The ROAD to Housing scarcity: Hidden provision in Senate housing bill may kill build-to-rent

By Booker Lightman | Guest Commentary, Rocky Mountain Voice

How a Senate bill to increase construction will do the opposite

You may have heard about a bipartisan omnibus bill currently being debated in the U.S. Senate, called the ROAD to Housing Act. From the name, you might think it’s about promoting housing construction, and that’s indeed how it’s being sold in the media. 

Yet a provision recently added to the bill, which forces build-to-rent companies to sell their homes within seven years, would cripple housing production and drive up housing costs for everyone.

Why is the forced sale provision bad? 

The seven-year deadline would incentivize builders to prioritize speed over quality and hide defects rather than take the time to fix them. It would take single-family homes off the rental market, making it harder for renters to find homes in single-family neighborhoods. 

While you might think it would be good for those who want to buy single-family homes, as firms forced to sell on a deadline will have to lower their prices, this ignores the likelihood that the homes never get built in the first place. 

The National Association of Home Builders has warned that, if the forced sale provision is not removed, ROAD to Housing would “essentially kill any future built-to-rent activity.” This would be bad for everyone – renters, buyers, and the build-to-rent companies and their employees.

Why, then, have some Senate Republicans announced they intend to vote for the bill? 

I don’t think they want to cripple the build-to-rent sector. Build-to-rent companies are nobody’s idea of a villain. These are main-street firms that nobody ever hears about because they stay out of politics. The provision was added as part of an effort to stop private equity from buying single-family homes. 

It should be a cautionary tale about the dangers of Republicans embracing mindless anti-corporate politics. Republicans shouldn’t be slavishly pro-corporate; they shouldn’t stick up for corporations that express hostility and contempt for conservatives and their values. 

But just as dangerous is the tendency of some Republicans to be mindlessly anti-corporate and embrace regulation for regulation’s sake. You might think you’re sticking it to “elites” and then vote for a bill that cripples a local businessman who’s spent his life working hard, playing by the rules, and providing your constituents with opportunity and jobs.

It also lets the government off the hook. The real reason for high housing costs is the regulations that choke off the housing supply, such as rent controls, inclusionary zoning mandates, limits on density, minimum lot sizes, setback requirements, urban growth boundaries, and building code regulations unrelated to safety.

Fostering a zero-sum mentality and demonizing the rich is not going to solve the housing crisis. Nor is it a political winner, after all, Americans just elected as President a billionaire real estate developer who takes pride in his wealth and success and won with record working-class support. 

Demonizing the rich is bad policy, it’s bad politics, and it’s also bad for the soul, as a politics based on envy erodes the virtues of aspiration, hard work, and personal responsibility that make for successful people and a successful country.

Booker Lightman is a Highlands Ranch resident active in the Douglas County GOP.

Editor’s note: Opinions expressed in commentary pieces are those of the author and do not necessarily reflect the opinions of the management of the Rocky Mountain Voice, but even so we support the constitutional right of the author to express those opinions.