A Reprieve for Build-To-Rent

Happy Tuesday, and welcome to the latest edition of Rent Free. This week’s slightly abbreviated post-Memorial Day issue includes a breakdown of the latest version of the housing bill passed by the House last week.

We also have an item on how, contra some recent headlines, New York Mayor Zohran Mamdani is not offering any major exceptions to his coming rent freeze.

A bipartisan housing supply bill that has been in the works since the summer of last year passed the House last week, minus a controversial requirement that large investors sell off their holdings of build-to-rent single-family homes to individual owner-occupiers.  

The latest House version of the 21st Century ROAD to Housing Act, which passed 396–13 on Wednesday, still bans large investors from purchasing existing single-family homes.  

But these investors would no longer be required to sell off their holdings of purpose-built single-family rental communities, which the Senate’s version of the bill would have forced them to do. 

Housing supply advocates, who are generally supportive of the ROAD to Housing Act’s grab bag of policies aimed at increasing home construction, have praised the removal of the forced dispossession requirement for build-to-rent housing. 

“Just by removing that dispossession requirement changes the bill from something that has some positives for housing supply and one big negative into something that is unambiguously good for housing supply,” says Will Poff-Webster, a housing policy expert at the Institute for Progress.  

Build-to-rent single-family communities are often owned by large investors, built on a single, legal parcel of land around shared amenities, and intended as a long-term “hold” investment. In recent years, build-to-rent housing has accounted for as much as 10 percent of new single-family home construction. 

Requiring owners of these communities to break them up and sell them off to individual owners thus presented a huge list of legal and practical difficulties. The mere passage of the Senate’s bill with the build-to-rent restrictions included reportedly already caused some investors to pull out of build-to-rent projects. 

On the glass-half-empty side, the bill still does include a ban on investors owning more than 350 single-family homes. This restriction is predicated on the popular bipartisan notion that large corporations are frequently outbidding individual families for existing single-family homes. 

This never made much sense. Large investors have always owned a tiny share of single-family homes. The number of individual homes owned by large investors has also been falling for over a decade. 

Cracking down on large investors now likely won’t lower prices, but will marginally reduce the number of available single-family rentals. 

“The House bill still strongly favors wealthier homebuyers over less-wealthy renters [and] feeds off myths about investors,” writes rental housing economist Jay Parsons. 

Politically, it likely would have been very difficult to pass the ROAD to Housing Act without some restrictions on corporate single-family home ownership. 

President Donald Trump has actively pushed for these restrictions for much of his second term. The White House urged the House to pass the Senate’s version of the ROAD to Housing Act, even with the build-to-rent restrictions. 

Its statement on the House’s version also singles out the remaining large investor restrictions for praise. 

Trump admin blesses House version of housing bill pic.twitter.com/sMfnbMYzc4

— Burgess Everett (@burgessev) May 20, 2026

“Given this is the president’s top priority in housing, I think something was going to happen on this. And the House version is way better than the Senate version,” says Poff-Webster. 

The president has found ready allies among progressive Democrats in his war on large single-family housing investors. 

As Politico reported over the weekend, Sen. Elizabeth Warren (D–Mass.) was a major advocate for the build-to-rent restrictions in the Senate version of the housing bill and is not happy about their exclusion in the House’s version. 

She said in a joint statement with Sen. Tim Scott (R–S.C.) that there is “still work to be done” on the House bill. 

The House bill also includes some deregulation of community banks that are a priority for House Committee on Financial Services Chairman French Hill (R–Ark.), but which Warren opposes. 

This adds more friction to a bill that has received wide bipartisan support whenever it’s been brought up for a floor vote. The House has now passed its own version of the bill twice with nearly 400 yes votes. The Senate passed its version of the bill with 89 ayes. 

But the waxing and waning investor restrictions in the bill continue to imperil the final passage of this generally popular bipartisan collection of little fixes to federal housing policy.

For all the fireworks over the investor restrictions, the gist of Congress’ housing bill has remained largely the same since the first version of it was introduced last summer in the Senate’s Banking Committee by Scott and Warren. 

From day one, its purpose has been to shift federal policy in a more pro-growth direction without creating massive new programs or spending a lot more money. 

The latest House version of the bill continues to do that.

It would remove a number of federal building code restrictions on manufactured housing, including a cost-increasing rule that manufactured homes must sit on a permanent steel chassis. 

The bill also retains a provision, authored by Warren, that creates an “innovation fund” that would give grants to localities that liberalize their zoning codes to allow more types of housing in more places and/or streamline housing approvals. 

Environmental reviews of federally funded housing projects would be streamlined.

The House’s legislation also includes an idea first sponsored by Sen. John Fetterman (D–Penn.) that would have the Department of Housing and Urban Development (HUD) publish model zoning code reforms. 

The House bill does notably axe the Build Now Act, authored by Sen. John Kennedy (R–La.), which was originally intended to redistribute some Community Development Block Grant (CDBG) funds from communities that build little new housing to communities that build a lot. 

The Senate’s housing bill had included the Build Now Act, albeit a flawed version of the original idea, says Salim Furth of George Mason University’s Mercatus Center. 

“The Build Now Act was premised on the idea that cities should receive more federal funding if they build more homes,” he says in an email. “The text of the Build Now Act [in the Senate bill] made a number of klutzy errors. The most egregious of those was that it distributed bonus funding on the basis of how many homes exist in a city, not how many homes are built.” 

In effect, it would have made CDBG a subsidy program for the biggest cities, regardless of whether they were increasing their housing stock or not. 

To be sure, neither the House nor the Senate bill attempts to reduce Washington’s role in housing policy. For that reason, even early versions of the bill that did not include restrictions on large investors attracted criticism from small government proponents.

Still other free marketers argue that if the federal government is going to influence housing markets through an array of grant programs and regulations, it might as well use its influence to encourage more home construction and less local and state regulation.

The remaining investor restrictions aside, the latest House version of the bill largely does that.

Earlier today, The Wall Street Journal reported that some New York City landlords would be exempted from Mayor Zohran Mamdani’s proposed rent freeze. According to the Journal‘s reporting, landlords who had received financing from city departments would be allowed significant one-time rent increases on their empty units. 

New York’s limits on the ability of landlords to raise rents on vacant units have been a major sore spot for landlords, who complain that they’re unable to finance needed repairs when a unit turns over or charge something approaching market rents on new tenants. 

A recent lawsuit filed by property owners against the city alleges that the rent caps on vacant units are unconstitutional. 

The Journal article caused a stir in part because Mamdani has continued to stick to his campaign trail promise to freeze rents on rent-stabilized units. The city’s Rent Guidelines Board is in the process of giving the mayor his wish. 

On closer inspection, however, there’s less to the Journal story than meets the eye. Mamdani himself stressed at a press conference today that any one-time increases on vacant units would be done through existing programs and not through some new initiative.

Most vacant units would not qualify for these rent increases, says Michael Gareth Johnson, vice president for communications and research at the New York Apartment Association. Rent increases would be granted on a case-by-case basis and likely mostly to non-profit-owned units, he says. 

So, in short, the mayor has not offered any significant new systemic lifeline to property owners being driven into bankruptcy by New York’s rent caps.