Happy Tuesday, and welcome to another edition of Rent Free. This week's newsletter includes stories on: 

• The Treasury Department's proposed rule for restricting large investor ownership of single-family housing. 
• The land use angle in the Texas Senate race. 
• Salt Lake's middle housing reforms.

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The Populism-to-Paperwork Pipeline

Last Thursday, the U.S. Treasury issued a proposed rule that restricts large institutional investors from acquiring new single-family rental homes. 

The proposed regulations are intended to implement large investor restrictions passed by Congress as part of its bipartisan housing bill, the 21st Century ROAD to Housing Act, that generally bans entities that already own 350 single-family rentals from buying new ones. 

As I covered last week, the new rule primarily proposes definitions left of the text of ROAD and adds additional details about when large corporate buyers' build-to-rent and renovate-to-rent projects are exempt from the new restrictions.

Wonks and interest groups are digging through the details of the sprawling proposed regulations, but there doesn't seem to be major new policy shifts in the rule. It's mostly a bunch of paperwork requirements.

That's not how the Trump administration has framed the new proposed rule. 

Hear Vice President J.D. Vance tout the new rules as saving the American dream of homeownership from "private equity barons."

The American Dream doesn't belong to Wall Street. It belongs to the American people.

Thanks to President Trump and Scott Bessent, families don't have to worry about getting out-bid on their dream homes by private equity barons. And we're making those same big investors give…

— JD Vance (@JDVance) October 22, 2026

Also chiming in was Sen. Elizabeth Warren (D–Mass.), who had proposed much more sweeping restrictions on institutional investors when the ROAD Act was still working its way through Congress. 

Our bill to stop private equity from buying up homes is now law.

Despite Donald Trump's refusal to sign it, his Administration must now implement it.

We'll be watching closely to ensure it's done right. https://t.co/aQyqYdSViC

— Elizabeth Warren (@SenWarren) October 22, 2026

Despite the implication in Warren's post, Trump's decision to not sign the ROAD Act was not because of his apathy about the investor restrictions in it. On the contrary, the president had urged Congress to enact institutional investor ownership of single-family homes. 

(His decision had more to do with his displeasure at Congress not passing the SAVE Act.) 

As housing policy watchers will know, the backlash to corporate ownership of single-family rental housing has been a bipartisan populist concern for a while now. 

Both right-wing Republicans and left-wing Democrats have argued that Wall Street investors are a primary cause of high housing costs and low housing availability. They are allegedly outbidding individual owner-occupiers for homes, thus condemning ordinary families to a life of perpetual renting.

It was notable that perhaps the only thing that Minnesota Gov. Tim Walz and Vance agreed on in their 2024 vice presidential debate was that "Wall Street" needed to be kept out of owning single-family homes. 

Criticisms of restricting institutional investor ownership of single-family rentals are legion. The arguments generally boil down to the assessment that they are a small but beneficial presence in the single-family market.

The vast majority of new home sales still go to owner-occupiers. Families that can't get, or don't want, a mortgage but do want to live in a single-family home have the option of renting from one of the big guys. And large investors also add to the housing stock through build-to-rent developments and their renovation of dilapidated existing units. 

Those arguments were convincing enough to get a much more sweeping institutional investor ban initially included in ROAD (which would have required investors to proactively sell off their portfolios and effectively kill the build-to-rent sector in the process) pared back into something far more modest. 

The final result is the paperwork requirements the Treasury released last Thursday. 

One can see that as a positive development. The housing market would have been made much worse if Congress had decided to kill build-to-rent housing. 

On the other hand, we're still left with a bunch of bureaucratic busywork requirements that will add compliance costs to the business of single-family rentals but don't make anyone better off. 

Populist backlashes typically target large, seemingly alien institutions that are allegedly crushing ordinary people, big bureaucracies, large capitalists, etc. 

It's a bit ironic then that the new investor restrictions informed by that populist backlash and outlined in the Treasury's proposed rule largely leave the capitalists and bureaucrats in place while requiring them to shuffle a lot of paperwork between themselves. 

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The Data Center Angle in the Texas Senate Race

A long-time electoral advantage for the Texas GOP has been the state's status as a growth machine under its rule. 

Over the past three decades, Republicans have won every statewide race in the Lone Star State partially on the argument that they've delivered a remarkable degree of economic growth. 

Yet this year, in a political environment that's exceptionally bad for Republicans, Democrat James Talarico appears poised to best Republican Ken Paxton in the Texas Senate race and finally turn the state blue. 

There are a lot of reasons that could explain why the polls are giving Talarico a slight edge over Paxton. One that I explore in my new profile of Talarico (which was published today) is that a backlash to data center development is souring Texas voters on economic growth generally and the party that claims to have delivered it. 

There's not much about housing in the profile. But there are a couple of interesting housing-adjacent themes explored in it that Rent Free readers might find interesting. 

The first is that loose land use controls are a primary reason that Texas has become a major location for data center development. The second is that even places with very pro-growth political cultures and policy regimes can still experience sudden, sweeping anti-growth backlashes. 

Public support for "abundance" of new housing or new commercial development can't ever be taken for granted. 

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Salt Lake City Waters Down Zoning Reforms

Last week, the City Council of Salt Lake City, Utah, proposed paring back a set of zoning reforms that are intended to allow more smaller homes to be built in existing single-family neighborhoods. 

Under the original proposal, property owners would have been allowed to add accessory dwelling units on more parcels. Relaxed lot size, height, and setback requirements would have also allowed builders to add smaller homes and duplexes in single-family neighborhoods. 

These are all pretty standard "middle housing" reforms. They provoked the standard criticism that quiet, tidy single-family neighborhoods would be swamped by out-of-scale development. 

Now the city council is considering pairing the zoning liberalization with an owner-occupancy requirement. Anyone attempting to use the reforms to build new housing would also have to live on-site.

Owner-occupancy requirements often act as a major "poison pill." They effectively exclude professional developers from buying up parcels and adding new housing on them. Instead, homeowners (most of whom are not professional builders) will be the only ones who can make use of the new rules. 

If the council does include an owner-occupancy requirement in its zoning reforms, it can expect a lot fewer units to be built.

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Quick Links

• President Donald Trump has issued a new housing affordability executive order, which largely attempts to make mortgages obtained or secured by federal programs cheaper for borrowers. 
• Singer Stevie Wonder is attempting to evict a woman who's lived in a home he's owned rent-free for nearly 40 years. 
• D.C. Councilmember Robert White has proposed a pilot program that would have delinquent tenants go to mediation with their landlords if they owe less than three months of rent. 
• Americans for Prosperity has a new analysis of a Massachusetts ballot initiative that would allow homes to be built on smaller lots. 

The post The Populism-to-Paperwork Pipeline appeared first on Reason Magazine.

Texas might finally turn blue, and the man poised to do it is a mask-wearing, trans rights–supporting, Gnostic Gospel–quoting liberal from Austin. In an already tough year for Republicans, voter dissatisfaction at the state's data center boom is giving the Democrat an edge.

A few weeks out from the 2026 midterm elections, the polls have been giving state Rep. James Talarico (D–Austin) a small, steady edge over Republican Attorney General Ken Paxton in the race to fill the Senate seat currently occupied by Republican Sen. John Cornyn.

Texas has not elected a Democrat to statewide office since 1994. The chattering class's constantly misfiring prediction that the latest liberal challenger will beat the favored Republican has made "Texas turning blue" a mockable meme—the political equivalent of Charlie Brown winding up to kick the football.

But this year may be different. The national environment is very bad for Republicans. President Donald Trump's unpopular tariffs and unpopular war have made him, well, unpopular and given GOP candidates little to run on. Texas Republicans are also saddled with Paxton, who won a hotly contested primary despite having little natural charisma and a lot of scandals (both personal and political) to explain away.

Republicans' political headwinds have made Talarico, a 37-year-old legislator with a history that puts him solidly to the left of the median Texas voter, a surprisingly competitive candidate. Some of Talarico's edge can no doubt be chalked up to the candidate's own political skill and fundraising advantage. But he is also benefiting from a late-breaking development that few saw coming: the Lone Star's data center revolt.

For as long as Republicans have run Texas, they've been able to claim credit for the state's decades-long economic growth streak. But the grassroots groundswell of opposition to Texas' data center boom has helped to neutralize that traditional GOP advantage. In solidly red rural areas, large majorities are telling pollsters that they are opposed to the hundreds of data centers proposed in their backyard.

When Republicans thus talk about their economic stewardship today, it conjures up not positive feelings of persistent prosperity but dissatisfaction at all the ways the party has allowed an unpopular data center to be built next door. In a tight race, that might just be enough to give Talarico the last little push he needs to finally turn Texas blue.

Lab-Grown Liberals vs. the GOP Growth Machine

All the Texas Senate races of the past couple of decades have taken place within a growth machine. From 1998 through 2024, the Lone Star state posted the fourth-highest GDP growth rate, a period that roughly matches the GOP's unbroken record of statewide election wins. Not a day goes by, it seems, without a major corporation announcing a Texas megaproject or a billionaire relocating to booming Austin.

The state's frenetic growth rate has given the Texas GOP a good story to tell voters about why they should continue Republican rule: Under their low-tax, low-regulation regime, Texas has prospered. The jobs and businesses flooding into the state tend to be coming from states ruled by the Democrats trying to unseat them.

Those Texas Democrats whose bids for statewide office have managed to electrify liberals, meanwhile, have been ill-suited to convince voters that they'll keep the "Texas Miracle" going. There's an old joke that "Republicans fall in line, Democrats fall in love." In Texas, this hopeless romanticism has led to repeated heartbreak. In 2014, Wendy Davis inspired a national media buzz with her pro-abortion messaging while running for governor against Greg Abbott. Beto O'Rourke's style-over-substance challenge to Ted Cruz in 2018 produced a similar mania. Both lost. 

You might expect Talarico to meet a similar fate. The fresh-faced lawmaker seems almost grown in a lab to leave liberals giddy while making swing voters stick with the GOP. A former teacher, he first won elected office in 2018, when he flipped an open Texas House seat in the Austin suburbs from red to blue. At 29 years old, he was then the youngest member of the Texas Legislature.

Analyses of lawmakers' voting record put Talarico squarely in the ideological middle of his fellow Democrats, and well to the left of the state's political center. His national star began to rise among Democrats when he used religious arguments to challenge Texas Republicans' culture-war battles over education.

In 2021, Texas Republicans proposed a bill requiring K-12 athletes to play on girls' or boys' sports teams according to the sex listed on their birth certificates. Two years later, they introduced a measure that would require the Ten Commandments to be displayed in public school classrooms. Talarico, a Presbyterian seminarian, cited his liberal brand of Protestantism to oppose both bills. "Trans children are God's children, made in God's own image. There's nothing wrong with them. Nothing at all. They are perfect. They are beautiful, and they are sacred," he said in a floor speech opposing the sports bill. In a debate on the Ten Commandments bill, he declared the legislation "deeply un-Christian," citing Christ's instructions in the Gospel of Matthew to pray privately. (The sports bill eventually passed. The 2023 Ten Commandments bill failed, but a near-identical bill would pass in 2025.)

Conservative Christians would quibble with Talarico's progressive readings of the Bible. For national Democrats and liberal-leaning magazine writers, however, his penchant for reframing the Annunciation as a pro-abortion parable and his citations of the noncanonical Gospel of Thomas to support trans rights all served as proof that this "deeply religious" Democrat could effectively speak to Christian swing voters in their own terms.

Talarico has also taken many secular positions that might be hard sells in Texas. In May 2020, a couple of months into the COVID-19 pandemic and weeks before George Floyd was killed by Minneapolis police, Talarico declared that racism was the real virus. At a 2022 animal welfare fundraiser, a mask-wearing Talarico said he was running a vegan campaign. The same year, he said in a public hearing, again wearing a mask, that "fossil fuels are destroying the planet."

In a state where oil, gas, and beef are champion industries, swing voters to not swoon ordinarily for race-critical, carbon-neutral veganism. Talarico himself seems to have conceded that point. He's dispelled rumors of his veganism by eating barbecue on camera and waved away his past wokisms as "cringey" and "miss[ing] the mark." Even so, Talarico's campaign platform remains stridently progressive. He wants to tax billionaires and raise the minimum wage. If it were up to him, he'd open up Medicare to everyone, regardless of age, and would codify abortion protections into law. He's pro–marijuana legalization and fanatically anti–school choice.

So why are polls showing Talarico maintaining a consistent two- to six-point edge over Paxton?

In one sense, his continued leftward lean is an electoral boon. In a race with a clear enthusiasm gap, some 91 percent of Democrats say they'll be supporting Talarico in the general election. Only 79 percent of Republicans say the same about their candidate. Talarico has also been blessed with a national environment that's shaping up to be a bloodbath for Republicans, who have to answer for the rising prices driven by Trump's tariffs and the Iran war.

But there is one final factor putting Talarico over the edge: a statewide data center revolt that's souring Texas voters on their state's growth machine and neutralizing the pro-growth message that has carried the GOP through so many other tough election cycles. 

It's the Data Centers, Stupid

In November 2025, on the heels of Google's decision to invest $40 billion in data center development in the state, Gov. Greg Abbott proudly declared, "Texas is the epicenter of AI development, where companies can pair innovation with expanding energy." Just a few months later, the governor was vowing to impose new regulations on data centers to "protect" Texans from the consequences of their rampant development.

The U.S. has experienced a rapid revolt against data centers this year, and in few places has that backlash been more sudden or more pronounced than in Texas. According to a 2025 poll by the University of Texas at Austin, nearly 60 percent of Texans were either supportive or neutral about a data center being built in their neighborhood. In August 2026, 57 percent said they would oppose a local data center project.

This backlash against data centers couldn't have come at a worse time for Texas Republicans, or, consequently, at a better time for Talarico. The policies the Texas GOP have long touted as the key to the state's economic success—loose land use and environmental regulations, no state income tax, and the cheap commercial energy prices created by its deregulated energy sector—are the same policies attracting data centers. When the most visible recent consequence of those pro-growth policies is a data center boom most Texans hate, the state's Republicans are having to run away from what were once their prime selling points.

The sudden negative turn in public opinion on data centers has "proven a catalyst for people raising questions about governance and the economy in the state," says James Henson, director of the Texas Politics Project at the University of Texas at Austin. Making matters worse, says Henson, is the geography of the data center backlash. Opposition to these projects is concentrated in rural areas that have long been Republican strongholds and in suburban areas where the party needs to stay competitive to win statewide elections.

As Abbott's pivot demonstrates, Texas Republicans feel acutely vulnerable on this issue and are scrambling to adopt policies that ensure these developments do not lead to higher electricity prices for residential consumers. Paxton himself has called for a raft of new regulations on these facilities' water and power use and for ending a sales tax exemption on data centers, as well as some more off-the-wall conservative-coded policies, such as holding data centers criminally liable for facilitating AI chatbots that "endanger" children.

Talarico's data center proposal isn't all that different. He too would require data centers to pay for the full costs of their power and would end the sales tax exemption they can currently claim on equipment purchases. He'd also give local communities veto power over data center projects. That makes him more moderate on data centers than fellow Democrat Gina Hinojosa, who is running for governor against Abbott. She's called for a moratorium on data center construction until the state Legislature can convene to discuss "protections" for Texans.

Talarico's moderation could be partly explained by the fact that data centers are more popular, relatively speaking, in heavily Democratic urban areas. He also represents a slice of Austin, which has become a booming tech town. Why risk upsetting one's base when long-ruling Republicans already have to own the data center boom they were so recently bragging about?

'Talafreako'

The 2026 midterm environment seems almost tailor-made to neutralize Republicans' long-time advantages in Texas. Nationally, they have to own higher prices. Locally, they have to own an unpopular data center boom. Waning voter concerns about illegal immigration have caused their favored red-meat issue to turn a dull brown.

The Texas GOP's only weapon left is personal attacks on the man they call "Talafreako"—some weirdo liberal who calls trans kids "perfect" and thinks racism is the real virus. Talarico's persistent lead in the polls and on the prediction markets (which, in late  October, put the chances of him winning at nearly 70 percent) suggest that these attacks are not working.

One could sense Republicans' desperation when right-wing influencers spun up a rumor that Talarico was absent from the campaign trail in early October because he was in a mental health facility in Ohio. (The hospital publicly denied ever treating Talarico. The candidate himself said he'd been recovering from the flu and said he'd never even visited Ohio.)

When Republicans call Talarico a freak, they mean to cast him as abnormal and off-putting: a "freak of nature." But freak has multiple usages. The word can also mean an unpredicted or unusual event: a "freak occurrence." Talarico succeeding in ending Republicans' three-decade run of statewide victories in Texas would fit the latter definition.

Rather than run from the Talafreako barb, Talarico's campaign has emblazoned merch with the intended insult. They at least seem to appreciate the irony of it all.

If Talarico is a freak, that will make his likely victory all the more freaky.

The post Will a Data Center Backlash Help James Talarico Turn Texas Blue? appeared first on Reason Magazine.