A Housing Bill Is Already Slowing Down New Construction
There’s a housing bill being talked about right now, and it’s already affecting the market.
The main issue is one rule.
If a company owns 350 or more homes, they would have to sell build to rent homes within 7 years.
At first, that sounds like it helps buyers.
More homes getting sold instead of being held by big investors.
But here’s the problem.
The industry is already reacting before anything is final.
- Investors are pulling back.
- Financing is getting paused.
- Projects are not moving forward.
That’s because build to rent communities are not meant to be short term investments.
They are built more like apartment communities, where the long term hold is what makes the deal work.
If you force a sale after 7 years, a lot of projects no longer make sense to build.
And if builders stop building, we lose supply.
That’s the bigger issue.
Less supply usually means more competition and higher prices, especially in markets like New Jersey, where inventory is already low.
Right now, the Senate has passed the bill, but it is stalled in the House.
There is pushback, especially on that 7-year rule.
So nothing is final yet.
But even if this bill doesn’t pass, this is something to watch.
Some states are already starting to look at their own rules around investor-owned housing.
The Bottom Line
This bill is trying to fix a real issue.
But if it slows down new construction, it could create a bigger one.
Because when supply drops, buyers and renters feel it first.
This information was broken down from an article written by Chris Nebenzahl, Vice President, Rental Research. (Linkedin)
