FOR THE FIRST TIME in decades, the federal government is seriously wading back into housing policy, but most experts say its impact on high-cost Massachusetts, where leaders are desperate to see more housing built, will probably be modest.
A new bipartisan housing law includes financing reforms and zoning incentives that could chip away at some of the many barriers to building in Massachusetts. The flashy provision that has drawn the biggest headlines, however — limiting institutional investors from snapping up lots of single-family homes — is not likely to have much impact here.
The 21st Century ROAD to Housing Act became law without President Trump’s signature this month. Though he had eagerly touted the bill in the run-up to its passage, Trump declared just before a scheduled signing ceremony that he wouldn’t sign it until Congress passed his unrelated election reform measure. But he didn’t veto the bill, so it became law 10 days after it was passed.
A centerpiece of the bill is a ban on institutional investors who own more than 350 single- family homes buying more units, a provision that backers say will lessen the squeeze on the homebuying market.
US Sen. Elizabeth Warren, one of the bill’s champions, hailed the new investor rule as a significant reform.
“This bill, for the first time ever, says to private equity, ‘You do not get to come into our neighborhoods, buy up all the housing, turn us into a nation of renters,” Warren said on GBH News radio in June. It is, she said, the “first bill ever to say no to private equity.”
But local housing experts point out the rule takes aim at a dynamic that has reshaped Sun Belt metros like Atlanta and Phoenix far more than it has many other areas of the country, including Greater Boston, where large-scale investors buying single-family homes is not an issue.
While some regions may feel some relief, the provision is a “big nothing burger” here, said Adam Ploetz, manager of housing and neighborhood development at the Metropolitan Area Planning Council, a regional planning agency serving Greater Boston.
Warren herself acknowledged that the sprawling bill is a long-term play that will produce incremental gains, including those driven by its financing changes and an array of carrots and sticks to encourage upzoning. Massachusetts is trying to get 222,000 housing units built by 2035, and other states are dealing with their specific combination of building barriers and unit shortages.
“The way I would describe every part of this bill is it just moves us in the right direction,” Warren told GBH hosts Jim Braude and Margery Eagan. “It’s not going to be an overnight change. But it also is the federal government for the first time in like pretty much forever saying something besides, ‘damn, the price of housing is going up!’”
The handful of provisions that Massachusetts housing officials and researchers say could actually grind down the state’s overwhelming shortage are far less buzzy than the investor restrictions.
Andrew Mikula, senior housing fellow at the Pioneer Institute, praised the law’s elimination of the permanent chassis requirement for manufactured homes. Manufactured homes are built on a steel undercarriage, which can cost as much as $13,000, designed to allow them to be moved.
But most are never moved once they are put in place. Removing that requirement could cut construction costs by thousands of dollars.
This is one instance where the law’s changes, though a good step, are “not very tailored to Massachusetts related-housing concerns,” Mikula said. “The bill nibbles at the edges on a number of process and regulatory standards,” which “disproportionately” affect other regions more than the Northeast.
Manufactured housing is concentrated in the South and Midwest. Massachusetts has roughly 250 manufactured housing communities serving about 35,000 residents, many of them older or fixed-income homeowners in age-restricted parks.
Mikula said about two-thirds of Massachusetts communities ban the housing type outright, limiting how much the federal change could do in the state.
Rachel Heller, executive director of the Massachusetts Housing Partnership, pointed to an investment provision in the bill as potentially the most consequential Bay State change. It increases, from 15 percent to 20 percent, how much of their assets banks can devote to public welfare investments like affordable housing.
That pool of capital funds low-income housing and new markets tax credits. “When you have banks reaching the limit on what they can invest, that means less resources going in,” Heller said.
With the increase, “we can see more demand for those credits,” she said. “That gives our developers more ability to create more affordable housing to make the numbers work.”
Housing experts point to a survey of mid-size banks that found this change could create a $4 to $4.5 billion increase annually in investment activity nationally.
Massachusetts housing experts also highlighted a change in how communities can spend federal block grants. Community Development Block Grants, flexible federal funding cities and towns have received since 1974, could historically only be used to rehabilitate existing buildings but not build new ones.
Municipalities can now direct up to 20 percent of their annual block grant allocation toward new construction. Ploetz, the Metropolitan Area Planning Council manager, said there are dozens of grantees that have not been able to spend millions in block grant money fast enough on allowable rehab projects
“This basically opens up a spigot that has been closed off,” he said. “It’s never even been a spigot.”
A related provision cuts a community’s allocation by 10 percent, after a three-year grace period, if its housing production lags. That money gets redistributed to faster-building communities.
Ploetz said the provision targets “high-cost communities with low housing production,” a description that he said fits most of Massachusetts.
Several sections of the new law, advocates say, will likely only ease cost pressures down the line.
Heller and Ploetz pointed to a section that would allow the US Department of Housing and Urban Development to review the implementation of the Build America, Buy America Act, which requires materials like steel used in federally funded infrastructure projects to be produced in the United States.
“It can be a real challenge for housing developers to be able to get all the materials that they need here in our country,” Heller said, “and so, being able to have HUD review that and consider ways to help housing production move forward when materials are not readily available is really important.”
State officials describe the federal law as something of a reinforcement for policies Massachusetts already has underway.
Officials pointed to a list of overlapping state efforts already in motion, including the 2024 housing bond bill, statewide legalization of accessory dwelling units, and the MBTA Communities multifamily housing law.
They said the federal law’s new database of underused public land parallels the state’s own State Land for Homes effort. Its zoning and permitting incentives, they said, echo the MBTA Communities law and existing by-right ADU rules.
One major downside, housing experts noted, is that bill largely stays away from infusions of new funding, with the exception of a seven-year $200 million annual competitive grant program for local authorities that demonstrate measurable increases in housing supply.
As for what could have been included, there is more room for the federal government to invest in public housing, said Ploetz, describing it as “a model of housing assistance that has been marginalized at best [and] excoriated at worst by policy makers on both sides of the political spectrum for decades.”
Jim Rooney, president of the Greater Boston Chamber of Commerce, agreed. The state’s housing bond bill included funding to bring 10,000 public housing units back on the rolls that are out of the state’s inventory, “just because they were left to decline,” Rooney said.
He said he would welcome “something complementary to that” on the federal side, “that would supercharge either bringing back on the rolls, or updating, or remodeling, or doing what needs to be done for what exists as public housing.”
Rooney said he remains wary of federal intervention in local zoning, even where it might speed up housing production.
“I’m hesitant, in the spirit of maintaining state-level control, to suggest … the federal government [impose] housing development regulations that usurp the states’ rights,” Rooney said.
The much-touted institutional investor change, state housing experts say, takes aim at a real concern for Massachusetts communities but misses the mark.
The state’s cripplingly low rate of available homeownership and rental options are both driving up costs, and seasonal communities like the Cape and Islands are very concerned about investors buying limited homes and renting them for exorbitant rates in the summer months. But the provision takes aim at the lack of homeownership options rather than rental prices.
MAPC’s research into investor purchases has found the Bay State’s investor activity concentrated among small and midsize buyers rather than large institutions. A national mapping project from the Lincoln Institute of Land Policy found similar unevenness: corporate ownership is real and growing, but not spread evenly across the country.
Ploetz noted the bill might preserve some single-family homeowner opportunities, but it does not address the major investor-owner issue in the Bay State.
“I think the real problem in Massachusetts is large institutional investors purchasing rental projects and jacking rents up on what is more often than not low-income populations,” he said. In some ways, he said, the new law’s exemptions for newly constructed homes intended for rent or renovations to rent, signals that “it’s okay to screw renters.”
In Greater Boston, “it’s like 0.2 percent of single-family homes that are owned by institutional investors,” said Mikula, citing 2024 data. Mikula called the restriction more a win for “populist-minded politicians” than a meaningful change in Massachusetts.
Despite the law’s uneven fit with Massachusetts’s specific housing pressures, housing leaders said its passage matters mostly because it signals renewed federal engagement in housing after decades of near silence.
“It’s a couple of different strategies at play here,” Heller said, “but more so on the ‘let’s remove barriers, let’s make it easier’ side, and that cannot be understated.” At all levels of government, friction between zoning, permitting, financing, and bureaucratic processes can slow new production, she said.
“So any streamlining that is done, anything that that makes that work easier,” she said, “actually helps to move our housing forward.”
