Housing Reform Should Focus on Supply, Not More Federal Control

Affordable housing is central to the American Dream, which is why Americans expect policymakers to make a serious bipartisan effort to address the nation’s housing affordability crisis. Americans for Free Markets (AFFM) welcomes recent efforts by the Trump administration and Congress to respond.

The ROAD to Housing Act
The ROAD to Housing Act, which passed the House in February and the Senate in March, includes several positive provisions.

• Cuts red tape by streamlining environmental and permitting reviews through the BUILD Housing Act, helping local communities move projects forward faster.
• Supports innovation and faster homebuilding through initiatives like the Innovation Fund and the Accelerating Home Building Act, which reward jurisdictions that increase housing supply and help communities adopt ready-to-use housing plans and streamlined approval processes.

These are constructive steps. At a time when the country needs more housing, policymakers should focus on making it easier to build, preserve and renovate homes. But other parts of the ROAD to Housing Act take the wrong approach.

Additional Reforms Required
Rather than removing barriers to investment and construction, some provisions add new federal restrictions, create market uncertainty and discourage the private capital needed to expand housing supply. The legislation would also increase federal control over local housing markets and shift authority away from state and local leaders who understand their communities best. Housing challenges vary by market, and Washington should not impose one-size-fits-all rules.

Government Overreach in the Housing Sector
Government intervention in housing markets often produces the opposite of its intended effect. Policies like rent control can discourage new investment and property improvements, weakening housing quality and limiting supply.

The bill’s “Homes Are for People, Not Corporations” section is especially concerning. It targets large institutional investors in single-family housing, even though they own only a small share of that market—just 0.7 percent of the 92 million single-family homes in the U.S. according to John Burns Research & Consulting. President Trump recently took issue with this provision, seemingly backtracking from his executive order to prevent institutional investors from purchasing single-family homes earlier this year.

Most single-family homes are still purchased by individuals. In many cases, institutional investors provide private capital to older properties that need repairs and upgrades that individual buyers may not be able to afford. That can improve housing stock without government subsidy.

The Core Issue Driving the Housing Crisis
The central problem is simple: America does not have enough housing. Years of underbuilding, restrictive zoning and land-use rules, excessive permitting delays and high construction costs have made it harder for families to find homes they can afford. Policymakers should encourage responsible private investment that expands supply, not push it away.

Congressional Solutions
President Trump’s instincts are right: while large institutional investors are often blamed for the housing crisis, preventing them from purchasing or owning single-family homes won’t address the issue, and in fact, may exacerbate it. If Congress wants to make housing more affordable, it should double down on pro-growth reforms that let the market work. That means:

• Reforming zoning and land-use rules;
• Streamlining state and local permitting;
• Empowering communities to pursue local solutions;
• Removing barriers to development;
• Trusting the private sector to help meet demand.

The strongest parts of the ROAD to Housing Act expand competition, streamline reviews and reduce barriers that slow construction and raise costs. Housing reform should follow a simple principle: build more, regulate smarter and let local communities lead.