Name: WSJ Opinion: The Senate Housing Bill Backed by Tim Scott and Elizabeth Warren
Uploaded: 2026-03-11T21:14:00Z
Duration: 22 min 46 s
Description: Voters are frustrated by home prices, and the Senate will soon take up the bipartisan 21st Century ROAD to Housing Act. But the bill is a 300-page melange of federal grants and pilot programs, plus a progressive ban on home purchases by big investors. Plus, 22 states sue over Donald Trump's tariffs under Section 122.

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Voters are frustrated by home prices, and the Senate will soon take up the bipartisan 21st Century ROAD to Housing Act. But the bill is a 300-page melange of federal grants and pilot programs, plus a progressive ban on home purchases by big investors. Plus, 22 states sue over Donald Trump's tariffs under Section 122. Photo: Chris Arbisi

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Voters are frustrated by home prices, and the Senate will soon take up the bipartisan 21st Century ROAD to Housing Act. But the bill is a 300-page melange of federal grants and pilot programs, plus a progressive ban on home purchases by big investors. Plus, 22 states sue over Donald Trump's tariffs under Section 122.

WSJ Opinion: The Senate Housing Bill Backed by Tim Scott and Elizabeth Warren

As the Senate prepares to pass a bipartisan housing bill, what's in this legislation and can it get through conservative objections in the House? Plus 22 Democratic attorneys general sue to challenge President Trump's latest global tariff regime, and they cite no less an authority than Milton Friedman.

Announcer: From the Opinion pages of "The Wall Street Journal," this is "Potomac Watch."

Welcome, I'm Kyle Peterson with "The Wall Street Journal." We're joined today by my colleague on the WSJ's opinion pages, columnist Allysia Finley. The Senate is set to vote in coming days on the 21st Century ROAD to Housing Act. And what a suitcase this bill is, about 300 pages covering a pretty wide range of housing topics, maybe bipartisanship at its most backslapping. And to that point, here is one supporter of the bill. This is South Carolina Republican Senator Tim Scott.

The 21st Century ROAD to Housing Act really does meet the need. It focuses on local jurisdictions, number one. It removes red tape and unnecessary burdensome processes from the federal government, number two. And number three, it creates and will expand housing supply while focusing on affordability.

Here on the other side of the aisle is Massachusetts Democrat Elizabeth Warren.

Private equities' housing grab has increased rapidly in just the last couple of years, so I think it's time to do something about it. We're working in Congress right now to tackle this issue. We've taken a good first step with bipartisan legislation this week that would ban private equity from competing with you as you're trying to buy a home. That's right. Ban 'em. Just tell 'em no. These giants can't stomp into people's neighborhoods and start throwing around their cash and buying up all the homes. So look, I'm proud of this new bill, and it's actually gonna get a vote in the Senate in the next few days, and I'm hopeful we're gonna get it signed into law soon.

Allysia, what do you make of this bill and the spirit of bipartisanship on this housing question that is now prevailing in the United States Senate?

Right, so I think this is a politically motivated and driven bill on both sides. President Trump has made it a priority, to, quote unquote, ease housing costs by whatever means. And he wants to show that he's doing something and so do Republicans on Congress. And so you've got now Democrats allied with Republicans, and Democrats have their own motivations to support this bill, namely that it does a lot to, quote unquote, boost funding and provide subsidies, federal loan guarantees, loans and grants for quote unquote affordable housing, meaning low income housing that is in big cities. Now, what happened at the last minute is that President Trump's staff struck an agreement with Elizabeth Warren to insert a provision that would ban large investment firms, defined as those who own more than 350 homes, from buying any more. And the president has been really trying to drive this over the finish line so he can declare victory on that narrow point because he thinks it polls well. Now, for the rest of the bill, it really includes a melange of provisions that really won't do anything to boost the supply at the margins, are just pork-filled. It establishes various grant programs that to provide more money to localities to do this or that, including setting up like best practices for zoning, provides grants for or allows the Treasury Department, and the HUD, Housing and Urban Development Department, to administer grants to localities that do this or that. And there are some differences with the House bill, the House passed a similar bill about a month ago. And one of the differences is this ban on investment-owned housing and also providing more grant money to the cities and localities without any regards to whether it actually produces more housing or not. This house actually tried to make this a result-based outcome, a result-based metric in which localities would get more money if they actually show that they were boosting more housing. The Senate scrapped that. And I think it's one thing that's notable is that you see a lot of liberal groups endorsing this bill, and the reason why is because it helps promote their own priorities, which is to increase funding for multifamily housing in the cities.

Just to provide an overview, I pulled up a section-by-section explanation of this bill from the Senate Banking Committee, and here are a few things that jump out: a pilot program to offer grants and forgivable loans to eligible recipients to holistically address home repair needs and health hazards. A pilot program to incentivize housing development of all kinds in certain Community Development Block Grant participating jurisdictions. A pilot program to offer competitive grants to assist state, local, and tribal governments with regional housing planning and community development activities. And another pilot program within the Home Investment Partnerships Program to convert vacant and abandoned buildings into attainable housing; a grant program to help communities establish pre-approved housing designs or pattern books to help streamline and expedite local construction processes. So all of that sounds like it fits your definition of this bill, Allysia, kind of meddling at the margins in ways with federal money, federal grants in ways that do not really address the fundamental problems in the housing market, which are often state and local issues, frankly. A couple things from the section-by-section piece that jump out at me as maybe positive moves: it says it rightsizes National Environmental Protection Act review for small and infill housing projects. I'm not sure exactly the details of that provision, but maybe moving in the right direction there. Updating the federal definition of manufactured housing to include units not built on a permanent chassis to encourage innovation. There's an explanation in "The Wall Street Journal's" news pages that say builders have complained about this for years because manufactured homes are often no longer left on a chassis. So they say this is a cost that often no longer makes sense. But Allysia, the problems in the housing market are often state and local zoning, high interest rates that have locked many people into homes maybe that no longer fit their needs. But it's pretty expensive now to move because if you have a rate that is at 3% or something like that, you're looking at upgrading that rate if you change houses. And so Allysia, what do you make of the broader issues in the housing market? And is there much that the federal government can really do to address those if it wanted?

Well, I think the fundamental problem and the biggest culprit for the why housing is so quote unquote unaffordable is because the fed eased eased rates or eased policy that also included its quantitative easing, buying up mortgage-backed securities to drive down the 30 year mortgage rates early in the pandemic. And it kept money pretty easy for over two years and actually didn't start tapering until around summer of 2022. And the result was that, as you point out, people locked in uber historically low mortgage rates, more than 50%, and and when I say locked in, that was either by buying new homes or refinancing. And so as a result, more than 50% of mortgages now have rates below 4%. So if they were to try to move, many couldn't afford to at the current rates, which are about 6%, because they would face not only higher interest payments on the loan, they'd actually face much more principal payments, because home prices have appreciated so much. The supply of housing is relatively inelastic relative to the demand that was really boosted during the pandemic by the low interest rates. And so prices appreciated about 50% on average between or since the beginning of the pandemic. And so people just now can't afford to buy a newer home or move. And that has actually resulted in a kind of a constrained supply of homes, that are on the market, or many fewer homes than historically are and be able to sell. So it's kind of a vicious circle right now. Things that the government could do, I think, is, or Congress could perhaps increase the capital gains exemption, which is right now about $250,000 for an individual and 500,000 for a couple when they sell a home. I think this would probably help mainly some folks or seniors on the coast who do wanna move, but they would have to pay a huge penalty if they were to downsize or go to assisted living, because the capital gains tax is just prohibitive. So that's one thing that they could do. I think you mentioned NEPA reforms. I mean I think that that might help at the margin, but most of the issue is when you start creating government grant programs, by the way, all of this money is then become subject of NEPA. So any kind of government money that localities try to use to boost supply or whatever, or affordable housing or whatnot, all of a sudden, those projects have to comply with NEPA and go through environmental impact statements and all that. So that could actually be counterproductive. But I think the most important thing is that we need to get real incomes up. And so you've actually started to see that a little bit, that the real incomes have risen a bit over the last year under Trump. And that in itself can make housing more affordable, though it's gonna take a while to dig out of this problem.

But the biggest choke point to my mind is in these zoning rules, the things that states and localities often do to make it difficult to build. And part of what motivates those is this confusion about whether a home is something that you consume and you live in, or whether it's an investment and the point of it is to have the price go up and to build your wealth as a homeowner. And to that point, let's listen to President Trump in a cabinet meeting in January.

People that own their homes, we're gonna keep them wealthy, we're gonna keep those prices up. We're not gonna destroy the value of their homes so that somebody that didn't work very hard can buy a home. We're gonna make it easier to buy, we're gonna get interest rates down. But I wanna protect the people that for the first time in their lives feel good about themselves, they feel that they're wealthy people, and I want them to understand it. There's so much talk about, "Oh, we're gonna drive housing prices down." I don't wanna drive housing prices down. I wanna drive housing prices up.

Talk about mixed messages there. Sometimes speaking to some audiences saying that we need affordable housing, we're gonna pass some kind of bills, we're gonna kick investors out of buying homes and renting them out because that is pushing prices up, sometimes telling other audiences that we wanna protect your home values, we want prices to go up. It's a conflict, and to my mind the solution is abundance, make it easier to build homes, that will make it easier for people to get into homes. But Allysia, it's a political problem. And what's your view of this focus, one of the prominent pieces of this bill on that idea of banning investor ownership? I mean, is that basically an effort by political actors in Washington to find a scapegoat to something that the public is frustrated with?

Yes, I mean, these investor-owned homes, or investor companies, are becoming a very popular scapegoat because there's this narrative though that they're buying up all these homes with cash and they're making it more difficult for people who can't buy homes or don't have the cash to buy them outright and have to rely on financing. Makes them more difficult because they can't compete in a bidding war. Now I think this is just, actually, it's a fallacious and spurious narrative in part because the vast majority of homes that these investment firms own are actually, or were bought, right after the 2008 housing crash when prices plunged. And actually the government encouraged them to come. The Obama administration encouraged them to come in and to buy up these homes in places like Nevada, Atlanta to put a floor on the market. And these firms have actually, on net, been selling homes over the last couple of years, because while it's actually been a fairly good investment for them in terms of the prices have appreciated. So they're gonna sell homes at significant profit, so to speak. And so that as actually they'd been selling homes. The issue or a issue is that actually small firms that own fewer than 10%, or 10 rental homes actually make up the majority, vast majority about 86% of the single family rental stock. And these firms are actually get government guarantees from Fannie Mae and Freddie. And as it turns out, Ed Pinto at the American Enterprise Institute and Tobias Peter have estimated that this makes it, actually, they have a competitive advantage when they're bidding on homes compared to first-time home buyers. And they can get a, or the average mortgage payment is about $170 less than someone who is a first-time home buyer getting a FHA guarantee. So that actually is a bigger problem. So if the politicians really wanted to tackle this quote unquote investment or investors, they would eliminate the government backstop for these small investment firms. Bigger investment firms actually don't benefit from this government backstop, but I think it polls well, and that is why, or banning investors from or big investors from buying homes single to rent out polls well with the public. And that's why Trump and both Elizabeth Warren have gotten behind it.

Let's turn to the latest litigation over President Trump's global tariffs. After the Supreme Court recently struck down his attempt to use an emergency law called IEPA, President Trump responded by citing Section 122 to impose a tariff of 15% for up to 150 days. And last week, Allysia, 22 Democratic attorneys general filed a lawsuit challenging this tariff regime imposed by the president. What is it that they are arguing?

They're arguing that the Trump administration basically misinterpreted the law, which Section 122 allows the president to impose tariffs up to 15% for 150 days to address a quote unquote large and serious balance-of-payments deficit. And now the president actually claimed that he was using these tariffs to reduce the trade deficit in goods. Now the issue here is, or the economic issue, and misunderstanding by the White House, maybe it's a purposeful misunderstanding, is that the balance-of-payments deficit is not the same thing as the trade deficit. In fact, the balance-of-payments deficit includes the trade account, the current trade account, as well as financial investment and foreign capital inflows. And when you incorporate the latter two, the US balance-of-payments deficit was a mere $53 billion in 2024, which is about 0.2% GDP, and was smaller than actually it has often been throughout history. So it actually isn't a large and serious balance-of-payments as he claims. By using these terms into interchangeably, I think the Democratic AGs say that the president is wrongly using these terms, balance-of-payments and trade deficits interchangeably, and is thereby exceeding his authority granted by Congress in this Section 122 law. And I think they have a pretty strong argument on that.

The gist is that Section 122 is from a a bygone era and this balance-of-payments problems is a problem of fixed exchange rates, which we no longer have. So that is the context in which these Democratic AGs are quoting Milton Friedman. Here is the line from Friedman: a system of floating exchange rates completely eliminates the balance-of-payments problem. And Allysia, one of the questions in my mind here is whether courts and judges, especially lower judges, are going to be able, interested, willing to enjoin these kinds of tariff regimes from the president, especially given the bait-and-switch kind of that the Trump administration did on refunds when they were litigating these emergency tariffs up to the Supreme Court. They said don't enjoin them, leave them in place for now, because if they're ultimately ruled illegal, people will get their money back. And then in recent days after the Supreme Court ruled that they were in fact not authorized by that IEPA law, that Trump administration then started arguing against the idea that it would be forced to issue refunds over all these imports. And so I wonder if the strength of this case, as you're laying it out, combined with the fact that judges may be a little more skeptical this time if the Trump administration says leave the tariffs in place for now, I wonder if that will convince lower judges to block this 122, the system of tariffs that the president is now imposing.

This lawsuit was filed in an international trade court, which was the same jurisdiction that, or in judicial, sorry, same court that the small businesses filed a lawsuit to challenge his IEPA tariffs. Now the small businesses in that quote unquote Learning Resources case actually prevailed on the merits both at the lower court level and then the appellate court level. But in both instances the judges declined to actually enjoin the tariffs, and so they continued while the case was being litigated up until February. So what has resulted is that, in many cases, businesses have been paying the tariffs for over a year. Even though that they are now have been declared unlawful, they have to go through kind of a rigmarole to seek refunds and the administration is saying, well, first it said that they weren't actually required to do so, issue the refunds, but then they backtracked after a federal court ordered them to and said, "Well, we're just not gonna be able to do it very quickly, it's gonna take months maybe more to issue these refunds, 'cause we don't have the technical systems to do so." And as a result, many businesses probably won't get refunds in any time soon. Interestingly enough, many hedge funds are actually buying claims for refunds at steep discounts, 'cause businesses want the cash now and aren't willing to go through the rigmarole to actually seek the refunds and they're not sure they're gonna eventually get it. So there's actually been kind of an arbitrage opportunity there for the hedge funds. But I think this does, the administration's kind of bait-and-switch in the IEPA case will may make the judges that hear this Section 122 case a little more reluctant, or if they strike down the tariffs, or less reluctant to enjoin them. So I think you're more likely to see an injunction, not just against the tariffs, that that bars the administration from continuing to collect them while the litigation plays out. What you have to keep in mind also is that these tariffs are only good for 150 days under the law. And so who knows how long this litigation is going to take to play out. By the time the the merits are actually decided, the president's power under this law to levy these tariffs may have actually expired. So I think that actually heightens and underlines the importance of getting an injunction relatively quickly.

Thank you, Allysia. Thank you all for listening. You can email us at pwpodcast@wsj.com. If you like the show, please hit that subscribe button and we'll be back tomorrow with another edition of "Potomac Watch."

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