Trump to Congress: Pass ROAD Act with institutional investor ban

President Donald Trump, in a Truth Social post Monday night, urged Congress to pass the 21st Century ROAD to Housing Act. 

In the post, Trump doubled down on his support for a ban on institutional investors buying single-family homes. The Senate’s version of the bill includes a provision that would prohibit investment firms that own 350 or more single-family homes from purchasing more homes. 

“As I said at my State of the Union Address on February 25th, the American Dream of Homeownership is under attack. For example, Rachel Wiggins, a mom of two, from Houston, placed bids on 20 homes, and lost all of those bids to gigantic investment firms that bypassed inspection, paid all cash, and turned those houses into rentals, stealing away her American Dream — She was devastated! Stories like this are why I signed an Executive Order to ban large Wall Street Investment Firms from buying up single-family homes,” Trump wrote. 

Legislation in limbo

The U.S. House passed its version of the legislation on February 9 by an overwhelming 390-9 vote. The U.S. Senate then passed its version of the bill by an 89-10 margin on March 12. 

However, the legislation has been in limbo for the past two months, largely over a controversial provision included in the Senate bill at the last minute. 

That provision, Section 901, would ban institutional investors that own 350 or more single-family homes from purchasing additional single-family properties, other than manufactured housing. On a more controversial note, while it would provide an exemption for build-to-rent (BTR) communities, it would mandate that new BTR communities be sold to individual homeowners within seven years. 

Industry stakeholders say that the uncertainty caused by Section 901 has largely frozen capital flow into new BTR construction. If it passes into law, these stakeholders warn that Section 901 would essentially kill the BTR industry as we know it and reduce rental supply, therefore pushing up rents. 

Opposition to this provision among members of the House is a key reason why the legislation has stalled. In April, a bipartisan group of 76 representatives, specifically the Real Estate Caucus and the Build America Caucus, signed a letter urging House leadership to remove or substantially alter Section 901. 

Representatives from organizations that advocate on behalf of the BTR industry told HousingWire’s The Builder’s Daily that most of their advocacy efforts have been focused on the House. Penetrating the Senate has been much harder, as many Senators don’t want to revisit their bill and make changes. 

Trump signals support for institutional investor ban

Politico reported last week that Trump privately raised concerns over Section 901, indicating that he would like to see a carve-out for the BTR industry. According to Politico, he was close to sending out a post voicing his objections to the provision, but he ultimately held off. 

Trump didn’t include any of these objections in last night’s post, in which he seemed to throw his support behind the U.S. Senate’s version of the bill. 

“Also, in my speech, I called for Congress to save the American Dream of Homeownership, and ban these purchases, PERMANENTLY! Senators Bernie Moreno and Tim Scott have worked to ensure my call becomes a reality, and have a bill which has passed the Senate with nearly 90 votes. I am asking Congress to pass that Bill, the 21st Century ROAD to Housing Act, which would ensure that homes are for people, not Corporations,” Trump wrote. 

Trump has repeatedly signaled his support for a ban on institutional ownership of single-family homes. However, many housing advocates argue that such a ban is misguided and wouldn’t improve affordability in any meaningful way. According to John Burns Research and Consulting, investors that own 350 or more single-family homes own only 0.7% of America’s single-family housing stock.