Investor ban on buying homes stalls housing affordability bill

A major housing affordability bill expected to be approved in the Senate on Thursday will hit a wall in the House of Representatives, in part because of concerns about banning large investors from buying single-family homes.

At a meeting of the House Republican caucus this week with party leaders and committee chairmen, Majority Leader Steve Scalise (R-La.) predicted the housing measure would likely be deadlocked due to differences between the House and Senate versions. He said that if the Senate does not address the broad concerns of House members and House Financial Services Chairman French Hill, the bill is likely to be negotiated between the House and Senate before becoming law.

“If the Senate thinks we’re going to get this medicine, we’re going to go to conference,” Scalise said, according to three attendees who spoke on condition of anonymity to discuss the closed meeting. A conference committee consists of lawmakers from both chambers tasked with reconciling differences between legislation approved by the House and Senate.

The housing package has received rare bipartisan support in a sharply divided Congress. While the House version of the bill passed 390-9 in February, the Senate measure advanced on procedural votes and was supported by more than 80 votes.

But Scalise’s view of the Senate bill means it will likely need to go through weeks or months of negotiations before the final bill is ready.

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

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

According to two participants, many MPs raised issues with this provision during the meeting.

One respondent said there was concern that there would not be enough capital to build new homes if companies were forced to sell them in less than a decade. The respondent also said the provision could limit real estate agents’ ability to get the best price for the seller.

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

Hill added that lawmakers “look forward to working to achieve bicameral success on housing policy that will benefit Americans through increased supply and lower construction costs.”

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

“Our bill is great. Their bill is good too,” Scott said. “When we put those two together, we have a bicameral approach to housing.”