Housing costs have skyrocketed, with an acceleration during the pandemic. Congress is finally tackling the root causes of rising housing costs with legislation to deregulate the housing industry at the federal level.

Recently, Congress took another step closer to enacting needed reforms that will bring down housing costs.

The 21st-Century ROAD to Housing Act

The U.S. House of Representatives passed the 21st Century ROAD to Housing Act on May 20, 2026, by a vote of 396–13. This bill is a bipartisan housing package with reforms aimed at increasing housing supply, affordability, and access.

The Senate originally passed its version of the bill in March by a wide margin of 89-11. Unfortunately, that bill included a “ban” on large institutional investors from purchasing single-family homes. The Senate also included a provision requiring large institutional investors to sell their “build-to-rent” properties after seven years. As we’ve explained, here and here, institutional investors are not causing the shortage of single-family homes but are actually putting move-in-ready homes on the market. However, Independent Women supported the Senate bill for its overall likely impact on the economy.

After months of negotiations between the Senate and the House, the House-passed amendments rolled back some of the damaging provisions in the Senate bill, including stripping the seven-year sell mandate and broadening exemptions for build-to-rent developments. 

House Committee on Financial Services Chairman French Hill (R-AR), Ranking Member Maxine Waters (D-CA), Subcommittee on Housing and Insurance Chair Mike Flood (R-NE), and Subcommittee on Housing and Insurance Ranking Member Emanuel Cleaver (D-MO) deserve much credit for getting this truly bipartisan bill to this point.

How Did We Get Here?

As we explained in the housing chapter of our recent Reclaiming Affordability Report, housing costs have risen due to government overregulation squeezing the housing supply:

New construction is restricted due to home-building regulations, zoning and land-use restrictions, and an arduous permitting process. There are between 1.5 million and 5.5 million fewer houses available to purchase due to chronic underbuilding over recent decades. 

Red tape carries a high cost. According to the National Association of Home Builders, government regulations at every level account for 24% of the final price of a new single-family home and 40% for multifamily homes. Biden-era energy mandates on 15 consumer appliances also add up to $31,000 to the price of a new home. Existing homes are increasingly off the market because recent high interest rates and potential tax bills from the inflationary gains in home values have locked many homeowners in place.    

Chronic underbuilding of new homes due to onerous red tape and increased costs, as well as the lock-in effect among long-time homeowners due to higher taxes, have limited the housing supply.

What This Bill Means for Affordability

Housing is one of the biggest drivers of unaffordability today. When housing supply expands, and that includes homes for rent and sale, prices will fall. Because housing costs consume the biggest shares of household incomes, cost reductions and greater choices will provide great relief to Americans on the biggest essential expense.

As Speaker Mike Johnson (R-LA) stated, “The 21st Century ROAD to Housing Act… delivers on our promise to reduce restrictive regulations, increase the housing supply, limit institutional investing in the housing market, and drive down the price of homes nationwide.”

Beyond the cost of shelter, the 21st Century ROAD to Housing Act holds the promise of putting the American dream of home ownership back within reach. As House Republican Conference Chairwoman Lisa McClain (R-MI) said, “Americans are tired of watching the dream of homeownership slip further out of reach while Washington keeps piling on costs, delays, and bureaucracy. House Republicans are focused on lowering costs, building more homes, and giving families a fair shot at owning a home again.”

What Happens Next

The full Senate needs to vote on the changes made to the bill by the U.S. House before heading to President Trump for his signature. 

We will monitor this bill and hope to see this Congress enact critical, needed housing reforms to spur the creation of new homes for years to come.