By Richard Cowan
WASHINGTON, March 12 (Reuters) – The U.S. Senate on Thursday overwhelmingly approved legislation aimed at boosting affordable housing construction nationwide, giving lawmakers the opportunity to campaign for re-election this year by highlighting efforts to ease the burden of high living costs.
The legislation, spearheaded by Senate Banking Committee Chairman Tim Scott of South Carolina, a conservative Republican, and Senator Elizabeth Warren of Massachusetts, the progressive senior Democrat on that panel, must be reviewed and voted on by the House of Representatives.
The vote marked a rare moment of bipartisanship in a Congress that has been deeply divided since early 2025 over tax policy, immigration policy, Republican cuts to social service programs and the war President Donald Trump is waging on Iran without approval by Congress.
Republican Senator Mike Rounds of South Dakota said the bill would help rural states like his, saying it updates a U.S. Department of Agriculture rural housing program for the first time in a decade.
“Without congressional action up to 400,000 Americans nationwide could face rent increases or displacement” and “the impact would fall hardest on regions in the Midwest and South,” he said.
Democratic Representative Andy Kim of New Jersey, in a Senate speech on Wednesday, said the measure “will take meaningful steps to lower the first-time home buyer age significantly by allowing for the construction of substantially more homes at more affordable prices.”
The bill would provide a range of government incentives for the housing and financial industries to narrow an estimated 4 million home shortfall that is the result of several factors.
Those include high mortgage interest rates, a 60% increase in home prices since 2019 according to some estimates, construction material shortages following the COVID pandemic, and the lasting effects of the 2008 financial crisis.
Under the bill, environmental reviews for construction projects would be waived or sped up and more financing would be freed through federal block grants to states.
Also, loan limits would be raised for federally-backed mortgages for multifamily homes.
In a controversial move, the bill would cap institutional investors’ ability to buy single-family homes at 350 and require them to sell newly built rental housing after seven years of ownership. The goal is to tamp down investors outbidding individual buyers.
Some industry groups this week expressed opposition to the provisions, arguing they could diminish the availability of housing units on the market.
(Reporting by Richard Cowan; Editing by Chris Reese, and Franklin Paul)
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