This article originally appeared in the Phoenix Business Journal.
A pair of federal bills designed to help making housing more affordable could create the opposite effect, industry insiders say.
The 21st Century ROAD to Housing Act (Reauthorizing Opportunity, Accountability and Development) is a bipartisan legislative package aimed at lowering housing costs. The U.S. Senate passed its version in March and is awaiting approval of changes in the House, which passed its own affordable housing bill that same month with a similar name, the Housing for the 21st Century Act. The two bills could be on a collision course in a reconciliation committee.
“The [Senate] bill is trying to increase housing supply but risks undercutting one of the fastest ways Phoenix is actually delivering units,” said Adam Baugh, a land use and zoning attorney and partner at Withey Morris Baugh.
That fast way to deliver product, he said, is the wildly popular build-to-rent sector that started in Arizona and spread across the country, where single-family, detached homes are built within rental communities with shared amenities.
Phoenix led the country in BTR transaction volume in 2025, with nearly 1,500 units trading for more than $500 million, according to Northmarq’s newly released 2026 Build to Rent special report.
The Phoenix market accounted for more than 40% of all BTR completions in the West region in 2025, with more than 7,500 units delivered, according to the report.
But if this bill passes, the momentum of development will come to a screeching halt, Baugh said.
He’s already seeing deals pausing or changing course.
“Just today I had a BTR client change their entire plan to be triplex units instead of cottages and bungalows to avoid the potential impacts of the new law — if it were to be adopted,” Baugh said. “It’s having an immediate chilling effect on pending deals and plans right now.”
The National Multifamily Housing Council is encouraging members to contact their representatives to advocate against the bill.
There’s a section in the proposed legislative package that would require large investors owning more than 350 homes to sell or convert certain properties within a seven-year period.
Still, the developers who kicked off the entire build-to-rent phenomena believe their product would not be included in this proposed legislation.
“The bill’s focus on single-family home acquisitions by large institutional investors does not describe what we do,” said Josh Hartmann, CEO of Phoenix-based NexMetro Communities. “NexMetro is multifamily by every federal definition that matters. Our Avilla Homes communities are classified as multifamily housing under HUYD, FHFA and FinCen definitions. We do not acquire existing single-family homes. Just like apartments, our purpose-built rental communities are not taking away for-sale inventory from the American public.”
Todd Wood, CEO of Mesa-based Christopher Todd Communities, which started the doggie-door amenity craze in BTR development, said the bill was horribly written.
He agrees with Hartmann that the products that NexMetro and Christopher Todd Communities developed over the years is not the same as the single-family rental community that the bill is targeting.
“We’re excluded from this,” Wood said.
Even though Hartmann and Wood were at the forefront of the BTR industry, teaching municipalities how their product is zoned differently from a traditional homebuilder subdivision — where homes are individually owned — Wood said he’s separating himself from the BTR description.
“We have a multifamily product we call cottage horizontal apartments,” Wood said.
But attorney Baugh is concerned they actually are not excluded from the legislation.
“Unfortunately, the act defines single family homes as a structure that contains two or fewer dwelling units that are each intended for residential occupancy by a single household,” Baugh said. “Every NexMetro bungalow is essentially two or fewer dwelling units. Unintentionally, the bill would include his product type even if he thinks it does not. And that is my main criticism of the bill because I don’t think neither the House nor the Senate fully appreciate the unintended consequences it will have on the BTR industry that looks like NexMetro, Empire Group and others.”
The way BTR builder Wood sees it, homebuilders that sell their excess inventory to investors who rent the newly built homes could be impacted by this bill.
Traditionally, when a homebuilder is nearing sellout of a community it’s developing, the few remaining homes are sold to investors, who then turn around and rent out the homes, Wood said.
“That’s all going to go away if this bill passes,” Wood said, because investors would prefer to hold long term and not be forced to sell within seven years.
“The bill is just a disaster,” Wood said.
Under the new legislation, homebuilders could only sell those homes to investors with fewer than 350 units, said Sean Fergus, executive director of economic research for Zonda Home.
As for developers of rental communities, the new bill would have a significant negative impact on new home construction and supply at a time when the country needs it the most, Fergus said.
“Many companies in this sector are in the business of developing these communities with the intention of leasing them up until they are stabilized, at which point they sell them to long-term institutional holders,” Fergus said. “The bill effectively eliminates their ability to sell the single-family communities to these long-term holders. With no exit strategy, significantly fewer BTR communities will be brought to market.”
The build-to-rent and single-family rental provisions limiting ownership and requiring sales of newly built rental communities is poorly conceived, said Jim Belfiore, CEO and founder of Phoenix-based Belfiore Analytics.
“It will result in less housing supply and ultimately higher rental prices,” he said. “It will achieve the opposite of politicians’ purported goals of increasing housing affordability. Less supply would result in higher prices, period.”