The Senate passed the 21st Century ROAD to Housing Act, a combined housing reform bill that also takes aim at large institutional investors in single-family homes. The new legislation merges the Senate's ROAD to Housing Act with the House-passed Housing for the 21st Century Act. Local governments would see a reduction in burdensome regulations and more streamlined federal support to increase housing supply and affordability.
What’s Changed
The legislation focuses on incentives to build new homes, including new grants to revamp aging houses, accelerated environmental reviews for housing developments, and a new program to convert abandoned buildings into housing.
The bill would ban large investors from owning more than 350 single-family homes, though it includes many exemptions, including homes built to rent and investors who report positive rent payments to credit bureaus. The provision sunsets after 15 years and does not apply to private equity investment in multifamily or manufactured housing.
The bill requires investors and private equity firms that build new single-family homes to sell them to individual buyers within seven years, gradually reducing institutional ownership over time. Other deregulatory measures in the latest version include:
- Rental Assistance Demonstration Program Cap: Removes the cap on this program, unlocking private investment to improve dilapidated public housing
- Housing Supply Expansion Act: Repeals the permanent chassis requirement for manufactured homes, reducing costs by up to $15,000 per unit, according to industry estimates.
- Environmental Reviews: Streamlines the review process for states, local governments, and small infill housing projects.
- HUD-USDA-VA Interagency Coordination: Directs HUD, USDA, and VA to identify areas for collaboration on housing programs.
- Inspection Streamlining: Streamlines inspection requirements for housing units financed by multiple programs, including Section 8.
- Creating Incentives for Small-Dollar Loan Originators and Small-Dollar Mortgage Points and Fees: Increases flexibility for lenders originating for mortgages under $100,000 by easing regulatory requirements.
- Appraisal Workforce: Removes barriers to recruiting and retaining appraisers to address workforce shortages in the industry.
- Homeless Shelters: Gives communities flexibility to expand shelter capacity in response to homelessness.
- HOME Program: Updates the largest federal source of affordable housing construction funds, which has not been updated in over 30 years, by cutting red tape and updating it for the 21st century.
The White House has said President Trump would sign the legislation as is. Senate leaders must now convince the House to support their vision for a combined bill. The Senate version did not include the community banking provisions the House sponsor supports, one of the few House provisions not included.
Review the U.S. Senate Banking, Housing, & Urban Affairs Committee's section-by-section outline of the bill for more information.