Senate Housing Bill Faces Challenges Amid Bipartisan Support

The 21st Century ROAD to Housing Act, a comprehensive housing package recently passed by the Senate, aims to address the ongoing housing crisis in the United States. The legislation includes measures designed to expedite the construction of homes and reduce costs. However, it also introduces restrictions on institutional investors in the single-family rental market, which has sparked significant debate among lawmakers and industry stakeholders.

New York Times

One of the most contentious aspects of the bill is a provision that limits the ownership of single-family rental homes by institutional investors. Specifically, it mandates that investors owning 350 or more rental properties must sell newly built units to individual homeowners after seven years or face penalties. Critics argue that this restriction could hinder the overall goal of increasing housing availability. Ryan Smidt, CEO of Clay Residential, expressed concern that the bill's approach to single-family rentals reflects a bias against renters, stating, “It is as if the bill views renters as being not deserving of a single-family lifestyle.”

New York Times

The Mortgage Bankers Association has withdrawn its support for the legislation, citing concerns over the institutional investor cap and changes to Federal Housing Administration (FHA) multifamily loan limits. Bill Killmer, a senior vice president at the association, noted that the amendments could negatively impact housing volume growth. The Senate's changes have made the bill less appealing to key banking stakeholders, complicating its passage in the House, where a different version of the bill had previously been approved.

Banks sour on Senate housing bill, but may not stop passageNew York Times

House Financial Services Committee Chairman French Hill has expressed dissatisfaction with the Senate's version, particularly regarding the removal of community bank regulatory provisions. Rep. Maxine Waters, the committee's ranking member, has called for a conference committee to reconcile the differences between the House and Senate bills. She emphasized the need to address stakeholder concerns about potential negative impacts on housing construction and other unintended consequences.

Banks sour on Senate housing bill, but may not stop passage

As the housing bill moves to the House for consideration, the likelihood of a straightforward vote appears slim. Analysts predict that a conference committee will be necessary to negotiate a version that satisfies both chambers and key industry players. Kim Johnson from the National Low Income Housing Coalition noted that the involvement of influential lawmakers like Waters indicates a prolonged negotiation process ahead.

Banks sour on Senate housing bill, but may not stop passage

• “It is as if the bill views renters as being not deserving of a single-family lifestyle,” — Ryan Smidt, CEO of Clay Residential

New York Times

• “The concern is obviously the chilling effect that that would have — particularly the way that capital flows into those particular projects — if there's a recognition that you might be covered and that you have to dispose of the property, you know, within seven years, either from the time that you first invested or going forward,” — Bill Killmer, Mortgage Bankers Association

Banks sour on Senate housing bill, but may not stop passage

• “Unfortunately, the Senate removed several critical housing and banking provisions that House Democrats fought hard to include and that make the legislation stronger,” — Rep. Maxine Waters, D-Calif.

Banks sour on Senate housing bill, but may not stop passage

The 21st Century ROAD to Housing Act represents a significant effort to tackle the housing crisis, yet its passage is complicated by internal disagreements and industry pushback. The upcoming negotiations will be crucial in determining the final shape of the legislation and its effectiveness in addressing the nation's housing needs.

New York Times