Housing affordability bill stalls as investors are banned from buying homes

A major housing affordability bill that is expected to pass the Senate as early as Thursday will hit a wall in the House, due in part to concerns about banning large investors from buying single-family homes.

At a House Republican retreat this week attended by party leaders and committee chairs, Majority Leader Steve Scalise (R-Louisiana) predicted that the housing measure would likely stall due to differences between the House and Senate versions. He said unless the Senate addresses the broader concerns of House members and House Finance Committee Chairman French Hill (R-Ark.), the bill will likely need to be consulted by both chambers before it becomes law.

“If the Senate thinks we’re going to take this drug, we’re going to go to the conference,” Scalise told the committee, according to three attendees who requested anonymity because they were discussing a closed session. The conference committee is made up of members of both chambers and is tasked with reconciling differences between bills approved by the House and Senate.

The housing policy received rare bipartisan support in a deeply divided Congress. The House version of the bill passed 390-9 in February, and the Senate version passed a procedural vote with more than 80 votes.

But Scalise’s outlook for the Senate bill suggests that it will likely take weeks or months of negotiations before a final bill is finalized.

President Donald Trump has called on Congress to not only pass housing affordability legislation, but also include a ban on large investors and corporations buying single-family homes.

Although the request came too late to add the provision to the House bill, senators agreed to language that would prohibit companies from owning more than 350 homes. However, there is an exception for companies that build or renovate single-family homes that can own more than 350 homes if they sell additional homes to non-corporate buyers after seven years.

Several lawmakers raised questions about this provision during the meeting, according to two people in attendance.

One participant said he was concerned that if companies had to sell homes in less than 10 years, they would run out of funds to build new homes. Attendees also said the provision could limit real estate agents’ ability to offer sellers the best price.

Hill was not present at the meeting, but the House members said in a statement that they “shared their concerns with their colleagues in the Senate.”

Hill added that lawmakers “look forward to working to achieve bicameral success in housing policy that benefits Americans by increasing supply and reducing 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 key provisions, including meeting the right-wing Freedom Caucus’ demand for a five-year ban on central bank digital currencies.

“Our bill is great, their bill is great,” Scott said. “When you put those two together, you get a bicameral approach to housing.”