House Passes Sweeping Housing Bill 396-13, Sending It Back to the Senate

The House voted 396-13 on Wednesday to pass an amended version of the 21st Century ROAD to Housing Act, a broad package meant to bring down housing costs by encouraging construction. Because the House changed the text the Senate passed in March, the two chambers must still agree on a single version before it can go to President Trump, according to WYPR and CNN.

The bill would expand loans for housing construction, push local governments to loosen permitting rules, expand manufactured housing and limit Wall Street ownership of single-family homes, CNN reported. Both versions would eliminate a 1974 federal requirement that manufactured homes be built on a permanent chassis, a change the Bipartisan Policy Center estimates could cut the cost of each home by $5,000 to $10,000, CNN said. The House text also streamlines environmental reviews for homes built in gaps between existing buildings and creates a grant program for communities to draw up “pattern books” of preapproved housing designs, WYPR reported. It also supports converting office buildings to residential use, CNN reported.

The sharpest disagreement is over institutional investors. The Senate version bars investors that already own about 350 homes from buying more single-family houses and would require developers to sell build-to-rent homes after seven years. The House version keeps the ownership limits but drops the seven-year sale requirement and instead creates a hotline for tenants in properties owned by large investors, CNN reported. WYPR reported that the House also removed several exemptions the day before the vote.

Industry groups criticized the sale requirement. A letter from 79 industry groups said it would “effectively eliminate the production of Build-to-Rent housing,” WYPR reported. Eleven national housing organizations, including the National Association of Home Builders and the Mortgage Bankers Association, jointly supported the bill, saying “the revised Act, like all compromise legislation, is not perfect,” CNN reported. WYPR said Sen. Raphael Warnock pushed for the investor limit that appears in the Senate bill. WYPR said research on the effects is mixed: restricting investors can raise sale prices in some cases but can lower rents by adding supply.

Mr. Trump endorsed the Senate bill on May 11 and called for a permanent ban on institutional home purchases, The Boston Globe reported. He wrote earlier this month that it “would ensure that homes are for people, not corporations,” according to CNN. Accounts of his reaction to the House changes differed: The Globe reported the White House endorsed the House bill on Wednesday, while WYPR said he had urged House Republicans to pass the unamended Senate version and had not commented on the altered bill.

The next step falls to the Senate. Banking Committee Chairman Tim Scott, R-S.C., and the panel’s top Democrat, Elizabeth Warren of Massachusetts, will discuss the House changes with senators of both parties, CNN reported, and the two issued a joint statement saying “there’s still work to be done,” according to The Globe. Senate Majority Leader John Thune said he wished the House would simply pass the Senate bill, while Speaker Mike Johnson urged the Senate to “swiftly” pass the House bill, the Globe reported. The Globe reported that neither side appeared eager to appoint a conference committee.

The stakes are large for buyers. WYPR put the average home price at about $400,000 and Realtor.com estimates a gap of about 4 million homes between supply and demand.