Housing affordability bill clears Senate with investor ban

But the bill faces an upward battle in the House, which passed its own bipartisan legislation in February. House GOP leaders have already said the measure will need to be negotiated, suggesting they will not take up the Senate-passed bill. House Majority Leader Steve Scalise, R-La., earlier this week told fellow House Republicans in a closed-door meeting that the measure is likely to bog down over differences between the two chambers’ versions.

One of the biggest issues is a ban on investors and companies from buying single-family homes if they already own 350 or more. Companies that add to the housing supply through building or serious renovations would be able to own more homes, but would need to sell those homes after no more than seven years. 

That provision was not initially in the Senate bill, or in the bill the House passed, but President Donald Trump championed the ban and indicated he wouldn’t sign a bill without it.

Numerous industry groups, including the National Association of Home Builders, Mortgage Bankers Association and National Housing Conference said in a position statement that the seven-year limit would eliminate production of build-to-rent housing and “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.”

Sen. Elizabeth Warren, D-Mass., supported adding the institutional investing homeownership limit and said it would protect consumers.

“They can also build as many apartment houses, as many condo complexes, as many triplexes as they want,” Warren said in an interview Thursday with CNBC. “But there’s a point of principle here, and that is that private equity cannot come in and buy up all of the housing supply in America. Homes should be for families, not for giant corporations.”

That view was not universally shared, however.

Sen. Brian Schatz, D-Hawaii, who voted against the bill, said the 350 homes cap is “bananas” and would ultimately result in a ban on rental housing. Schatz, like Warren, has a liberal voting record.

“I don’t think people are clocking how bad this is going to be on the supply side,” he said, adding that it will “screw up” the single-family and duplex rental market.