Will the ROAD to Housing Act Help Reduce Home Prices? Expert Insights
Could the ROAD to Housing Act actually – The Senate is set to debate a rare bipartisan bill on Monday, aiming to address the nation’s housing affordability crisis by boosting supply. Known as the “21st Century ROAD to Housing Act,” the legislation proposes to limit institutional investors’ ability to purchase single-family homes, streamline construction processes, and incentivize zoning reforms to expedite housing development. If approved, the bill would move to the House for final consideration and is expected to receive presidential endorsement from Donald Trump, who earlier this month hailed it as “the most comprehensive and consequential housing legislation in the history of our country.”
Key Provisions of the Bill
Among the act’s measures, a cap on investor-owned single-family homes stands out. This provision would restrict financial entities, such as private equity firms and real estate trusts, to a maximum of 350 properties nationwide. The rationale is to prevent large-scale buying by these entities, which contributed to the housing market’s instability during the 2007-09 financial crisis by acquiring foreclosed homes at low costs. However, firms exceeding the limit would not be forced to sell their existing holdings.
Other initiatives include a grant program, the Innovation Fund, allocating $200 million annually for five years to cities that have demonstrated success in expanding housing stock. Additionally, the bill introduces a pilot program to convert unused commercial buildings into affordable housing units and eliminates a regulation requiring homes to be constructed on chassis frameworks, thereby reducing costs for factory-built housing.
Why Have Home Prices Soared?
Home prices have surged since the 2007-09 crash, driven by a mismatch between demand and supply. “There’s a general recognition that a big part of the reason why home sale prices and rents have gone up significantly is that we have under-built housing by millions of homes since the Great Recession,” stated Dennis Shea, executive vice president at the Bipartisan Policy Center, a D.C.-based think tank supporting the legislation.
According to the Federal Reserve Bank of St. Louis, the median home price in the U.S. has climbed to approximately $403,000, a 77% increase from $227,000 in 2011. Redfin data reveals that households need an annual income of $116,780 to afford the average home. The bill’s architects argue that by increasing supply, these trends could be reversed.
Investor Ownership Higher in Some Cities
Analysts note that while institutional investors hold about 0.34% of the U.S. housing stock, their influence is concentrated in specific areas. For instance, a 2026 Government Accountability Office report found that over 20% of single-family rentals in Jacksonville, Florida, are owned by investors. Similarly, Dallas and Phoenix saw investor-owned home counts rise by 177% and 114%, respectively, between 2018 and 2024.
A Senate aide emphasized that the proposed rules target existing single-family homes rather than new developments, allowing financial firms to continue investing in construction. “The restrictions apply to current properties, not new builds, preserving incentives for growth,” the aide explained. Dennis Shea added, “Institutional investors don’t own a large percentage of all single-family homes in the U.S., but their presence is concentrated in certain communities, which raises concerns.”
