Congress isn’t waiting on Trump to tackle high housing costs

By Samantha Delouya, CNN

(CNN) — President Donald Trump has vowed to tackle the housing affordability crisis, but the White House has offered few details about its plans.

Now, a bipartisan group in Congress is moving forward with its own solution.

Members of both the Senate and the House of Representatives have introduced a package of bills to address high housing costs and the shortage of affordable housing by reforming zoning and reducing federal barriers to construction. The House’s bill is expected to receive a floor vote this week.

Washington is under pressure to address the high cost of living, and housing has emerged as a pain point. In recent years, surging home prices and persistently elevated mortgage rates have put homeownership out of reach for millions of Americans.

A New York Times/Siena University poll last month showed that more than half of registered voters surveyed said the cost of housing has gotten so high that it has become unaffordable.

What is Congress’s plan?

In the years since the 2008 financial crisis, homebuilding has lagged, creating a housing shortage that has pushed prices higher as demand far outstrips supply across much of the country. An additional three to four million homes need to be built to close the gap, according to an October estimate from Goldman Sachs.

Congress’s package aims to tackle the housing shortage directly, and the legislation is nearing the finish line.

The Senate’s ROAD to Housing Act — led by South Carolina Sen. Tim Scott, a Republican, and Massachusetts Sen. Elizabeth Warren, a Democrat — had passed late last year as part of a broader package but was ultimately stripped from the final bill negotiated with the House. The Senate is expected to vote on a standalone version of its bill in the coming weeks.

The House’s companion bill, introduced by Arkansas Rep. French Hill, a Republican, is called the Housing for the 21st Century Act.

The House measure is narrower than the Senate’s version, containing 25 provisions compared with the Senate’s 40.

The White House did not respond to a request for comment on whether Trump would sign a version of the bills into law if they reached his desk, but his administration has previously signaled support for the Senate’s bill.

Here are some key provisions in the bills:

Easing zoning and permitting rules

Many housing experts point to local zoning and red tape as the root of the slowdown in homebuilding — something that is difficult for the federal government to address, since each local government makes its own rules.

But if land-use regulations were relaxed, an extra 2.5 million housing units could be added to the US in the next decade, the Goldman Sachs report found.

The bills include provisions to encourage states and local governments to adopt more pro-housing land use and zoning policies, encouraging them to boost their housing productions.

“State and local governments are directly in charge of what’s built in their jurisdictions,” said Andy Winkler, the managing director of housing and infrastructure policy at the Bipartisan Policy Center. “Both packages are designed to kind of give state and local governments more tools, more guidance and additional flexibility to adopt pro-housing policies.”

The Senate’s bill would tie some community development grants from the Department of Housing and Urban Development to housing production, offering bonuses to local governments that accelerate homebuilding while reducing funding for those that fall behind.

The House’s bill, meanwhile, would require recipients of community development grants to report on local policies that restrict housing supply, including zoning laws.

Both packages would offer money to local governments to design pattern books, which would be housing designs pre-approved by the government to help speed up local construction.

More manufactured homes

The bills would also make it easier to expand the supply of manufactured homes, which are built in factories and typically faster and cheaper to produce than traditional, site-built houses.

Under federal law dating back to 1974, manufactured homes must be built on a permanent chassis, a wheeled base that allows them to be transported, similar to traditional mobile homes. In practice, though, most manufactured homes are never moved once they reach their destination.

The requirement to add wheels adds costs and can limit where these homes are allowed, often confining them to mobile home parks under local zoning rules. Eliminating the rule could reduce the cost of each manufactured home by $5,000 to $10,000, according to the Bipartisan Policy Center.

Repairing aging US home supply

Due to a nearly two-decade-long decline in new construction, the country’s housing stock is aging. According to the latest US Census data, the median age of homes is 40 years old, with nearly half built before 1980. That’s nine years older than the median age of homes in 2005.

Millions of those homes have fallen into disrepair, according to a 2023 report from the Harvard Joint Center for Housing Studies.

The bills would make it easier for homeowners and landlords to get loans for home repairs and modifications to update older homes.

The legislation would also make it easier to convert vacant offices and other unused buildings into apartment buildings, a practice that has grown in popularity since the pandemic-era work-from-home boom.

What the White House has proposed

Trump has addressed the home affordability issue more frequently in recent months and introduced a series of proposals aimed at easing the problem.

Last month, he signed an executive order banning large institutional investors from buying single-family homes, a move that experts say won’t significantly increase the supply of homes on the market.

Trump also announced a strategy to lower mortgage rates by having Fannie Mae and Freddie Mac, the two government-sponsored mortgage giants, purchase $200 billion in mortgage bonds. Trump’s allies have also suggested that they may allow savers in 401(k) retirement plans to use the money for down payments on a home purchase penalty-free.

Taken together, Trump’s proposals would likely boost demand in the short-term but do little to ease the chronic shortage of homes for sale, said Daryl Fairweather, Redfin’s chief economist.

“As demand goes up in a supply constrained market; it just results in higher home prices and makes it hard for people down the line to be able to afford homes,” she said.

However, Trump has said he doesn’t want to increase the supply of homes too much to protect the wealth of existing homeowners.

“People that own their homes, we’re going to keep them wealthy. We’re going to keep those prices up,” Trump said last month. “We’re not going to destroy the value of their homes.”

But Winkler said that in many places, adding supply may not cause home prices to fall; rather, it would moderate the rate at which prices continue to climb after skyrocketing over the past few years.

“It’s an age-old problem of housing. You want people to be able to afford it, but we’ve also built-up homeownership in particular as a safe place for your investment,” Winkler said. “Hopefully this would be pushing markets to a more happy medium, not one extreme or another.”

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