Congress has passed 21st Century ROAD to Housing Act, HR 6644.  The bill contains dozens of provisions to address America’s ongoing housing affordability crisis.  Chief among the provisions is Title X, Home-Ownership for Main Street America, which institutes a 15-year ban on Large Institutional Investors from purchasing “or enter[ing] into a contract to directly or indirectly purchase” single-family homes.

Because a “Large Institutional Investor” is, by definition, an entity that owns or controls 350 or more single‑family homes, this prohibition functions as a cap on the number of homes such entities can own or control and imposes financial penalties on investors who exceed that limit. However, several types of purchases are excepted, as described below.

Violations of this prohibition can trigger civil penalties of up to $1,000,000 per violation or three times the purchase price of the subject property, whichever is greater.

Key Definitions

  • Large Institutional Investor

The bill defines a “Large Institutional Investor” as a for‑profit legal entity that is “in the business of investing in, owning, renting, managing, or holding single-family homes” (in whole or in part) and controls 350 or more single-family homes in the aggregate. This definition applies whether the entity works alone or in concert with other entities to control such homes.  To control a single-family home means that the entity either owns or generally controls the property, and the bill describes a broad array of qualifying activity. For example, such control can be established by owning or controlling (directly or indirectly) the general partner or managing member of the entity that owns the home, owning more than 25 percent of equity interests in the entity that owns the home (with an exception for passive investors), controlling the manager, management company, or investment advisory of the owner entity, or being the owner, or having primary authority or fiduciary responsibility to make material investment or management decisions relating to, the single‑family home, among others.

  • Single-Family Homes

The bill defines a single‑family home as “a structure that contains 2 or fewer dwelling units that are each intended for residential occupancy by a single household” but does not include manufactured homes.

  • Purchase

Note that the prohibition on purchases of single‑family homes by Large Institutional Investors is also broad and includes “any purchase, transfer, or other acquisition of single family homes, including through mergers, acquisitions, construction, foreclosures, or bulk purchases, whether or not for cash consideration.”

Exceptions

The bill includes several purchases that do not count towards the 350‑home cap, such as certain build-to-rent programs, certain renovate-to-rent programs, homes operated as part of a 55+ community, and homes acquired from other Large Institutional Investors that owned the property at enactment or who acquired it compliantly.  The bill also allows for “purchases” in connection with a foreclosure, a deed-in-lieu of foreclosure, enforcement of mortgages and other security interests, and similar circumstances so long as the action is “not as a long-term investment strategy.”  Additional exceptions apply, and we recommend any entity that may fall into the category of Large Institutional Investor carefully review the exceptions in connection with an assessment of their portfolio.

What Happens Next?

Following Congress’s passage of the bill, the President has initially refused to sign the bill until the SAVE Act is enacted—⁠thrusting the bill’s fate back into flux.  However, after the President receives the bill, the bill will automatically become law 10 days later unless the President formally vetoes the measure.

If enacted, the Large Institutional Investors provision becomes effective 180 days later.  Additionally, by December 31st, (and every year thereafter) all Large Institutional Investors must comply with certain reporting requirements regarding the number and location of the single-family homes it controls.

The Colorado General Assembly has recently passed (and the Governor signed into law) Senate Bill 26-001, “Workforce Housing & Housing Tax Credit”, with the intent of increasing financial flexibility and county authority to promote workforce housing, low-income housing, and general housing needs.

SB 26-001 grants a board of county commissioners the power to sell any public building or real property, with the exclusion of public parks, for the purposes of developing housing.  This is intended to provide greater flexibility for counties when selling their property and to provide counties additional funds for housing developments.  In particular, under SB 26-001, counties now have the power to appropriate property tax revenue, county general funds, and other specified funds, towards housing programs.  This removes the prohibition under prior law on using property taxes for housing, opening up previously inaccessible funds to necessary housing projects.

The bill also authorizes governmental or quasi-governmental entities to transfer what is known as the middle-income housing tax credit to any income taxpayer that has acquired credits for the development of affordable housing.  The middle-income housing tax credit provides an income credit for housing developments that serve households whose income is between 80% and 120% of the area’s median income.  Under current law, the Colorado Housing and Finance Authority may allocate the tax credit to any governmental or quasi-governmental entity, who may in turn transfer the credit only to taxpayers with an ownership interest in a qualified development.  This new bill removes the ownership interest requirement, increasing taxpayer eligibility for the credit.

Under the new law, a county may also enter into long-term rentals or leasehold agreements. This expands governmental authority and opportunities for developing affordable housing or housing identified in a needs assessment developed by the county.

The law also provides that construction and building materials are exempt from taxation for projects involving highways, roads, streets, workforce housing, and other public works owned and used by governmental entities.

SB 26-001 was signed into law on March 26, 2026, and will take effect 90 days after the adjournment of the Colorado General Assembly on May 16, 2026 (August 14, 2026), unless a referendum petition is filed.  The changes to the middle-income tax credit will take effect January 1, 2027.

This bill is one in a series of efforts by the Colorado General Assembly this session to encourage housing development.  The “Housing Opportunities Made Easier ‘HOME’ Act” (HB 26-1001) also signed in March of this year allows nonprofits, schools, universities, housing authorities, or regional transit authority to bypass local planning processes to build affordable residential housing on their land. In addition, HB 26-1065, signed in May, allows local governments to create transit and housing authority investment zones.  These zones can utilize state sales tax increment financing and tax credits to support relevant projects.

Colorado lawmakers continue to pursue aggressive housing policy reforms aimed at increasing housing supply and expanding affordable housing financing tools. One significant measure introduced during the 2026 legislative session is House Bill 26-1206, titled “Improved Funding to Support Development” (“HB26-1206”). HB26-1206 would substantially expand the financing capabilities of city and county housing authorities and could have meaningful implications for commercial real estate developers, lenders, and public-private development partnerships throughout Colorado.

Purpose of HB26-1206

HB26-1206 was introduced amid continued concerns regarding housing affordability, rising construction costs, and elevated interest rates, with supporters arguing that zoning reform alone is insufficient to address Colorado’s housing shortage. As introduced, HB26-1206 would authorize city and county housing authorities to seek voter approval for certain sales taxes or sales and use taxes dedicated to affordable housing and development initiatives. Earlier versions of the bill also contemplated broader property tax authority, although portions of that language were narrowed during committee consideration.

In addition to expanding taxing authority, HB26-1206 would authorize county housing authorities to issue revenue bonds and general obligation bonds backed by approved revenue streams. As a result, HB26-1206 could significantly increase the ability of housing authorities to participate in large-scale redevelopment, public-private partnerships, and affordable housing financing initiatives throughout Colorado.

Legislative History and Current Status

HB26-1206 was introduced by Representatives Junie Joseph and William Lindstedt during the 2026 Colorado legislative session. HB26-1206 advanced through multiple House committees, including House Finance and House Appropriations, where several amendments were adopted refining the scope of the proposed taxing authority and financing mechanisms. HB26-1206 subsequently passed the Colorado House on third reading in late April 2026 and was introduced in the Senate, where it was assigned to the Senate Finance Committee for further consideration.

Remaining Legislative Steps and Timeline

If approved by the Senate Finance Committee, HB26-1206 would proceed through additional Senate review and full Senate floor votes before being presented to Governor Jared Polis for signature or veto. If the Senate adopts amendments, the House would need to concur with those amendments or the bill could proceed to a conference committee prior to final enrollment. Assuming enactment during the 2026 legislative session, HB26-1206 would likely become effective either upon the Governor’s signature or following the standard 90-day post-adjournment period applicable to most Colorado legislation, although certain provisions, particularly those involving voter-approved taxes or bond issuances, would require additional local governmental approvals before implementation.

Potential Impact on Commercial Real Estate Developers

For commercial real estate developers, HB26-1206 could materially expand the availability of public financing support for mixed-income and affordable housing projects. Housing authorities with independent revenue sources and bonding authority would likely become more active participants in public-private partnerships, transit-oriented development, land assemblage, infrastructure financing, and mixed-use redevelopment projects.

HB26-1206 could also improve the feasibility of projects that currently struggle to close financing gaps due to construction costs, insurance expenses, and capital market constraints. Developers pursuing adaptive reuse or higher-density urban redevelopment projects may particularly benefit from expanded access to public financing participation and long-term infrastructure support.

Potential Impact on Commercial Real Estate Lenders

Lenders are likewise monitoring HB26-1206 closely. Expanded governmental participation in development projects may create additional complexity in financing structures, including intercreditor arrangements, bond financing coordination, collateral priority issues, public financing covenants, and governmental consent requirements. At the same time, additional public financing sources contemplated by HB26-1206 could improve project viability, reduce equity gaps, and support developments that otherwise may not proceed under current market conditions. As public financing becomes increasingly intertwined with private development, lenders will likely need to evaluate more sophisticated capital stacks involving housing authorities, tax-exempt financing, and municipal participation.

As demand for AI and cloud-computing infrastructure continues to accelerate, data center development has become an increasingly important issue for commercial real estate developers, utility companies, municipalities, and land use practitioners across the country.  During the 2026 legislative session, Colorado lawmakers considered two competing bills that would have impacted the landscape for large-scale data center development in the state.

HB26-1030 (Data Center & Utility Modernization) proposed an incentive program designed to attract data center development in Colorado through substantial tax incentives and utility modernization measures.  Among other things, the bill would have created a 100% state sales and use tax exemption for qualifying data center projects that satisfied certain investment, wage, utility coordination, and sustainability requirements.  In contrast, SB26-102 (Large-Load Data Centers) focused primarily on increased oversight and environmental accountability for large-load data centers, including measures relating to energy usage, renewable power sourcing, and infrastructure impacts.  Ultimately, neither bill advanced.  HB26-1030 was postponed indefinitely by the House Committee on Energy & Environment on May 7, 2026, and SB26-102 was postponed indefinitely by the Senate Committee on Transportation & Energy on May 11, 2026, leaving Colorado without a statewide incentive structure for data center development or industry-specific environmental regulations governing such facilities.

At the local level, the debate has intensified even further.  On May 20, 2026, Denver City Council unanimously passed a one-year moratorium on new data center construction in the city, and several other Colorado jurisdictions, including Larimer County, have enacted or are considering similar moratoria on new data center applications.

The debate surrounding these bills reflects a broader national trend as states and local governments attempt to balance the economic benefits of attracting AI and cloud-computing infrastructure with increasing scrutiny over sustainability, utility costs, water consumption, and long-term infrastructure planning.  Data centers have become an increasingly attractive asset class due to growing demand for AI computing, cloud services, and digital infrastructure.  However, these projects present unique land use, utility, and environmental considerations that distinguish them from more traditional industrial developments.  Notably, the fiscal note for HB26-1030 states that at least 37 states currently offer some form of tax incentives for data center development.  Colorado lawmakers are expected to revisit these issues during the next legislative session.  Until then, future projects will likely continue to face a patchwork of local land use regulations, utility coordination requirements, environmental review standards, and entitlement processes that may vary significantly by jurisdiction.

In today’s real estate market—defined by rising prices, tightening credit, and limited inventory—alternative transaction models have emerged alongside traditional home sales. One such model is being implemented by Denver-based FulHouse, Inc. (fulhouse.io), which combines elements of real estate transactions with sweepstakes-style entry systems. Under the FulHouse model, consumers have the opportunity to “purchase” a home for as little as five dollars.

FulHouse describes its platform as allowing participants to enter drawings for residential properties. The platform allows homeowners to list a property and set an escrow goal representing the amount they would seek to receive from a traditional sale. Members of the public may then purchase entries into a drawing tied to the property. If the escrow goal is not met, the drawing does not occur, and participants may select from options such as refunds or alternative uses of their payment, including charitable donations. If the goal is met, a winner is selected through a random drawing process, with funds described as being handled through third-party escrow and payment services.

Legal Considerations

Promotional sweepstakes and prize-based contests have long been used in real estate marketing. However, FulHouse’s sweepstakes mechanism appears to function as the core transaction structure rather than as a promotional tool. The legal viability of such a model is questionable and centers mainly on the distinction between a lawful sweepstakes and prohibited gambling.

In most U.S. jurisdictions, including Colorado, gambling is generally defined by three elements: (1) consideration (the risking of money or a thing of value); (2) chance; and (3) the possibility of gain. Sniezek v. Colo. Dept. of Revenue, 113 P.3d 1280, 1282 (Colo. App. 2005). Sweepstakes are typically structured to remove the element of consideration, often by providing a free alternative method of entry.

To enter into a drawing, FulHouse includes a free mail-in entry option, apparently intended to address the consideration requirement. However, case law suggests that the presence of a free entry method may not be sufficient to eliminate consideration in all circumstances. In Sniezek, for example, the Colorado Court of Appeals determined that a system primarily designed around the sale of entries for prizes could constitute illegal gambling, even where free entry options existed. The court emphasized the overall structure and primary purpose of the business in reaching its conclusion, holding that because the primary purpose of the business was the sale of entries to prize-based drawings, consideration was not eliminated solely by the availability of free alternative measures of entry.

Additional questions arise regarding consideration from the seller’s perspective. The platform’s structure contemplates that the escrow goal for entry purchases collectively corresponds to the value of the listed property. Colorado courts have not directly addressed whether receiving property value through such a system would constitute consideration in a gambling analysis. Aside from gambling considerations, the transfer of real property as a prize introduces real property transaction complexities as well. These may include title transfer requirements, compliance with recording statutes, treatment of existing liens and encumbrances, and tax implications. Anyone desiring to participate in a drawing will first want to determine, at the very least, whether existing liens on the property will be paid off from the proceeds of the drawing, whether the winner will receive an owner’s policy of title insurance, and examine any exclusions or exceptions to such policy.