Why a hugely popular housing bill is still stuck in Congress

In an era marked by deep political polarization, the House of Representatives passed a major housing package with an overwhelming majority of 396 votes. But despite its popularity, it remains stuck in Congress.

The 21st Century Road to Housing Act is the largest housing bill in decades. The legislation aims to address the housing crisis by reducing red tape and expanding the use of lower-cost housing options, such as modular and manufactured housing.

Still, the bill remains stalled due to minor differences in the House and Senate versions, including technical provisions related to the banking industry and large institutional homebuyers.

The slow process is ‘mind-boggling’, Joe Harristhe National Association of Realtors’ vice president of Government Advocacy said this week at a conference in Washington, DC.

“It’s unlike anything I’ve seen in 25 years in D.C.,” Harris said. “It’s not even a party issue; it’s a Senate versus House issue, pure and simple. And very rarely, especially when one party controls both the House of Representatives and the Senate, is it the case that the leading Republican in the House and the leading Republican in the Senate can’t get along.”

Harris spoke Sunday at NAR’s annual Legislative Meetings, where members from across the country gather on Capitol Hill to pressure Congress to make progress on the group’s top legislative priorities. This year, NAR is strongly advocating for progress on housing law, NAR Chief Advocacy Officer Shannon McGahn told those present.

While NAR is making full press, there are signs that the dam is about to break. On Monday, Politics reported that the Senate is on the verge of making some compromises on what could be a final version of the housing bill. Once the Senate and House of Representatives align their versions of the bill, it would go to the president’s desk for signature.

Small differences delay the big bill

The Senate and House of Representatives each passed different versions of the historic housing bill. But because both chambers must speak the same language, each must vote to approve changes to the other’s bill. That’s where the bill has been since its 90-8 vote in the Senate in March.

Both parties have reservations about the other version of the bill. The Senate bill included several unfunded mandates that the House did not like, as well as controversial restrictions on institutional investors in the housing market. The House amended the Senate’s investor ban and relaxed some restrictions, such as a sell-off requirement. The strict provisions made some MPs nervous.

At the president’s insistence Donald Trumpthe House adopted the Senate’s amendments after further amending them in the landslide of 396 votes.

The Senate’s concurrence vote, which could happen this week, should be the last item on the hill. But it remained quiet for a few weeks to reach compromises. The Senate version of the bill has always been more comprehensive.

But there is a willingness to compromise. NAR leaders have met with Trump administration officials 50 times this session of Congress on housing affordability issues.

“There were certain things, and the House, and their provisions, including some banking provisions that didn’t always go over well with the Senate, but I think we’ve absolutely ironed that out, knock on wood,” Matt Strosssaid NAR director of government advocacy. “There are six provisions that the Senate wants to include, and that the House seems to agree with after some adjustments.”

NAR is lobbying in support of the bill

NAR is the second-largest lobbying organization by spending in DC, spending $54 million in 2024, according OpenSecrets. It’s using affordability as a talking point this week, McGahn said.

“We will continue to urge not only Congress but this administration to advocate on our behalf,” Harris said. “It has been a very productive and useful form of interaction and partnership in keeping this issue front and center.”

Trump is attuned to interest rates, but NAR focuses his message on affordability. While two of the leading proponents of housing policy – ​​Sen. Johannes Cornyn (R-Texas) and Sen. Michael Bennet (D-Colorado) – leaving Congress, NAR says more rank-and-file members of Congress are getting the message.

“It’s one of the frustrating things about working in DC because everything can be set up perfectly for bill signings, home ownership month and things like that,” Harris said. “There’s such a feeling when you talk to members of Congress, they all agree it has to be done.”

Ultimately, he and McGahn are both optimistic that the bill will pass.

“Rarely do you get such a golden opportunity to do something so impactful,” Harris said. “So I think it will work out.”

Separately, seek reform of taxes on home sales profits

NAR is also advocating that Congress change current capital gains tax rules so that home sellers can make a larger profit when selling without owing taxes.

The group has been pushing all year for updates to the 1997 code, which limits the capital gains tax exclusion to $250,000 for single filers and $500,000 for joint filers.

A significant portion of homeowners have risen above these thresholds in recent years thanks to the appreciation of their homes. NAR says the outdated system locks people in their homes, discouraging them from selling and exacerbating inventory shortages.

The More Homes on the Market Act, introduced by Rep. Jimmy Panetta (D-California), has more than 120 co-sponsors, but the bill has not advanced out of committee. That’s a common fate for bills that fail to gain traction.

Panetta acknowledged at a previous NAR event that there was some resistance because changing the exclusion could cause a huge dent in federal tax revenues, increasing the deficit. Panetta tried to advance similar legislation last year but failed.

Government analysts estimate that a wholesale change to the plan could cost money $46 billion of tax revenue. More targeted changes, such as an exception for seniors, still cost the government billions.

But NAR engaged early and often, including with the Real Estate Caucus, a large and bipartisan group of members of Congress concerned about housing policy.

NAR believes Congress will want to take up this issue later this year. The group has been pushing to rename the capital gains tax a “home wealth tax,” so it’s clearer that it’s not a new tax break, but rather an expansion of an existing exemption, McGahn said.

“The good news is that when we go into these offices to talk about capital gains, we are met with much more enthusiasm, even than last Congress,” Harris said. “A lot more people are talking about it, a lot more staff members are aware of the problem.”