Senate Passes Bipartisan Affordable Housing Bill

The Senate on Monday by a vote of 85-5 passed a bipartisan affordable housing bill that would limit the number of single-family homes major investors can purchase, after months of debate spanning both chambers of Congress.

The vote came after lawmakers reached a deal last week on the bill, which is aimed at increasing the supply of homes while limiting private equity's influence on the housing market. The House is expected to vote on the bill later this week.

Sen. Tim Scott, R-S.C., who helped shepherd the bill to passage, characterized the U.S. housing situation as a crisis, with young people delaying longer and longer their first purchase of a home.

"Housing prices are too darn high and housing supply too low. Rent is too high. Starter homes — too hard to find. And that American dream slips further and further away for far too many," Scott said from the Senate floor ahead of the vote.

The legislation is meant to increase housing affordability at a time when both parties are touting their work to bring down the cost of living ahead of the 2026 midterm elections, in which Republicans hope to defend narrow majorities in both chambers. President Donald Trump has signaled its support for the bill.

But the bill almost failed to get off the ground, as Republicans debated over provisions limiting institutional investors and the House and Senate haggled over different versions of the proposal. Lawmakers found middle ground last week between the House version, which was viewed as more friendly to Wall Street, and the Senate version, which included more restrictions on institutional investors.

One sticking point in an earlier iteration would have required investors who own 350 units or more to sell any new units they build beyond that cap within seven years. Lawmakers on both sides of the aisle worried that putting such limits in place would stifle the creation of new housing.

The final version of the bill, which the Senate is expected to vote on Monday afternoon, maintains the 350-unit cap but removes the seven-year sell-by provision.

"With America facing a shortage of over 4.7 million homes, expanding supply remains the most effective and sustainable way to improve affordability, support workforce mobility, and strengthen local economies," Neil Bradley, executive vice president, chief policy officer and head of strategic advocacy at the U.S. Chamber of Commerce, said in a statement last week.

"This supply-focused package would incentivize housing development by modernizing federal housing programs, reducing regulatory barriers, preserving residential and multifamily rental housing options, increasing pathways to homeownership, and encouraging much needed investment and new construction," Bradley said.

The package was led by Scott and Sen. Elizabeth Warren, D-Mass., the top Republican and Democrat on the Senate banking panel, and Reps. French Hill, R-Ark., and Maxine Waters, D-Calif., who sit atop the House Financial Services Committee.

It would also ease some regulations to allow for the building of new homes, tie Community Development Block Grant funding to increasing housing supply in communities and create a pilot program to award grants to fund the redevelopment of vacant units into housing.

"We are closer than ever to passing the biggest housing bill since 1990, when the average price of a home in America sold for $150,000," Warren said from the Senate floor ahead of the vote. "Today, 36 years later, the average home is selling for over $500,000, and the American dream of home ownership is now out of reach for millions of families."

— CNBC's Emily Wilkins contributed to this story.