Housing proposal threatens build-to-rent business model

A bipartisan housing proposal in the U.S. Senate could reshape the rapidly growing single-family rental market by forcing large institutional investors to sell newly built rental homes within seven years, The Wall Street Journal writes. 

Supporters say the measure would help expand homeownership by preventing deep-pocketed investors from holding large inventories of houses that might otherwise be available to buyers. 

But builders and investors warn the provision could undermine the “build-to-rent” business model that has expanded across the country in recent years. Industry groups argue the requirement would make it harder to finance new housing developments and could ultimately reduce the number of homes built, potentially driving up both rents and home prices. 

The provision is part of a broader housing package that also seeks to limit institutional investors’ role in the housing market. The Senate could vote on the legislation soon, though the House passed its own housing bill without similar restrictions, setting up possible negotiations between the chambers. 

Read the full story from The Wall Street Journal.