Investor ban on buying homes stalls housing affordability bill

A major housing affordability bill poised to clear the Senate as soon as Thursday will hit a wall in the House, in part over concerns about a ban on major investors from buying single-family homes. 

During a meeting at the House Republican retreat this week attended by the party’s leaders and committee chairs, Majority Leader Steve Scalise, R-La., predicted the housing measure is likely to bog down due to differences between the House and Senate versions. He said that if the Senate doesn’t address wide-ranging concerns from House members and House Financial Services Chair French Hill, the bill is likely to require discussions between the House and Senate before it could become law.

“If the Senate thinks we’re gonna take this medicine, we’re gonna go to conference” committee, Scalise said according to three attendees, who spoke on condition of anonymity to discuss the closed-door meeting. A conference committee is made up of lawmakers from both chambers who are charged with reconciling differences between legislation that’s been approved by the House and Senate.

The housing package has received a rare degree of bipartisan support in a bitterly divided Congress. A House version of the bill passed 390-9 in February, while the Senate measure has advanced through procedural votes with more than 80 votes supporting it.  

Yet Scalise’s outlook for the Senate bill means the legislation will likely need to go through weeks, or months, of negotiations before a final bill is ready.

President Donald Trump called for Congress to not only pass housing affordability legislation, but also include a ban on major investors and companies from buying single-family homes.

The ask came too late for the provision to be added to the House bill, but senators agreed on language that would ban companies from owning more than 350 homes. However, companies that build or renovate single-family homes would have an exception allowing them to own more than 350 if they sell the additional homes to non-corporate buyers after seven years.

Several lawmakers raised issues with that provision during the meeting, according to two attendees. 

One attendee said there were concerns about a lack of capital into building new homes if companies had to sell them after less than a decade. The attendee also said the provision could limit the ability of real estate agents to get the best price for the seller.

Hill, who was not at the meeting, said in a statement that House lawmakers “have communicated the concerns from our members to our Senate colleagues.”

Hill added that lawmakers “look forward to working to achieve a bicameral success in housing policy that will benefit the Americans people with growing supply and lower construction costs.”

Senate Banking committee Chairman Tim Scott, R-S.C., told CNBC’s Squawk Box on Wednesday that the Senate has adopted 20 of the House bill’s main provisions, including meeting the demands of the right-wing Freedom Caucus for a five-year ban on central bank digital currency.

“Our bill is fantastic. Their bill is good,” Scott said. “Putting those two together, we have the bicameral approach to housing.”