US Senate advances bill to lower housing prices

By Richard Cowan

WASHINGTON, March 11 (Reuters) - Republicans and Democrats in the U.S. Congress are lining up behind legislation to encourage more affordable housing, in a rare example of bipartisan action on a quality-of-life issue for voters.

The bill, which has drawn broad support from industry groups, would overhaul regulations to make it faster and cheaper to build new housing. It would also modernize rules for factory-built housing and ban large investment groups from buying more single-family homes, a measure backed by President Donald Trump.

The Senate late on Wednesday voted 84-10 to back a compromise version of the measure and 82-11 to clear the way for a vote on passage, likely on Thursday.

At a time when Republicans and Democrats are fighting bitterly over Trump's immigration crackdown and the war on Iran, lawmakers have rallied around the affordable-housing effort.

The latest version is spearheaded by Republican Senator Tim Scott of South Carolina and Democratic Senator Elizabeth Warren of Massachusetts.

The House of Representatives passed its own version by a similar margin, and the two chambers will have to resolve their differences before Trump can sign it into law.

Some industry opposition to specific provisions of the Senate bill has surfaced, which could stir resistance in the House if they are kept in the legislation.

The Mortgage Bankers Association, the National Association of Home Builders and several other groups released a statement on Tuesday citing their strong support for the Senate bill.

But they balked at a provision requiring large institutional investors to sell newly built rental housing after seven years of ownership. That, they wrote, "would take hundreds of thousands of housing units off the market over the next decade, many of which would serve lower- and middle-income households."

Meanwhile, a Senate provision barring the establishment of a federal digital currency could be a complicating factor because crypto broadly is a contentious issue in Congress.

Lawmakers are eager to show voters they are tackling the issue ahead of the November midterm elections, which will determine control of Congress.

The affordability debate has encompassed everything from the cost of eggs to child care, but few items account for a larger share of household budgets than housing.

Economists say the U.S. has a shortage of roughly 4 million homes after years of underbuilding following the 2008 financial crisis, while local zoning rules often make it difficult to build in developed areas.

Supply-chain disruptions during the COVID pandemic drove building-material costs higher as well, while the sharp increase in interest rates that followed also pushed up mortgage costs.

Home prices have risen 60% since 2019, according to Harvard University's Joint Center for Housing Studies, and the median price of a single-family home in 2024 reached five times the median household income, well above the ratio widely considered to be affordable.

CURBING CORPORATE HOME PURCHASES

The legislation would streamline federal environmental reviews for construction projects and make it easier to convert vacant buildings into apartments.

It also would expand financing for affordable housing and increase loan limits for federally backed mortgage insurance programs for multifamily homes.

The National Association of Realtors and civic groups like the National League of Cities support the bill.

Companies that own more than 350 single-family homes would be prohibited from buying more, in an effort to prevent them from outbidding individual buyers.

Even the bill's champions say it will not fix the problem. Warren said it "takes a good first step" to rein in corporate landlords, while Norbert Michel of the libertarian Cato Institute said it mainly tweaks existing policy in an attempt to show voters that lawmakers are taking action.

"It's a political ploy to say they are doing something about housing," he said.