Will the “21st Century ROAD to Housing Act” Make Housing More Affordable?

Will the proposed federal housing bill actually improve affordability—or could it make housing more expensive?

A recently proposed piece of legislation called the “21st Century ROAD to Housing Act” is intended to make housing more affordable. While the goal is widely supported, some housing economists and market researchers believe parts of the bill could actually reduce housing supply and increase housing costs over time.

Housing affordability ultimately comes down to a simple equation: supply and demand. When policies unintentionally limit supply, the result can be higher rents and higher home prices.

What the Bill Is Trying to Do

The legislation attempts to address concerns about institutional investors purchasing single-family homes. In particular, the bill proposes new restrictions around Build-to-Rent (BTR) housing communities.

Build-to-rent communities are neighborhoods of single-family homes designed specifically for renters who want the space and lifestyle of a house without committing to homeownership.

The bill introduces a requirement that certain rental homes owned by larger investors must be sold to individual buyers within seven years.

Why Some Housing Experts Are Concerned

Researchers studying housing supply believe this requirement could have unintended consequences.

If investors are required to sell rental homes within a short time frame, developers may decide the projects are too risky to build in the first place.

That matters because:

• Fewer new homes would be constructed

• Rental supply could shrink

• Rent prices could increase

• Home prices could rise due to limited inventory

In other words, restricting development capital could reduce the number of homes entering the market.

Institutional Investors Are a Small Piece of the Market

Another important point raised by housing researchers is that institutional investors represent a very small share of the overall housing market.

Large investors owning more than 350 homes account for approximately:

• 0.7% of the 92 million single-family homes in the United States

• Around 1% of home purchases in 2025

Because their share of purchases is relatively small, limiting their activity may not significantly impact overall housing affordability.

The Bigger Drivers of Housing Affordability

Most housing economists agree that affordability challenges are largely driven by several other factors:

• High mortgage interest rates

• Local development restrictions

• Rising construction costs

• A national shortage of housing supply

Some estimates suggest the U.S. is short roughly one million homes, which continues to place pressure on prices.

Increasing housing supply remains one of the most widely supported solutions for improving affordability.

Why Build-to-Rent Housing Exists

Build-to-rent communities have grown in popularity because they serve people in transitional phases of life.

Many renters choose these homes because they:

• Are saving for a down payment

• Recently relocated to a new city

• Prefer flexibility before committing to ownership

• Want single-family living without maintenance responsibilities

Research shows many residents stay two to three years, often using the time to prepare financially for purchasing a home.

Final Takeaway

While the intent of the proposed housing bill is to improve affordability, some analysts believe certain provisions could actually reduce housing supply and push prices higher if development slows.

Housing affordability is complex, and the long-term impact of policy decisions often depends on how they affect construction, investment, and supply levels.

Understanding these dynamics helps buyers and sellers better interpret the broader housing market.

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