The landmark 21st Century Road to Housing Act became law after midnight Saturday without the signature of President Donald Trump.
His inaction and the subsequent path to enactment capped months of work for what is one of the most significant housing reform packages in 30 years, Realtor.com reported. Its enactment comes at a time when Americans are grappling with housing affordability.
The law was delayed for 10 days after being sent to the White House for Trump’s signature, a timeframe that was prompted when the president abruptly canceled signing the bill last month.
Joel Berner, senior economist at Realtor.com, says it’s unlikely we’ll feel much impact from the reforms this year.
“It could take years for a meaningful uptick in production to materialize and longer for it to have any impact on overall affordability,” Berner said.
CNBC reported that Trump had pushed his Republican allies to make the election bill, called the SAVE America Act, their top legislative priority before the November midterms, when Democrats hope to retake at least one chamber of Congress. The bill is aimed at cutting noncitizen voting in U.S. elections, even though that is already federally illegal and happens rarely, among other provisions, according to numerous media reports.
Months of Negotiations
Congressional leaders spent months negotiating the housing bill, Realtor.com noted. Its 45 provisions seek to spur more home construction and cut red tape. Also, the law adds limitations to institutional investors in the housing market.
Jay Shuman, an attorney at Nelson Mullins who focuses on real estate, told Realtor.com that much still needs to be done.
He said that developers and homebuyers need clarity on some of the provisions, especially those involving the investor ban. And some regulatory changes, while not major, require a wait-and-see approach.
“These are not large regulatory changes necessarily, other than [the institutional investor rules],” Shuman said. “But these things are the type that will stimulate more development, more supply, and make more deals pencil, particularly at the margins.”
Berner added that Congress also needs to approve funding for some of the new mandates.
He takes the long view, “especially as building is encouraged in the places that need it the most (the places where it’s currently hard to build due to regulatory burden), supply growth can close the housing shortage.”
Road to Housing Act’s Long Road to Enactment
Realtor.com noted that the bill’s final passage marked the end of a complex journey through Washington.
The Senate and the House each created its own version of the bill, and spent the first half of the year merging their different priorities.
The president inserted his own complication by pushing for a ban on institutional investors in the housing market. Some of the language of the Senate version of those rules made House members uneasy. The final bill kept some of those rules.
The Senate passed the bill a final time June 22 by an 85-5 vote. The next day, the House followed with a 358-32 vote.
The following day, Trump abruptly canceled his signing ceremony.
A few days later, Trump made clear he wanted to see an unrelated voter ID bill passed. Trump downplayed the housing bill, calling it a “big yawn” that includes too many Democrat policies. But when pressed, the president shied away from issuing a veto threat, calling it “fine,” Realtor.com reported.
Both parties continued to champion the bill ahead of the highly contested midterm elections, as a chance to show their side is focused on Americans’ affordability concerns.
“This common-sense bill passed with wide bipartisan support,” Rep. John Garamendi (D-CA) said on Wednesday. “Sign the bill, Mr. President, and let’s start to build.”
Overwhelming Support
Americans overwhelmingly support constraints on large institutions in the single-family housing space. And many are pessimistic about home affordability, Realtor.com noted.
The bill “represents a major step forward in addressing our nation’s housing challenges by addressing housing affordability and supply challenges,” the California Association of Realtors said.
The final version of the 381-page bill includes 45 provisions with major implications for housing, Realtor.com noted. Many of the measures are aimed at boosting housing production to address a huge national shortfall.
Realtor.com economists estimated that the U.S. has a shortage of more than 4 million homes, as a consequence of more than a decade of building fewer homes than were needed to meet demand.
“Among other things, the legislation aims to incentivize homebuilding by establishing policy guidelines and best practices, streamlining environmental review, and improving existing programs, including tying community development block grants to housing outcomes,” Realtor.com Chief Economist Danielle Hale said. “This last provision enables the federal government to put its finger on the scales of policymaking at the state and local level, where many of the policy and regulatory hurdles to homebuilding exist.”
The legislation also makes it easier to build and finance both manufactured and modular homes, which could bring down construction costs if used more widely, Realtor.com noted.
Here are some of the key provisions of the bill, according to Realtor.com:
- Restricting corporate buyers: Blocks Wall Street firms and large institutional investors from mass-purchasing single-family homes, backing the ban with steep financial penalties.
- Zoning reform: Creates a $200 million grant program to reward cities that eliminate restrictive zoning, while penalizing slow-growth communities by cutting their Community Development Block Grant funding by 10%.
- Cutting regulatory red tape: Accelerates construction timelines by waiving lengthy NEPA environmental reviews for low-impact HUD projects and streamlining repetitive property inspections.
- Expanding mortgage access: Launches a HUD pilot program to expand access to small-dollar mortgages below $100,000 and increases the amount of private bank capital that can be invested in local affordable housing.
- Modernizing factory-built housing: Updates FHA lending standards and draw schedules to give manufactured and modular housing financing parity with traditional, site-built homes.
- Disaster recovery fixes: Permanently authorizes the Community Development Block Grant-Disaster Recovery framework for faster postdisaster rebuilding and protects low-income rural tenants from losing rental assistance when a property’s underlying mortgage matures.
Trump’s Protest
In his Truth Social post, Trump wrote, “I will not sign the Housing Bill, which has been fully approved by Congress and sent to the White House, in PROTEST over the fact that the United States Senate is not capable of passing THE SAVE AMERICA ACT.”
“THE SAVE AMERICA ACT’S non-passage is CRAZY, and a serious threat to any politician who votes against it!” Trump wrote. He also claimed that the bill has broad support from Americans, despite polls that have shown otherwise, CNBC reported.
Trump also repeated his demand for Republicans to eliminate the Senate filibuster rules — which require 60 votes to pass most legislation instead of a 51-vote majority — in order to pass the election bill and other GOP priorities.
