The National Apartment Association is urging the U.S. Senate to amend language in the bipartisan 21st Century ROAD to Housing Act, warning that a provision in the bill could have a chilling effect on the build-to-rent (BTR) housing sector.
In a letter to Senate leadership, the association and a coalition of housing industry groups said language in Section 901 could effectively halt new BTR development, a segment of the housing market that has expanded rapidly in recent years as developers seek to address demand for single-family rental homes.
The legislation, originally introduced by Tim Scott and Elizabeth Warren, aims to address the nation's housing affordability crisis by boosting housing supply and modernizing federal housing programs. The bill combines elements of earlier House and Senate housing proposals and focuses on reducing regulatory barriers, expanding financing tools, supporting manufactured housing and strengthening oversight of federal housing programs.
The Senate began considering the combined proposal after it was unveiled on March 2, following the House's earlier passage of the related Housing for the 21st Century Act, a bipartisan housing supply and affordability package. Lawmakers are working toward final passage of a unified housing reform measure.
The letter, sent to Senate Majority Leader John Thune, Minority Leader Charles Schumer, as well as Scott and Warren, expressed appreciation for lawmakers' efforts to tackle housing affordability but said the coalition is "deeply concerned" about the impact of Section 901.
The provision would restrict large institutional investors from purchasing certain single-family homes in an effort to prioritize homeownership opportunities for individuals rather than corporations. The measure reflects growing concern among policymakers that private equity firms and institutional investors have been purchasing large numbers of single-family homes, limiting supply for first-time and middle-income buyers.
However, the coalition warned that the language could inadvertently undermine the BTR sector.
"As written, the language would have a chilling effect on the entire BTR supply chain by requiring firms owning more than 350 units to dispose of them after seven years," the letter said.
"Because BTR developments require large-scale investment and benefit from economies of scale, most firms operate beyond that threshold. They cannot invest under the risk of forced sales and potential losses driven by arbitrary deadlines."
The groups argued that curbing investment in new rental housing would run counter to the goal of addressing the nation's housing shortage.
According to the National Housing Conference's Paycheck to Paycheck database, nearly half of the 150 occupations tracked across 390 metropolitan areas cannot afford a two-bedroom apartment, up from 38% in 2019. Over that period, 86 metro areas required a 50% or greater increase in salary to afford a one-bedroom apartment, while 62 metros saw the income needed for a two-bedroom unit rise by at least 50%.
"This is a national crisis," the letter said.
The letter was signed by a broad coalition of housing industry and advocacy organizations, including the Mortgage Bankers Association, National Multifamily Housing Council, The Real Estate Roundtable and YIMBY Action, along with dozens of local pro-housing groups nationwide.
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