The editorial board of the Wall Street Journal has called on Senate Republicans to reject the 21st Century ROAD to Housing Act, stating its passage would mark a “big win for Massachusetts Sen. Elizabeth Warren and the political left.”
In an editorial titled “Elizabeth Warren’s Housing Coup,” the Journal complained that the “pork-filled bill hitting the Senate floor this week” was “a melange of some 40 bills” that created new grant and loan programs, expanded federal power over local zoning, and instructed the Department of Housing and Urban Development Department to establish housing “best practices” for local governments.
The Journal was particularly irritated over the bill’s ban on large investors purchasing single-family homes and turning them into rentals, which President Trump has advocated. The editorial opined, “President Trump thinks the investor ban polls well and likes to say ‘people live in homes, not corporations.’ But who does he think lives in rental homes—hedge fund managers? Most tenants are lower-income. The Senate bill could force many of them out of their homes.”
The Journal further complained the problems facing the housing market were not caused by institutional investors.
“The real leading culprit is the Federal Reserve’s pandemic-era monetary policy,” the editors stated. “Historically low mortgage rates followed by inflation fueled price appreciation and resulted in a lock-in effect for owners that is constricting the supply of homes for sale. Large investment firms mopped up foreclosed homes after the 2008 housing crash, placing a floor on prices. They account for less than 1% of the single-family housing stock, and the number of rental homes has declined on net by 900,000 since 2017. They manage fewer homes in pricy markets like Los Angeles (0.3%), Boston (0.02%) and Washington, D.C. (0.07%).”
The editorial concluded that the eagerness by the White House and Capitol Hill Republicans to claim a legislative victory on housing policy will backfire.
“But why do Republicans want to provide a down payment for Ms. Warren and fellow progressives to expand Washington control over housing in their states?” the Journal asked.
Photo: Gage Skidmore / Flickr Creative Commons
