The Retired Investor: A New Road for Housing

You may have missed it given all the geopolitical turmoil, wildfires, and so on. Congress passed a bill this month that some call the most significant piece of housing legislation in almost 40 years. It is called the 21st Century Road to Housing Act.

 

It is remarkable for a variety of reasons. It is a bipartisan effort by both houses of Congress, which the president refused to support or sign. It became law anyway (a first). The legislation encompasses 50 measures, a hodgepodge of ideas from both sides of the aisle. The intent is to relieve the scarcity of affordable housing for a generation of low- and middle-income Americans.

 

Homeownership has long been a cornerstone of the American myth. For so many of the younger generations, it has become hopelessly out of reach. In many urban centers, a typical starter home can now command almost $1 million. Home prices have increased by 54 percent nationwide, and even if a young couple could scrape up enough for a down payment, the monthly costs of owning a home have also skyrocketed.

 

A report by the Joint Center for Housing Studies at Harvard reveals that the monthly cost of a median-priced home was $3,120 in the fourth quarter of 2025. Today it has jumped to $3,200, including mortgage payments, thanks to inflation and a variety of other costs. From 2019 to 2025, property taxes gained 31 percent, insurance premiums rose 72  percent, and interest rates on mortgages are above 6 percent and continue to increase. Overall, monthly costs have risen 46 percent since 2019. No wonder the homeownership rate last year fell for the second year in a row! No surprise that the largest decrease was in those under the age of 35.

 

In past columns, I have written at length about the plight of our youngsters. They are strapped with student debt, a weaker job market (thanks to AI and other factors), and are still living with family in basement apartments or their old bedrooms. There is little affordable housing being built to answer the needs of our younger generations. The new bill aims to remedy that problem.

 

It does so mainly by loosening local building regulations while encouraging building. In some cases, it offers areas that build more housing to receive a bigger share of federal funding while cutting money from areas that don't. On the lending front, the act reduces regulations around rural community banks, where most lending occurs in the small mortgage market of less than $100,000.

 

It also discourages the practice of private equity firms that buy up huge swaths of single-family homes. Critics argue that practice reduces the housing stock and forces many would-be buyers to rent instead. It allows investors to hold onto houses they already own but prohibits any future purchases that would bring their holdings above 350 homes.

 

Ask any builder, and they will tell you regulations are the bane of their existence. Red tape, they complain, adds delays, unnecessary costs, and huge headaches for builders and buyers alike. It won't happen overnight, but the act will loosen federal regulations, making it easier and cheaper to build housing at lower prices. It also relaxes lending rules, but probably the most important change is just a tiny tweak to a 50-year-old law.

 

Until now, mobile homes or manufactured homes were required to have a permanent chassis — that's the under-frame that is used to transport the house and must be left attached. It no longer needs to be attached. Those steel chassis can now be reused, saving anywhere from $5,000 to $10,000 toward the price of the house. That may not seem like much, but it is in the world of manufactured housing.

 

Remember, the bill is addressing affordable starter homes for buyers priced out of the market. Manufactured housing can cost anywhere from 27 percent to 65 percent less than houses built on site. When you consider the average manufactured home costs about $135,000 to build, a $10,000 reduction in costs would go a long way if the builder passed that savings on to the first-time home buyer.

 

Now, before you hold up your hands in horror that America will soon become a nation of trailer parks, settle down. Let's take a closer look at manufactured housing. They are built in factories like automobiles, and as such, economies of scale are at work. They use standardized materials and centralized purchasing. Weather isn't an issue, nor is a shrinking labor supply (due to immigration policies).

 

Getting rid of a huge, cumbersome steel frame under the house both saves money and opens a whole new set of possibilities. We could see multi-story versions or houses that are designed to be lower to the ground. Basement installations would be possible and cheaper as well. It could radically change the whole stigmatized trailer park environment we grew up with. The act also provides grants to communities to repair some of those dismal parks that have become eyesores in many neighborhoods.

 

There are too many parts to this legislation to cover thoroughly in the space I have allotted. Is it a panacea for filling the multi-million home building gap we are experiencing today in the U.S.? Not entirely, but it helps. It does set up the conditions to increase the country's housing supply, expand home ownership, and bolster community development programs.

 

It is not an instant cure. Although federal regulations on home construction are being relaxed, there are a myriad of local zoning laws and building regulations that need to be addressed as well, especially in the manufactured-home segment. And the legislation does not address two of the largest issues in the real estate market right now. High mortgage rates and the 54 percent increase in home prices over the past five years.

 

President Trump refused to sign the bill, which automatically became law on July 11. He said he would only sign the bill, which he dismissed as "a big yawn" and "of minor importance," unless Congress passed his pet legislation, a strict voter ID bill, called the SAVE America Act. Even his most partisan allies in Congress could not muster the votes that, if passed, would require proof of citizenship to register to vote and photo ID to cast a ballot. In a mid-term election year where affordability is of critical concern to voters, the president's decision on housing is right up there with his handling of the Iran war.