Affordable housing has been a fixture of policy debates and campaign speeches for years, with little to show for it at the federal level. That changed on July 11, 2026, when the 21st Century ROAD to Housing Act, the most significant federal housing legislation in decades, became law.
Although its core provisions won’t take effect until January 7, 2027, the law is already reshaping how investors, developers, and lenders are thinking about the road ahead. Here are just a few ways that the new legislation might impact the multifamily market.
A Shift Towards Built-to-Rent
The 21st Century ROAD to Housing Act placed meaningful portfolio size restrictions on scattered-site single-family rental (SFR) owners: investors controlling 350 or more single-family homes are now barred from acquiring additional existing homes outside of build-to-rent (BTR) and other excepted categories.
In his newsletter, nationally recognized rental housing economist Jay Parsons suggests the new law may accelerate the shift from scattered-site SFR rental acquisition toward build-to-rent construction. “The good news is that BTR ‘feels’ largely safe,” Parsons said. “It ‘feels’ different for traditional scattered-site SFR acquisitions.”
As Parsons explained in his Multifamily Investment Forum keynote earlier this year, SFR investment has become politically controversial. Although the share of American homes owned by investors is declining, common narratives still cast scattered-site SFR investors as villains buying up inventory that would otherwise go to everyday homebuyers. Build-to-rent avoids that narrative, which is why many investors view it as carrying less reputational and legislative risk.
Jay Parsons speaking at Metonic’s 2026 Multifamily Investment Forum, April 2nd 2026
No BTR forced sale requirement
Although the final passed version of the 21st Century ROAD to Housing Act became much more friendly to the BTR industry, the initial proposed version created hesitancy among BTR investors. The original Senate version of the bill would have forced BTR investors owning 350 or more single-family houses to sell their new BTR houses to individual buyers within 7 years. However, lobbying from industry groups and broader education around the practical value of BTR to communities helped get that provision removed in the House version and ultimately the final legislation.
“We put investigating potential future BTR deals on hold for a while, since the uncertainty around the potential forced-sale requirement made underwriting BTR communities incredibly difficult,” said Kassie Inness, President of Metonic. “Now that congress has passed the 21st Century ROAD to Housing Act, we have the confidence and clarity we need to continue pursuing new and innovative BTR deals.”
Drone photos of The Collection at Gretna Landing, a build-to-rent community being developed by Metonic, July 27th 2026
Cutting Red Tape
The new law also acknowledges the need to develop new affordable housing by cutting red tape for developers and owners. The 21st Century ROAD to Housing Act:
- Streamlines environmental review for some affordable housing projects
- Reduces duplicate housing choice voucher inspections for units financed by certain federal housing programs, including the Low-Income Housing Tax Credit (LIHTC) program
- Provides grants to local governments and tribes to select and implement pre-reviewed housing designs, speeding up affordable housing construction
- Incentivizes zoning reform by directing HUD to update its outdated 1920s-era model zoning codes and provide best-practice guidance
Unlocking Low-Income Housing Financing
In addition to enabling construction, the new legislation has also cleared barriers for banks looking to finance affordable housing. Banks have long been allowed to make “Public Welfare Investments” (PWIs), including investments in affordable housing and community development projects. But because these are riskier, less liquid investments than traditional loans, regulators capped how much of a bank’s capital could go toward them. Under the National Bank Act, that limit sat at 15% for years.
The new legislation raises the limit to 20%, unlocking meaningful additional capital for affordable housing without abandoning the underlying safeguard. It’s a small percentage change with an outsized impact: more bank equity flowing into the projects that need it most.