21st Century Road to Housing Act: Massive Reform Package Wins Support Despite Investor Ban Concerns

A bipartisan housing package nearing the finish line in Congress could be one of the biggest reforms in decades, and it has attracted both support and detractors from the housing world.

The Senate voted Wednesday to advance the 21st Century Road to Housing Act—a bill that merges the language of a housing bill it passed last year and a more limited bill the House passed last month.

Sens. Elizabeth Warren (D-MA) and Tim Scott (R-SC) led the new bill, which must be reconciled before it can be signed by President Donald Trump.

Scott said this week a final version of the bill will probably include 20 to 21 of the provisions in the House bill's 25 total, as well as 36 of the 40 in the Senate bill.

The bill has won favor with industry groups, including the National Association of Realtors®, which said it "strongly supports" it.

Shannon McGahn, executive vice president and chief advocacy officer at NAR, said the recent trends—including a multimillion-unit supply shortage and rising ages for first time homebuyers—are evidence "that the system is not working for too many people across this country."

"NAR has consistently called for a comprehensive, bipartisan approach to address our nation’s housing supply crisis," McGahn said. She added the bill "represents the type of meaningful reform we have long advocated for."

NAR has been supportive of a variety of provisions in the bill.

"It confronts barriers to housing at every level by helping communities plan and build for growth, streamlining federal processes that delay construction, modernizing financing options for manufactured and rural housing, improving access to credit, and strengthening awareness of VA home loan benefits," McGahn said.

"These are practical steps that can help boost supply, lower costs, and expand opportunity."

Treasury Secretary Scott Bessent also posted support for the bill on X, urging Republicans to send the bill to the president's desk.

Finance reforms to aid housing

The merged bill has a strengthened focus on home finance. Those provisions include changes to the National Housing Act that increases limits on loans and allows them to be used for accessory dwelling units.

Sen. Jack Reed (D-RI), who contributed some of those provisions, said they would "cut red tape, boost the production of new housing, and help more renters and homebuyers at different income levels afford a place to live, put down roots, and strengthen communities."

The Senate's version of the bill considers a new system that would tie Community Development Block Grant funding to housing production, which could encourage more communities to create more development-friendly local laws.

The Urban Institute noted this goal will hit cities differently based on recent housing law. For instance, New York would get a $6.6 million bonus to its CDBG funding based on recent housing growth, as would Chicago, Miami, and many DC suburbs. On the other hand, Los Angeles, Boston, and Phoenix could lose millions.

Investor ban concerns

That's not to say the bill is without detractors.

The legislation puts forth new language involving a ban on institutional investors who own 350 or more homes. Trump wants to see these larger companies discouraged from buying single-family homes. But legislators have thus far struggled to define that term.

Institutional investors own a relatively small share of the overall housing market, but they're concentrated in certain cities, leaving some communities more affected than others.

NAR has also in the past vouched for incentives that encourage those investors to get out of the market, but called for policy that still encourages housing production.

An email from the National Association of Home Builders posted to X and reported on by Bloomberg, shows it has some concerns that the investor ban could discourage construction of new housing. NAHB did not respond to Realtor.com® requests for comment on the bill.

On the other hand, Jim Baker of the Private Equity Stakeholder Project, a critic of private capital firms, criticized the bill as not going far enough. In a posting, that organization said there were too many carve-outs and exceptions to the law that don't effectively rein in corporate ownership of single-family homes.