Will Housing Legislation Make Homes More Affordable?

Love, Money + Real Estate #72: Congress passed a housing bill. Pop the champagne? Not so fast.

On March 12, 2026, the U.S. Senate passed the 21st Century ROAD to Housing Act with a remarkable 89–10 vote. Bipartisan. Sweeping. Over 40 provisions. Co-sponsored by Tim Scott (R-SC) and Elizabeth Warren (D-MA), two senators who agree on almost nothing. Newspaper headlines called it the most “significant federal housing legislation in decades.”

Wow. But significant doesn’t mean effective. And big doesn’t mean necessarily mean good. There is, however, a lot of good that can be done with this legislation, if our politicians get it right.

What the Bill Actually Does

There’s genuinely useful stuff in here:

• The bill streamlines environmental reviews under the National Environmental Policy Act (NEPA), which should help speed up construction timelines.

• It eliminates the chassis requirement for manufactured homes — a change that could lower production costs by $5,000 to $10,000 per unit, making starter homes more affordable, and, hopefully expanding mortgage and insurance access.

• It expands access to FHA-backed small-dollar mortgages under $100,000, a segment lenders have abandoned because the profit margins are too thin when you make mortgages under that amount.

• And it fixes a real problem in rural housing by decoupling rental assistance from maturing USDA mortgages, so low-income residents don’t lose their support when a mortgage expires.

The Investor Ban: Good Politics, Bad Policy?

The headline measure bars large institutional investors — those owning 350 or more single-family homes — from purchasing additional properties. Build-to-rent communities can still be developed, but investors must sell after seven years, with current tenants getting first right of purchase.

You might be asking: Why are we trying to control institutional investors? These are the same folks (well, similar) who bailed out the housing industry during the Great Recession, when millions of families handed back the keys because they couldn’t afford their mortgages.

Here’s the thinking behind this part of the legislation: It feels wrong (to some people) that corporations are competing with first-time buyers for the same three-bedroom ranch house. But large institutional investors own less than 2% of the nation’s single-family homes. Banning them won’t solve a 4.7 million-unit housing shortage driven by high labor costs, scarce lots, and decades of restrictive zoning.

Worse, experts at John Burns Research and Consulting point out that build-to-rent communities are financed as long-term rental assets. A forced seven-year sale makes them essentially uninvestable. Adam DeSanctis, Vice President, Communications for the Mortgage Bankers Association shared four specific concerns the MBA has about the legislation, including the institutional investor restrictions on purchasing single-family homes:

• The MBA flagged what may be a drafting error in Section 213 that could accidentally lower FHA loan limits for multifamily construction — making it harder to fund the very apartments we desperately need;

• The requirement that servicers provide foreclosure-mitigation counseling – paid for from FHA insurance reserves -- for all government-backed loans at 30 days delinquent. The provision would, the MBA believes, unnecessarily drain the FHA’s Mutual Mortgage Insurance Fund without meaningfully improving borrower outcomes; and,

• Changes to FHA’s Informed Consumer Choice Disclosure that could create costly compliance burdens while doing little to help the veteran homebuyers it is intended to benefit.

The MBA and the National Association of Home Builders (NAHB) believes we need more housing, not less capital flowing into it, which is what they believe will be an unintended consequence of the legislation.

Why Is a Digital Dollar Ban in a Housing Bill?

Here’s something wacky: Buried in Section 1001 — its own standalone Title X, in fact — is a provision that has nothing to do with housing: a ban on the Federal Reserve issuing a central bank digital currency (CBDC) through 2030.

A digital dollar prohibition. In a housing bill.

Republicans have long wanted to kill the CBDC concept, arguing it raises privacy concerns and gives the government too much visibility into individual financial transactions. Fine — that’s a debate worth having somewhere. But it doesn’t belong in legislation meant to address the worst housing affordability crisis in modern American history. House Republicans are now demanding the ban be made permanent, which has become a key sticking point in reconciliation talks.

Is this all to promote crypto, in which this administration has a decent-size stake? Inquiring minds want to know.

But Wait, There Are More Legislative Oddities

The CBDC provision isn’t the only head-scratcher. Section 803 directs HUD to conduct a study on work requirements for public housing residents — examining the “challenges and benefits” of making people work in order to keep their federally subsidized housing. That’s a meaningful and contested policy debate. But its inclusion here feels like it wandered in from a completely different piece of legislation.

Then there’s Section 501, which permanently authorizes the Community Development Block Grant–Disaster Recovery (CDBG-DR) program and creates a brand new Office of Disaster Management and Resiliency inside HUD. Is this the replacement for FEMA? Disaster recovery funding is important — ask anyone who went through Hurricane Helene or the California wildfires. But “permanently authorizing a new federal office” buried inside a housing supply bill, with no additional funds authorized (per Section 1102), raises real questions about what exactly Congress thinks it’s doing here.

And, yet, this is how Washington sausage gets made. A must-pass bill becomes a Christmas tree. Everyone hangs their ornament.

Where Things Stand

The Senate bill still needs to be reconciled with the House version. The two chambers disagree on the investor ban, the CBDC sunset vs. permanent ban, community bank deregulation provisions, and more. President Trump recently told House Speaker Mike Johnson that “no one gives a s*** about housing” and has threatened to hold other legislation hostage until Congress passes voter ID legislation first.

Sigh. So, all this might be for naught. Still, the manufactured housing reforms, the small-dollar mortgage provisions, and the rural housing fixes are genuinely worth passing. But I think investor ban is likely to reduce rental housing supply, not increase it. And the CBDC ban and work requirements study seem like political additions that have no business riding in a housing bill.

Congress has a real opportunity to help families who are locked out of homeownership. I hope they don’t blow it.

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More from Love, Money + Real Estate

If you’ve been following the broader housing and financial picture, these recent posts provide additional context:

• We’re Living in the Land of Never Before — Record credit card debt, the assault on Fed independence, and why renting is now 37% cheaper than owning. The “never before” data will make your head spin.

• The End of Real Estate Matters — and What Comes Next — After 33 years of writing our weekly column, Sam Tamkin and I said goodbye. But the affordability crisis we’ve chronicled? That’s not going anywhere.

• How AI Is About to Change Everything About Buying and Selling Homes — The most significant shift in real estate since the internet may already be underway. And for the millions of Americans priced out of homeownership, it could be the best news we’ve had in years.

• Consumer Confidence and the Housing Market’s Frozen January — Existing home sales dropped 8.4% in January. Consumer confidence is at its lowest since 2014. Lower than the pandemic. What’s going on — and what does it mean for you?