The US Senate voted 89-10 to pass the 21st Century ROAD to Housing Act, a bipartisan bill designed to address the challenges facing the housing market. However, leaders within the housing industry offered a mixed response to the bill’s contents and goals.
The 303-page bill was written by Sen. Tim Scott (R-SC), the chairman of the Senate Banking Committee, and Sen. Elizabeth Warren (D-MA), the committee’s ranking member. ass., won 89 votes. The bill creates a new series of grants and pilot programs designed to fuel a new wave of housing construction while seeking to restrict institutional investors from buying up single-family homes.
“Every member of the Banking Committee had an opportunity to invest their time, their energy, and their priorities into this legislation, making it a bipartisan win,” said Scott. “But more importantly, a win for the American people who want to experience their version of the American Dream.”
Opposition to the bill came from nine conservative Republicans and one Democrat, Sen. Brian Schatz of Hawaii, who found problems in the bill’s call for any entity that owns and rents out more than 350 housing units to sell their properties after a seven-year period.
“There’s literally no reason for this,” Schatz said. “And the problem is that it was written in such a way that it was trying to capture the hedge fund problem, but they wrote it wrong. And, so, the definition of institutional investor says, essentially, anyone who owns and operates more than 350 units to rent. That’s bananas.”
The bill will now go to the House of Representatives, which passed its Housing for the 21st Century Act. The Senate and House bills have different provisions, which Scott insisted could be reconciled. “The House passed their bill. They had about 25 provisions in their legislation, and we’ve taken 20 of those provisions and embedded them in the 21st Century ROAD bill,” Scott said.
However, there is no guarantee that the Senate’s version will effortlessly pass through the House, and there is also the question of President Trump’s legislative priorities. The president stated he would not sign any legislation before the SAVE Act passes the Senate. That bill passed the House and will be taken up by the Senate next week, although at the moment it lacks the 60-vote majority needed for passage.
Industry reaction to the passage of the Senate bill was mixed. Shannon McGahn, executive vice president and chief advocacy officer of the National Association of Realtors, said the bill’s creation was long overdue. “It has been nearly two decades since Congress last enacted a sweeping, bipartisan housing law,” she said. “The Housing and Economic Recovery Act of 2008 was the last major federal effort to address housing challenges at scale. Today’s affordability crisis demands that same level of national focus. The 21st Century ROAD to Housing Act takes important steps to close the nation’s housing supply gap and make homes more affordable.”
Chris Morton, CEO of the American Land Title Association, welcomed the bill’s passage by stating, “The 21st Century ROAD to Housing Act represents an important step in the effort to strengthen housing supply and modernize federal housing policy while ensuring the real estate system remains reliable and secure for homebuyers and lenders.”
“This legislation matters,” said Kimber White, president of the National Association of Mortgage Brokers. “It cuts red tape that has slowed housing production for years, boosts housing supply to address the root cause of affordability challenges and takes steps to keep corporate investors from outcompeting everyday homebuyers for single-family homes. For the mortgage industry, more homes in the pipeline means more families ready to buy — and more opportunities for the brokers and loan originators who serve them. We applaud the Senate for passing this bill and look forward to a swift resolution and completion of this bill.”
But there was also some trepidation over the bill’s contents. Mortgage Bankers Association President and CEO Bob Broeksmit stated that while the bill “many positive provisions,” he voiced concern over aspects of the legislation.
“The restrictions on institutional investment in single-family housing would further limit financing for build-for- and built-to-rent housing communities, while the Federal Housing Administration multifamily section would reduce loan limits and constrain capital for new rental housing development,” he said. “For these reasons, MBA urges Senate leaders and the Trump administration to work with the House to address these provisions before the legislation moves any further. The goal should be clear: a final package that puts the country on a path to increased affordability, lower operational costs, less red tape, and more housing, not less.”
Bill Owens, chairman of the National Association of Home Builders and a home builder and remodeler from Worthington, Ohio, also viewed the bill with apprehension. “While the Senate-passed housing package includes several favorable provisions that would streamline environmental reviews, encourage land use and zoning reforms and improve our aging housing stock, we are very concerned about a provision that could significantly curtail housing supply,” he said. “Specifically, the provision requiring institutional investors to sell built-for-rent single-family homes within seven years would severely reduce investment in rental housing and could slash single-family production by nearly 40,000 units per year. We urge the House to seek a conference and make changes to remove the government mandate to sell rental housing within seven years so that it will not lead to a decrease in new construction.”
