New legislation offers clarity on corporate home purchase ban
A bipartisan housing package advanced this week in the Senate. Meanwhile, another bill targets investor activity in areas hit by natural disasters.
Key points:
- The U.S. Senate voted this week to advance the 21st Century ROAD to Housing Act, a bipartisan package with “broad support” in the real estate industry.
- The legislation aims to limit certain home purchase by large institutional investors, but builders are concerned about one of the bill’s provisions.
- Other bills focused on housing affordability — including one that would shelter building materials from tariffs — are also under consideration.
As the spring homebuying season gets underway — and high costs continue to strain Americans' wallets — lawmakers in Washington, D.C., are trying to address the nation's housing affordability crisis.
In his State of the Union address last month, President Donald Trump vowed to lower mortgage rates but keep home values up for existing homeowners — and he reiterated his intent to ban home purchases by large institutional investors.
While the president has offered scarce details on how these goals will be met, legislators may be attempting to fill in the blanks. These are a few of the approaches they are exploring.
Targeting corporate homebuyers
On Feb. 24, Democratic senators introduced The American Homeownership Act, a bill the group said would eliminate some of the financial incentives that benefit Wall Street landlords and bolster antitrust officials who review corporate home purchases.
In a news release, co-sponsor Sen. Jeff Merkley of Oregon said hedge funds are "a significant factor in killing the dream of home ownership" and vowed to work with politicians on both sides of the aisle who are "serious about driving down home prices."
Two days later, Merkley and Republican Sen. Josh Hawley of Missouri introduced another bill, dubbed the Homes for American Families Act, aimed at blocking large institutional investors — defined as companies or funds with $150 million or more in assets — from buying single-family homes.
"Wall Street has exploited the American housing crisis," Hawley said in a news release, adding that families shouldn't have to compete "with big investment companies that irrevocably drive up housing prices."
Bipartisan package combines housing proposals
After the Housing for the 21st Century Act passed in the U.S. House of Representatives last month, Sens. Tim Scott of South Carolina and Elizabeth Warren of Massachusetts introduced a bipartisan package known as the 21st Century ROAD to Housing Act. The Senate voted to advance the package on March 4.
The legislation contains most of the ROAD to Housing Act, which had support in the Senate but lost steam last fall, and most of the Housing for the 21st Century Act. It also "takes a good first step to rein in corporate landlords that are squeezing families out of homeownership," Warren said in a news release.
The package focuses on cutting red tape, lowering costs, adding housing supply — a priority largely absent from earlier White House proposals — and helping Americans "have even greater access to economic opportunity and the American dream of homeownership," Scott said.
It has "broad support" in the real estate industry, according to NAR, but the National Association of Home Builders (NAHB) has raised concerns about a proposed requirement for build-to-rent investors to divest within seven years.
"For most investors that is a level of uncertainty that we've heard they're not willing to take," NAHB Chief Advocacy Officer Ken Wingert told Bloomberg.
What the NAHB is supporting
The NAHB has applauded the advancement of The Homeowner Energy Freedom Act, a bill that passed in the House in late February. The act would toss building codes and energy regulations — which backers say increase prices without addressing "the root cause of higher costs" — introduced during the previous presidential administration.
Some opponents argue that it would eliminate programs that help homeowners and contractors afford cost-saving upgrades. But the NAHB says the bill would remove energy compliance requirements that "make it much harder for home builders and multifamily developers to build housing that is available and affordable for American families."
The NAHB also supports a bill brought by two Democratic senators in late February that would exclude home building materials from tariffs introduced by the president.
"Roughly 60% of builders have already seen cost increases due to tariffs, which means higher housing costs for American home buyers and renters," NAHB Chairman Bill Owens said in a news release, calling the bill "an important step" in addressing the housing affordability crunch.
Another investor ban angle
Fourteen months after deadly wildfires began tearing through parts of Southern California, one of the Golden State's senators introduced legislation aimed at limiting corporate home purchases in areas devastated by natural disasters.
In the wake of these events, investors often pop up with "dramatically lower offers for land than what would otherwise be market price," according to the office of Sen. Adam Schiff, who introduced the legislation this week.
Recent Redfin data indicates that in the third quarter of 2025, investors bought about 1 in 4 vacant lots that sold in the Pacific Palisades — one of the neighborhoods hardest hit by last year's fires.
Schiff's bill specifically targets investors who own 75 or more single-family homes. It would block them from making offers on impacted homes, lots or parcels "during the 6-month period following the declaration of a major disaster."