Build More Homes
Congress should fix the ROAD to Housing Act before it reduces supply.
Hello Friends,
Housing affordability is hammering families. First-time buyers face high mortgage rates, high home prices, and too little inventory. Renters are paying more each month while trying to save for a down payment. Employers struggle to hire when workers cannot afford to live near jobs.
So yes, Congress should act.
But the right goal is not to look tough on investors. The right goal is to make housing more abundant.
That is why the House should fix the 21st Century ROAD to Housing Act before final passage.
The Bill Is Moving
The Senate passed the ROAD to Housing Act by an overwhelming 89-10 vote. The bill is now before the House, where lawmakers are deciding whether to accept the Senate version or amend it.
The key dispute is the Senate’s language targeting institutional investors in single-family homes. The provision would restrict certain large investors from buying additional homes and could pressure some firms to sell properties over time.
The White House and Senate leaders want quick action. Politico reports they are skeptical of House changes, while The Hill describes a growing House-Senate clash. President Trump has pushed for a housing win and backed the message that homes should be for people, not corporations, according to Politico.
The politics are moving fast. That makes it even more important to get the economics right.
The Target Is Too Small
Institutional investors are an easy target. They sound large, distant, and politically convenient.
But they are not the main cause of unaffordable housing.
A GAO report found institutional investors owned only about less than 1 percent to 3 percent of single-family homes in the metro areas studied. Realtor.com research found institutional investors represented roughly 1 percent of national single-family home sales over the past decade.
That does not mean every investor acts well. It means this is not the root of the crisis.
The root is supply.
Supply Is the Crisis
For years, policymakers made housing harder to build.
Zoning limits density. Permitting takes too long. Fees raise costs. Environmental reviews delay projects. Inflation raises materials and labor costs. Higher interest rates make financing harder. Property taxes and insurance make monthly payments more expensive.
Then lawmakers act surprised when housing becomes unaffordable.
But the math is simple: demand rose, supply lagged, and prices jumped.
A useful housing bill should attack that supply problem directly. The House and Senate housing packages include some constructive ideas on financing, housing programs, and local flexibility. Those should be improved and advanced.
But federal ownership restrictions move in the wrong direction.
Renters Need Options
The Senate provision also risks treating rental housing as less legitimate than homeownership.
That is a mistake.
Renters are families, workers, retirees, students, and people rebuilding financially. Some are saving for a down payment. Some need flexibility for a job move. Some cannot afford today’s mortgage rates. Some simply prefer renting for now.
A healthy market needs both ownership and rental options.
Forced sell-offs or ownership caps could reduce available rental homes, delay renovations, discourage build-to-rent projects, and raise rents in tight markets.
That would not help renters become homeowners. It would make the ladder harder to climb.
Capital Builds Homes
Homes require capital.
Builders need financing. Older homes need renovation. Rental communities need long-term investment. Markets need liquidity so homes can be bought, repaired, rented, and sold.
Institutional investors can provide some of that capital. They are not the whole market, but they are part of the ecosystem that supplies rental housing and renovation funding.
If Congress tells investors that housing capital can be targeted whenever politics shift, capital will respond. Some projects will slow. Some renovations will wait. Some money will move elsewhere.
Less investment today means fewer homes tomorrow.
That is not affordability.
My North Star
The North Star for housing policy should be clear:
More homes. More options. Lower costs.
Every provision should be judged by that standard.
Does it increase supply?
Does it reduce barriers?
Does it lower development costs?
Does it create stability for renters and buyers?
Does it encourage people to build, renovate, and invest?
If not, it should be removed.
As has been argued at The Daily Economy and in the Washington Examiner, affordability comes from abundance, not scapegoating.
Fix the Bill
The House should remove or substantially narrow the forced-sale and institutional-investor provisions.
A stronger housing bill would:
speed up permitting
reduce zoning barriers
reduce regulatory uncertainty
avoid picking winners and losers
Milton Friedman taught that policy should be judged by results, not intentions. A policy that sounds pro-family but reduces rental supply and discourages construction is not pro-family.
Congress should pass a housing bill that expands opportunity instead of shrinking options.
Three Takeaways
First, the ROAD to Housing Act is moving quickly after Senate passage, and House action soon could determine whether the final bill expands supply or discourages investment.
Second, institutional investors are a very small share of the housing market, while the real affordability problem is too little housing supply.
Third, the right answer is abundance: faster permitting, fewer barriers, lower costs, and stable rules that encourage building.
Build more homes. Fix the bill. Let people prosper.
Vance Ginn, Ph.D.
President, Ginn Economic Consulting