Congress has taken one of its biggest steps in decades toward housing reform, approving a sweeping bipartisan housing package aimed at increasing supply, breaking down construction barriers, and easing pressure on a housing market still struggling with high prices, high mortgage rates, and a severe shortage of homes.

On May 20, 2026, the House of Representatives passed the latest version of the 21st Century ROAD to Housing Act with bipartisan support of 396-13 after weeks of intense negotiations between lawmakers, the White House, homebuilders, and housing advocates.

The legislation now goes back to the Senate for final approval, as lawmakers hope to send the bill to President Donald Trump before Congress leaves for August recess. Major changes to controversial provisions that had threatened to derail the measure have already earned the revised version the White House’s support.

The bill is one of the most ambitious federal housing efforts in years and comes at a time when affordability has become one of the country’s most politically sensitive economic issues. Home prices are still at historic highs, mortgage rates recently rose above 6.5% again, and the U.S. still has a structural housing shortage of what is estimated to be millions of homes.

At the heart of the legislation is a tough balancing act: boosting housing supply while also addressing rising public anger over Wall Street investors buying up large swaths of single-family homes.

A Bipartisan Bill Focused On The Housing Crisis

The legislation melds components of two major housing measures that separately passed Congress earlier this year:

• the Housing for the 21st Century Act (H.R. 6644) passed in the House
• and the Senate-passed ROAD to Housing Act

The combined package was dubbed the 21st Century ROAD to Housing Act, spearheaded primarily by Senate Banking Committee Chairman Sen. Tim Scott (R-South Carolina) and Ranking Member Sen. Elizabeth Warren (D-Massachusetts), two lawmakers who don't often see eye to eye politically but have both made housing affordability a key issue.

The legislation attempts to address some of the biggest structural problems facing the housing market:

• long construction times
• zoning and permitting limitations
• limited supply of affordable housing
• HUD manufactured home barriers
• institutional investor in single-family housing

Unlike past federal housing efforts, it’s less about subsidies or financing and more heavily focused on increasing supply and reducing barriers to development.

That supply-driven approach has gained urgency as more and more economists argue that the U.S. housing affordability crisis is the result of decades of underbuilding following the 2008 financial crisis.

How a Battle Over Wall Street Landlords Almost Killed the Bill

The legislation has broad bipartisan support overall, but one issue almost derailed the entire package: how aggressively to restrict institutional investors and developers of build-to-rent. Supporters said the rule was needed to keep large corporate investors from competing against everyday homebuyers in the single-family market. As the midterms approached, housing affordability emerged as a political issue, and President Trump also spent months publicly pressuring Congress to crack down on institutional ownership.

Supporters argued the rule was necessary to stop large corporate investors from competing directly against ordinary homebuyers in the single-family market. President Trump had also publicly pressured Congress for months to crack down on institutional ownership as housing affordability became a growing political issue ahead of the midterm elections.

But homebuilders, lenders, and developers warned that the seven-year mandatory sale rule would kill the build-to-rent industry in the boomtown.

That industry has become an increasingly important source of new housing supply in recent years, especially in fast-growing Sun Belt states where many families cannot afford to buy homes but still want a suburban lifestyle.

Builders say requiring developers to sell homes after seven years would make many projects financially unfeasible because investors often need longer periods to recoup construction and financing costs. Industry groups said financing for projects was already freezing up even before the bill was signed into law. Reporting from The Wall Street Journal said that at least $3.4 billion in investment tied to around 10,000 units of housing had already been put on hold as investors waited to see whether the requirement for forced sales would make it through negotiations.

Developers warned the rule could effectively eliminate a sector that makes up about 7% of new single-family homes built nationwide.

Ultimately, the House stripped the seven-year sale requirement from the bill, a big win for the homebuilding industry that helped bring back support from developers and lenders.

Investor restrictions still apply

Lawmakers eliminated the forced-sale provision, but the revised legislation still includes sweeping restrictions on large institutional investors.

The current House version would impose new restrictions on companies owning more than 350 single-family homes from buying more.

The compromise came after intense negotiations between House leaders, Senate negotiators, White House officials, and Sen. Elizabeth Warren, who sought tougher restrictions on investors in the talks.

Ultimately, the White House embraced the revised compromise, saying the legislation will help expand homeownership opportunities for working families while still supporting new housing construction.

The final structure is a reflection of the political difficulty of balancing two competing objectives:

• reining in Wall Street’s role in housing
• and encouraging adequate investment to increase supply

The tension is shaping up to be one of the big housing-policy battles of 2026.

A Huge Focus on Construction Streamlining

Beyond limiting investors, one of the bill’s most significant features is its attempt to accelerate homebuilding itself.

The bill has several provisions to reduce regulatory burdens and accelerate development schedules, such as:

• streamline federal environmental review
• streamlining approval processes
• Making local zoning change
• easing restrictions on manufactured housing

Proponents say the reforms could significantly reduce the cost and time it takes to build homes across the country.

A particularly noteworthy provision eliminates a long-standing federal rule requiring that manufactured housing be built on permanent steel chassis frames. Housing advocates and builders say the repeal of that rule could make cheaper, faster forms of modular construction possible in places where manufactured housing was too difficult to use before.

The bill also provides more flexibility for Community Development Block Grant (CDBG) dollars to go directly to new construction of affordable housing.

They also included provisions urging local governments to adopt zoning policies more conducive to housing production, a politically difficult issue that many economists see as central to the nation’s housing shortage.

Housing is now a major political issue

The size and speed of the legislation highlight the political importance of housing in 2026.

Mortgage rates have climbed back up to around 6.56%, and home prices remain near record highs in many parts of the country, and affordability has become one of the top issues among voters. Younger buyers in particular have been increasingly frustrated at being shut out of homeownership.

Housing affordability has been a major domestic policy issue for the Trump administration this year, which has been aggressively pushing Congress to deliver legislative action ahead of the midterm elections.

Federal Housing Finance Agency Director Bill Pulte said the administration was “laser focused” on restoring affordability and expanding homeownership opportunities.

But the pressure is mounting, as the housing crisis is no longer confined to pricey coastal cities. For years, underbuilding, high borrowing costs, inflation, and rapid price appreciation after the pandemic have spread affordability challenges across the country.

This has made housing a national economic and political issue, rather than a regional one.

Builders see bill as a lifeline

The revision of the legislation is being seen as a major victory for the homebuilding industry.

Builders had warned that earlier Senate provisions risked freezing development activity at a time when the country desperately needs more homes. Building firms said that punishing build-to-rent projects would ultimately reduce supply and worsen affordability problems rather than solve them.

With the forced-sale clause gone, many developers say financing and stalled projects may start up again.

Industry leaders also applauded the bill’s efforts to reduce permitting delays and streamline regulations, which builders say have become a major driver of construction costs over the past decade.

Meanwhile, builders still have a tough market to contend with:

• high mortgage rates
• high material costs
• rising insurance expenses
•  
• prudent buyers
• sales activity slowing

It’s not expected to immediately solve those issues, but developers are hoping it could help ease long-term supply conditions and break down barriers to future construction.

Critics Say Bill Is Not Enough

But even with wide bipartisan backing, some housing advocates say the bill still doesn’t go far enough.

The bill is too focused on market-based solutions and doesn’t have enough direct investment in affordable housing, critics say. Others say the investor restrictions are still too weak and will do little to stop large financial firms from dominating parts of the housing market.

There are also questions about whether local governments will embrace zoning reforms or continue to resist higher-density development.

Housing economists say federal policy can be helpful, but many of the biggest obstacles to building remain at the state and local level.

In short, even sweeping federal legislation alone can’t solve the housing shortage.