21st Century ROAD to Housing Act Prohibition on Large Institutional Investor Purchases of Single-Family Homes
Key claim: The Treasury Department proposes rules that would define which large institutional investors are barred from buying single-family homes, which purchases are excepted, and how the ban will be enforced before the ROAD Act takes effect.
Abstract
(Proposed Rule · Treasury Department) The Department of the Treasury (Treasury) is issuing this proposed rule to carry out the purposes of section 1001 of the 21st Century ROAD to Housing Act (the Act or the ROAD Act). Section 1001 of the ROAD Act prohibits large institutional investors from purchasing single-family homes, subject to certain exceptions. The proposed rule would clarify certain terms relevant to those restrictions, including “large institutional investor”; clarify the application of certain exceptions from the statutory prohibition; and clarify the statutory enforcement mechanism. The proposed rule is intended to provide clarity to market participants and other stakeholders on the application of the statute before the effective date of the ROAD Act.
Why this matters
The ROAD Act’s institutional investor ban is one of the first federal statutory limits on who may buy single-family homes, and Treasury’s definitions will determine whether the restriction bites on the largest single-family rental operators or sweeps in smaller funds and build-to-rent developers. The exceptions and enforcement design will shape price competition in starter-home markets and the structure of the single-family rental industry.