Why Everyone is Talking about Housing Policy Right Now

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Sarah Holder** (0:08)
Congress recently came together across party lines to pass a bill tackling one of the country's most pervasive and politically salient issues, housing affordability.

**Katy O'Donnell** (0:20)
It's an issue that's been almost 20 years in the making.

**Sarah Holder** (0:23)
The legislation is called the 21st Century Road to Housing Act, and it's mostly focused on addressing the nation's housing shortage.

**Katy O'Donnell** (0:31)
Construction rates cratered after the global financial crisis, and they haven't really recovered.

**Sarah Holder** (0:37)
That's Bloomberg Housing Policy Reporter, Katy O'Donnell.

**Katy O'Donnell** (0:40)
So the bill is designed to address that by boosting the supply of new homes as a way of bringing down prices by kind of increasing supply to meet demand.

**Sarah Holder** (0:50)
The legislation had early support from President Trump, and overwhelmingly passed the House and the Senate. What was so unifying about this issue?

**Megan Scully** (1:00)
The midterm elections and the focus on affordability and growing frustration among voters that neither party is doing enough to bring down prices.

**Sarah Holder** (1:10)
That's Megan Scully, who leads the Bloomberg team covering Congress.

**Megan Scully** (1:13)
There was a recognition that this is not sort of a cure-all for housing prices, nor is it a cure-all for the broader economic concerns voters face, but it was a good faith effort.

**Sarah Holder** (1:24)
Why hasn't it officially passed yet, then?

**Megan Scully** (1:28)
There's one reason, and that is Donald Trump. He announced that he would not be signing the piece of legislation. He wanted to basically hold it hostage for the Save America Act, a voter identification bill that he has said is his top priority ahead of the midterm elections.

**Donald Trump** (1:47)
Some people say it's wonderful. To me, compared to the Save America Act, just about everything is a big yawn.

**Sarah Holder** (2:00)
I'm Sarah Holder, and this is The Big Take from Bloomberg News. By 12 a.m. Saturday morning, a major bipartisan housing bill could become law or fall to a presidential veto. Today on the show, Bloomberg's Megan Scully and Katy O'Donnell, on the housing legislation's strengths and limitations, Trump's calculus behind holding it up, and how the saga could complicate Republican messaging for the midterms.
Katy, this bi-partisan housing package had a long journey to get where it is today. It's the product of a lot of back and forth between the House and the Senate over the past year plus, and in its final form, it has 60 provisions. Dena Shea from the Bi-Partisan Policy Center told you and your colleague it marked a paradigm shift in housing policy. Why do experts see this housing package as such a paradigm shift?

**Katy O'Donnell** (3:00)
Everyone agrees that a supply shortage is at fault here, which is a new thing. That's not always been the case. There's been a lot of movements to, for instance, subsidize demand and when you have constructed supply, subsidizing demand makes prices go up.
The fact that everyone could agree on the root cause was seen as this big moment. There are a few provisions people are really excited about though. There's one that would remove the permanent chassis requirement for manufactured housing. So that removes this requirement that this big steel frame plate that is used to transport manufactured homes under current regulations, that must stay there even though most of these homes like 90 percent of these homes don't move once they're sited. That is expected to save consumers some $10,000 but also to make it easier to put manufactured housing in localities that have various restrictions about cladding and the way it looks.

**Sarah Holder** (3:55)
Another piece of this legislation tackles an issue Trump himself has elevated.

**Donald Trump** (4:00)
America will not become a nation of renters.

**Sarah Holder** (4:03)
In January at the World Economic Forum, Trump said that the dream of buying a home was out of reach for too many Americans.

**Donald Trump** (4:11)
That's why I have signed an executive order banning large institutional investors from buying single-family homes. It's just not fair to the public.

**Sarah Holder** (4:19)
One of the major sticking points in this reform package as it was being drafted involved the role that institutional investors like private equity firms have played in this housing affordability squeeze. There were debates over how exactly Congress should regulate Wall Street's ownership of single-family homes, especially where exactly did lawmakers land?

**Katy O'Donnell** (4:40)
It's interesting. It was something that largely was negotiated by the White House with Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee. It was critical for the White House and it was something that Democrats have been behind in the past. But interestingly, as a Senator, JD. Vance had supported a bill to kick Wall Street out of the housing market.