Bipartisan Housing Bill Advances Despite Trump’s Push for Investor Ban

The Senate is moving forward with a sweeping housing package designed to address affordability challenges, but a provision championed by former President Donald Trump to restrict institutional investors from purchasing single-family homes is creating a point of contention.

Lawmakers cleared another procedural hurdle for the bill on Wednesday, setting up a potential final vote before adjourning for the week. The “Housing for the 21st Century Act” previously passed the House in a 390-9 bipartisan vote, demonstrating broad support for addressing housing affordability.

The legislation aims to increase the supply of affordable housing and assist first-time homebuyers and lower-income Americans. Sen. Tim Scott (R-SC), chair of the Senate Banking, Housing and Urban Affairs Committee, and Sen. Elizabeth Warren (D-MA), the committee’s ranking member, collaborated to advance and modify the bill in the Senate.

“When President [Donald] Trump and Elizabeth Warren and Senate Republicans can all approach 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 told CNBC’s “Squawk Box.”

Trump’s Push for an Investor Ban

Initially, the bill lacked a key policy priority for Trump: a ban on large institutional investors, such as hedge funds and corporations, from buying single-family homes. Trump issued an executive order earlier this year seeking to ban the practice and urged Congress to codify it during his State of the Union address.

“I’m asking Congress to make that ban permanent because homes for people — really, that’s what we want,” Trump said. “We want homes for people, not for corporations.”

Scott and Warren subsequently added a provision to the bill that would prohibit large-scale investors from purchasing single-family homes and require companies exceeding a certain ownership threshold to divest within seven years.

Concerns Over the Investor Ban

However, the institutional investor ban is facing opposition from some Senate Democrats and industry stakeholders, who argue it could hinder the development of build-to-rent housing units.

Sen. Brian Schatz (D-HI) expressed concerns on the Senate floor, stating that the ban was written in a way that could force “anybody who owns and rents out more than 350 units, single family or duplexes” to sell after seven years. “There’s literally no reason for this,” Schatz said. “And 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.”

Industry representatives likewise voiced their concerns in a letter to Scott and Warren, warning that the seven-year clause could “effectively shut down build-to-rent development, leading to less supply and fewer options for renters.”