On Thursday, in an 89–10 vote, the Senate passed the 21st Century ROAD to Housing Act, sponsored by Sen. Tim Scott (R-SC) and Sen. Elizabeth Warren (D-MA). 

Despite gaining broad bipartisan approval in the Senate, the bill is “dead in the House as is,” according to Politico, with several members of the House Freedom Caucus comparing aspects of the bill to “socialism.” Last month, the House passed a different housing bill, the Housing for the 21st Century Act, in a 390–9 vote. 

While both bills share many provisions, the key difference is that, as passed, the Senate version would ban large institutional investors from buying single-family homes. It would also require any major investor who builds or owns single-family homes available for rent to sell those properties after seven years. 

The Senate bill defines large institutional investors as anyone who “directly or indirectly has investment control of not less than 350 single-family homes in the aggregate.” The Senate added these provisions to comply with President Donald Trump’s demand in the State of the Union to make his executive order permanent. It has now drawn the ire of their House colleagues. (RELATED: Trump Touts ‘Housing-Ban’ Buncombe)

According to reports from Politico and CNBC, both Speaker Mike Johnson (R-LA) and Majority Leader Steve Scalise (R-LA) agree that House Republicans might need a formal negotiating conference to address concerns. 

Breaking away from his colleagues during his speech on the floor, Sen. Brian Schatz (D-HI) called the provision a “very bizarre thing,” adding it was “positively Soviet.” 

Institutional investors own 2 percent of the single-family rental housing available nationwide, with ownership shares significantly higher in markets with high foreclosure rates, such as the Southeast. These investors own less than 1 percent of the country’s overall single-family housing stock and about 3 percent of single-family homes available for rent.

Opponents argue that by purchasing housing that would otherwise have sat vacant and dilapidated, these investors provide entry into the housing market for Americans who can’t yet afford homeownership but need the space. With a housing shortage of nearly four million units, members of the House likely feel that the Senate is cutting off a market solution that has already proven its value. 

Data from a University of Pennsylvania study shows that institutional investors lead to lower rents while spurring more construction of single-family units, mitigating any overall price increase caused by their involvement in the market.

Policies governing zoning, land-use regulations, and building restrictions are often made at the state and local levels. The House bill includes zoning and land-use reforms. It also addresses onerous environmental reviews, such as those under the National Environmental Policy Act of 1969, that prevent new housing from being built.

Despite threats from President Trump to refuse to sign any bill until the passage of the SAVE America Act, a White House official told Politico that “the administration supports the bill as-is.”