The Senate voted to advance the significant housing bill, a major bipartisan package that could be one of the most transformative housing policy changes in decades.
The chamber passed the 21st Century Road to Housing Act in a 89-10 vote Thursday afternoon. The bill has dozens of housing reforms aimed at making it easier to build homes and obtain financing to buy them. It also puts forth a ban on major institutional investors buying single-family homes.
The bill still faces many hurdles. It must be reconciled with the House version before it can be sent to President Donald Trump‘s desk. But some of the more conservative members of the House Freedom Caucus oppose some provisions.
And, while the White House signaled support for the bill, Trump has also pivoted his attention to voting. He’s called on Congress to pass a voter ID bill, the Save America Act, and gone so far as to threaten not to act on other bills until then.
The House Financial Services Committee Chairman, Arkansas Rep. French Hill, a Republican who sponsored the House version of the bill, emphasized bipartisanship after the vote. In the senate, Massachusetts Sen. Elizabeth Warren, a Democrat, and South Carolina Sen. Tim Scott, a Republican, led the rally around the bill.
But Hill also acknowledged the concerns about the bill in the House, where it faces reconciliation.
“It is critical we get the details right and mitigate some of the concerns raised by House members with the Senate bill,” Hill said.
Emphasis on affordability
The housing bill is a more limited version of one the Senate passed last year—an effort that stalled when it was stripped from the National Defense Authorization Act. But it comes at a time when Democrats and Republicans are, separately, emphasizing affordability and solutions to rising prices.
Scott said on the house floor Thursday the bill’s provisions must turn back alarming trends in the housing market, such as the rising age of first-time homebuyers and pessimism from young people that a home is attainable.
“We can do what so many folks failed to do in this legislative body for the last few decades,” Scott said on the Senate floor before the vote. “That is, pass consequential legislation that makes it easier to become a homeowner for those who are ready at that part of their journey.”
The House passed its own version of the bill last month, with about 25 provisions to the Senate’s original 40. Reconciliation on the two bills will require some measures to be removed.
South Dakota Sen. Mike Rounds, a Republican, said the “consensus-driven” package addresses housing issues in rural and urban areas. The regulatory reforms drew votes from the right, especially as homebuilding in rural areas has slowed.
“These are practical reforms that strengthen the rural housing safety net while helping communities maintain a stable workforce and local economy,” Rounds said.
The National Association of Realtors voiced support for the bill. Shannon McGahn, NAR’s executive vice president and chief advocacy officer, said it “offers the kind of comprehensive approach needed to address the affordability crisis and expand homeownership opportunities for more Americans.”
Concerns about the investor ban continue
Even with both chambers of Congress passing the bill, it will still face headwinds.
The bill’s investor limitations are new in the Senate version. That’s a priority for Trump and is popular with some Republicans. Trump signed an executive order to that effect earlier this year. But that order exempts build-for-rent communities, while the bill requires those owners to sell in seven years.
That led to concern among industry experts and homebuilders that the ban could reduce home construction, watering down the solutions to what is fundamentally a supply-side housing crisis. The new investor ban language has raised concern from some former supporters of the bill—including the National Association of Home Builders.
“NAHB believes the current version of the Senate’s housing bill would greatly curtail investment in the construction of single-family rental housing,” NAHB Chief Advocacy Officer Ken Wingert said in a statement to Realtor.com®. “The president’s Executive Order included an exception for built for rent housing. Any housing bill that makes it to his desk should do the same.”
After the vote, Mortgage Bankers Association President Bob Broeksmit also called out the investor ban. Meanwhile, he said some of the Federal Housing Administration multifamily section provisions “reduce loan limits and constrain capital for new rental housing development.”
Broeksmit called for Congress to adjust the bill so it “puts the country on a path to increased affordability, lower operational costs, less red tape, and more housing, not less.”
The Realtor.com housing supply gap report released this week shows the shortage of homes hit 4.03 million. Realtor.com economist Joel Berner cautioned the concerns about the investor ban are well-founded. That’s despite positive steps in things like streamlined reviews and encouragement for zoning reforms.
Build-for-rent can be a steady stream of income for homebuilders and investors. And fewer options on how to use the homes once built, and who they can be sold to, is a disincentive to build, Berner said.
“All homes are good homes when it comes to closing the US supply gap,” Berner said. “Whether those homes are being sold or rented out, people need places to live, but this provision disincentivizes new construction and adds arbitrary restrictions to the market.”
And Trump’s vow not to approve any bill before the Save America Act also presents a challenge. Senate Majority Leader Sen. John Thune, a South Dakota Republican, said he would bring that bill to the floor next week.