The Senate is pushing ahead with a bipartisan bill to improve housing affordability, teeing up a critical week for housing on Capitol Hill and raising major questions about what provisions will be included.
Senate Majority Leader John Thune (R-SD) filed cloture on legislation from the House on Thursday, and the Senate will hold a vote on whether to proceed on Monday. The situation, particularly about what will be added or stripped out of the House bill by the Senate, is fluid.
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There have been two competing bipartisan housing bills — the Senate’s ROAD to Housing Act and the House’s Housing for the 21st Century Act. They share some important similarities, but also significant differences.
The ROAD to Housing Act would change the federal government’s role in housing and would limit barriers to construction imposed by localities and environmental rules. The bill contains provisions encouraging local and state governments to build more housing.
At a high level, the Housing for the 21st Century Act is designed to help modernize local development and rural housing programs, further expand manufactured and affordable housing finance opportunities, and protect borrowers and assisted families. It also enhances oversight of housing providers.
Both measures have strong support from members of both parties who see housing affordability as one of the major problems facing the country. Still, it will be difficult to get a bill through both chambers with the support of the White House.
The Senate might take the Housing for the 21st Century Act, strip it down, and add a lot of the text of its own bill into that shell. There will also likely be pieces of the House bill that were not in the ROAD to Housing Act that will remain in, although it is not clear which ones.
One significantly different measure in the House bill is a provision that would overhaul the HOME Investment Partnerships Program, a major housing program administered by the Department of Housing and Urban Development.
A senior GOP Senate aide told the Washington Examiner that the legislation is being framed as “ROAD to housing, plus” and will include additions to what was in the original iteration of ROAD to Housing, which previously passed the Senate last year as an amendment to the National Defense Authorization Act, but it was cut from the legislation in the House and did not become law.
Still, the parameters of the negotiations are in flux.
“I’m expecting they will probably … strip out 21st Century and put in much of the ROAD to Housing Act, and then potentially put in other elements of the 21st Century bill,” Dennis Shea, executive vice president and chairman of the Bipartisan Policy Center’s housing policy center, told the Washington Examiner.
But the idea of gutting the House bill and inserting much of the Senate bill might not sit well with some on the House side.
A senior House aide told the Washington Examiner that there needs to be “serious negotiation” as part of the process.
“Given the significant bipartisan support in the House, replacing the text of the Housing for the 21st Century Act with ROAD to Housing would be an affront to the legislative process,” the aide said. “This work should not be tossed aside, and there must be a serious negotiation if the goal is to quickly get a bill to the president’s desk.”
House Financial Services Committee Chairman French Hill (R-AR), who led the charge for Republicans on the House legislation, said in a statement this week that it is crucial that the Senate work with the House on the matter. He said that Thune invoking cloture on the House bill was an “important step.”
“It is imperative that my Senate colleagues work with the House to deliver a bipartisan housing bill to President Trump’s desk — one that reflects the shared priorities of the House, Senate, and White House,” Hill said.
A senior GOP Senate aide said last week that negotiations over what will be in the housing legislation from the Senate would continue over the weekend.
One big question is about whether the final Senate legislation will include a provision to ban large institutional investors from buying single-family homes. That is a priority for President Donald Trump, yet it is at odds with traditional Republican free-market economics.
The original versions of both ROAD to Housing and Housing for the 21st Century did not include such prohibitions.
Trump first announced the proposed ban earlier this year and later signed an executive order meant to effectuate it in part. But the administration’s goal has always been for Congress to pass such a restriction into law. He mentioned the executive order during the State of the Union on Tuesday and called on Congress to codify a ban.
“I’m asking Congress to make that ban permanent, because all this for, people, really, that’s what we want,” the president said. “We want homes for people, not for corporations. Corporations are doing just fine.”
Some Republicans on Capitol Hill are squarely opposed to the Trump proposal, such as outgoing Sen. Thom Tillis (R-NC), a member of the Senate Banking, Housing, and Urban Affairs Committee. Tillis noted that the policy has been proposed by liberal Democrats in the past, such as Sen. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA).
“To me, I think it’s masking the underlying problem of not enough housing starts,” Tillis told the Washington Examiner. “So if we view that as a solution to that problem, I don’t see how it fits. I’ve been against it when Bernie Sanders first proposed it, or Elizabeth Warren, I’m still against it.”
But other Republican lawmakers, such as Sen. Bernie Moreno (R-OH) and Rep. Marlin Stutzman (R-IN), have been pushing hard for an institutional investor ban to end up in the housing legislation. Both have previously introduced legislation to that effect.
Last week, the White House began circulating draft legislative language on such a ban. That language defines a “large institutional investor” as any investment fund, corporation, or entity that controls over 100 single-family homes.
Sen. Markwayne Mullin (R-OK) said he thinks some of the details, such as what constitutes a large institutional investor, in the Trump proposal that the White House circulated on Capitol Hill could end up changing.
“I think the numbers may change a little bit, I mean, like 100 to maybe 500 or 1,000, or something like that, but I think there’s definitely a path forward,” Mullin said.
Shea said he thinks a lot of conversations surrounding specifics are ongoing.
“I assume within the conversations that are ongoing between Congress and the administration and the private industry … they’re looking at exceptions, they’re looking at ways to maybe manage the proposal in a way that would create more support for it,” Shea said.
The White House reiterated its desire for such a ban for large institutional investors when contacted by the Washington Examiner on Friday.
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“The administration is strongly seeking a prudent and robust provision addressing the challenges of institutional investor purchases of single-family homes,” White House spokesman Davis Ingle said.
In terms of timing, there will likely not be a vote on the final bill text from the Senate this coming week, but there might be the following week, the Senate aide said.