Several homebuilding groups say they support most of the massive housing reform bill moving through Congress, but want certain provisions, including those related to build-to-rent (BTR) and manufactured homes, changed before it moves forward.
The 21st Century ROAD to Housing Act, co-sponsored by Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA), aims to increase housing supply and affordability by expanding programs, creating pilot projects and reducing regulatory red tape. If signed into law, it would be the largest housing supply legislative package in decades.
The bill passed the Senate earlier this month with overwhelming bipartisan support 89-9. It includes some provisions from an earlier Senate bill, the Renewing Opportunity in the American Dream (ROAD) Housing Act, as well as housing reform legislation that the House passed by a vote of 390-9 in February.
But despite enthusiasm for housing reform from both parties and both chambers, the fate of the legislation was in question at press time, as some House members pushed back, saying the Senate bill removes some of the critical provisions of their own chamber’s bill. On March 23, House Financial Services Committee Ranking Member Maxine Waters (D-CA) asked members of both chambers to enter conference committee negotiations to resolve differences between their respective bills.
Another potential obstacle is that President Donald Trump has vowed to refuse to sign any legislation until a separate voter ID bill is passed. At press time, it was unclear whether the president would stick with that vote, as he had reportedly indicated he might be open to a proposal to partially fund the Department of Homeland Security, which has been shut down for nearly six weeks.
Pros and cons
Among the provisions of the 303-page bill is a measure to require institutional investors who own at least 350 single-family homes to sell BTR properties to individuals within seven years, a sticking point for groups including the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC), an apartment industry lobby.
BTR properties are considered horizontal multifamily projects, which resemble apartment buildings with shared amenities and features such as central clubhouses. Developers must get city approval for commercial zoning for BTR work, not individual homes, an NMHC spokesman said.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new intelligent AI search tool.
Ask ENR →
Matthew Berger, senior vice president of NMHC, says the bill’s BTR provisions are problematic for several reasons, including the fact that it’s difficult to subdivide single-plat properties in such a short period of time, he told ENR.
“You don’t know what the economy is going to look like seven years from now, and nobody’s going to invest in a product that you have to get rid of, and that’s even if you could dispose of it,” Berger said. The NMHC is working with industry partners in Congress to change the provisions, he added.
The BTR provision “would severely reduce investment in rental housing and could reduce single-family production by nearly 40,000 units per year,” NAHB President Bill Owens said in a statement after the Senate vote.
The Senate bill has some good provisions that would increase housing supply by removing barriers and promoting housing investment, notes Matthew Berger, senior vice president of NMHC.
The bill also expands the definition of manufactured housing by eliminating the permanent frame requirement for these types of Housing and Urban Development (HUD) housing. It also calls for HUD to review the Federal Housing Administration’s construction financing programs to identify barriers to the use of modular housing methods.
“In general [the Senate bill aims] to increase housing inventory, and we’re all for it,” said Tom Hardiman, executive director of trade group the Modular Home Builders Association (MHBA). “Our concern is that [the bill is] blurring the lines between manufactured and modular, and the consumer may not understand these nuances. … The whole (manufactured home) industry was created to address affordability, not durability, not energy efficiency, not resilience.”
The manufactured homes are built to HUD standards and are designed to be transportable with a steel chassis, he said. Modular homes must meet the same state and local building code requirements as any conventionally built home and are not designed to be transportable, Hardiman said.
The average buyer may not be aware of the distinction between the terms “manufactured” and “modular,” which could be a problem when it comes time to sell a home only to discover it’s not built to conventional standards, he said. The distinction between the two types of housing must be made clear with some kind of educational element in the bill, he added.
Hardiman also pointed to some of the large housing projects underway that use modular construction. These include Cal Poly’s 10-year, $1 billion project to build a multi-story residential housing complex, the largest housing investment in the university’s history in San Luis Obispo, Calif., according to the school.
