Several trade groups usually supportive of efforts to increase housing inventory are taking exception to new homebuilding language added to a federal bill currently under Senate consideration.

Lawmakers added a provision in the 21st Century ROAD to Housing Act that will require large institutional investors purchasing build-to-rent properties to sell units they purchase after seven years, leading to outcries from the industry groups.

Following criticism from President Donald Trump lodged against institutional investors for their roles in reducing affordable housing inventory, senators inserted a ban on new corporate purchases in their legislation but carved out an exemption for BTR properties while also attaching the controversial seven-year mandate. 

With that requirement in place, though, the National Association of Home Builders announced it was withholding support of the bill in its current form, saying it would essentially kill any future BTR activity. 

"It's hard to process that a housing bill would reduce housing supply and have housing industry opposition. To be clear, NAHB was prepared to key vote in SUPPORT," the trade group argued in a message sent to senators this week. The revisions made to the act "force" it to oppose, it continued. 

In the emailed correspondence, NAHB said it planned to "oppose the overall legislation and will consider designating a key vote in opposition" if the seven-year sales requirement remains. 

"Because of the different financing sources, BTR investors would likely shift to other equity investment opportunities; an increase in single-family for-sale housing starts should not be expected as a result of cutting off BTR investors," it stated.

That same seven-year sales rule led to similar criticism from numerous other mortgage and community development trade groups. Although they called for removal of the requirement, the groups held back from the homebuilders association's call opposing passage. 

Still, the joint letter signed by 12 policy advocacy organizations, including the Housing Policy Council and Mortgage Bankers Association, as well as dozens of local housing groups from across the U.S., emphasized key points made by NAHB. The groups said the rule would have a "chilling effect" on development.  

"Because BTR developments require large-scale investment and benefit from economies of scale, most firms operate beyond that threshold. They cannot invest under the risk of forced sales and potential losses driven by arbitrary deadlines," the letter states.

The path of recent housing legislation

Senators approved moving the bill with wide bipartisan support earlier this month to a final vote, which is expected to occur during the week of March 9. The final tally to advance the Renewing Opportunity in the American Dream to Housing Act came in at 90-to-8, with one member voting present. 

The package includes several housing proposals targeting homebuilding and buyer affordability that senators initially attempted to push forward in December's national defense bill. Counterparts in the House of Representatives eliminated that particular section of the bill to a chorus of criticism at the time but also said it would attempt to come up with a plan of its own. 

The new bill combines elements of both the House's efforts and 2026 Senate negotiations.