If Passed, Housing Bill Would Require Big Investors to Sell Homes

Washington, DC, March 9, 2026-"In a bipartisan bid to make homeownership more affordable, the U.S. Senate is aiming to restrict the industry that builds homes to rent them,” reports the Wall Street Journal.

“Senators recently inserted a new provision in their latest housing legislation that would require large single-family home investors to sell their newly built rental properties to individuals within seven years of completing them.

“Investors and builders were blindsided by the move and say it would effectively dismantle the single-family rental business for large companies and real-estate investment trusts-and lead to higher housing costs. 

“Last week, trade groups across the industry, including the National Association of Home Builders and the National Multifamily Housing Council, sent letters to the White House and lawmakers opposing the new seven-year sale proposal. 

“By contrast, some groups such as the National Association of Realtors, which represents real-estate agents, have come out in support of the Senate’s latest housing package. 

“The Senate is expected to vote on the bill as soon as this week. 

“The White House previously sent Congress a proposed addition to the Senate’s housing bill to ban large institutional investors from buying existing homes, which would end the practice of deep-pocketed investors competing with traditional homebuyers.

“But that proposal exempted build-to-rent developers that construct new homes for the purpose of renting them out, either on their own or by selling the homes to institutional investors.

“Now, the Senate’s latest provision takes aim at the build-to-rent industry by making it difficult for these companies to secure financing. Investors would be reluctant to fund new rentals that they would own for a few years before having to sell them off, investors and builders said. 

“The provision would also likely lead to forced evictions of the tenants in those rental homes if they cannot afford to buy the property themselves, builders said. 

“The seven-year sale provision is part of a housing package that supporters say would boost housing supply and make homeownership more accessible to the average American.

“‘It’s about making sure people like the single mom who raised me in North Charleston, South Carolina, have even greater access to economic opportunity and the American dream of homeownership,’ Sen. Tim Scott (R., S.C.), who is co-sponsoring the bill with Massachusetts Democratic Sen. Elizabeth Warren, said last week.

“Some analysts saw it differently. A report from John Burns Research and Consulting said that the new provision would make housing affordability worse by reducing new supply, leading to higher rents and home prices. 

“‘The capital devoted to rental development will have to look for opportunities elsewhere,’ the report said. ‘We believe the number of new homes constructed in America will be less.’

“The House has already passed its own housing bill and didn’t include language related to an investor ban. Republican Rep. French Hill of Arkansas, who is leading the House’s housing package, expressed concerns over the Senate’s bill on Friday and said that further negotiations might be required to get House members on board. 

“If the two chambers resolve their differences and President Trump signs a bill into law, it would be Congress’s first piece of major housing legislation in decades.

“Trump supports the Senate’s new housing bill, even with the seven-year sales provision, a White House spokesman said.

“Wall Street’s presence in the housing market exploded after the subprime mortgage crisis. Firms have invested billions of dollars and own hundreds of thousands of single-family homes throughout the U.S., even though institutional investors have never owned more than a tiny slice of the overall housing market. 

“But in several cities, investors hold a significant share of homes. During the pandemic housing boom, investors accounted for more than 20% of all home sales in some hot markets. 

“The seven-year sale requirement is part of a ban on large institutional investors buying single-family homes, which Trump proposed and ordered Congress to pass earlier this year.”