Road to Housing or Dead End?

It’s widely known across the political spectrum that the United States currently faces a housing crisis. Nationwide, there is a shortage of roughly 6 million homes, home prices have increased by 150% since 2012, and the median single-family home costs five times the median household income. The median age of a first-time homebuyer is now 40, as homeownership remains out of reach for many Americans. Housing policy reforms are top of mind for many lawmakers nationwide, at local, state, and federal levels. 

The housing crisis has led to a flurry of bipartisan bills to address the issue in Congress. A sweeping omnibus bill, the ROAD to Housing Act, passed the Senate last year, while a similar bill in the House of Representatives, the Housing for the 21st Century Act, passed the lower chamber in February. Sen. Tim Scott and Sen. Elizabeth Warren introduced a compromise bill, the 21st Century ROAD to Housing Act, on March 3, 2026, which passed the Senate on March 12, 2026.  

The 21st Century ROAD to Housing Act contains a few welcome provisions that will cut federal red tape for developers and property owners nationwide, including reforms AFP supports. Notably, the bill removes the requirement that manufactured homes be built on a permanent steel chassis, allowing for manufactured homes built on more permanent foundations, streamlines and reforms federal environmental permitting requirements for affordable housing, and increases oversight over the Department of Housing and Urban Development.  

However, the 21st Century ROAD to Housing Act also takes several steps backwards by increasing federal intervention in housing. The bill contains numerous new grant programs, increasing federal spending and subsidization of housing, and excludes efforts in the House version that would have encouraged states and localities to reform onerous land-use laws without increasing federal spending or mandates.  

Most notably, the 21st Century ROAD to Housing Act would largely ban corporate investors from owning more than 350 single-family homes (the definition of which likely includes townhomes and duplexes as well) nationwide. Newly constructed investor-owned housing, including build-to-rent properties and renovated investor-owned rental housing, would be required to be sold within seven years in many circumstances. Restricting corporate homeownership reduces property rights for those owners and reduces the rental supply for Americans, especially low-income families who oftentimes cannot afford downpayments on single-family homes.  

Moreover, contrary to popular belief, corporate ownership of existing single-family homes constitutes a tiny percentage of the single-family market. It is estimated that large institutional investors own just 0.7% of all single-family homes in the U.S. and restricting corporate ownership would not meaningfully address housing supply shortages in any state across the country. 

While traditional investor-owned housing constitutes a miniscule share of single-family homes, build-to-rent schemes have been gaining traction in recent years. Kevin Erdmann of the Mercatus Center estimates that build-to-rent communities now constitute up to 10 percent of newly built single-family homes annually. Forcing these investors to dispose of their properties within seven years or even 10 years would likely make many of these projects financially infeasible and deter future construction. Thus, the Senate’s efforts could actually lead to a reduction in housing supply, rather than an increase.  

Progressive Democrats hail these new restrictions on homeownership, with Sen. Warren saying, “The policy is to block private equity from taking over the single family home, and that is quite deliberate.” Even some Republicans are adopting these ideas. Yet, restricting who may or may not buy property reduces property rights and increases government meddling, when the real issue is excessive regulation of housing. 

The House version, the Housing for the 21st Century Act, avoids many of the Senate version’s pitfalls. In addition to environmental permitting reforms and removing the permanent chassis requirement, the House bill notably does not restrict investor-owned housing, encourages state and local zoning reform, and includes sunset provisions for new grant programs. 

At the end of the day, removing barriers to housing supply is primarily a state and local issue, not a federal concern. Americans for Prosperity has helped deregulate zoning and land-use laws in states across the country. AFP’s Roadmap for Housing Reform highlights numerous state and local reforms to reduce burdensome regulations and restore property rights.