By Joe Light
The objections of home builders, mortgage lenders, and institutional investors likely won't be enough to keep one of President Donald Trump's main legislative priorities from passing the Senate this week. But the bill's road to becoming law still looks dicey.
As soon as Thursday, the Senate is expected to pass the so-called 21st Century ROAD to Housing Act, a bill that has the stated intention of alleviating U.S. housing costs. Among other provisions, the bill makes it easier to develop factory-built homes, reduces regulations, and rewards cities that make building easier with federal funds.
However, perhaps most important to private equity firms like Blackstone are severe restrictions that the bill puts on institutional investors who buy and rent out single-family homes.
Such investors bought up single-family homes during and after the housing crisis to turn into rentals. Progressive lawmakers including Sen. Elizabeth Warren (D, Mass.) have argued that such purchases drove up home prices and boxed out families that would otherwise buy. Republicans generally have opposed such a ban.
But Trump threw a curveball earlier this year by supporting an institutional investor ban, which he said would help housing affordability. Shares of firms including Blackstone and Invitation Homes, one of the largest owners of single-family rentals, plummeted.
"Our ownership of U.S. single-family homes represents about 2% of our real estate AUM and 0.5% of the overall firm. We have also been a net seller of homes over the last decade -- with our holdings down more than one-fifth," Blackstone said in a statement. The company also shared a document that said institutional investor ownership of homes was negligible and that it is helping to alleviate the housing shortage.
Since Trump's first steps to push the ban "capital flow has been stymied, to say the least," said Invitation Homes CEO Dallas Tanner at a conference last week. "You see it in our public valuation. You see it in the private conversations we're having with private operators, that there are a lot of deals sitting on an investment committee desk that aren't sure what to do."
The bill so far has had overwhelming bipartisan support, but now some advocacy groups and lawmakers say that the institutional investor ban might be going farther than intended.
At issue are "build-to-rent" communities, where entire neighborhoods of single-family homes are built to rent out. Trump's proposed investor ban earlier this year included a carve-out for such communities, which were purely new housing supply rather than supply sponged up by an investor.
The Senate included the carve-out but also said build-to-rent investors must sell the homes within seven years, a provision that builders and lenders say is unworkable.
"I will stipulate that there are a lot of good things in this bill that are kind of on the pro-housing supply side, but what we are about to do is essentially ban a specific kind of housing," said Sen. Brian Schatz (D, Hawaii) in a speech on the Senate floor on Wednesday, calling the provision a "drafting error."
Selling within seven years could be logistically difficult for an investor to pull off, since a build-to-rent community is often financed by one large loan. It could also be costly, since the investors would in effect be trying to sell hundreds of homes in the same neighborhood at once.
Earlier this week, groups including the National Association of Home Builders, Mortgage Bankers Association, and Affordable Housing Tax Credit Coalition sent a letter to Senate leaders trying to get the build-to-rent provision changed. As written, the letter said, the "requirement will effectively shut down BTR development, leading to less supply and fewer options for renters."
But at this point, the bill has progressed so far procedurally in the Senate that it's likely too late to make changes even if lawmakers wanted to. Some housing groups hope that the House of Representatives will attempt to overhaul the bill itself, putting in that change and others, or that Senate and House leaders will enter a so-called conference committee to resolve the differences.
Some House lawmakers have already indicated they don't want to go with the Senate bill as-is. House Financial Services Committee Chair French Hill (R, Ark.) last week said the Senate bill needs revisions. More than two dozen lawmakers wrote a letter to Speaker Mike Johnson (R, La.) threatening to kill the Senate bill unless it permanently bans the U.S. issuance of a central bank digital currency, which the bill currently bans only temporarily.
So far, the administration has pushed back against revising the Senate bill. The White House issued a statement last week saying that it "strongly supports" the Senate bill. It didn't respond to a request for comment on Wednesday.
It would be foolish to discount Trump's ability to twist the arms of rank-and-file Republicans who vow to kill one of his priorities, something that he's successfully done on most every other legislative issue.
"If for some reason the White House doesn't feel compelled to aggressively force the House to swallow it, you could run into problems, " said Beacon Policy Advisors analyst Christopher Niebuhr, who added that such an outcome wasn't his base case given that the institutional investor ban was a White House priority.
Write to Joe Light at joe.light@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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March 11, 2026 17:00 ET (21:00 GMT)
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