We have a new federal housing law called the 21st Century ROAD to Housing Act and it aims to increase housing supply, restrict large corporate home buyers, and reform federal building rules. It became law on July 11, 2026, following bipartisan congressional approval.
You might be wondering how this new housing bill could impact Colorado. Of course, time will tell as to how items in this bill are implemented and how municipalities do or don't take advantage of some of the provisions. Read on below for an explanation of key provisions and how we see this bill could impact our local market.
So what is in this bill? Here are the key provisions of the ROAD to Housing Act:
- Investor Restrictions: One of the most talked about provisions in the bill limits large institutional investors who already own 350 or more single-family homes from buying additional properties. The goal here is to limit investment from large institutional investors so regular homeowners don't have to compete.
- Supply & Zoning Incentives: The bill creates a $200 million annual grant program for local governments that show measurable increases in housing construction and zoning reforms.
- Streamlined Building: The bill simplifies environmental review processes for small and infill housing projects. There is also a provision that could help streamline the permitting process for homeowners who want to build ADUs (Accessory Dwelling Units) by allowing municipalities to pre-approve sets of building designs so the permitting process is more efficient.
- Manufactured Housing: One stipulation removes the permanent chassis requirement for manufactured homes to lower production costs.
- Commercial/Office Conversion: The bill creates a grant program to help local governments convert vacant office and commercial buildings.
So how might these provisions impact our area?
The reality is that most of the provisions in this bill aren't applicable in our area. Let's break it down.
Regarding the limitation on institutional investing (arguably the part of the bill that has gotten the most attention), that is not a sizable piece of our local market. This is likely due to our higher than average home prices and varied housing stock. In 15 years, Ken and I have not had a large institutional investor buy one of the listings we had for sale. While this piece of the bill may have a greater impact in different parts of the country, we don't see this as being impactful here. According to Realtor.com:
- Institutional investors (defined in this report as those who have made more than 350 single-family purchases since 2015) account for a very small portion (1%) of total single-family home purchases nationally. Even at their peak, they comprised just 16% of all investor purchase activity from 2015 to 2025.
- Taking a lower threshold does not change the overall story: Investors with 100 or more purchases account for just 1.7% of single-family buyers over that time.
- Most investor activity is driven by small, mom-and-pop investors (those with fewer than 10 purchases), who now make up over 60% of all investor purchases, up from 50% in 2021–22.
This is the same with regard to eliminating the permanent chassis requirements on manufactured homes. Again, this is a small part of our market and unlikely to result in large changes in our area.
Assisting local governments in converting commercial and office building spaces could impact some large buildings in downtown Denver but it isn't easy to convert commercial and industrial spaces for residential use, and the costs are typically prohibitive. These buildings are typically not set up with the appropriate plumbing and electrical systems and layouts and window locations aren't ideal. So while there could be a number of projects that could be helped from this stipulation in the bill, it's hard to imagine this having a large impact overall. It is usually more efficient for builders to build residential homes from the ground up rather than try to convert an older building.
Helping municipalities streamline processes for adding accessory dwelling units could help some homeowners. The bill allows municipalities to provide homeowners with pre-approved designs for ADUs and this could lower the planning, permitting, and design costs. We envision this benefit to be modest. Some of our clients do have an interest in adding an ADU for a parent, college-age kid, or as a rental producing part of their property. However, it isn't the permitting process or planning costs that usually deter them. It's zoning, the cash out of pocket needed for building, as well as HOA and land limitations that usually hinder their plans.
As far as the federal grant program for communities that show measurable success in streamlining building, this is one that is hard to predict. We may see municipalities able to take advantage of this program by greenlighting more projects, however, more development will always run up against practicalities and friction in our area. We know there is lots of concern about traffic, parking, water, and infrastructure, already.
In our estimation, there could be some modest changes resulting from this bill, however, most of the things that make housing expensive in our area aren't going anywhere. Interest rates are still a concern to many buyers, housing prices remain elevated (although they have come down a bit since their COVID era highs), and property taxes and insurance aren't addressed in this bill. The bill also won't eliminate communities' concerns about water, traffic, and environmental impacts.
Of course, this bill is complex and different communities may implement parts of this bill in different and unexpected ways. Maybe there will be some creative projects that come out of this. Time will tell! As always, we will be observing and reporting back to you!
Until next time!
Allison and Ken
Sources:
NPR: Largest housing affordability bill in decades becomes law without Trump's Signature
Inside the Deal: What's in the Final 21st Century ROAD to Housing Act
The Shrinking Institutional Investor Footprint: National Trends and Local Concentration
