Florida, investors own over 20% of single-family rental homes, as revealed by a 2026 U.S. Government Accountability Office analysis. Between 2018 and 2024, Dallas and Phoenix saw substantial increases in investor-owned homes, with each city adding at least 16,000 such properties, marking an increase of 177% and 114%, respectively, over that period.
“Institutional investors don’t own a large percentage of all the single-family homes in the United States, but it’s concentrated in certain communities throughout the country, and that’s the concern,” Shea commented, highlighting the localized impact of investor activity.
Would limiting investors make a difference?
The proponents of the bill highlight it as a crucial step in addressing the severe shortage of affordable housing nationwide. They believe it will make a tangible difference.
“This bill is the result of years of work to lower costs, expand housing supply, cut red tape, protect taxpayers and help more Americans achieve the dream of homeownership,” stated Senator Tim Scott of South Carolina, one of the bill’s principal architects, in a recent statement.
Experts, however, offer a more measured perspective on the bill’s potential effectiveness. Daryl Fairweather, chief economist at Redfin, expressed skepticism that the bill would significantly boost the national housing supply. She pointed out that investors might find ways to circumvent the ownership cap by dividing their holdings among smaller entities.
“A lot of people think that if we get rid of private equity, there will be all these houses available for sale for first-time homebuyers,” she remarked. “But that’s not going to happen.”
Despite her reservations, Fairweather acknowledged that the legislation could potentially stimulate new home construction, which in turn might alleviate price pressures. She suggested that the bill’s incentives could encourage developers to focus on building more of what is known as “missing middle” housing.
“Developers, they focus on large single-family homes or small apartments and condos,” she explained. “With these new incentives in the act, we should see developers building more of that missing middle housing like town homes, multi-family or smaller condo buildings,” she told CBS News.
