Housing affordability remains a major challenge in the United States, and lawmakers are increasingly focused on the role large institutional investors play in the single-family housing market.

The concern is understandable. When private equity firms buy large numbers of homes, they may contribute to rising prices and make it harder for first-time buyers to compete. These issues deserve thoughtful solutions.

One proposal moving through Congress, the Renewing Opportunity in the American Dream (ROAD) to Housing Act, would restrict so-called “large institutional investors” from purchasing single-family homes. However, the bill’s definition may be broader than intended.

Under the proposed language, entities that own, invest in, or manage more than 350 homes could be affected. That could include not only large investment funds, but also newer platforms that allow everyday Americans to invest smaller amounts in rental housing.

These platforms differ significantly from institutional buyers. Through Regulation A offerings expanded by the Jumpstart Our Business Startups Act, individuals can invest modest sums into residential real estate and receive a share of rental income and returns.

This creates distributed ownership rather than concentrated ownership. If Congress aims to reduce market concentration, restricting platforms that broaden access to real estate investing may have the opposite effect.

The Jumpstart Our Business Startups Act was designed to expand investment opportunities beyond institutions and wealthy individuals. Restricting these newer models could unintentionally close a pathway Congress previously opened for Main Street investors.

If lawmakers want to curb excessive institutional ownership, legislation should be carefully tailored to target those specific actors—not teachers, nurses, and middle-class savers seeking diversified access to real estate.

Housing affordability requires more supply, better financing conditions, and balanced policy. Congress should be careful not to solve one problem by creating another.