Senate Advances Housing Bill As BTR Advocates Seek Clarity

Bipartisan legislation designed to put a dent in the nation’s longstanding housing shortage is on the congressional fast track, though it still contains a potential wrinkle for the build-to-rent sector.

The Senate voted 85-5 to advance the 21st Century Road to Housing Act on Monday night. This came after leaders in the chamber struck an agreement with their House counterparts last week, which made its ultimate passage extremely likely.

The House will begin considering the legislation on Tuesday and could vote on it the same day, Politico reported. President Donald Trump, who has expressed support for the bill, could hold a ceremony to sign it into law as soon as Wednesday.

Sen. Elizabeth Warren, a Democrat from Massachusetts, said the bill will be the most significant federal housing legislation in more than three decades and addresses an affordability crisis that has been a source of broad bipartisan concern.

“Housing prices are too darn high and housing supply too low,” Sen. Tim Scott, a Republican from South Carolina, said ahead of the vote.

The wide-ranging bill includes everything from incentives for streamlined zoning and the redevelopment of vacant or abandoned buildings to a ban on institutional investors owning more than 350 single-family homes.

Previous versions of the bill would have required BTR investors in the sector to sell new builds to a single-family buyer within seven years.

Following significant pushback from the commercial real estate industry, that rule was removed from the legislation.

However, last week, a group of industry lobbyists, including the National Multifamily Housing Council, National Apartment Association and Affordable Housing Tax Credit Coalition, raised alarms about language that was sowing confusion for the BTR industry.

They requested a technical fix, which wasn’t worked into the latest version of the legislation that Scott’s office provided to Bisnow on Monday night.

“It is unclear whether an existing or newly constructed development that is sold would be considered ‘newly constructed’ and, therefore, be subject to the ban,” the letter says. 

“The ambiguity of the statutory language has already created additional confusion in the rental housing market as investors continue to hold capital on the sidelines until this is resolved as the ability to engage in future transactions is critical to the business plans of many companies.”

The issue will need to be worked out by the Department of the Treasury during the implementation process if it isn’t addressed before the president signs the bill into law, NMHC Vice President of Public Affairs and Media Relations Colin Dunn said.