On the ROAD Again
A little slopulism goes a long - and the wrong - way
Thanks to Team Italy, Team USA was almost bounced out of the group stage of the World Baseball Classic, but the following night, thanks to Team Italy, they were given new life. Elect an American Pope and all kinds of baseball-related miracles start happening. If it’s Friday, it’s Family Matters:
This Is Why We Can’t Have Nice Things: Detours on the ROAD to Housing
Who Will Get Stuck With the Bill?: State tax policy divergence and whether we’ll have tax sanity again
And The Oscar Goes to…Dad: This year’s nominees have a surprising focus on fatherhood
It’s Me, Hi: New policy brief on financially supporting new parents
Parting Shots
This Is Why We Can’t Have Nice Things
When the ROAD to Housing was first being considered, I described it as “not a home run ball, but it’s lots and lots of singles and doubles.” Unfortunately, recent changes have taken some of those singles off the board — and added in the policy equivalent of Team USA falling behind 8-0 to that noted baseball powerhouse Team Italy.
How did we get here? And why?
Last November, the Senate passed Sen. Tim Scott (R-S.C.) and Elizabeth Warren (D-Mass.)’s Renewing Opportunity in the American Dream (ROAD) to Housing Act. In December, Reps. French Hill (R-Ark.) and Maxine Waters (D-Ca.) introduced the Housing for the 21st Century Act, a less ambitious bill focused more on updating current programs than the Senate bill’s more comprehensive reforms, which the House passed by a 330-9 vote in February. In the meantime, President Donald Trump released an executive order seeking to curb institutional investors owning single-family homes.
This month, Senators Scott and Warren released the text of the 21st Century ROAD to Housing Act, which seeks to harmonize the House and Senate bills. The White House announced the President will sign the 21st Century ROAD to Housing Act so long as it includes the ban on institutional investor-owned housing and a prohibition of a central bank-created digital currency, a priority of some House Republicans. And, yesterday, the Senate passed the revised text by a vote of 89-10; it now goes back to the House in a bid for final passage.
Before we get to the strikes against the bill, let’s celebrate the best parts of it:
Lifting the cap on units in the Rental Demonstration Assistance (RAD) program, allowing public housing authorities to convert more units from traditional public housing into project-based Section 8 contracts, and improving public housing quality by tapping private dollars.
Tweaking Opportunity Zone criteria to give greater preference to housing
The Build Now Act, which will use Community Development Block Grant funding to reward cities that build housing at above-average rates
Updating treatment of manufactured housing, such as removing the requirement it be built on a permanent chassis and allowing for more experimentation with modular design
Expanding the number of projects that are exempt from NEPA review
Including some aspects aimed at helping low-income families progress towards self-sufficiency, including a pilot program to create interest-bearing escrow accounts and a HUD review of whether work requirements could be implemented on public housing
What got dropped from the original text? The zoning guidance and benchmarking that would have allowed HUD to publish federal requirements on what better supply-side zoning policy could look like. Gone, too, is the Build More Housing Near Transit Act, which would have given greater weight to projects that built new housing near public transit. The House’s language included a preference for community banks that also didn’t make the final cut, and drops some of its changes to multifamily lending, which could result in low-to-moderate income renters being worse off.
And then, of course, the pièce de résistance of contemporary horseshoe approaches to political economy — the ban on institutional investor ownership of single-family housing. As devoted Family Matters readers will recall, I remain fairly unimpressed with the arguments for the move. Institutional ownership of single-family homes did rise during the Great Recession, buying up homes that would have otherwise sat empty, and then experienced a temporary pop during Covid. But they have drifted back down, and on the whole, make up a small share of the total single-family housing stock — most “investor-owned” single-family homes belong to small “mom-and-pop” landlords, who are somehow exempt from all the memes about “BlackRock1 buying up all the housing.”
And on a metro level, there is just vanishingly little evidence that institutional ownership corresponds to house price increases; indeed, Sun Belt cities with that tend to be among the more affordable metro areas tend to boast above-average shares of investor-owned housing.2 (See last year’s report, Home Improvement, for more on these dynamics.) As Parcl Labs’ Jason Lewris and Lucy Ferguson found last month, “Investor purchase activity has already been falling since rates rose in 2022, before the current administration took office.
The ban would restrict a behavior that the market has been curtailing on its own for years.” Those who want to pin housing unaffordability on hedge funds are letting vibes dictate their economic policymaking. They are trying to sell preventing hedge funds from “stealing the American dream” as a “massive victory,” a “litmus test” to see how is truly serious about making housing more affordable. If that is what they really think, they will be disappointed in the results.
If it was just signaling, it wouldn’t be so bad. When the White House first announced its approach, for example, it took particular care to mitigate some of the foreseeable impact on the market. The President’s executive order specifically exempted the section of the investor-owned market known as “build-to-rent,” in which developers that construct new homes for the purpose of renting them out on their own, or selling them to institutions to do so. Because of the strong demand for single-family rentals, growth in this category had been robust in recent years — according to one analyst, the sector “now accounts for nearly 10% of all home builds, a stark rise from 3% just a few years ago.”
The Scott-Warren bill does not include an exemption like the executive order. Instead, it goes even further, forcing all institutional investors (defined as those with a portfolio of over 350 units) to convert their rental homes to owner-occupied units after a seven-year window. That would essentially kill this market segment — very few firms would be able to recoup their investment in such a short window, particularly when facing the risk of being forced to sell into a market downturn. As John Arnold of Arnold Ventures wrote, “Restricting what new capital can do with homes it builds will result in less housing, undermining the bill’s purpose.”
In other words, in exchange for cutting out the roughly 0.7% of homes currently held by institutions with 350+ units in their portfolio, the bill would be cutting off an increasingly important pathway to increasing family-friendly housing supply overall. Per the John Burns research firm, there are 160,000 such units coming online soon thanks to build-to-rent.
Remember, this isn’t private equity firms outbidding families for existing homes; it’s leveraging private capital to build homes, a meaningful share of which wouldn’t otherwise exist. At his Substack, Kevin Erdmann argues that build-to-rent single-family homes exist because “there is essentially no market for increased homeownership above current trends under current lending conditions.” Going after an increasingly important chunk of new housing supply because we don’t like the people who own the business will not magically make it easier for other, different single-family projects to pencil out.3
But for progressive economic populists, freezing out investors altogether itself is the goal, no matter what it does to the ultimate goal of making housing more affordable. The Wall Street Journal editorial board suggests that the text came from Senator Warren’s team, with the Trump team demanding expansive discretion for the Treasury Department “because they realize [the potential for] problems in the housing market.” But relying on an executive branch backstop to fix a badly-written law only works so long as you are confident you will hold the executive branch.
It would be far better for Congress to tweak this provision to more closely align with the White House’s more tailored approach to meeting the President’s policy goal. On Wednesday, White House spokesman Davis Ingle told reporters the President will “sign bold new executive orders on housing in the coming days,” suggesting machinations in the offing. It seems likely a conference committee will need to resolve differences between the two chambers, and members of the House, who are already unhappy about other changes made to the bill, should absolutely make a fix to this provision part of what it takes to get to yes. If the final bill doesn’t, at the very least, exempt build-to-rent, the 21st Century ROAD to Housing Act will end up working against itself, cutting off one proven way of getting new housing online while using carrots and sticks to try to induce it elsewhere.
Reason magazine’s Christian Britschgi says the “effective build-to-rent ban will almost certainly destroy more new homes than all of the pro-supply tweaks in the bill will create.” That seems like an overstatement; the rest of the modest singles in the bill likely still outweigh the effective ban on build-to-rent, but it’s a much closer call than if the Senate language had been drafted with more care.4 There’s enough good stuff elsewhere in the bill that letting one counterproductive provision bring down the whole thing would be a real loss.
But there’s little more depressing than watching a bill that includes a lot of modest good ideas be outweighed by a bad idea written without thought given to predictable downsides. The whole interlude illustrates the dangers of “slopulism”; the vibes-based approach to policymaking that indulges in cheap gestures rather than tackling the real factors underlying our economic problems. What’s dangerous about it is that it feels like a cheap win, with invisible downsides — it’s not like a ban on investor-owned housing will be a visible and hotly-contested sign of arrested progress. It will just become just one more hurdle that gets in the way of addressing the crisis of housing affordability.
Everyone agrees that scapegoating Wall Street can be a politically effective tool. But when the hunt for convenient villains threatens to undermine the overall intent of bipartisan legislation, it’s fair to ask just what we’re doing here. Some of it may just be mood affiliation, as Matthew Yglesias alleges, based in little more than the sense that mom-and-pops are good and corporations bad (despite a growing base of evidence suggesting that renters benefit from the economies of scale of larger chains).
How else can you explain people blaming “hedge funds for stealing the American dream” when Sun Belt metros like Tampa, Dallas, and Charlotte remain relatively affordable, despite their above-average share of investor-owned housing stock and growing prevalence of build-to-rent? Are there concrete reasons why we should prevent investors from building single-family homes to rent, even though no one serious would suggest preventing them from building an apartment to rent out instead? Or are there specific negative externalities from allowing the new building of homes to rent that we should be legislating against? Those arguments have yet to be made in a rigorous way — because they can’t be.
Who Will Get Stuck With the Bill?
My past and future collided earlier this week, as the legislature of South Carolina (proud home of Family Matters) voted to pursue lowering the state’s income tax to 1.99% (and eventual potential elimination) within the same 24-hour span that the Washington (our ancestral home) state legislature voted to impose a new state income tax on households making $1 million or more (the same, it should be noted, for married and single earners — and they say progressives don’t hate marriage!)
This happened the same week as Sen. Cory Booker (D-N.J.) introduced his “Keep Your Pay” plan, which increases the standard deduction to $37,500 for individuals and $75,000 for married couples (at least he recognizes the existence of marriage penalties!) It’s an approach that rewards high-income families most of all, given that most families at or below median income have little federal income tax liability in the first place. As Conor Sen put it on Twitter, “a policy that optically helps working-class families but in practice benefits upper-middle class families nails the sweet spot for the Dem coalition in the mid-2020s.”
There are some commentators on the right who believe America is overtaxed across the board; they at least tend to be arguing in good faith, even if the delta between our spending commitments and our tax revenue continues to grow. Then there are some on the left who seem to agree that America is overtaxed except for the top 1 or 2 percent of earners, who should be soaked to pay for all the social welfare state goodies that Europe has. The problem being, of course, that Europe does not, and the U.S. cannot, rely on extremely progressive tax system soaking high earners to pay for that level of social spending. As the Washington Post editorial board summed up, “there simply are not enough rich people to sustain the spending they desire.”
This dynamic was summarized succinctly in a good post from Jared Walczak at the Tax Foundation, at his Substack The SALT Road:
“For those on the right, pursuing policies that exempt many voters from formerly broad-based taxes will make it harder to keep rates on remaining taxpayers in check. It’s surprising that more conservatives aren’t wary of this, and perhaps less surprising that many progressives are okay with it.
“But for the left, convincing voters that middle-class families shouldn’t pay taxes is playing with fire. There’s no realistic level of tax on the wealthiest households that can fund their preferred size of government—or indeed our current size of government—for very long if taxes are reimagined as a penalty on the rich…
“[P]ublic finance will be far more precarious if policymakers of all stripes reconceive taxes as penalties and convince the public that taxes are something only other people should pay.”
For the left, at least, there seems to be some opposition in watching their preferred candidates try to outflank Republicans at the tax cut game. As Bharat Ramamurti told the Wall Street Journal’s Richard Rubin, “It is hard to make the case that a multitrillion-dollar middle-class tax cut should be at the very top of the agenda.” But given the contours of their realigned political coalition, Democrats have little else to offer beyond the political appeal of lower taxes on you and higher taxes on them (where “them” is defined as households making more than $250,000 or $400,000 a year, depending on your Democratic standard bearer.)
Republicans, on the other hand, offer lower taxes for everyone, and even lower ones for politically favored groups. It’s a “guns and butter for everyone!” stance that is hard to run against — at least so long as the fiscal picture doesn’t get too dire… Whether either side blinks before the fiscal house of cards collapses is worth exploring another day.
And the Oscar Goes to…Dad
The Oscars are Sunday, and one theme has gone under-discussed in this year’s crop of nominees: 2025 was the year of Movie Dads!
The majority of this year’s ten (still too many!) Best Picture nominees featured surprisingly explicit meditations on fatherhood. In Chloe Zhao’s Hamnet, Paul Mescal plays a despondent William Shakespeare, affectingly, if anachronistically, channeling the loss of a son into artistic greatness. Frankenstein offered Guillermo del Toro’s Gothically weird take on that creation myth. The titular ping-pong competitor played by Timothée Chalamet in Marty Supreme seeks to avoid paternal responsibilities while chasing his dreams of sporting glory across the globe. The foreign film Sentimental Value, directed by Joachim Trier (who also directed 2021’s criminally underrated The Worst Person in the World), is about two Norwegian sisters reconciling with their father. F1 featured action scenes as heart-pounding as its plotline was predictable, but it, too, reflected on a form of legacy, with Brad Pitt’s older race car driver acting like a surrogate father, taking a younger driver under his aged wings to teach him a thing or two about loyalty and commitment.
Then there’s the two biggest favorites to win the Best Picture award. Sinners, Ryan Coogler’s blues-music-meets-zombies thriller, which treats family as a source of generational trauma.5 We learn that one of the twins played in a dynamite dual performance by Michael B. Jordan killed their father to protect the other, and that the death of a child led to a marriage that falls apart. A young boy, Sammy, lies to his father to be able to play at the new juke joint, and their relationship, it is suggested, never heals. But it’s Hollywood playboy Leonardo DiCaprio playing a bona fide GirlDad who gives the most interesting treatment of fatherhood in One Battle After Another. Beyond its sympathetic treatment of 70s-style violent radicalism, it’s a countercultural affirmation of presence, protectorship, and commitment.
A good year for dads at the movies, and for the movies overall. One Battle is my pick to win, beating Sinners both because of its uncanny political resonance and the fact that Academy voters will want to give Paul Thomas Anderson the equivalent of a lifetime achievement award.
It’s Me, Hi
Trump Accounts will put $1,000 in a modestly tax-advantaged account that new parents can look forward to their children benefiting from decades hence. But that does little to support families having kids today. Upfront assistance for new parents — a “baby bonus” — could be provided around the time they receive their new bundle of joy’s Social Security card, and make it easier for more families to start parenthood with stability. And, as a new brief I published at EPPC shows, it’s popular, too:
Parting Shots
A new report from my EPPC colleagues Ryan Anderson and Jamie Bryan Hall suggests that complications associated with the abortion pill rose after the FDA removed the requirement that women wanting a chemically-induced abortion meet with a physician in-person (EPPC Fact Sheet)
Absolutely stunning reporting from Christopher Weaver, Tom McGinty, and
Anna Wilde Mathews on how a push to broaden support and subsidies for behavioral therapy for children on the autism spectrum has led to multi-million dollar paydays for providers willing to upcode and prescribe highly intensive regimes regardless of the clinical need (Wall Street Journal)
While I appreciate the enthusiasm behind Kristan Hawkins’ claim that “Trump Savings Accounts represent the newest example of how to financially support children at all stages of LIFE,” it seems unlikely that a tax-advantaged account aimed at increasing retirement security decades hence will do much to help women facing an unplanned pregnancy today — pro-lifers need to push for more upfront assistance, like the aforementioned baby bonus. (Townhall)
Tahra Hoops at The Rebuild has written a policy document for progressives interested in sharpening their approach to housing, health care, energy, and family. I would quibble with some of the legislation included — some are clearly demand-side subsidies wrapped up in supply-side clothing — but the energy is interesting and worth watching. (Chamber of Progress)
11 SUNY community colleges will be expanding child care support for parents who are enrolled in community college classes, per a release from New York Gov. Kathy Hochul.
States — red, blue, and purple — want to help families, reports Rebecca Gale. Could more state-level Child Tax Credits be in the offing? (The 74)
“[M]any Americans are disquieted by the pervasiveness of vice and its harmful effects….perhaps a well-organized group of citizens could convince them not just to stop but to turn back.” Sign me up, Charles Fain Lehman! (City Journal)
Helen Roy reviews a new book on the relationship between Christianity and feminism (First Things)
Ramesh Ponnuru argues that age limits on social media can complement, not substitute for, parents’ rights to raise their children as they deem best, citing the work of my EPPC colleague Clare Morell (Washington Post)
Clare Ath makes the case for social conservatives to care about supporting working parents: “The goal here isn’t to replace immediate family or community support with government. It’s to remove unnecessary barriers that make family formation financially perilous. Smart childcare reform can expand options for those who need them most. If we want stronger families, a healthier economy, and a culture where moms don’t feel forced into abortion by their circumstances, we cannot ignore the role childcare plays in all three.” (Daily Wire)
Comments and criticism both welcome, albeit not quite equally; send me a postcard, drop me a line, and then sign up for more content and analysis from EPPC scholars.
It’s Black-STONE
Atlanta is the big exception here, though it is facing other, bigger supply-side barriers as it starts to strain against the limits of just how much sprawl one Southern city can handle.
This was a particularly clear explanation from Ben Miller of Fundrise.
Sen. Warren herself suggested that the provision was drafted to “block private equity from taking over the single family home, and that is quite deliberate,” per the Huffington Post’s Igor Bobic.
The themes of intergenerational suffering and connection come out most strongly in a barn dance sequence in which ghostly musicians from across the millennia emerge to turn the whole scene into a kind of seance; I’d happily rewatch Sinners for that (plus the zombies singing “Wild Mountain Thyme”) alone
Increasing the standard deduction is always a win, and not likely to help blue state UMC.
Blue states have the salt deduction as well as a variety of other deductions they are very good at getting into tax laws and navigating.
The bigger the standard deduction gets the less it makes sense to itemize and the value of all these deductions goes to zero.
Republicans should embrace hikes to the standard deduction wherever they can.