Housing affordability has emerged as a defining political issue heading into the 2026 midterms, with more than 80 percent of Americans saying it is a problem in their communities. The challenge is especially acute in states like Montana, where home prices have surged over 66 percent since the pandemic, pushing ownership out of reach for many working families.
Congress took a significant step last year with the passage of the 21st Century Road to Housing Act, a bipartisan package designed to expand supply, modernize federal programs, and address widespread frustration. Former Sen. Jon Tester (D-Mont.), who served on the Senate Banking Committee until his departure in 2025, called the law a rare example of lawmakers listening and adjusting to produce better policy.
The bill's most debated provision caps the number of single-family homes that Wall Street investors can buy, but it stops short of barring professional housing providers from building or refurbishing rental properties. This balance was critical, Tester argued, because an earlier version that would have blocked new single-family rental construction risked chilling the market. The Urban Institute estimated that such a restriction could reduce rental unit construction by at least 72,000 annually, while Pew urged lawmakers to reconsider the mandate.
"When the goal is to make housing more affordable, policymakers should be looking for ways to remove barriers to supply, not create new requirements that make it harder and more expensive to build homes," Tester wrote in a recent analysis. He noted that roughly 34 percent of Americans rent, including 30 percent in Montana, where families, energy workers, and seniors all depend on rental options.
The final legislation drew support from across the aisle, including Sen. Tim Scott (R-S.C.) and Sen. Elizabeth Warren (D-Mass.), who found common ground on the need to protect renters while encouraging investment. Tester emphasized that the law does not solve everything, and he is now urging state and local governments to take the next steps.
Key priorities at the state level include zoning and permitting reforms to allow more homes to be built, as well as policies that encourage private investment in housing refurbishment and development. Tester highlighted a less obvious benefit of such investment: it supports pension funds. In Montana, the Teachers' Retirement System and the Public Employees' Retirement System manage billions of dollars for educators and public workers, with police and firefighter pensions also relying on housing-related investments.
"Private investment in housing is a win-win situation," Tester said. "More investment in home repairs and development creates more homes and helps maintain affordable prices for working families, while ensuring that Montana's teachers, police, and firefighters receive their fully-funded pensions."
The former senator cautioned against policies that demonize all investors, noting that responsible professional housing providers play a role in increasing supply. He called for holding bad actors accountable without cutting off the capital needed to build and preserve homes.
As states consider their own housing agendas, Tester's message is clear: avoid the pitfalls of overregulation and focus on removing obstacles to construction. The federal law, he said, provides a model of how to balance competing interests, and states should build on it rather than undermine it.
For more on the broader political landscape, see Democrats' Gen Z housing push and battleground governor races shaping the midterms.
