In a prior article, HOA and Condo Rental Restrictions and Institutional Investors, I discussed the increasing role of institutional investors in the single-family housing market and the steps many community associations are taking, including rental caps and leasing restrictions, to address large-scale investor ownership within their communities.
That discussion focused on what associations can do through their governing documents. A recent development suggests that this issue may now be moving beyond governing document amendments and into federal action.
A recent report from CNN highlights proposed federal legislation, often referred to as the “21st Century ROAD to Housing Act,” that would directly affect institutional investors in single-family rental housing. The bill has already passed the Senate with strong bipartisan support. It was co-sponsored by Tim Scott and Elizabeth Warren and is part of a larger effort to address housing supply and affordability.
One key provision targets large investors, generally those that own 350 or more single-family homes. The bill would require them to sell newly built rental homes individually after 7 years. As a practical matter, that means the proposal is aimed at larger, institutional ownership structures and would not directly affect many smaller associations.
Separately, President Trump recently signed an executive order directing federal agencies to ban large investors from buying existing single-family homes. The impact of that order is not yet clear.
As discussed in the earlier article, one concern for associations is the rise of “build-to-rent” communities. These are neighborhoods built as rentals from the start. That trend has grown quickly, with about 10% of new single-family homes now built for rent.
The proposal is already affecting the market, as some financing for build-to-rent projects has slowed or paused while investors wait to see what happens.
Where Things Stand
The bill has passed the Senate but is not law yet. It still must go through the House, and changes are possible before any final version is enacted.
A Continuing Issue for Associations
The issue from the prior article has not changed. Associations are still dealing with rental limits and investor ownership. What may change is who is shaping those rules. Federal law may begin to play a role in larger communities along with association governing documents.
For now, boards should stay informed but avoid making decisions based only on a proposal that is not final.