It’s a rare thing for everyone in Washington to agree on anything these days, but it’s undeniable that the cost of housing has become untenable. Homeownership is considered out of reach for millions of Americans, with renters increasingly being priced out of major cities. To paraphrase a sage from over two decades ago: The rent and mortgages alike are too damn high around the country.
For the last several months, a bipartisan push has been underway in Congress to change that — with full backing from the White House. The Senate passed a bill in March that President Donald Trump has urged the House to pass without changes. But the one thing that could potentially grind the whole process to a halt is a divide over how much to rein in corporate investors buying up housing stock. It’s a gap that will have to be bridged before a new construction boom can begin to finally relieve the pressure that’s been building on renters and owners alike for years.
The one thing that could potentially grind the whole process to a halt is a divide over how much to rein in corporate investors buying up housing stock.
Trump’s been narrowly focused on the demand side of the housing market, looking for ways to help potential homeowners borrow and otherwise finance their purchases. As with many of his supposed priorities, though, there’s been more posting than action from the White House on the housing front. (According to Punchbowl News, the president also reportedly told Speaker Mike Johnson, R-La., in March that “nobody gives a [bleep] about housing,” though the White House has denied this account.)
That’s left it up to Congress, where legislators have been focused on the supply side of the equation, hoping to address a nationwide shortfall of available housing units. According to an analysis from Goldman Sachs last year, it could take three to four million new homes to address the affordability crisis that’s only gotten worse since the pandemic, as home prices have gone up far faster than wages.
The Senate’s 21st Century ROAD to Housing Act comes courtesy of two senators that aren’t often on the same side of an issue: Tim Scott of South Carolina and Elizabeth Warren of Massachusetts. The pair are, respectively, the chair and ranking member of the Senate Committee on Banking, Housing and Urban Affairs Committee, and have been working on this bill in various forms for almost a year. The latest version — pieced together from a bill the two crafted last year along with another housing bill that the House approved — would cut red tape on new housing construction, increase production of manufactured homes and renovate older houses that are at risk of falling apart.
While cobbled together from two bills that received overwhelming support in their respective chambers, new language in the Senate bill restricting private equity firms and other companies from gobbling up housing has sparked pushback in the House. The bill’s current text mandates that single-family homes built by large investors for the purposes of renting them out must be sold to individual buyers after seven years, with the renters getting first dibs to purchase them. “We put this bill together with the deep-seated belief that it is families who should live in homes and that’s what homes are for,” Warren told NPR in March. “They’re not there simply as investment vehicles for Wall Street private equity.”
The resulting uproar from the House has prompted House Financial Services Chair French Hill, R-Ark., and ranking member Rep. Maxine Waters, D-Calif., to negotiate an updated version of the bill. As Politico reported last week, the amended bill narrows the definition of “single-family home” and deletes the provision that would require the sale of long-term rental homes after seven years. Several other portions were removed to make the bill more appealing to House conservatives, but the shift on large investors’ ownership is the change most likely to give more progressive lawmakers pause.
Even bills loaded up with “shovel ready” projects still take time to bear fruit.
Despite Trump’s insistence on simply passing the Senate version, the House GOP leadership is hoping to have a vote on the revised text this week. The question then becomes whether the Senate accepts those changes in the name of getting the rest of the package through for Trump’s signature. It’s a question that could determine whether the first major housing bill in over 30 years leads to a housing boom or collapses before it can even provide a solid foundation.
Getting a bill through Congress sooner rather than later is good for multiple reasons. Politically, we’re getting close to the point where the midterms will dominate any consideration from lawmakers, who would like to be able to have some accomplishments to point to when making their case to voters. Logistically, a lot of time in Congress will get eaten up by the reconciliation bill, with the clock ticking all the while to fund the government for the new fiscal year that begins in October.
More importantly, even bills loaded up with “shovel ready” projects still take time to bear fruit. Most of the homes that this bill will help build won’t be available until next year at the soonest. With the median price of homes now far exceeding the median national income, there can’t be any more delays in finally helping make roofs available for every head who needs one.
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