{"id":19612,"date":"2026-05-11T23:20:26","date_gmt":"2026-05-11T23:20:26","guid":{"rendered":"https:\/\/imsfund.com\/?p=19612"},"modified":"2026-05-11T23:20:26","modified_gmt":"2026-05-11T23:20:26","slug":"the-build-to-rent-strategy-could-be-in-jeopardy-as-lawmakers-push-back-on-new-legislations-7-year-sell-off-rule","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2026\/05\/11\/the-build-to-rent-strategy-could-be-in-jeopardy-as-lawmakers-push-back-on-new-legislations-7-year-sell-off-rule\/","title":{"rendered":"The Build-to-Rent Strategy Could Be in Jeopardy as Lawmakers Push Back on New Legislation\u2019s 7-Year Sell-Off Rule"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"post-content\" :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n                            <!-- Table of contents: mobile --><\/p>\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n                    <button x-on:click=\"open = !open\" class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n                        <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<p class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In This Article<\/p>\n<p>                    <\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">The dream Wall Street REITs had of owning vast swathes of purposely built single-family rental communities, stretching as far as the eye could see, has hit a snag. A new \u201cseven-year sell-off\u201d rule has many people wondering if the build-to-rent (BTR) phenomenon is over before it really began.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A provision in the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/congress-weighs-bills-to-eliminate-tax-breaks-for-large-investors\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">21st Century ROAD to Housing Act<\/span><\/a><span data-preserver-spaces=\"true\"> would force institutional investors to sell newly built rental homes seven years after construction. Industry groups, such as<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.resiclubanalytics.com\/p\/lawmakers-against-institutional-homebuying-ban-7-year-selloff-rule-build-to-rent-btr-homebuilding\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> members of the Build America Caucus<\/span><\/a><span data-preserver-spaces=\"true\">, fear that it could stop new build-to-rent projects and ripple through the housing ecosystem, affecting both Wall Street titans and mom-and-pop investors.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">What the Seven-Year Sell-Off Rule Does<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">At the center of the debate is Section 901 of the Senate\u2019s 21st Century ROAD to Housing Act, which passed the Senate in March and is now awaiting reconciliation with a different House version. The bill targets institutional landlords who own at least 350 single-family homes, capping their ability to acquire more properties by requiring them to sell newly built rental units to individual buyers after seven years or face penalties, the<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2026\/03\/25\/business\/economy\/single-family-homes-rentals-housing-shortage.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">New York Times<\/span><\/a><\/em><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2026\/03\/25\/business\/economy\/single-family-homes-rentals-housing-shortage.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> reports<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cIt is as if the bill views renters as [being] not deserving of a single-family lifestyle,\u201d Ryan Smidt, chief executive of Clay Residential, a Houston builder of single-family rental communities in Texas, told the <\/span><em><span data-preserver-spaces=\"true\">Times<\/span><\/em><span data-preserver-spaces=\"true\">.<\/span><\/p>\n<div class=\"justify-center \" x-data=\"{ IabAdad_block_: popAd(['r720x90'], '1') }\" :class=\"IabAdad_block_.linkURL ? 'flex pt-8' : 'hidden'\">\n    <a x-show=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.linkURL\" :href=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.linkURL\" x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/the-build-to-rent-strategy-could-be-in-jeopardy-as-lawmakers-push-back-on-new-legislations-7-year-sell-off-rule', IabAdad_block_.sponsor, IabAdad_block_.title, IabAdad_block_.id, 'blockAdClicked', 'blockAd', 'postContent')\" target=\"_blank\" x-init=\"adLoaded('https:\/\/www.biggerpockets.com\/blog\/the-build-to-rent-strategy-could-be-in-jeopardy-as-lawmakers-push-back-on-new-legislations-7-year-sell-off-rule', IabAdad_block_.sponsor, IabAdad_block_.title, IabAdad_block_.id, 'postContent')\" x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/the-build-to-rent-strategy-could-be-in-jeopardy-as-lawmakers-push-back-on-new-legislations-7-year-sell-off-rule', IabAdad_block_.sponsor, IabAdad_block_.title, IabAdad_block_.id, 'blockAdViewed', 'blockAd', 'postContent')\"><\/p>\n<div class=\" hidden sm:block\">\n        <img class=\"m-0\" :src=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.r720x90\" :alt=\"IabAdad_block_.r720x90Alt\" loading=\"lazy\" fetchpriority=\"low\"\/>\n      <\/div>\n<div class=\"block sm:hidden\">\n          <img class=\"m-0\" :src=\"https:\/\/www.biggerpockets.com\/blog\/IabAdad_block_.r320x50\" :alt=\"IabAdad_block_.r320x50Alt\" loading=\"lazy\" fetchpriority=\"low\"\/>\n        <\/div>\n<p>          <\/a>\n  <\/div>\n<h2><span data-preserver-spaces=\"true\">Why Wall Street Is Fuming<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The build-to-rent phenomenon has taken shape over the last few years, with major REITs such as Blackstone, Invitation Homes, and Pretium Partners pulling back from investing in individual single-family homes in<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/real-estate\/build-to-rent-single-family-home-investments-d6e57200\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> favor of new communities, which they could better manage and control<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cWe think we\u2019re really in the early stages of what could be a pretty significant, almost new asset class,\u201d AvalonBay chief investment officer Matt Birenbaum told the<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/real-estate\/build-to-rent-single-family-home-investments-d6e57200\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Wall Street Journal<\/span><\/a><\/em><span data-preserver-spaces=\"true\"> in 2024.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The housing crisis, however, has changed the game, as the government seeks ways to increase inventory and homeownership. Jim Baker, executive director of the Private Equity Stakeholder Project, a watchdog organization focused on the impact of institutional investors, told the <\/span><em><span data-preserver-spaces=\"true\">Times<\/span><\/em><span data-preserver-spaces=\"true\">:<\/span><\/p>\n<p><em><span data-preserver-spaces=\"true\">\u201cBuild to rent is essentially homebuilders switching their construction from building homes for people to building homes for large institutional investors. It puts homeownership further out of reach for individuals, [denying them an opportunity] for building wealth for themselves, their families, and their children.\u201d<\/span><\/em><\/p>\n<p><span data-preserver-spaces=\"true\">Big investors are fuming over the new provision. \u201cIf this bill passes as is, I can\u2019t really grow,\u201d Richard Ross, chief executive of<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/live-quinn.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> Quinn Residences<\/span><\/a><span data-preserver-spaces=\"true\">, which owns about 5,300 single-family houses in rental communities across the Southeast, told the <\/span><em><span data-preserver-spaces=\"true\">Times<\/span><\/em><span data-preserver-spaces=\"true\">.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Why Lawmakers Turned Their Attention to Built-To-Rent Communities<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Wall Street started investing heavily in single-family real estate <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnbc.com\/2023\/02\/21\/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">after the 2008 financial crash<\/span><\/a><span data-preserver-spaces=\"true\">, helping save thousands of homes from being abandoned when homeowners could no longer afford to live in them.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The purchases were made primarily in the Sunbelt, and they have continued to buy there. Although Wall Street owns only about 3% of single-family homes nationally, in certain cities, such as Atlanta, Phoenix, and Jacksonville, it owns<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.businessinsider.com\/institutional-investors-single-family-homes-cities-map-2026-1\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> 15%-30%<\/span><\/a><span data-preserver-spaces=\"true\">.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Unsurprisingly, it\u2019s also<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.realpage.com\/analytics\/5-largest-btr-projects-2025\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> here<\/span><\/a><span data-preserver-spaces=\"true\"> that most BTR communities are based, which has amplified local concerns about pricing and competition with first-time homebuyers. This tallies with a <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/newsroom\/baby-boomers-remain-largest-share-of-home-buyers-as-first-time-buying-falls-to-record-low\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">recent NAR report<\/span><\/a><span data-preserver-spaces=\"true\"> showing that the share of first-time homebuyers fell to the lowest level on record this year.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">The Backlash<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Although the 21st Century ROAD to Housing Act was bipartisan, it\u2019s not just Republicans who are against the seven-year sell-off requirement. Senator Brian Schatz, a Democrat from Hawaii, called the particular mandate \u201cbizarre,\u201d suggesting that it unfairly punishes those who want to build housing to replace aging rental stock. Commercial real estate groups have also <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rer.org\/tag\/build-to-rent-btr\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">urged Congress to remove the provision<\/span><\/a><span data-preserver-spaces=\"true\"> while maintaining restrictions on the purchase of existing homes.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A report from John Burns Research and Consulting said the new provision would have the opposite effect of what it was intended to achieve, the<\/span> <em><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/economy\/housing\/senates-new-housing-bill-would-force-large-investors-to-sell-homes-a6185e90\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Wall Street Journal<\/span><\/a><\/em><span data-preserver-spaces=\"true\"> reported. \u201cThe capital devoted to rental development will have to look for opportunities elsewhere,\u201d the report said. \u201cWe believe the number of new homes constructed in America will be less.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Adrianne Todman, chief executive of the National Rental Home Council, which represents institutional homebuyers, shared the report\u2019s sentiments, saying in the <\/span><em><span data-preserver-spaces=\"true\">Journal<\/span><\/em><span data-preserver-spaces=\"true\">: \u201cIn a housing supply bill, this is an anti-housing supply policy.\u201d<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">The Takeaway for Small Investors<\/span><\/h2>\n<aside class=\"my-10 xl:my-4\">\n<p class=\"font-bold mt-0 mb-4 text-xl text-slate capitalize\">You might also like<\/p>\n<\/aside>\n<p><span data-preserver-spaces=\"true\">This provision only affects institutional investors with over 350 units, meaning smaller investors are safe. In fact, the lack of rental competition will likely spark optimism among active investors buying single-family homes, especially in Sunbelt markets where BTR construction was most robust.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There\u2019s no doubt that living in a shiny, new amenity-filled BTR community has its<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rentcafe.com\/blog\/renting\/build-to-rent-communities-pros-and-cons\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> pros and cons<\/span><\/a><span data-preserver-spaces=\"true\">. One drawback is the rental price, which is generally far higher than that of a comparable-sized single-family home.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If Wall Street decides against the BTR strategy entirely, it will further stymie the need for additional housing, playing into the hands of landlords who currently own sizable portfolios or those seeking to expand their holdings.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Such is the blowback from institutional investors that this provision is by no means a done deal.<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.realtor.com\/news\/real-estate-news\/institutional-investor-ban-congress-letter-mike-johnson\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\"> Realtor.com<\/span><\/a><span data-preserver-spaces=\"true\"> reports that 76 House members have already warned Speaker Mike Johnson that the provision could shrink housing supply if not carefully implemented, so this will probably not be the last word. Expect carve-outs and adjustments.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Forcing tenants out and developers to sell their rentals will not be easy. Investors will also want to ascertain what the stipulation for the sell-off actually entails. Could there be an opportunity for investors to buy these homes, make cosmetic upgrades, and sell if the market is conducive? Will renting any sections of these homes through STR sites\u2014with the owner-occupant present\u2014be allowed?\u00a0<\/span><\/p>\n<p><em><span data-preserver-spaces=\"true\">Did you know that a BiggerPockets Pro membership comes with over $5,000 in potential annual savings through Pro Perks, including discounts on property management, banking, renovation supplies, and investor loans and insurance. <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/pro-membership\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Become a Pro today!<\/span><\/a><\/em><\/p>\n<\/p><\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/the-build-to-rent-strategy-could-be-in-jeopardy-as-lawmakers-push-back-on-new-legislations-7-year-sell-off-rule\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In This Article The dream Wall Street REITs had of owning vast swathes of purposely built single-family rental communities, stretching as far as the eye could see, has hit a snag. A new \u201cseven-year sell-off\u201d rule has many people wondering if the build-to-rent (BTR) phenomenon is over before it really began. A provision in the [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":19613,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2025\/03\/new-construction_canva-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-19612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/19612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=19612"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/19612\/revisions"}],"predecessor-version":[{"id":19614,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/19612\/revisions\/19614"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/19613"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=19612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=19612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=19612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}