The ROAD not yet taken

Editor's note: The following text is a transcript of a podcast story. To listen to the story, click on the arrow beneath the headline above.

MARY REICHARD, HOST: Coming up next on The World and Everything in It: Making housing affordable again.

Lawmakers are back in session this week, and on the table is a bill to cut some red tape on building new homes and make it easier for some buyers to get loans.

NICK EICHER, HOST: It’s up to the Senate now to review changes from the House before sending it on to the president—with strong bipartisan support in both chambers.

WORLD’s Josh Schumacher has more from Washington.

JOSH SCHUMACHER: The 21st Century Renewing Opportunity in the American Dream, or ROAD to Housing Bill, enjoys the broad support of Congressional Democrats, Republicans, and the White House.

Francis Torres, a housing expert at the Bipartisan Policy Center, says housing affordability is an issue that most lawmakers from both parties can get behind. But getting the House and Senate to agree on how to address the issue is a different story.

TORRES: Usually in Congress, right, in D.C., you see a lot of partisan polarization. In this case, it's much more so a case of difference between the chambers.

Overall, both chambers agree on the core policies. They want to incentivize more home building through grant programs, relax some environmental review requirements, and make federal-backed mortgages under $100,000 more accessible. 

But differences that have kept the bill from reaching the president’s desk remain.

One is a policy that would ban institutional investors from owning more than 350 single-family rental homes. The Senate version calls for such firms to divest of those homes within 7 years, while the House version dropped that requirement.

ANTONI: This is a classic case of trying to close the barn door after the horse has already left the building.

E. J. Antoni is Chief Economist at the Heritage Foundation. He says the housing market has changed since the COVID-19 pandemic. Interest rates then were so low that investors snapped up housing left and right. But as rates have climbed, the pace has slowed. 

Additionally, the legislation itself has changed since President Donald Trump first asked for it.

ANTONI: There are loopholes in here with accepted purchases that kind of, I think, really take the teeth out of this section. So again, I just don't see this as really being helpful at all.

Antoni and other economists say the bill also tries to make it easier to afford existing housing rather than increasing the amount of housing available. Essentially, it tinkers with demand when it should be trying to increase supply.

Norbert Michel is a finance expert at the Cato Institute:

MICHEL: If you make it easier to get loans, if you make it easier to get insurance and all these things, you are going to increase the price. You're going to make it less affordable.

Michel says those who stand to benefit the most from this bill are the politicians.

MICHEL: Housing prices nationally, they peaked in 2022. So if everything goes as planned, you pass the bill and you start campaigning for midterms, and you're going to be able to see national housing prices still kind of coming down a little bit.

Antoni at the Heritage Foundation says government involvement could create more problems than it solves, but enforcing immigration law could actually move the needle in the right direction.

ANTONI: When you add 10 or by some estimates, 20 million people, to the housing market… That is a large increase in the demand for dwelling units. Increasing demand increases price.

If the Senate accepts the House’s edits to the bill, it could go to the President’s desk as soon as this weekend.

Reporting for WORLD, I’m Josh Schumacher.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.