New house under construction. (Photo by Dan Reynolds/Getty Images)
WASHINGTON — Republicans, Democrats and the White House are methodically and calmly moving toward a common goal: agreeing on a broad package of bills that would quickly facilitate ponderous housing costs and escalate supply.
There is no question of congestion here. No guerrilla snipers. A miniature effort to show voters in an election year that their lawmakers realize there’s a substantial problem when it comes to home buying.
This is why House earlier this month, it passed its version of housing reform with just nine dissenting votes. A Senate committee writing a similar bill approved it unanimously last year.
While there are still some hurdles before anything reaches President Donald Trump’s desk, what’s happening is almost like a throwback to the days when hitting 80% of the plan was a major victory and a political prize that was being lauded back home as the midterm elections loomed.
“There is no silver bullet to solve this problem,” he said Representative Mike FloodR-Neb., chairman of the Housing and Insurance Subcommittee.
But he added: “I think this bill, this legislation, includes a number of significant housing reforms that will increase housing supply and ultimately lower housing costs.”
Housing shortage
The House and Senate bills share a common goal, said Emma Waters, senior policy analyst at the Washington-based Bipartisan Policy Center. “Both bills really push for making it easier to build more affordable homes,” she said.
Rep. Emanuel Cleaver, director of financial services and a member of the House Financial Services Committee, explained the bill: “It ensures that every dollar we spend goes to further development.”
Some analysis conducted by the Zillow Group, a real estate company that studies home prices and trends last summer determined that about 1.4 million modern homes were added to the housing stock in 2023, but these were 1.8 million newly created families.
As a result, the housing shortage amounted to as many as 4.7 million apartments. Other estimates say as many as 7 million.
Typical house price in January in the U.S. was $359,078, up 0.2% from a year earlier, Zillow said. Prices depend on many different factors, including labor costs, material costs, interest rates, supply and demand, and more.
What can the government do
The Congressional legislation is trying to facilitate reduce supply and stabilize prices as much as the government can at this stage.
The House and Senate bills have several similar provisions. The Washington, D.C.-based bipartisan research organization estimated that the House bill contains portions of at least 43 different House or Senate bills27 of which had cross-party support.
Under the House plan, the federal Department of Housing and Urban Development would update the department’s construction standards for manufactured housing. The Senate bill contains similar provisions.
Rep. John Rose, R-Tenn., a member of the housing subcommittee, explained the problem: “Municipalities across the country have restricted or outright banned homes built on permanent steel frames. The result is less construction work, higher costs and fewer opportunities for working families to own a home.”
The House bill would provide money for “pattern books” of such apartments that would include pre-approved plans, which could speed up the approval process.
The legislation would also provide “many provisions to make it easier for state and local governments to reduce regulatory barriers,” Waters said.
Bills would allow money from Community Development Block Grants, that facilitate finance neighborhood projects to better support housing production.
The Senate bill would reward CDBG recipients who, unrelated to other CDBG projects, increased housing production in the previous year.
As a reward for building more housing in the previous year, these jurisdictions will receive additional CDBG funds, but there are still restrictions on how these funds can be used.
However, the House bill would change this restriction so that CDBG money could be used to build housing.
Help for consumers
Housing experts believe the reason for landlords’ reluctance is an unwillingness to submit to a government inspection; bills would streamline this process. Landlords would be given incentives to take on tenants with rent vouchers.
The HOME Investment Partnership Programwhich supports state and local efforts to provide housing for lower-income families would also get a billing change of sorts.
For example, the bill states that for many projects, environmental impact statements will no longer be needed and it will be easier to raise money from the DOM budget.
It can also facilitate consumers: make it easier for banks – usually social institutions focusing on local needs – to invest in cheaper housing. The House bill would raise the benefit cap on public investments, allowing more such investments to be made.
Rep. French Hill, R-Ark., was enthusiastic about this recipe. “Our bill helps banks gain access to stable deposit funds, streamlines an examination process tailored specifically for our premier community banks, and helps promote more community banks to do what they do best: lend locally and support their communities,” Hill, chairman of the Financial Services Committee, said in a statement.
What awaits us?
Banking regulation is one of the few major areas where the Senate and House disagree. Some Democrats express concerns that the House bill would remove too many regulatory barriers to banks.
“We have a bipartisan bill with unanimous support in the Senate that will help build more housing and lower costs for the American people. I’m glad to see the House moving forward on housing proposals,” said Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee.
But she said, “House Republicans should not hold housing assistance hostage in order to push through a bunch of bank deregulation bills that will make our community banks more fragile while harming consumers, small businesses and economic growth.”
Another potential obstacle to negotiations is the White House’s willingness to prohibit institutional investors from purchasing single-family homes. There is not much support in Congress for this idea.
Trump last month issued an executive order directing “key agencies to issue guidance that prevents relevant federal programs from approving, insuring, underwriting, securitizing, or facilitating the sale of single-family homes to institutional investors.”
Stay hopeful
There remains a sense on Capitol Hill that Republicans and Democrats will unite on a major housing bill, especially since Congress and the White House agree on most key provisions and leading interest groups are helping to push the legislation forward.
The National Association of Realtors enthusiastically welcomed the House and Senate bills.
“By removing barriers at every level of government, the legislation will make it faster and cheaper to build new homes,” the organization said after the House passed the housing reform bill. Realtors had similar praise for the Senate version.
The Coalition for Affordable Home Loan also liked the House bill, with CEO Emily Cadik calling it “a set of commonsense, bipartisan housing proposals that would increase the supply of affordable housing.”
Most Washingtonians who follow housing policy closely are hopeful about the legislative prospects.
“It’s all pretty positive,” Waters said.
