Bipartisan housing bill passes US Senate, targeting red tape and corporate homebuyers

The US Senate approved a wide housing package on Monday. The bill aimed to boost supply and ease prices. It also sought fewer federal rules and more local control. Lawmakers described it as a major attempt in decades. The vote was 85-5, and the bill moved to the House.

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Negotiations intensified in recent weeks, as both parties faced voter pressure over housing costs. The House was expected to take up the bill later this week. If passed, it would go to President Donald Trump. President Donald Trump has signalled support, making passage more likely.

Housing bill and corporate investors

The final text banned corporate investors from buying single-family homes. It did not keep a Senate idea on resale timing. That earlier measure would have forced investors to sell new homes within seven years. Backers said the ban targeted Wall Street interest in housing and rising affordability stress.

The measure was the result of years of work to lower costs, expand housing supply, cut red tape, protect taxpayers, and help more Americans achieve the dream of homeownership, said Senate Banking Committee Chairman Tim Scott, who worked with Democrats to get the bill passed.

Massachusetts Senator Elizabeth Warren called it a landmark since 1990. Warren noted the average home then cost USD 150,000. Warren said prices now exceed USD 500,000. The bill acknowledges that the federal government has a role to play in lowering housing prices, Warren told The Associated Press.

For the first time ever, private equity will be blocked from buying up single-family homes and trying to turn housing into one more Wall Street investment.

Democratic Rep Maxine Waters of California supported the deal after talks. Democratic Rep Maxine Waters of California said it was a huge step toward finally addressing the affordable housing and homelessness crises in this country. Senate passage also stood out as a rare bipartisan win.

Housing bill and US affordability pressure

Republicans and Democrats promoted the bill as a response to the affordability crisis. Rising prices have been tied to a shortage of affordable homes. The housing market has stayed weak since 2022. That was when mortgage rates rose from pandemic-era lows and reduced buyer demand.

Sales of existing US homes stayed near a 4-million annual pace since 2023. That level was below the historical norm of 5.2 million. Sales dropped last year to a 30-year low. This year also started weak, with declines in January and February versus a year earlier.

An April Economic Report of the President cited a shortage of 10 million homes. A Harvard Joint Center for Housing Studies report this month also flagged weak sales. It said inventories were rising due to high buying costs. It added that renter and owner burdens kept increasing.

Realtor.com data showed median US monthly rent fell for nearly three years. Yet rent in May stayed 17.2 per cent above pre-pandemic levels. Lawmakers said these pressures helped drive the push for a large bill. Both parties also saw political risk in leaving costs unchecked.

Housing bill and grants, Section 8, manufactured housing

To lift supply, the bill aimed to shorten environmental reviews and speed building. It offered funds to local governments that add more homes. Community Development Block Grant money would support places exceeding the median building rate. It also set funds to convert abandoned infrastructure into housing.

The bill set a framework for communities to update outdated zoning rules. Such rules often limit larger developments. It also allowed banks to invest more in affordable housing. It raised limits on public housing units that can use private financing through Section 8 to rehabilitate properties.

It also removed older requirements around manufactured homes and expanded federal financing. Manufactured housing produces some of the most cost-effective housing in America, but access to financing has been tightly restricted, Warren said. This creates the opportunity for more manufactured housing and, at the same time, creates a structure for people living in manufactured housing communities to organise and protect their investment in their homes.

Housing bill and disaster recovery compromise

A key dispute involved a federal disaster recovery programme. The earlier Senate plan would have permanently authorised block grant recovery funds. That change aimed to avoid new requests after each disaster. House lawmakers raised concerns about programme operations. Negotiators settled on a three-year authorisation instead.

Support came from across the housing sector, including landlord groups and tenant advocates. There is no magic wand that will fix this crisis overnight, and no single piece of legislation is perfect, David Dworkin, chief executive of the National Housing Conference, the nations oldest housing coalition, said. Compromise demands that. But this bill is a significant down payment on a long-term effort to make housing more affordable for all Americans.

With inputs from PTI