The Big Picture
Following President Trump’s Executive Order, Stopping Wall Street from Competing with Main Street Homebuyers, and the passage of the 21st Century ROAD to Housing Act (ROAD), states are increasingly putting their unique spin on policies that ban or severely limit institutional investment in single-family homes.
Section 1001 of ROAD, Homes Are for People, Not Corporations, prohibits “large institutional investors” (LIIs), defined in part by an entity’s ownership of 350 or more single-family homes, from purchasing additional single-family homes. This ban takes effect 180 days after the Act’s date of enactment, sunsets 15 years later and includes limited exceptions. Importantly, because of the industry’s advocacy, forced sale requirements were not included in the final package and build-to-rent housing exemption preserved.
Deeper Dive
The National Apartment Association (NAA) is seeing a growing number of state legislatures and city/county councils interested in this policy approach, looking to the federal government for inspiration but making it uniquely their own.
These policies often have bipartisan support as advocates argue they promote homeownership and protect individual homebuyers in supply-constrained markets. However, in practice, these policies can have the opposite of their intended result given the restrictions they place on new capital entering a jurisdiction, causing market uncertainty and ultimately reducing supply.
Additionally, the construction of new build-to-rent homes faces increasing roadblocks as developers and investors navigate new and untested regulations at the state and local levels. Allowing the development of new build-to-rent communities is crucial to easing our nation’s longstanding housing supply crisis.
State and Local Approaches
Michigan’s HB 6074 was signed into law on July 21, 2026. This law moved rapidly through the legislature and prohibits entities with a net value of $375 million or more from owning more than 100 single-family homes within the state.
The Property Management Association of Michigan (PMAM) told NAA that, “while well-intentioned, HB 6074 restricts investment without addressing the root cause of Michigan's housing affordability challenges. We believe expanding the supply of housing, not limiting who can purchase it, is the most effective path to improving affordability.”
In Virginia, state lawmakers explored LII restrictions with two bills that were introduced and failed before the 21st Century ROAD to Housing Act’s passage. VA SB 693 and VA SB 1424 were introduced by Republican and Democratic lawmakers, respectively, and would have prohibited entities with more than $50 million in assets under management from purchasing a single-family home in Virginia.
At the local level, O-26-7-102 was introduced in Knox County, Tennessee, and uses a complex targeting framework with more exemptions than any comparable legislation. Under the proposed bill, an entity may not purchase more than 100 single-family homes for rental purposes in Knox County with the following exemptions:
-
Affordable housing;
-
Properties owned above the cap before the effective date of the ordinance;
-
An entity legally domiciled within the State of Tennessee;
-
A publicly traded company with a total market capitalization that does not exceed $1 billion; and
-
Homes constructed as a community for rental purposes, otherwise known as build-to-rent.
NAA’s Perspective
NAA urges policymakers at all levels of government to prioritize policies that increase the supply of housing. These state and local approaches demonstrate the increasing complexity of these proposals, and the disparity in geography and bipartisan interest indicates that this trend will continue throughout the coming months and years.
NAA will continue to monitor this issue and provide updates on national policy trends and appreciates the advocacy levels of its affiliate partners.
For more timely updates on the industry’s advocacy and legal news, register for NAA’s monthly Advocacy and Legal Webinar (ALW) series and tune in every third Wednesday of the month at 2 pm ET. This webinar is exclusively for NAA members and affiliate partners.