Great Politics, Bad Policy: The Trouble with the ROAD to Housing Act
While the 21st Century ROAD to Housing Act appears to be on the fast track toward becoming law, it appears that track is still a bit icy.
One of the latest problems is that Senator Brian Schatz (D-HI) is upset that the bill requires institutional investors who build and rent more than 350 units to sell within a 7-year period. Schatz seems to think it was a drafting error, but Banking Committee Ranking Member, Senator Elizabeth Warren (D-MA), says it was no error.
Pardon my cynicism, but the fact that many PE firms target a 7-year return period might have something to do with how that provision was crafted. Regardless, Schatz’s complaint is bizarre because if one is happy to restrict investors from purchasing these homes, then it doesn’t really make sense to complain about forcing investors to sell them. (If you don’t want them to buy homes, you don’t want them to own homes.)
A couple of other bumps are coming from the House, both from top leadership and members of the Freedom Caucus.
For instance, Freedom Caucus Chairman Rep. Andy Harris (R-MD) said the current version of the bill is dead on arrival in the House. Some lawmakers are upset with various housing provisions in the bill, and others are upset that the bill’s ban on a central bank digital currency (CBDC) expires in December 2030.
Rep. Ralph Norman (R-SC), for example, posted a letter (signed by 32 members) to social media opposing this temporary CBDC ban, and with good reason. Of all the legislation that Congress passes without any kind of sunset, why on earth would members include one for the CBDC ban? Either way, banning something for four years isn’t really much of a ban.
The 4-year “ban” on a CBDC is kind of funny, though, because the bill’s “ban” on institutional investors isn’t really much of a ban either.
At the end of all this tussling, the fact remains that the 21st Century ROAD to Housing Act is much more about pure politics than policy.
Even before the Senate added the institutional investor “ban,” the various versions of the bill (in both chambers of Congress) garnered enormous support, much higher than a simple majority. That kind of support often indicates the bill doesn’t change the status quo too much, and that’s certainly the case here.
For the most part, the bill tweaks, extends, and expands existing federal block grants for housing, broadly defined. And at the very least, nobody should expect anything radically different (from the past 50 years of housing policy) for that very reason.
Much more troubling, though, is the so-called “ban” on home purchases by institutional investors. There is literally nothing about this provision that qualifies as good policy. It’s great politics, but politics is about telling people what they want to hear, not implementing the best policies.
Here’s a short list of why this investor ban is such bad policy:
Institutional investors own fewer than 1 percent of America’s homes. It is incredibly strange to blame them for increasing the cost of housing. (It’s also true that average new home prices peaked in 2022; by October 2025 they were about $70,000 lower than the peak.)
In 2025, institutional interest declined, and small investors (owning fewer than 11 homes) made up about 90 percent of all investor-owned homes.
Corporations are set up by people, for people. They’re owned by people, and people invest in them and work at them. They’re not alien lifeforms sent to attack people. Restricting what corporations do is equivalent to restricting what people can do.
The fear of investors bidding up prices is misguided. Anyone buying a house could, in theory, bid up the price. Investors have no incentive to pay “too high” a price because it lowers their return.
A high price is great for the seller, so it makes little sense to punish the highest bidder for a home.
Banning private investment in housing, from any source, will not increase housing supply or make it more affordable.
Giving federal officials vague discretionary authority, to dictate who invests in what kind of asset, sets a dangerous precedent and is ripe for abuse. Future administrations could expand the “ban” in any number of ways, to any number of buyers. This provision is a poster child for why limited government is so important for protecting people from abusive government officials.
The investor “ban” has about a dozen or so exemptions as a baseline, meaning that it is not really a ban and that Congress is open for business. (The bill screams for increased rent seeking behavior.)
If a corporation invests in single family homes, that investment will turn out poorly unless people are willing and able to either buy or rent those homes. The same goes for any investor and buyer combination, corporate or otherwise.
Private enterprise, including investment firms from “Wall Street,” does not work by harming other people.
Ultimately, this new housing bill is full of block grant expansions, mainly for the same programs that have been ineffective and failed to improve affordability for decades. The biggest innovation it has is a “ban” on certain purchases by institutional investors, one that is so packed with exceptions it doesn’t really ban them. While the bill might be great politics, it’s full of bad policy.