MICHEL MARTIN, HOST:
Congress passed the largest housing bill in decades last night with strong bipartisan support.
A MARTÍNEZ, HOST:
The measure now heads to the president's desk for a signature. So what will it actually do to help with housing affordability?
MARTIN: Here to tell us about it is NPR personal finance reporter Stephan Bisaha. Stephan, good morning.
STEPHAN BISAHA, BYLINE: Good morning, Michel.
MARTIN: So homeownership is a big part of the American dream, but it's just financially out of reach for many people right now. Why is that?
BISAHA: Yeah. Well, there are a lot of reasons the cost of homeownership has gone up. Like, you know, mortgage rates have risen over the past several years. Wages have recently fallen behind inflation. The cost of land alone has skyrocketed about 75% since the pandemic. And then there's the classic supply-and-demand problem. The U.S. is short millions of homes - by some counts, about 4 or 5 million units short of the demand - and, you know, that sends prices up.
MARTIN: So what does this legislation try to do to make homeownership more attainable?
BISAHA: Well, probably the part of the bill that's gotten the most attention is that it will ban corporate investors from buying up tons of single-family homes. Politicians like Massachusetts Senator Elizabeth Warren and President Trump have all blamed private equity for gobbling up these homes by putting down cash offers, and that also drives up prices. So this legislation will make it so those big investors can't buy up more than 350 homes. Now, these investors - they do just make up a tiny fraction of the overall housing market. But I did speak with Senator Warren, a Democrat, who co-sponsored the bill with Republican Senator Tim Scott, and she pointed out how, in some places like Atlanta, corporations own a big slice of the market.
ELIZABETH WARREN: If you don't live in a neighborhood where private equity has already moved in, believe me, you're on that list.
MARTIN: OK. So that's one change. But this bill has more than 40 parts to it. What else stands out to you?
BISAHA: Yeah. One of the core ideas of this bill is to make it easier for homebuilders to build homes, and it does that by streamlining federal housing regulation. Like, for example, if there's a new building going up between two that already got an environmental review, builders really can just skip that step. Another provision creates a grant to have communities develop, like, essentially a Sears catalog of preapproved housing designs, so builders need fewer approvals to get up to code. And when I asked researchers, there was, like, one thing they were most excited about - this corner of the housing market that sort of has been forgotten about and stigmatized.
MARTIN: OK. What corner is that?
BISAHA: Yeah. That is manufactured homes. They are cheaper to build than other homes, and this bill will make it so that's even cheaper by getting rid of a part that most owners don't even need. That is this permanent chassis - this metal frame that lets you transport it. You know, mobile homes are rarely actually mobile. They usually stay in just one spot. This bill gets rid of that chassis requirement 'cause it's just not needed in many cases. That alone could save 5 or $10,000 of the price tag, so it can make a pretty big difference here.
MARTIN: OK. Yeah. I see that point. But, you know, housing problems have been a problem for a while. I mean, you've been reporting on this. If President Trump signs this bill, like he's expected to do, how soon before Americans could notice some relief?
BISAHA: Well, it's going to take a while to feel most of the effects of this bill. It's just going to, you know, take time to encourage more new home building and just actually build the homes. The bill also encourages local governments to do some reforms because they have actually a lot of power over how fast houses get built. And there will still be other challenges like mortgage rates and land costs. But, you know, Warren said it's been about 30 years since the federal government really took on any major housing legislation. Now, she says, lawmakers have finally actually moved.
MARTIN: That is NPR personal finance reporter Stephan Bisaha. Stephan, thank you.
BISAHA: Thank you. Transcript provided by NPR, Copyright NPR.
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