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The Senate came close Wednesday to advancing a sweeping housing package aimed at boosting affordability, but a Trump-sponsored provision barring institutional investors from buying single-family homes emerged as a bright spot.
Lawmakers cleared another hurdle in the bill’s process on Wednesday, setting up a final vote before leaving Washington on Thursday.
The Housing for the 21st Century Act passed the House last month by a bipartisan vote of 390-9. The legislation includes a broad slate of measures designed to increase the supply of affordable housing.
HOUSE PASSES BIPARTISAN HOUSE BILL AS TRUMP ZEROES IN ON PROVISION
President Donald Trump speaks about military strikes against Iran, during a news conference, Monday, March 9, 2026, at the Trump National Doral Miami in Doral, Florida. (Mark Schifelbein/AP Photo)
Sen. Tim Scott, RS.C., chairman of the Senate Banking, Housing and Urban Affairs Committee, and Sen. Elizabeth Warren, D-Mass., its top Democrat, joined forces to develop and amend the bill in the Senate.
“When the President [Donald] “Trump and Elizabeth Warren and Senate Republicans can come together on a housing bill, it shows that if you put partisan politics aside and focus on issues that affect the American people, you can get results,” Scott told CNBC’s “Squawk Box.”
In its original form, the law was intended to help first-time homebuyers and low-income Americans enter the housing market or gain access to affordable housing options.
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Sen. Tim Scott, RS.C., arrives for a Senate Banking, Housing and Urban Affairs Committee hearing in the Dirksen building on Thursday, February 27, 2025. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
But the original bill lacked a key policy that Trump wanted: a ban on institutional investors, such as hedge funds or large corporations, from buying single-family homes. Trump earlier this year signed an executive order banning this practice and urged Congress to incorporate it during his State of the Union address.
“I’m asking Congress to make that ban permanent because people’s homes — that’s really what we want,” Trump said. “We want people’s houses, not corporations.”
Scott and Warren added that provision to the bill. If passed, the package will also include several policies from the ROAD to Housing Act, a separate proposal the Senate has previously stalled.
The provision would prohibit large investors from buying single-family homes and would require companies that exceed a certain ownership limit to divest within seven years.
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Sen. Brian Schatz, D-Hawaii, warned that they are “in trouble” with the bifurcated Senate package. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
But the ban on institutional investors is causing concern among some Senate Democrats and industry stakeholders, who say it could devastate rental housing.
Sen. Brian Schatz, D-Hawaii, said on the Senate floor there was a “problem” with the bill. He pointed out that the ban on corporations and hedge funds buying single-family homes was written in a way that would force “anyone who owns and rents more than 350 units, single-family or duplexes” to sell after seven years.
“There’s no reason for this,” Schatz said. “And the problem is that it is written in such a way that it tries to capture the problem of the hedge fund, but they wrote it wrong.”
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So the definition of an institutional investor is, basically, anyone who owns and operates more than 350 rental units — that’s bananas,” he continued.
Several members of the housing and rental industry wrote in a letter to Scott and Warren that the seven-year rule “will effectively shut down the development of rental housing, resulting in less supply and fewer options for tenants.”
