By Joe Light
The House of Representatives plans to vote on a major housing bill as soon as Tuesday. The bill bans big institutional investors from buying homes to rent out, but for investment firms such as Blackstone and Invitation Homes, the ban isn't as harsh as once feared.
Tuesday's vote is on the 21st Century Road to Housing Act, a bill with bipartisan support that is meant to increase home affordability. Among other provisions, the bill reduces builder regulations and makes it easier to develop factory-built homes. The Senate passed its own version of the bill earlier this year by a vote of 89-10.
For institutional investors, the most feared part of the bill is a ban on buying single-family homes to rent out. The ban has been a longtime goal of progressives such as Sen. Elizabeth Warren (D., Mass.), but had no shot of becoming law until President Donald Trump threw his support behind it earlier this year.
Supporters of an institutional investor ban argue that institutions unfairly compete against mom-and-pop home buyers, making it harder and more expensive for Americans to buy homes. Some investors in build-to-rent properties say that restricting their business just means the homes wouldn't be built at all.
During the housing crisis, institutions bought up foreclosures and other distressed properties for pennies on the dollar and turned them into rentals. But as home prices rose in recent years, that business faded. Instead many institutions now build communities of single-family rental homes.
The Senate bill not only would keep institutions from buying existing single-family homes but would require them to divest within seven years homes that they build to rent out. That makes many build-to-rent projects unprofitable, and some investors have already pulled back on building new homes in response.
In a welcome turn for the investors, however, the House version of the Road to Housing Act strips out the seven-year divestment requirement.
The House version of the bill also closes a loophole highlighted by Barron's that seemingly would have allowed investors to subvert the ban by creating a "homeownership boost" program meant to help renters buy the homes they're leasing. While the Senate bill wouldn't have required investors to make a financial commitment for such programs, the House bill text says such a program "requires contribution of meaningful financial support...including price concessions" from investors.
"The amendment addresses the bewildering flaws of the institutional investor provision in the Senate's bill, strengthening the exemption for boosting homeownership and removing the poison pill for the build-to-rent sector," said Jim Parrott, a housing industry consultant and nonresident fellow at the Urban Institute.
Senate Majority Leader John Thune (R., S.D.) has expressed reservations about revisiting the housing bill, and both he and Trump said last week that the House should pass the Senate's version of the bill rather than one of its own. Having to reopen the bill in the Senate could mean that time runs out to pass the bill this year. Trump hasn't said whether he would sign the bill as written by the House.
"In either event, [build-to-rent] investors are likely spared either by the House's changes to the bill or the overall failure to pass a housing bill," analysts for Beacon Policy Advisors wrote in a research note on Monday.
For now, it appears likely that investors will have to live with a watered-down ban -- or face no ban. Both would be positive outcomes for institutional investors.
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.
(END) Dow Jones Newswires
May 18, 2026 16:22 ET (20:22 GMT)
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