US Senate passes housing affordability bill with bipartisan support; what's in it?

The US Senate on Monday (June 22) approved a bipartisan housing bill aimed at reducing housing costs by encouraging new construction, easing permitting requirements and limiting the role of large investors in the housing market.

The measure, known as the 21st Century ROAD to Housing Act, passed by an overwhelming 85 to 5 vote and now moves to the House of Representatives. If approved there, it will be sent to President Donald Trump for his signature.

The legislation arrives as Democrats and Republicans prepare for the November midterm elections, with housing affordability expected to remain a major concern for voters. Several senators missed the vote because severe thunderstorms in the Washington area disrupted flights and led to a ground stop at Ronald Reagan National Airport.

Limiting institutional investors

One of the bill's most prominent provisions seeks to curb purchases of single-family homes by large institutional investors. Under the proposal, corporate investors that already own 350 or more properties would be barred from buying additional single-family houses.

A key section of the legislation titled “Homes Are For People, Not Corporations” is designed to prevent families from being outbid by large investment firms in the housing market.

The final agreement emerged after months of negotiations. The Senate had passed one version in March, while the House approved a different version in May. Lawmakers eventually reached a compromise after the Senate accepted several House-backed provisions and dropped a proposal requiring major investors owning or building at least 350 single-family homes to sell them after seven years.

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Incentives to build more homes

The legislation also focuses on increasing housing supply through grants and funding programmes. It creates a competitive grant programme worth $200 million annually to reward cities and local governments that expand housing construction or reform restrictive zoning policies.

The bill allows Community Development Block Grant funding to be used directly for building affordable housing and requires recipients to maintain a database of undeveloped publicly owned land.

It also establishes a pilot grant programme to help local governments convert vacant commercial and industrial buildings into affordable homes.

Another provision removes the federal "chassis rule" for manufactured housing. The requirement previously mandated that manufactured homes remain permanently attached to a steel frame with wheels and an axle. Supporters believe eliminating the rule could reduce construction costs for a new manufactured housing unit by as much as $10,000.

The legislation also streamlines environmental reviews to accelerate construction projects and raises the Public Welfare Investment cap for banks from 15 per cent to 20 per cent, allowing greater investment in affordable housing and community development initiatives. In addition, it increases private financing limits under Section 8 to support the rehabilitation of older public housing properties.