The bipartisan legislation was crafted in both chambers and must now pass the House. It seeks to build more homes and prevent large investors from out-bidding families.
The Senate voted overwhelmingly on Monday to pass a sweeping housing affordability bill aimed at lowering costs, putting Congress on the brink of a rare bipartisan victory in Donald Trump’s second term.
The vote was 85-5.
The legislation, which makes it easier to build homes and slaps limits on Wall Street investors from buying up houses, now goes to the House, which hopes to vote on it in the next few days. Then, it would go to Trump’s desk to be signed into law.
That it’s gotten this far with this many votes means that investment firms have already placed language into the bill that will let them continue to buy up houses by completing a few additional low-effort steps.
Last I heard the limit on ownership was 100 units, but it may not have been very aggressive at avoiding companies from splitting off into 1000 LLCs or other such nonsense.
That’s what I’m guessing, that each LLC is only allowed a certain number of units, or there’s a limit on the number of different types of units which will only lead them to re-name each type of unit to something else. It’s no longer “single family homes” but “one unit housing with land”. Or it limits the amount of “affordable housing” they can buy, but then they just change what’s affordable, or only build luxury houses - like everyone wants affordable, economical cars these days, but all you can buy are expensive, gas-guzzling SUVs.
This does not appear in the HR bill. Corporations are not allowed to purchase any new single family residences (which can have up to 2 units) at all. They’re not forced to sell what they currently own, but can’t buy up more.
so i’m going to admit i have shit understanding of the residential real estate market. kind of like congress, because how many congresspeople worked in residential real estate. so i picture they went and said “hey, let’s keep duplexes as SFRs” (i don’t know why, probably because they think they have more in common with SFRs that are one unit and less with condos, which kind of makes sense to me.) someone who can afford to go into the bank and ask for a loan with a straight face is probably a better bet to explain the residential real estate market though.
edit: shit, posted and forgot to take all the [oh my gods the government is insane you have to go insane to understand the government] ranting out. edited.
I think a bunch of homes have what’s often called a Mother-In-Law suite. Effectively a separated section or the house, or sometimes even a separate building in the same land parcel, where an older relative, or grown up child might live, but with a touch more privacy. Nothing to stop those being rented out, either.
So this would prevent those getting bought up. I believe you can get up to a 4 unit with certain types of government backed home loans.
yeah, those MiL suites are called ADUs (i think Accessory Dwelling Unit, essentially an Accessory Unit that is also a Dwelling. I’m making up the name for the acronym but i’m sure i’ve got it) when they’re not attached. Laws have gotten a lot less stringent about building those. i’m going to go dream of tiny homes for a bit now.
i used to live in utah and those MiL suites were called “we finished our basement”
How does it affect multi-family housing (e.g. apartment buildings)? And is this considered a problem, or is it only buying SFH that is the issue?
Doesn’t. This only refers to 1-2 unit structures.
How convenient.
Not sure why you expected apartments to be covered by a bill addressing home ownership.
hey, so it might help to take a dive into residential zoning law. figure out what you need to do to legally build an ADU without a permit in your locale and you should have figured out enough
Hah, I was about to comment that there’s no doubt some fine print in there that does still allow a shell company to buy, so while the book looks great, the story is shit!
Is that actually true or are you just assuming this?
I’m lazy so I asked an llm to analyze the text of the bill. I am Jack’s complete lack of surprise:
Yikes. I was speculating based on how easily this is being pushed through…
I did the same. Dueling LLMs. (Gemini Pro for this one.)
🤖 🤖 🤖
Here are the specific safeguards in the text preventing companies from using shell companies or subsidiaries to bypass the cap:
1. The “Aggregate” Rule
The legislation establishes a cap of 350 single-family homes. Crucially, the text defines a “large institutional investor” as any for-profit entity that, “alone or together with other entities,” holds the homes in the aggregate.
If a parent company sets up ten different LLCs and puts 340 homes in each, the law aggregates them. For regulatory purposes, the parent company owns 3,400 homes and is in blatant violation of the ban.
2. A Broad Definition of “Investment Control”
The bill uses a sweeping definition of “investment control” to catch indirect ownership. An entity is counted toward the 350-home cap if it: Owns the home directly.
Has primary investment or management decision-making authority over the home.
Directly or indirectly controls the owning entity (this catches general partners, managing members, investment managers, and advisors). Directly or indirectly owns a significant equity stake (usually defined as over 25%, though explicitly excluding genuinely “passive” investors).
For example: If you own 200 homes through Subsidiary A, 100 homes through Subsidiary B, and you act as the General Partner on a real estate syndication holding 60 homes, your aggregate count is 360. You are over the cap.
3. A Loophole-Free Definition of “Purchase”
Companies cannot use corporate restructuring to sneak homes into their portfolios. The bill defines “purchase” to include any transfer or acquisition of a single-family home. This includes acquiring homes through:
Mergers and acquisitions (buying a company that owns homes counts as buying the homes).
Bulk portfolio purchases.
Foreclosures.
Construction.
4. Severe Financial Penalties
The financial penalties are designed to be punitive enough that testing gray areas isn’t worth the risk. Violations carry a civil penalty of up to $1 million per violation or three times the purchase price of the home, whichever is greater. Buying a $400,000 house in violation of the cap could trigger a $1.2 million fine.
It seems this is mostly covered: controlling the financial manager or over 25% of the entity that controls the homes counts as the company owning the house. But those first level entities wouldn’t be able to buy any more, any way.
Ah a fellow cynic. I also have no faith this will solve the problem. My issue is that this is all coming way too late. I personally think they’ve gotten all the easy money out of the system and realizing that the housing market has hit a temporary peak. Now it’s safe to pass this bill and allow politicians to get brownie points. Atleast in my area, I’m hearing of way less stories of families being beat out by cash offers 200k over asking. Which was the norm during covid.
It’s fine if they get political points for doing good things. That’s how it’s supposed to work.
This should help.
A bigger solution would be more real mass transit in cities. This Atlanta, LA, Texas traffic is fucking stupid and just one more lame won’t fix anything. Mass transit and walkable villages bring high density housing that people actually want. And they reduce traffic and make the world a better place for everyone.
Guess what, if you’re just visiting a city, or you want to go to a concert or a sporting event, mass transit still helps you even if you’re in a car. Shouldn’t be hard to see why.
Yeah the non-cynic in me agrees with you, but I shoved him in a box for that comment, and for this one. The thing that doesn’t sit well with me is that this bill is coming 6 years after the problem really became an issue. With that and the close proximity of midterms, it just seems like some corporate daddy with enough swing has gotten their fill of single family housing and has decided to let a bill be passed that doesn’t affect their current enormous backlog of “investments”. There’s also a crazy man that lives in my crawlspace that believes that this is all because community credit unions started bidding on homes in low income neighborhoods and selling them back fo people who lived there /have lived in that neghboor hood. He’s bad with specifics (radon and rats it from the crawlspace accommodations) but I think it was in Detroit or Chicago?
At anyrate, I would sure love a solid passenger train system that wasn’t getting fingerbanged by the elephant hand that is the US freight system.