WATCH LIVE: Senate approves bipartisan housing bill

WASHINGTON (AP) — The Senate passed a wide-ranging bill Thursday to make U.S. housing more accessible and affordable, a rare bipartisan effort in Congress to address a growing national problem.

Watch the Senate floor in the video player above.

The bill, approved by an 89-10 vote, would reduce regulations and streamline corporate investors and expand how housing dollars are used to build affordable homes and rentals. It will now return to the House of Representatives, which passed a similar bill earlier this year.

“We have a housing shortage across America,” said Massachusetts Sen. Elizabeth Warren, who worked with Republicans to gain overwhelming bipartisan support for the legislation. “We need more housing of every type. More housing for first-time homebuyers, more housing for renters, more housing for seniors, more housing for people with disabilities, more rural housing, more urban housing, more, more, more.”

She said the legislation “will help bring prices down.”

Senate Banking Committee Chairman Tim Scott led the effort with Warren. The Senate “will do what too many people have failed to do in this Legislature over the last few decades, which is pass consequential legislation that makes it easier to become a homeowner,” he said before the vote.

Obstacles to legislation

Despite a bipartisan vote in the Senate and a shared desire to pass the legislation before the midterm elections, it is unclear whether the House will take up the bill again — or whether President Donald Trump will sign it.

Trump has supported the legislation through bipartisan negotiations, but also slowed its momentum by announcing last weekend that he would not sign any new measures unless Congress passes legislation requiring voters to show proof of citizenship and ending most mail-in ballots. The Senate is expected to begin considering this bill next week, but it is unlikely to pass because all Democrats oppose it.

At the same time, House leaders have indicated they are unlikely to accept the Senate’s version of the housing legislation, and have suggested they launch a formal conference process to negotiate a final agreement between the two chambers — a process that could take months.

Senate Majority Leader John Thune said before the bill passed that conference negotiations were a possibility, “but obviously the quickest way to do that is to get a Senate bill and pass it.”

If the White House wants that to happen, he said, “maybe they should make that argument to House leadership.”

House Financial Services Chairman French Hill, R-Arkansas, said in a statement that Senate passage is an “important step” but added that “it is important that we get the details right and alleviate some of the concerns House members have raised about the Senate bill.”

Make housing more accessible

Both Republicans and Democrats have embraced this legislation because of the national shortage of home construction and with prices rising faster than incomes. The bill would give local governments more authority over housing issues, allow banks to invest more in affordable housing and lift restrictions on the number of public housing units that can receive private financing through Section 8 financing to rehabilitate properties.

“There are several provisions in this bill that stop treating the United States as a single housing market and start giving local leaders the tools they need to solve their unique regional puzzle,” said Peter Carroll of Quality, which tracks housing data.

The bill aims to make building homes easier by simplifying some regulations that require environmental reviews and inspections. It also raises the maximum grant for emergency shelter beds and street homeless outreach.

Since many affordable housing developers rely on manufactured and modular homes that can be transported to areas in need of housing, the legislation also would eliminate the requirement to build these homes on a permanent structure, reducing costs and making them easier to build and design.

Corporate investors

One of the most controversial provisions in the bill would prevent institutional investors from buying single-family homes — a top priority for Trump.

The draft law defines these investors as anyone who directly or indirectly owns 350 or more single-family homes. Investors of any size would not be required to sell single-family homes purchased before the date the bill becomes law.

They will still be allowed to buy or build single-family homes if they rent them out, but will be required to sell them to a single homebuyer after seven years.

Trump pushed the ban because he was under pressure to address voters’ concerns about affordability ahead of the midterm elections. “People live in homes, not businesses,” Trump said in a social media post in January, calling on Congress to act.

Critics of the bill’s restrictions on large institutional investors say it will lead to lower rental housing stock and higher rents as landlords face less competition. At the same time, it’s unclear how a ban targeting institutional investors who own 350 or more single-family homes would significantly reduce the competition that average homebuyers might face when they shop for a home.

Need for repair

The US housing market is experiencing a recession dating back to 2022, when mortgage rates began to rise from their pandemic-era lows.

Previously occupied U.S. home sales have been approaching an annual pace of 4 million now going back to 2023 — well below the 5.2 million annual pace that has been the historical norm. They slowed last year to a 30-year low and have remained sluggish so far this year, falling in January and February compared to the previous year.

The sharp rise in housing prices, especially in the early years of this decade, and the chronic housing shortage exacerbated nationally by years of below-average housing construction, drove many aspiring homeowners out of the market.

Meanwhile, while the median monthly rent in the U.S. has been declining for more than two years, it was still 15.2% higher in January than it was at the beginning of 2020, according to data from Realtor.com.

Cramon reported from Atlanta and Vega from Los Angeles.