Trump Pushes House To Pass Housing Bill With BTR Forced-Sale Provision
President Donald Trump, after months of silence, urged the U.S. House of Representatives to pass a housing bill that the real estate industry is pushing hard to change.
The U.S. Senate in March passed the 21st Century Road to Housing Act, but a bipartisan group of lawmakers in the lower chamber is refusing to sign off on it. Their opposition is due in part to a provision that would require the sale of newly constructed, build-to-rent single-family homes to homeowners after seven years.
“The American Dream of Homeownership is under attack,” Trump said in a Monday night social media post calling for a ban on Wall Street investment firms purchasing single-family homes.
He added that the Road to Housing Act “would ensure that homes are for people, not Corporations.”
The president’s supportive post came after unnamed sources told Politico he had soured on the BTR sale requirement earlier this month. Trump had even reportedly drafted a social media post panning it that was ultimately never published, Politico reported.
Trump signed an executive order in January banning large investors from purchasing single-family homes and calling on Congress to enact permanent legislation.
The Road to Housing Act initially passed the House without the BTR ban earlier this year, but the forced-sale provision was worked into the Senate version two weeks before it was passed by the upper chamber.
The sale requirement would threaten the potential construction of 40,000 BTR units per year, according to a March report from the National Association of Home Builders. The market quickly froze up in response to the Senate proposal, with lenders and investors halting financing for projects amid the uncertainty.
“That has driven the market to basically paralysis,” Kinloch Homes CEO Bruce McNeilage, a BTR developer, told Bisnow last month. “Everything is up in the air, we don’t know what’s going to happen, and therefore investors can't fund deals.”
But as recently as last week, some BTR players appeared to be optimistic about the industry’s lobbying efforts against the forced-sale provision.
Invitation Homes and AMH, two major players in the space, spent a combined $554M on stock buybacks during the first quarter in a show of confidence.
Even if the bill passes in its current form, it is unclear exactly how it would be implemented in practice.
“There's so many unanswered questions and ambiguous directives within that original bill that it just makes it very hard for us to understand how they could actually implement it,” Southern Impression Homes CEO Chris Funk said. “I don't think it's so much that people aren’t nervous, it's just that they know that there's going to have to be changes.”
