Much of the housing industry has done an abrupt about face and shifted from support of the 21st Century Road to Housing Act to outspoken opposition after language was included by U.S. Senators Elizabeth Warren (D- Mass.) and Tim Scott (R-S.C.) that would effectively eliminate the Build-to-Rent housing sector as it currently exists.
The U.S. House of Representatives passed a version of the bill in February, and the Trump administration expressed its support. The multi-component, largely bipartisan legislation seeks to reduce or eliminate construction delays caused by environmental reviews and establish zoning guidelines for municipalities. Shortly afterward, President Trump issued an executive order concerning single-family ownership by investment institutions to limit the financial sector’s influence in the housing market.
Warren and Scott’s revision to the bill was overwhelmingly approved in the Senate. That revision, however, has the housing industry up in arms because it bars institutional investors from owning more than 350 homes and, most specifically, requires them to sell any new homes in properties developed as Build-to-Rent communities to individual buyers within seven years.
A coalition of 12 industry groups, including the Mortgage Bankers Association, issued a letter of opposition, saying the “requirement will effectively shut down BTR development, leading to less supply and fewer options for renters.”
The letter asserted implementing the requirement would displace thousands of renters every year and negate the benefits of the overall bipartisan housing package. The MBA has urged legislators and President Trump to amend the bill before approving it into law.
More than three dozen other groups signed an earlier letter urging changes after the measure passed its initial procedural vote, claiming it was a massive overreach.
Democrat Sen. Brian Schatz of Hawaii said the bill would eliminate an entire segment of the housing market and said he thought the change might be an easily corrected error in drafting.
Warren, however, confirmed the change was intentional “to block private equity from taking over the single-family home.”
The next step for the bill in the legislative process requires the House to either take up and pass the Senate version or for the two chambers to meet to reconcile the bill into a uniform piece of legislation to send to President Trump, who could then either sign or veto it. (Source)