One California broker says anybody who knows the housing market is going to roll their eyes at it
It turns out the road to a bipartisan housing bill has one more pothole remaining to navigate.
Congress passed the 21st Century Road to Housing Act this week, with the House approving it 358-32 and the Senate passing it 85-5. Supporters say the bill includes more than 50 provisions aimed at increasing supply and reducing costs.
President Trump was scheduled to sign the bill on Wednesday, but cancelled the signing ceremony, saying he would not act until Congress passes the SAVE America Act, a voter ID bill. The bill becomes law automatically if it is not signed within 10 business days, excluding Sundays, as long as Congress remains in session and the bill is delivered to the White House.
House Speaker Mike Johnson said Wednesday he expects Trump to sign the bill within 10 days. Once it is enacted, the question will be how much help it will provide to the housing industry. One broker is skeptical about the actual benefit.
Amir Nurani (pictured top), broker-owner at Left Coast Leaders in San Diego, said he thinks the bill comes up short in many areas.
“I’ll start by saying something is better than nothing,” Nurani told Mortgage Professional America. “It’s nice to see that we’re trying to actually attack the problem. But here’s my issue — the problem is supply. We don’t have enough homes for sale. And unless you are fundamentally attacking that problem with solutions that are viable, can be deployed, and that we see the upside from in a reasonable period of time, then I think it’s nothing more than showmanship.”
Limiting the free market
The bill’s most prominent provision caps institutional investors at 350 single-family homes, prohibiting further purchases beyond that threshold. Nurani said the intent is understandable, but the execution has two problems.
The restriction is open-ended, he said, in a way that concerns free-market advocates. Institutional buyers do drive up prices, Nurani acknowledged, but those elevated comps also benefit existing homeowners who have built equity against them.
“When those corporations are buying up these properties, people who own homes are seeing the benefits of that,” he said. “So we don’t want that to disappear entirely. We want capital flows. And if you interrupt capital flows, you’re going to see prices that’ll stabilize. They might even come down.”
The restriction also comes with a workaround that Nurani said any sophisticated investor will find quickly.
“These corporations, if they have 350 plus homes, will create subsidiaries. Those subsidiaries will purchase homes,” he said. “So there are ways to get around these restrictions. And you know full well that these guys will do those things. So how much of the needle is actually being moved? I think very little.”
While there are broker concerns with the final bill, trade organizations applauded the bipartisan effort to get reforms passed. Bob Broeksmit, Mortgage Bankers Association president and CEO, called it a genuine step forward.
“By advancing commonsense reforms that encourage housing production and improve program efficiency, Congress has demonstrated that bipartisan cooperation can deliver real results,” Broeksmit said.
More regulatory help needed
The manufactured housing provision is the best element in the bill, Nurani said. But it’s not something that’s going to benefit homebuyers everywhere.
“I thought that was pretty good,” he said of the financing changes for manufactured homes. “But in California, we don’t have a lot of manufactured modular homes being sold. Does that solve the problem in Ohio? Yeah, sure. Maybe help there. It doesn’t help around the nation.”
Housing supply is controlled at the state and county level, Nurani said, and California’s regulatory environment makes construction dramatically more expensive than Texas’s.
“The federal government can swing an iron hammer and make some actual impactful changes that every state needs to abide by,” Nurani said. “Like FHA loans — the guidelines around FHA loans are national. Something similar could probably happen with how homes are being built and how to remove some of the red tape.”
Bill Dallas, a pioneer in the wholesale mortgage space and now chairman of Dallas Capital, said the tools that would actually move the needle are not in the bill.
“Housing is a local issue, and we need to engage communities, not look to the federal government to solve this,” Dallas said. “Use existing housing stock and encourage Americans to help solve the problem. Provide tax incentives for homeowners to build ADUs, subdivide their land, and encourage older homeowners to rent out extra rooms safely.”
With midterm elections approaching, Nurani said the bill gives the public a false sense that progress is being made.
“For the general American, what they’re going to hear is that we’re doing something to help the housing market,” he said. “Anybody who understands what’s in this bill and understands the space, you’re going to get the feedback of — this isn’t anything. This is nothing more than posturing.”
That gap between perception and reality is what troubles him most, Nurani said.
“You are literally just trying to do something to try to gain public favor versus doing something to solve a problem,” Nurani said. “I would love to see a bill that actually moves the needle. This is not it.”
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