The U.S. House of Representatives will soon vote on a housing bill that supposedly addresses the nation’s very real affordability crisis and, even more important, lets politicians claim they are doing something about it.The Senate passed the 21st Century ROAD to Housing Act in March by an 89-10 vote. Democrats backed it almost unanimously, and all but one of the no votes came from Republicans, even though President Donald Trump pushed hard for the bill.States have the right to be stupid or smart. The federal government has no constitutional authority to make that choice for them.One provision separates the Senate and House versions, and it matters a great deal.The Senate bill would require investors who own more than 350 single-family rental properties to sell the excess after seven years. It exempts large institutional investors that build or buy new single-family homes for the rental market, but even they would have to sell those properties to individual homeowners after seven years.The House bill drops that provision. That may be its best feature.The Senate’s ownership cap is not only arbitrary and unfair; it is economically backward. Driving investors out of the market would raise prices, not lower them. It would shrink the pool of potential investors, reduce incentives to build and maintain housing, and leave buyers competing for a smaller supply of homes.Those effects would push housing prices higher.The only Democrat to vote against the Senate bill, Sen. Brian Schatz of Hawaii, blasted the seven-year forced-sale provision on the floor, calling it “bananas” and “a very bizarre thing” to restrict ownership by businesses other than hedge funds. The bill “demonize[s] people who want to build rental housing,” Schatz said.He was right. The Senate version would do serious damage to housing supply. As Schatz put it, “This is positively Soviet.”The two versions reflect sharply opposing views not only of housing, but of markets and government power in general. The real question is whether housing unaffordability reflects a “market failure” requiring federal and state correction, or whether markets work best when government limits itself to preventing force and fraud.RELATED: When your ‘rich’ neighbor can’t afford furniture SDI Productions / Getty ImagesToday’s housing crisis is not a market failure. It is the product of government interference.As I explain in my new Heartland Institute policy study, “Housing Affordability: America’s Short-Term Crisis and Long-Term Problem,” the immediate affordability crunch began with the rapid rise in federal spending starting in January 2021. The Federal Reserve accommodated that spending by expanding the money supply, helping ignite inflation across the economy.Housing prices rose sharply and crossed into statistical unaffordability in May 2021. They then surged further as inflation spread throughout the economy. The Federal Reserve later raised interest rates to contain the damage, which only made housing less affordable as mortgage rates climbed to levels not seen since the early 1980s.At the same time, the country was already suffering from years of weak housing-stock growth after the 2008 financial crisis, another disaster created by the federal government and the Fed. Add a rapidly rising population driven by mass immigration, along with Millennials and then Gen Z entering prime homebuying years, and a long-running squeeze turns into a full-scale crisis.That is the mess Congress and Trump now want to address.Their answer is to tweak some federal regulations in the hope of encouraging more construction. That may help at the margins. It will not do much to expand supply, and it will do nothing to address the inflation that turned a difficult market into a crisis.As I write in the policy study, “The solution to the inflation-inflicted affordability problem is significant cuts in federal spending,” though such cuts appear to have little political support.The long-term solution is straightforward: Build more houses.Here again, government is the main obstacle. Zoning restrictions, taxes, overregulation, rent control, urban-growth boundaries, land rationing, impact fees, excessive building-code requirements, and countless other local barriers have choked construction and sales.Those policies mostly come from states and localities. The federal government, however, encourages them through housing and urban-development spending.RELATED: Trump needs to denounce the Dignity Act Alex WROBLEWSKI/AFP/Getty ImagesBoth versions of the current bill try to reduce some of that federal encouragement of excessive state and local regulation. That is the right direction because under the Constitution, housing regulation belongs to the states.States have the right to be stupid or smart. The federal government has no constitutional authority to make that choice for them.