The Senate’s housing bill has a Warren problem
by Joe Borelli · The Washington TimesOPINION:
Washington has been chasing a silver bullet on housing for years. The latest target: institutional investors. The latest proposed quick fix: a government mandate forcing the sale of their homes after an arbitrary number of years.
This idea polls well, I acknowledge, but good polling and good policy are two different things. This provision is good polling disguising itself as good policy.
Institutional investors own less than 1% of single-family homes nationally. They are more visible in some markets than others, but they are not why housing is unaffordable across America. The real culprit is a supply shortage that the failed economic policies of the Biden years did not address.
Working American families are now paying that price. They deserve a real solution, not a scapegoat or the political antics between chambers.
That is why I am skeptical when the answer on the table is a sweeping mandate to force the sell-off of rental properties. That does not fix supply; it reduces it. No provision in this housing package magically gives renters a down payment on the home where they live to offset it.
That brings me to the Senate version of the 21st Century ROAD to Housing Act and its problem of Sen. Elizabeth Warren, Massachusetts Democrat.
This legislation, if passed, would be the most significant housing reform in nearly four decades. It exists because President Trump made housing affordability a central promise of his campaign and has continued to push it in office. Congress is responding to that mandate.
Yet as the Senate rushed its bill through the chamber on an 89-10 vote, Ms. Warren and her colleagues quietly buried a provision that cuts directly against Mr. Trump’s supply-side goals. Specifically, the provision would enforce a government-mandated sale of build-to-rent homes after seven years.
Advertisement Advertisement
It is worth addressing what build-to-rent actually is. These are homes that would not otherwise exist. Developers are not competing with families looking to buy; they are competing with empty lots and bureaucrats who would rather regulate than build.
Unlike restrictions on investors buying existing homes — which are understandable but misguided attempts to address competition with prospective buyers — forcing the sale of build-to-rent properties does something arguably worse. It tells builders to stop building.
When capital gets that message, it listens. In fact, we are already seeing capital sit on the sidelines as this legislation crosses the 1-yard line. Projects are stalling. Timelines are slipping. Builders are walking.
The supply we desperately need is already being affected, and it can only get worse if this provision passes.
Now consider who actually lives in these communities: real working families who want to live in a safe neighborhood near good schools, and seniors who have built their routines around a stable home. The Warren provision does not give them a path to ownership. It gives them an eviction notice.
Advertisement Advertisement
Families are displaced right before their children finish school. Seniors are uprooted just before retirement. That is not housing policy. That is chaos dressed up as reform.
The House is right to push back.
What House Republicans are doing is not obstructionism; it is course correction. They are removing a problematic provision so the rest of the package can work as intended. They are protecting the private capital that funds new construction, and they are doing it in alignment with what Mr. Trump has asked for: more supply and lower costs, a real win for American families.
I have supported the president for a long time. If he believes targeted restrictions on institutional investors are part of the solution, then I am open to them in the narrower way the House has framed them. Still, there is a right way and a wrong way. The Senate chose wrong on the heels of Ms. Warren, and Mr. Trump knows that.
Advertisement Advertisement
Mr. Trump deserves the right bill on his desk. It is time to send him one.
• Joe Borelli is a managing director at Chartwell Strategy Group in the firm’s New York office. He is a former New York City Council minority leader and chairman of the Staten Island delegation.