The U.S. Senate passed the 21st Century ROAD to Housing Act on Wednesday with an 89-10 vote, marking the largest housing affordability legislation in more than 30 years. The bipartisan bill, co-authored by Sen. Tim Scott (R-SC) and Sen. Elizabeth Warren (D-MA), bans large institutional investors from purchasing single-family homes and includes over 40 provisions aimed at boosting housing construction across the country.
The centerpiece of the legislation is a ban on any for-profit entity that owns 350 or more single-family homes from buying additional ones. The restriction, which carries a 15-year sunset provision, does not require existing investors to sell properties they already own. However, companies that build or renovate homes specifically for the rental market must sell those properties to individual buyers within seven years, with current tenants getting first right of purchase.
Senate Housing Bill Targets Institutional Investors With New Restrictions
The investor ban reflects a growing bipartisan consensus that institutional capital has priced individual buyers out of the market. According to the bill’s sponsors, large investors have purchased hundreds of thousands of single-family homes in recent years, driving up prices in communities where first-time buyers and small business owners are already struggling to find affordable housing.
The legislation drew strong support from both sides of the aisle and aligns with a directive from President Trump stating that “homes are for people, not corporations.” The White House has signaled its support for the bill’s framework, though its path through the House remains uncertain.
Beyond the Investor Ban
The bill also addresses the broader housing shortage through regulatory reform. According to HUD Secretary Scott Turner, regulations currently account for roughly 25% of single-family housing costs and 40% of multifamily development expenses. The legislation attempts to reduce those costs through several measures.
Environmental reviews for infill housing projects would be streamlined, allowing developers to break ground faster on projects in existing urban areas. The bill also modernizes manufactured housing rules by eliminating the requirement for a permanent chassis, a change estimated to save builders between $5,000 and $10,000 per unit. A new grant program would help communities develop pre-approved housing designs to cut permitting timelines.
On the financing side, the bill raises the cap on bank Public Welfare Investment authority from 15% to 20% of risk-adjusted capital, unlocking additional private investment for affordable housing and community development projects. It also refreshes the HOME Investment Partnerships Program for the first time in over 30 years and expands low-income housing tax credit programs.
Industry Groups Push Back on the Seven-Year Rule
Not everyone is celebrating. A coalition of 79 industry groups, including the National Association of Home Builders, the Mortgage Bankers Association, and the National Housing Conference, issued a joint statement opposing the seven-year sale requirement for build-to-rent properties. The groups argue that the restriction would eliminate production of build-to-rent housing and could remove hundreds of thousands of units from the market over the next decade.
The Congressional Budget Office confirmed that the bill includes no new mandatory federal spending, and it preserves local zoning authority, a point that helped secure Republican support.
What Happens Next
The legislation now faces a challenging road in the House, which passed its own bipartisan housing bill in February. House GOP leaders have already indicated that the Senate version will need to be negotiated through a conference committee rather than taken up as-is, setting the stage for what could be a prolonged debate over the investor ban’s scope and the seven-year divestiture requirement. If signed into law, the bill would represent the most significant federal intervention in housing markets since the early 1990s.
