Politicians should push deregulatory initiatives – not investor limits – to boost housing affordability
Both President Trump and Democrats in Congress seem to blame the high costs of housing on certain groups of real estate investors and to restrict their ability to purchase homes. In Tuesday night’s State of the Union address, Trump asked Congress to “ban large Wall Street investment firms from buying up in the thousands, single-family homes.” Meanwhile, some Senate Democrats have introduced a proposal aiming to reduce private equity and other investor ownership of homes by ending tax deductions – in the proposal’s words “for buying up housing of any kind” by these groups.
As I’ve stated previously, ideas like these won’t increase access to home ownership and will cause further harm to housing affordability.
Fortunately, there are many deregulatory initiatives backed by members of both parties that would make it easier for Americans to obtain and maintain affordable housing. Some of these proposals are part of the Senate bill S.2651, the Renewing Opportunity in the American Dream (ROAD) to Housing Act and the House bill H.R. 6644, the Housing for the 21st Century Act, both of which passed their respective chambers with overwhelming bipartisan support. Two of these populist deregulatory ideas would make both good policy and good politics.
Ending the “chassis rule” that blocks construction of manufactured homes
As my colleague Steve Swedberg has written, this long-outdated rule mandates that manufactured homes be built on a permanent chassis – or steel frame – for reasons having to do with transportation safety. As most manufactured homes are not moved around today, this rule no longer serves its purpose yet still adds tremendous costs to manufactured housing production.
Repeal of this rule, a provision of both the House and Senate bills, would have an immediate effect by reducing prices of manufactured homes. As Steve writes:
Removing the chassis from construction costs could lower the price of a manufactured home by 4 to 8 percent. For a first-time buyer or a working family, those savings could be the difference that encourages them to purchase a home.
Steve also notes that the University of Texas found that before the 1974 chassis rule, almost one in three new housing units was a manufactured home. By 1980, this declined to one in ten homes. “Allowing manufactured homes to be constructed without this constraint would broaden where and how manufactured housing can compete with site-built construction, which could increase housing supply further,” he concludes.
Reducing regulatory barriers to new – or de novo – banks
The House bill’s deregulatory measures on de novo banking are vital first steps in tackling the dearth of new banks and credit unions and a welcome sign that both parties recognize this as a problem for everything from housing to small business capital formation.
As I have written, only 54 new banks had been approved from 2010 to mid-2025, compared to more than 100 new banks annually in prior decades. This lack of competition in the banking sector is creating harmful voids in which many small businesses and consumers can’t find banks and credit unions to meet their needs.
Lifting regulatory barriers to de novo banks, as the bill would do, would inject much-needed competition into the banking system. This competition – especially if paired with repeal or relief from Dodd-Frank and other red tape crushing community banks – would lead to more banks offering more products tailored to the specific needs of borrowers and savers in their area. These new options would make it easier overall for consumers to build savings and obtain home loans.
There are more provisions in these bills and other pending legislation – such as H.R. 6955, the Main Street Capital Access Act introduced by House Financial Services Committee Chairman French Hill (R-AR) and Financial Institutions Subcommittee Chairman Andy Barr (R-KY) – that advance housing affordability through removal of longstanding and outdated regulatory barriers. CEI will highlight more of these deregulatory provisions soon.
Politicians in both parties should oppose socialist limits on property ownership and embrace free-market proposals to advance opportunities in the housing sector.