The U.S. Senate advanced a bipartisan housing bill on Wednesday that lawmakers say could help lower home prices by making it easier and cheaper to build new homes.
The measure, known as the Housing for the 21st Century Act, would also expand affordable housing financing and limit large institutional investors from buying more single-family homes.
Supporters say the bill is aimed at a long-running housing shortage that has pushed prices higher and made homeownership harder for working families.
Sen. Tim Scott, R-S.C., and Sen. Elizabeth Warren, D-Mass., worked together to move the bill through the Senate.
“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 said in an interview with CNBC.
The bill includes several measures aimed at increasing housing supply. It would speed up construction, streamline federal environmental reviews, and make it easier to convert vacant buildings into apartments.
It would also modernize rules for factory-built housing, expand affordable housing financing, and raise loan limits for federally backed mortgage insurance programs for multifamily homes.
Supporters say those changes could reduce costs over time by adding more housing supply.
Economists say the United States faces a shortage of roughly 4 million homes after years of underbuilding following the 2008 financial crisis. Local zoning restrictions have also made it harder to build in many developed areas.
Supply chain problems during the COVID-19 pandemic raised material costs. Higher interest rates also pushed mortgage costs higher.
According to Harvard University’s Joint Center for Housing Studies, home prices have risen 60 percent since 2019. In 2024, the median price of a single-family home reached five times the median household income, far above the level widely considered affordable.
One of the most debated parts of the bill is a Trump-backed provision aimed at large institutional investors. President Donald Trump has pushed to stop hedge funds and large corporations from buying up single-family homes, arguing that homes should go to families instead of big investors.
“I’m asking Congress to make that ban permanent because homes for people, really, that’s what we want,” Trump said during his State of the Union address. “We want homes for people, not for corporations.”
Under the Senate version, companies that own more than 350 single-family homes would be barred from buying more. Some large investors also would have to sell off holdings within seven years.
That provision has sparked resistance from some Democrats and industry groups, who argue the language is too broad and could hit build-to-rent developers instead of just Wall Street-style investors.
Sen. Brian Schatz, D-Hawaii, said the measure was written too broadly. “There’s literally no reason for this,” Schatz said on the Senate floor. “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.”
Housing and rental groups have also warned the provision could reduce supply instead of helping the market.
The Mortgage Bankers Association, the National Association of Home Builders, and others said forcing large investors to sell newly built rental housing after seven years “would take hundreds of thousands of housing units off the market over the next decade, many of which would serve lower- and middle-income households.”
Even so, the broader bill has drawn support from groups including the National Association of Realtors and the National League of Cities.
The House and Senate still must resolve differences between their versions before the legislation can go to Trump’s desk. Warren said the bill “takes a good first step” on corporate landlords, but the fight over the investor ban could still shape the final version.