Before we tear up zoning laws to accommodate millions of supposedly missing homes, perhaps we should ask whether those homes will actually be needed.
The post Breitbart Business Digest: What if We’re Building Too Many Houses? appeared first on Breitbart.
Happy Tuesday, and welcome to another edition of Rent Free. This week's newsletter includes stories on:
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.
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.
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.
The post The Populism-to-Paperwork Pipeline appeared first on Reason Magazine.
When the 21st Century ROAD to Housing Act was still a work in progress, the Senate briefly inserted a ban on corporate ownership of single-family rental housing so sweeping that it might well have killed off the small but growing build-to-rent sector.
After furious activism by the housing supply boosters, who had been the main advocates for the law's many other provisions, that investor ban was significantly pared back.
The final version of ROAD, which became law in July, prohibits investors who own 350 single-family rental homes from buying new ones. But it also includes a long list of exemptions for large investor purchases of single-family rentals.
The primary exemptions include homes purchased as part of a build-to-rent project and dilapidated homes that the investor spends significant money renovating.
The new restrictions go into effect this coming January. On Thursday, the Treasury Department released a proposed rule that would create definitions for terms that go undefined in the law and clarify the scope of "excepted purchases" of single-family housing that large investors can still make.
Build-to-rent housing that large investors can still buy is defined as a new single-family home that's never been owned by an owner-occupier, is purchased within 18 months of the home receiving a certificate of occupancy, and is occupied by a renter.
Protected "renovate-to-rent" homes are defined as homes that had major building code violations that were fixed by the large institutional buyer and for which the investor spent at least 15 percent of the home's purchase price on improvements.
The rule also provides definitions for rental homes owned as part of a program to boost homeownership, which is another excepted purchase large institutional investors will be allowed to make. Those programs are generally defined as programs in which the renter has the right of first refusal to buy the home and where the rent receives financial support from the homeowner to purchase the home.
Taken together, the clarified exceptions in the Treasury rule still leave a lot of room for large institutional ownership of single-family homes in keeping with the final text of the ROAD to Housing Act. They won't have to sell the homes they already own. They can still add to the supply of investor-owned rental housing through substantial rehabs and build-to-rent projects.
Nevertheless, the Treasury rules will impose numerous paperwork burdens on investors who'll now have to track and report, for example, precisely how much money they've spent renovating a purchased rental house or else risk a huge fine.
Large investors who purchase a single-family home in violation of ROAD are liable for a maximum civil penalty of $1 million per home purchase.
The proposed Treasury rule highlights what a glaring exception the investor restrictions are to the overall spirit of ROAD. Through a variety of means, the law attempts to reduce the regulatory burden on new housing. Now, large investors will have to absorb significant compliance costs just to prove that they're adding new rental housing supply in precisely the right way.
The post Under Proposed Treasury Rule, Corporate Homebuyers Who Don't Track Their Receipts Face $1 Million Fines appeared first on Reason Magazine.
Happy Tuesday, and welcome to another edition of Rent Free. This week, we're going to jump right into it with a philosophical question: What is an accessory dwelling unit anyway?
It's a question that officials in Somerville, Massachusetts, are realizing they didn't know the answer to after learning that a state law allowing ADUs in single-family neighborhoods could also require them to approve three-story backyard mini-apartments.
As the Boston Globe reported on Sunday, Somerville's "deep ethos in favor of new housing" is being tested by the extent of the state law. Elected officials are describing the potential for three-story ADUs as a "joke," and the area's state lawmakers, including one who voted for the state law, are demanding reforms to stop them.
The law in question was a statewide accessory dwelling unit (ADU) legalization tucked inside a major housing package of mostly new spending programs that passed in 2024.
The bill required municipalities to allow ADUs of either 900 square feet or half the size of the primary dwelling (whichever is smaller) anywhere single-family homes are allowed. A subsequent rule issued by state regulators also forbade localities from imposing height and bulk limits on ADUs that are stricter than the limits imposed on primary dwellings.
That latter rule is what's causing Somerville's freakout.
Because the town allows triple-decker apartments (a three-story triplex common in New England) in all its single-family zones, the state rule means that it must also allow ADUs to be three stories tall.
The Globe story notes that the mini-triple-deckers could still only be 900 square feet, meaning each floor of a mini-triple-decker would have to be pretty small. Thus far, no one has proposed building an ADU tower in Somerville.
Even so, the town is worried that someone will eventually propose one of these "out-of-scale" units that it'll have to approve. Its officials are now agitating for changes to the state law to prevent this.
On the one hand, one can perhaps understand why Somerville officials feel blindsided.
The text of the 2024 ADU law allows localities to set "reasonable" height and bulk limits on accessory units. It was state regulators who decided after the law's passage that requiring ADUs to be shorter than the primary unit was "unreasonable."
On the other hand, allowing a second home on a lot to be as tall as the first house sounds "reasonable" enough. Can one complain about out-of-scale development when the new unit is the same height as an existing home and a little bit smaller?
Somerville is not the first city where people's own colloquial definition of an accessory unit as "a tiny home that doesn't bother anyone" has clashed with official regulatory definitions that allow ADUs to be a fair bit bigger.
San Diego's ADU Bonus program once allowed a technically unlimited number of ADUs to be built on single-family parcels near transit stops. (Height and bulk regulations imposed practical limits on how many units could fit on a site.)
That enabled developers to build what were, in effect, ADU apartment complexes on large single-family lots throughout the city. This year, the city imposed new restrictions to stop these "monster" ADU developments, including a per-lot accessory unit cap.
The latest dust-up in Somerville, like the San Diego controversy before it, provides several lessons about the realities of housing reform.
The first is that the definition of "accessory dwelling unit" is completely arbitrary.
In Massachusetts, an ADU is a 900-square-foot home that can be one story or three stories, depending on the town and zoning district it's being built in.
In Montana, it's a 1,000-square-foot unit. In California, state law can require localities to allow ADUs as large as 1,200 square feet. Under certain conditions, these ADUs can even be sold separately from the main house.
At a certain point, an accessory dwelling unit is just a dwelling unit. A house is a house.
The second lesson is that any ADU reform that is actually intended to produce new housing units is going to cause controversy.
State and local laws allowing ADUs have been one of the more common forms of housing reforms to pass.
Supply-boosters see them as a way to get a modest number of new units. Supply skeptics don't see much to object to about allowing someone to install a kitchenette and bathroom in their garage.
If the ADU regulations don't allow much more than the garage conversion, supply-boosters will be disappointed and push for expansions of the law. California passed dozens of ADU laws before they started enabling actual units to be built.
If an ADU law actually allows more homes, the ADUs will look like homes, and the supply skeptics will be mad.
No amount of branding or planning will resolve the inherent conflict of some people wanting more development while others oppose it in their neighborhoods.
Thus far, Massachusetts' ADU law has been modestly productive. The state's ADU survey reports that 2,048 ADU permits have been issued since the state law went into effect in January 2025. About half of those units are attached ADUs (think the garage with the kitchenette).
That's a little under 10 percent of Massachusetts total housing production during that time, per the Census Bureau's building permit survey.
At 50 units permitted, Somerville has actually approved the second most ADUs of any jurisdiction in the state. (Boston has only approved 49.)
But now that it's facing the prospect of allowing ADUs that look like actual homes, it's starting to get cold feet about the new law.
The post ADU Nihilism appeared first on Reason Magazine.
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