The Senate moved closer Wednesday to advancing a sweeping housing package aimed at boosting affordability, but a Trump-backed provision banning institutional investors from buying single-family homes is emerging as a flash point.<\/p>\n\n\n\n
Lawmakers cleared another procedural hurdle for the bill Wednesday, setting up a likely final vote before they leave Washington Thursday.<\/p>\n\n\n\n
The Housing for the 21st Century Act passed the House last month by a 390-9 bipartisan vote. The legislation includes a wide-ranging slate of measures designed to increase the supply of affordable housing.<\/p>\n\n\n\n
Sen. Tim Scott, R-S.C., the chair of the Senate Banking, Housing and Urban Affairs Committee, and Sen. Elizabeth Warren, D-Mass., its top Democrat, teamed up to advance and modify the bill in the Senate.<\/p>\n\n\n\n
“When President [Donald] Trump and Elizabeth Warren and Senate Republicans can all come to the same place on a housing bill, it shows that if you put partisan politics aside and focus on the issues impacting the American people, you can get results,” Scott told CNBC\u2019s “Squawk Box.”<\/p>\n\n\n\n
In its original form, the legislation was primarily intended to help first-time homebuyers and lower-income Americans enter the housing market or gain access to more affordable housing options.<\/p>\n\n\n\n
But the initial bill lacked a key policy Trump wanted \u2014 a ban on institutional investors, such as hedge funds or large corporations, buying single-family homes. Trump earlier this year signed an executive order banning the practice and urged Congress to codify it during his State of the Union address.<\/p>\n\n\n\n
“I\u2019m asking Congress to make that ban permanent because homes for people \u2014 really, that\u2019s what we want,” Trump said. “We want homes for people, not for corporations.”<\/p>\n\n\n\n
Scott and Warren added that provision to the bill. If passed, the package would also incorporate several policies from the ROAD to Housing Act, a separate Senate housing proposal that previously stalled.<\/p>\n\n\n\n
The provision would prohibit large-scale investors from purchasing single-family homes and would require companies that exceed a certain ownership threshold to divest within seven years.<\/p>\n\n\n\n
But the institutional investor ban is drawing concerns from some Senate Democrats and industry stakeholders who argue it could eliminate build-to-rent housing units.<\/p>\n\n\n\n
Sen. Brian Schatz, D-Hawaii, said on the Senate floor that “there is a problem” with the bill. He argued the ban on corporations and hedge funds buying single-family homes was written in a way that would force “anybody who owns and rents out more than 350 units, single family or duplexes” to sell after a seven-year period.<\/p>\n\n\n\n
“There\u2019s literally no reason for this,” Schatz said. “And the problem is that it was written in such a way that it was trying to capture the hedge fund problem, but they wrote it wrong.<\/p>\n\n\n\n
“And, so, the definition of institutional investor says, essentially, anyone who owns and operates more than 350 units to rent. That\u2019s bananas.”<\/p>\n\n\n\n
Several members of the housing and rental industry wrote in a letter to Scott and Warren that the seven-year clause would “effectively shut down build-to-rent development, leading to less supply and fewer options for renters.”<\/p>\n\n\n\n