Senate Passes 21st Century ROAD to Housing Act, But Build-to-Rent Dispute Complicates Path Forward
Today, the Senate took a step forward in advancing housing regulatory reform legislation, but in doing so, without making changes to language concerning Build-To-Rent housing, it may have made the course forward more precarious.
By a vote of 89-10, the chamber passed the 21st Century ROAD to Housing Act. The bill includes a number of bipartisan proposals that we support and have been working on in both the House and Senate. You may view a section-by-section description of the bill here.
The Senate legislation includes provisions to:
Lift the RAD cap. (Sec. 201)
Lift the public welfare investment (PWI) cap from 15 to 20 percent (Sect. 204). This LIHTC industry priority has the potential to increase equity investment by financial institutions that are bumping up against the 15% cap.
Streamline NEPA reviews for small and infill housing projects. (Sec. 208).
Reform the HOME program. (see Sec. 502). As we previously noted, the Senate bill does not include the benign language substituted in the House bill that would have required a study of the Build America/Buy America program and recommendations for changes. We continue to work on BABA through a variety of avenues.
A ban on institutional investors from buying single-family homes. (See Sec. 901)
Despite considerable feedback and lobbying from the affordable housing industry and our market-rate colleagues, the Banking Committee did not amend the language to exempt Build-to-Rent housing from the mandate. Nor did they remove the requirement to sell properties after seven years. The proposal could adversely affect some Housing Credit properties, as it does not clearly exempt them from the forced sale of build-to-rent properties after seven years.
The legislation will now go to the House, where all indications lead us to believe the Senate bill will be rejected, and the House will demand a conference to meld provisions it favors that were not included in the Senate legislation. This includes amending the private equity language, which does not enjoy the support of many House lawmakers. We will be working to amend the language dealing with build-to-rent as it moves forward. A conference is uncommon these days, but despite Administration support (President Trump has indicated he is not focused on this legislation but rather a bill to address his concerns with voting. Last week, he dismissed housing as a priority for the American public), senior House leaders, including Financial Services Chair French Hill (R-AR) and Cong. Mike Flood (R-NE), as well as Speaker Johnson and Majority Leader Scalise, have indicated that a conference with the Senate is necessary to resolve the differences in the bills. This could drag out the process and put the legislation in jeopardy of failing to pass this Congress.