Bipartisan Home Affordability Bill Passes the House

The House of Representatives has passed a bipartisan bill aimed at tackling the country’s housing affordability crisis. This legislation promotes homebuilding nationwide and restricts corporate landlords from purchasing more than 350 houses.

Key Details of the Bill

The bill received significant bipartisan support, passing with a vote of 396 to 13. It builds upon a version previously approved by the Senate, which both legislative chambers must reconcile before presenting it to the president.

The legislation comes ahead of the midterms, with both parties eager to show action on housing. Elevated home prices, averaging around $400,000, highlight the urgency. According to Realtor.com, there’s a shortfall of 4 million units between available housing and current demand, which underscores the need for more homes entering the market swiftly.

Restrictions on Corporate Landlords

The bill addresses concerns over corporate landlords by prohibiting entities owning over 350 houses from acquiring additional single-family homes. This measure aims to alleviate the ability of well-financed investors to outbid families for homes. Although corporate investors represent only a small portion of the national rental market, they have a larger presence in regions like the Sun Belt and cities such as Indianapolis and Seattle.

Both parties share skepticism toward large institutional investors in residential properties. Former President Donald Trump previously issued an executive order opposing federal support for these investors. In the Senate version, a ban on such acquisitions, advocated by Sen. Raphael Warnock, D-GA, was included.

Build-to-Rent Developments

While limiting corporate purchases, the Senate bill allows these investors to build new rental homes. Build-to-rent homes now make up 7% of recent single-family construction, a growing trend. These homes cater specifically to renters, increasing housing supply and potentially lowering costs. However, the Senate version included a requirement for landlords to sell build-to-rent properties to families after seven years, a point contested by the homebuilding industry. The House’s version omits this resale provision.

Regulatory Changes and Urban Planning

“It’s got a lot of different ingredients in it, but it’s the fact that it’s all there together is what makes it so delicious,” said Elizabeth Warren, D-Mass., co-sponsor of the Senate version.

The bill incorporates a range of measures rather than a singular solution. Key provisions aim to relax regulations: permitting factory-built homes without permanent chassis and expediting environmental reviews for infill developments. A grant program supports the creation of “pattern books” with preapproved designs, expediting approvals and reducing costs.

Next Steps

Amendments were made to the House’s version, removing exceptions in the investor ban. The altered bill now returns to the Senate for potential final approval and alignment with the Senate’s earlier draft.