Congress is currently debating a significant housing bill known as the 21st Century ROAD to Housing Act, which has passed the House with a vote of 396-13. A key provision of the bill seeks to ban institutional investors from purchasing single-family homes, a move that has garnered considerable attention. The legislation aims to increase housing supply and affordability by deregulating zoning requirements, among other measures.
President Donald Trump has expressed support for the ban on institutional purchases, stating that homes should be for individuals rather than corporations. He emphasized this during his State of the Union address, advocating for a permanent ban on such purchases.
The legislation has sparked debate, with proponents arguing that institutional investors are driving up housing costs and limiting access for individual homebuyers. Critics, however, contend that these investors represent a small portion of the housing market and can provide rental options for those unable to secure mortgages.
Research cited by Laurel Kilgour from the American Economic Liberties Project indicates that tenants renting from large firms may face higher eviction rates and increased rents. Conversely, John Berlau from the Competitive Enterprise Institute argues that the proposed ban may exacerbate the housing shortage rather than alleviate it.
The bill's history traces back to the aftermath of the 2008 financial crisis, which saw a rise in institutional investment in the housing market. While such investments are relatively small on a national scale, they are more pronounced in certain metropolitan areas, such as Atlanta, where nearly 10% of homes were purchased by investors last year.
Recent changes to the bill have raised the threshold for defining a 'large institutional investor' from 100 to 350 homes, following pushback from industry stakeholders. The National Association of Home Builders has indicated support for the bill now that the controversial provisions have been removed. The final version of the legislation is still under consideration as it moves through Congress.