A sweeping bipartisan bill that aims to boost the nation’s housing supply and improve affordability took a major step forward but still faces an uncertain future.
By an 89-10 vote, the Senate advanced the 21st Century ROAD to Housing Act, which merges major components of the House’s Housing for the 21st Century Act and the Senate’s Renewing Opportunity in the American Dream (ROAD) to Housing Act.
“Americans continue to face high housing costs. The Senate’s vote today moves practical solutions forward,” said Dennis Shea, executive vice president and chair of the J. Ronald Terwilliger Center for Housing Policy at the Bipartisan Policy Center. “Differences with the House remain, but given how far lawmakers have come working together, we’re hopeful they can keep building momentum to deliver a strong bill to the president’s desk.”
Sponsored by Sens. Tim Scott (R-S.C.) and Elizabeth Warren (D-Mass.), the legislation is considered one of the most significant housing bills in decades.
A key section of the legislation that has gained attention would prohibit large institutional investors from buying single-family homes. In addition, housing organizations are objecting to a provision that would force large investors to sell build-to-rent (BTR) homes after seven years, which they say will dismantle an important housing sector.
“The provision requiring disposition of BTR communities as individual units to home buyers is plainly not feasible,” said Bob Pinnegar, president and CEO of the National Apartment Association, and Sharon Wilson Géno, president of the National Multifamily Housing Council, in a joint statement. “It would stall new communities from being built and divert investment away from an important affordable housing option for renters and their families. BTR housing opens the door to better employment and educational opportunities and is a vital part of our nation’s housing affordability solution. Fewer housing units means higher rental costs for Americans.”
Their organizations and other housing groups are calling on lawmakers to remove or amend the provision from the final bill.
For the affordable housing industry, the 21st Century ROAD to Housing Act would spur a number of important changes, including raising the public welfare investment cap from 15% to 20%, a move that will increase the capacity of banks to invest in affordable housing. This is important because additional capital is needed to help support the recent expansion of the low-income housing tax credit (LIHTC) program.
“The Affordable Housing Tax Credit Coalition appreciates the Senate’s effort to expand our nation’s affordable housing supply and modernize key housing programs,” said Emily Cadik, CEO of the Affordable Housing Tax Credit Coalition. “We especially appreciate a number of proposals in the 21st Century ROAD to Housing Act that will help support affordable housing investment using the LIHTC, which was recently expanded as part of One Big Beautiful Bill and remains the primary driver of affordable housing supply in the United States.”
The legislation also calls for updating the HOME Investment Partnerships and Community Development Block Grant programs.
“With the country millions of homes short of what is needed and housing costs continuing to rise, it is encouraging to see Congress come together around bipartisan solutions aimed at expanding supply and modernizing key housing programs,” said David M. Dworkin, president and CEO of the National Housing Conference. “This legislation includes important provisions to boost housing supply, support for state, local, and tribal housing planning, expand manufactured housing, increase the public welfare investment cap, streamline environmental reviews, and modernize the HOME program.”
In addition, it improves interagency coordination, updates U.S. Department of Agriculture’s Rural Housing Service, encourages landlord participation in the Housing Choice Voucher program, reforms disaster recovery, and promotes housing for veterans, according to Dworkin.
“No bill is perfect, but this legislation includes many important policies that will help expand housing supply and improve affordability,” he said. “Provisions in the bill that could hurt the ability of investors to build tens of thousands of units of rental housing per year will need to be addressed by the House.”
The bill faces a much tougher challenge in the House, where some conservatives are calling for changes. According to multiple news reports, lawmakers are split on several points, including language that would prohibit the Federal Reserve from issuing a digital currency.
Other housing leaders also commented on 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. 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.” —Bob Broeksmit, president and CEO, Mortgage Bankers Association
“By modernizing federal housing programs, reducing unnecessary barriers to development, and opening up new private investment to support construction and preservation of housing, including through the low-income housing tax credit, the 21st Century ROAD to Housing Act can help to expand our housing supply and make housing more affordable for families across the country. Today’s vote reflects strong, bipartisan commitment to tackling our nation’s housing shortage. We urge Congress to move swiftly to get bipartisan legislation signed into law so that lenders and housing providers can get to work building and preserving the housing we need.” —Sarah Brundage, president and CEO, National Association of Affordable Housing Lenders
“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. 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. NAHB will continue to work with House and Senate lawmakers to pass a final housing package that includes the best elements of both chambers’ bills and truly reflects Congress and President Trump’s stated purpose of increasing the nation’s housing supply.” —Bill Owens, chairman, National Association of Home Builders