House passes housing affordability bill that softens institutional investor ban
Construction workers build a home at a new housing development on July 1
(CNN) — A landmark housing affordability package moved one step closer to becoming law on Wednesday after winning bipartisan approval in the House of Representatives.
The measure is an amended version of the 21st Century ROAD to Housing Act, which cleared the Senate in March.
The bill, which won approval in a sweeping vote of 396-13, aims to tackle the housing crisis from multiple angles: expanding loans to construct housing, pushing local governments to loosen permitting rules, expanding manufactured housing, and curbing Wall Street’s ownership of single-family homes.
Together, the House and Senate proposals signal that Washington is treating America’s housing affordability crisis with new urgency. If enacted, the measures would amount to one of the most sweeping federal housing efforts in decades.
But while the two bills share broad goals, they diverge in key areas. Most notably, the House version takes a softer approach to restricting institutional investors from buying single-family homes than the Senate proposal.
The two governing bodies will have to reconcile the differences before the law hits President Donald Trump’s desk.
Senate Banking Committee leaders, Senators Tim Scott and Elizabeth Warren, will discuss the House bill with Republican and Democratic senators to get their view on the changes, a Senate aide told CNN on Wednesday.
Earlier this month, Trump expressed his support for the Senate’s bill in a social media post, writing that the measure “would ensure that homes are for people, not corporations.”
The institutional investor ban
This is the second version of the House bill to advance this year. An earlier draft stopped short of restricting large institutional investors from buying single-family homes.
But the Senate’s proposal, introduced after an executive order from Trump, would ban investors and companies from buying single-family homes if they already own 350 or more. It would also target the fast-growing “build-to-rent” industry by requiring developers to sell those homes within seven years. Critics warned the measure could severely hamper new rental construction.
The House measure passed Wednesday keeps the Senate’s broader limits on institutional investors purchasing single-family homes, but eliminates the requirement that investors sell build-to-rent and renovate-to-rent properties.
Instead, House lawmakers opted for a lighter measure: creating a hotline for tenants living in properties owned by large institutional investors.
The bill’s passage was applauded in a joint statement by 11 national housing organizations, including the National Association of Home Builders and the Mortgage Bankers Association.
“The revised Act, like all compromise legislation, is not perfect. Nevertheless, it is one that our organizations support as it encompasses some of the most significant housing proposals in a generation,” the statement said.
“As the process moves forward, it will be vital that the final language safeguards millions of BTR homes and the individuals and families that are building their lives in them,” the statement said.
What is in the bill
The bill aims to expand the housing supply through streamlined environmental reviews, grants for local housing planning and office-to-residential conversions.
Like the Senate’s bill, this House version would also make it easier to expand the supply of manufactured homes, which are built in factories rather than on site and are typically faster and cheaper to produce.
Under federal law dating back to 1974, manufactured homes must be built on a permanent chassis, a wheeled base that allows them to be transported, similar to traditional mobile homes. In practice, though, most manufactured homes are never moved once they reach their destination.
The requirement to add wheels creates additional costs and can limit where these homes are allowed, often confining them to mobile home parks under local zoning rules. Both bills eliminate that rule – which could cut the cost of each manufactured home by $5,000 to $10,000, according to the Bipartisan Policy Center.
Manufactured homes have historically been treated like personal property, but the bills also aim to make it easier for owners of manufactured homes to get traditional mortgage loans.
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