A sweeping bipartisan housing bill that restricts large-scale investors from buying single-family homes has cleared the House, but its path to becoming law remains uncertain.
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House passes housing bill with 396 votes, alters investor rules
The U.S. House of Representatives passed a major housing affordability bill with a commanding 396-13 vote, but the legislation now faces a complex path in the Senate after significant changes were made to provisions targeting institutional investors. The bill, known as the 21st Century Road to Housing Act, aims to address the housing affordability crisis, an issue that polls show is a top concern for voters heading into the November elections.
"There’s still work to be done," Senate Banking Committee Chair Tim Scott and ranking member Sen. Elizabeth Warren said in a joint statement, signaling that the bill's passage in the upper chamber is not guaranteed. "We are committed to continuing to work with the White House and our colleagues in the House on a housing bill that can pass the Senate and get to the President’s desk."
The most substantial change in the House version is the removal of a Senate provision that would have required large investors to sell off newly built single-family rental homes within seven years. This "build-to-rent" divestment rule was a major point of contention for the housing industry, which argued it would stifle the creation of new housing supply. The House bill also increases Federal Housing Finance Agency-insured multifamily loan limits, which have been static for 12 years.
The legislation seeks to walk a fine line between curbing the influence of large investors in the single-family home market and encouraging new construction. While the bill, backed by President Trump, is seen by Republicans as a key effort to address affordability, its final form will depend on negotiations between the two chambers to reconcile their different approaches.
Investor Restrictions Watered Down
The core of the bill's controversy surrounds its treatment of institutional investors like Blackstone, Invitation Homes (INVH), and American Homes 4 Rent (AMH). Lawmakers from both parties have argued that large-scale purchases of existing homes by these firms crowd out individual homebuyers.
The amended House bill scraps the Senate's requirement that investors sell their build-to-rent properties. However, it maintains a ban on institutional investors with portfolios of 350 or more homes from purchasing existing single-family homes under specific circumstances. It also introduces a new requirement for these large investors to report details of their housing portfolios to the Department of Housing and Urban Development (HUD). This change represents a "scalpel and not a hammer," according to Francis Torres, director of the Bipartisan Policy Center’s housing and infrastructure projects, reflecting a more nuanced approach to regulating institutional activity without disrupting the entire housing market.
What's In, What's Out
Beyond the investor rules, the House and Senate versions show significant divergence on federal housing programs and development regulations. The House bill streamlines the National Environmental Policy Act requirements for various HUD-funded activities, including for 221(d)(4) loans used for multifamily construction and rehabilitation. It also adds infill residential projects to a list of activities that would be exempt from federal environmental reviews.
However, several key funding provisions from the Senate bill were removed. The House version cuts the permanent authorization of HUD's Community Development Block Grant (CDBG) Disaster Recovery program, a critical source of funding for communities rebuilding after natural disasters. Also omitted is a provision that would have made the Rental Assistance Demonstration (RAD) program permanent, which public housing authorities rely on for addressing capital needs.
In their place, the House added new elements, including a competitive grant program for pilot programs around single-staircase residential buildings to explore cost-reduction in construction. It also creates a national eviction helpline for tenants in federally assisted housing and requires state and local governments to maintain a database of undeveloped public land.
This article is for informational purposes only and does not constitute investment advice.
[1] House Passes Affordable Housing Bill—With a Watered-Down Investor Ban[2] House passes revised bipartisan housing legislation, sending it to Senate[3] Here’s what’s changed in the revised ROAD to Housing bill[4] House passes housing affordability bill that softens institutional investor ban[5] BTR ban is gone in the revised ROAD to Housing bill. Here’s what else changed.
