The bipartisan 21st Century ROAD to Housing Act has been passed by the U.S. Senate in an 89 to 10 vote. The legislation aims to address the housing affordability crisis through a mix of regulatory reform, financing changes, and new restrictions on large institutional investors in the single-family rental (SFR) sector.
The bill would limit companies that own 350 or more single-family homes from purchasing additional homes but would still be able to purchase homes needing renovation to bring them to code.
For BTR developers, the legislation includes an important but controversial carve-out. Institutional investors would still be able to build or purchase new single-family homes intended for rental communities. However, the bill requires those properties to be sold to individual homeowners within seven years, effectively limiting long-term ownership by large investors.
That provision has sparked pushback from industry groups and developers who argue it conflicts with the core economics of the BTR model, which typically relies on long-term rental income and stabilized operations over decades.
National Multifamily Housing Council (NMHC) president Sharon Wilson Géno and National Apartment Association (NAA) president and CEO Bob Pinnegar released the following statement:
“NMHC and NAA strongly supported both of these bills and our organizations still see great potential in the core elements of the now combined 21st Century ROAD to Housing Act. Unfortunately, the promise of this overwhelmingly pro-housing legislation is now undermined by the eleventh-hour addition of a provision that will have an immediate chilling effect on housing supply, affordability and investment.
“The provision requiring disposition of BTR communities as individual units to home buyers is plainly not feasible. It would stall new communities from being built and divert investment away from an important affordable housing option for renters and their families. BTR housing opens the door to better employment and educational opportunities and is a vital part of our nation’s housing affordability solution. Fewer housing units means higher rental costs for Americans.”
If the seven-year disposition requirement stays in the final version it could mean:
- Shorter investment timelines. Developers and institutional capital partners may need to structure projects around faster exits.
- Opportunities for smaller operators. The restrictions for larger investors could open opportunities for regional developers and smaller capital partners not subject to the threshold.
- Possible BTR start slowdown. Limiting long-term ownership could reduce the incentive to build large SFR communities.
Other elements of the bill include getting rid of the requirement of a permanent chassis for factory-built homes; streamlining environmental reviews when building homes between existing buildings; and a grant program to develop books of pre-approved housing designs.
Marking one of the most significant federal housing policy efforts in over a decade, it now moves to the House where lawmakers will reconcile differences before it heads to President Donald Trump’s desk. Industry stakeholders, including the National Rental Home Council, are already lobbying for changes to the BTR language before final passage.
