The 21st Century ROAD to Housing Act became law last month the way bad ideas often do: quietly, and with a name that sounds like the opposite of what it does. At best, it is largely innocuous, and at worst, it will make America’s frustrating housing market even worse.

One provision stands out as particularly damaging: Section 1001, haughtily titled “Homes Are for People, Not Corporations.” Big companies, the argument goes, are buying up houses, and that’s why rent and home prices are so high. The section recycles President Trump’s executive order from earlier this year banning institutional investors from owning single-family homes, a tactic Democratic Senators Bernie Sanders and Elizabeth Warren have called for even earlier. While the ROAD Act’s exceptions and definitions of “institutional investor” and “single-family home” allow for some workarounds, its nice-sounding solution actually exacerbates America’s dysfunctional housing market.

The ban on institutional investors is as misguided as it is bipartisan. Such investors own a tiny percentage of the total single-family home inventory. Even in the metro areas where they are most concentrated, their share of total ownership doesn’t even crack the double digits. To blame them for high housing costs is, to put it kindly, a stretch.

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