The Senate voted on Thursday to pass a bipartisan housing affordability bill in an 89-10 vote.
However, the 21st Century ROAD to Housing Act, which was written by Republican Sen. Tim Scott of South Carolina and Democrat Sen. Elizabeth Warren of Massachusetts, will still need to pass in the House, which put forth its own bipartisan legislation in February.
The sweeping, 303-page bill by Scott and Warren establishes grants and pilot programs for new construction and revises federal definitions to promote the creation of more housing. It also features a ban on large institutional investors from buying up certain single-family homes, something that President Trump has advocated for recently.
House GOP leaders have said that the bill will require some negotiating, with House Majority Leader Steve Scalise (R-La.) saying in a closed-door meeting earlier this week that legislators are likely to squabble over differences between the two affordability bills, according to a report from CNBC.
“If the Senate thinks we’re gonna take this medicine, we’re gonna go to conference” committee, Scalise reportedly said.
One major point of contention may be the investor ban, which stipulates that investors and companies will not be allowed to buy single-family homes if they already own 350 or more.
Those companies that help increase the housing supply through building or renovations would not be limited to 350 homes, but they would be required to sell properties within seven years of owning them. The investor provision has prompted significant debate among economists and homebuilders about the bill’s potential impact on new home construction.
The investor ban was not included in the initial bill or in the House’s bill, but was added after President Trump indicated he would not sign an affordability bill without it.
Scott told NBC News the bill would help move forward the president’s affordability agenda by “cutting regulatory red tape, lowering costs and expanding housing supply while generating no new spending.” Meanwhile, Warren said the bill was an effort at “increasing housing supply and bringing down costs” by curbing large investors.
“It will mean, for the first time, that we’re moving housing prices in a better direction and beating private equity out of the system — making a very public statement that homes are for the families who live there, not for Wall Street investors who figured out another way to make a buck,” the senator from Massachusetts told NBC News.
The National Association of Home Builders and the National Multifamily Housing Council have opposed the seven-year investor ban provision within the bill. The National Association of Realtors, however, has supported the legislation and said earlier this month that recent additions — including the seven-year ban — would help address barriers to increased housing supply.
Sen. Brian Schatz, D-Hawaii, praised the bill as containing many good policies, but criticized the seven-year ban on investors.
“There’s literally no reason for this,” Schatz said on the Senate floor Thursday. “Anyone who wants to build housing and then provide it for rent is going to be forced to sell after seven years … A lot of these folks are not actually in a position to sell after seven years. They will not have made their money back.”
“This is positively Soviet,” he added.
