Breakthrough compromise in housing bill gives victory to investors

The U.S. House is set to approve a bipartisan housing affordability bill on Wednesday that would limit major investors from buying single-family homes while allowing them to build additional housing units.

The measure is gaining support from the White House after some last-minute changes struck a balance between the Senate version, which imposed more restrictions on major investors who can own homes, and the House version, which was seen as more favorable toward Wall Street.

The legislation won the support of the rental, construction and housing industries by removing a requirement in the Senate-passed bill that would have forced major investors — defined as owners of 350 units or more — to sell any units built beyond the cap within a seven-year window.

There have been several standoffs between the House and Senate over the housing affordability bill. Both houses approved their respective versions of the bill with strong bipartisan support earlier this year, but several provisions – including oversight of investors in the housing market – have sparked inter-chamber disputes.

It’s unclear whether the amended House bill will garner the 60 votes needed for passage in the Senate before advancing to the White House for President Donald Trump’s signature. Senator Elizabeth Warren, D-Mass., the top Democrat on the committee that oversees housing, worked with the White House to get several provisions with Democratic support into the bill. And other senators voted against the bill in March due to concerns about the forced sale of build-to-rent homes, arguing it would reduce housing supply.

Senate Majority Leader John Thune, R.S.D. He told reporters in response to a question from CNBC on Tuesday that when the House passes the bill, the Senate will “deal with it accordingly.”

Still, other senators said his original bill was right to target investors who build homes with the intent to rent, not sell.

“The House basically destroyed President Trump’s key priority, which is to make sure young people have access to single-family homes to buy,” Senator Bernie Moreno, R-Ohio, told CNBC in a hallway interview. He said the need for investors to sell the homes they have built is important for expanding home ownership.

“If we kill the building-and-rent industry, that’s what will happen,” he said. “We don’t want homes to be for rent, we want them to be in a way that young people, in particular, build generational wealth.