Congress’s landmark housing bill could backfire on millions of renters
On Tuesday evening, Congress passed a housing affordability legislation they hope will bring Americans some relief in a brutal housing market. Home sales have stalled since hitting a 30-year low in 2023 as the median home price remains over $400,000. Even if you wanted to buy a home, the market has a shortage of 4.7 million units. A family needs to earn nearly $117,000 a year to afford the typical home on the market—almost $30,000 more than what most U.S. households actually earn, according to Redfin. It’s no wonder the average first-time homebuyer in the U.S. has shot up to 40 years old. The sweeping 21st Century ROAD to Housing Act aims to change that. The legislation includes funding for programs to build new homes as well as ease certain regulations to address the supply issue. A key section of the bill, which has become a rallying cry for both the bill’s sponsor, Sen. Elizabeth Warren (D-Mass.). and President Donald Trump, is a ban on investors who own more than 350 single-family homes. A section entitled “Homes Are For People, Not Corporations” reflects the bipartisan agreement that Wall Street and large investors are a reason everyday Americans can’t afford to buy a home. “This bill helps us demonstrate our commitment to bringing down costs,” Warren told Politico. “We’re not in the majority, but we got in there and fought for 47 different provisions to lower costs for American families and to beat back private equity, and we made it happen.” But the bill may backfire for some of the tenants of the country’s 14.4 million single-family rentals. Economists told Fortune a ban on institutional investors won’t break fundamental barriers to homeownership and could negatively affect the low-income Americans the bills aim to help. “People want to identify a boogeyman that can say: ‘Hey, this is the problem, and give me an easy button to solve it right now,’” rental housing economist Jay Parsons previously told Fortune. “It’s an emotionally satisfying answer, even if i