In an era defined by deep political polarization, a major housing package cleared the House of Representatives with an overwhelming bipartisan majority of 396 votes. Yet despite its popularity, it remains stalled in Congress.
The 21st Century Road to Housing Act is the biggest housing bill package in decades. The legislation aims to address the housing crisis by cutting regulatory red tape and expanding the use of less-expensive housing options, such as modular and manufactured housing.
Yet the bill remains gridlocked over minor differences in the House and Senate versions, including technical provisions related to banking and large institutional homebuyers.
The slow process is “perplexing,” Joe Harris, the National Association of Realtors’ vice president of Government Advocacy, said at a conference this week in Washington, DC.
“It is unlike anything in 25 years in DC that I’ve seen,” Harris said. “It’s not even a party issue; it’s a Senate-versus-House issue, pure and simple. And very rarely, particularly when one party controls both the House and the Senate, do you have the lead Republican in the House and lead Republican in the Senate not able to get on the same page.”
Harris spoke on Sunday during NAR’s annual Legislative Meetings, where members from across the country converge on Capitol Hill to press Congress to move forward on the group’s top legislative priorities. This year, NAR is advocating strongly for progress on the housing bill, NAR Chief Advocacy Officer Shannon McGahn told attendees.
As NAR makes its full-court press, there are signs that the dam may be about to break. On Monday, Politico reported that the Senate is poised to advance some compromises on what could be a final version of the housing bill. Once the Senate and House align their versions of the bill, it would head to the president’s desk for signature.
Small differences delay major bill
The Senate and the House each passed different versions of the landmark housing bill. But because both chambers have to pass the same language, each has to vote to approve the other’s changes to the bill. That’s where the bill has been since the Senate’s 90-8 vote in March.
Both sides have reservations about the other’s version of the bill. The Senate’s bill included several unfunded mandates the House didn’t like, as well as contentious restrictions on institutional investors in the housing market. The House modified the Senate’s investor ban, easing some restrictions such as a sell-off requirement. The strict provisions made some House members nervous.
After prodding from President Donald Trump, the House passed the Senate’s changes after amending them further in the 396-vote landslide.
The Senate’s concurrence vote, which could happen this week, should be the final stop on the Hill. But it has remained quiet for a few weeks to hammer out compromises. The Senate’s version of the bill has always been more expansive.
But there’s appetite to compromise. NAR leaders have met with Trump administration officials 50 times about housing affordability issues this session of Congress.
“There were certain things, and the House, and their provisions, including some of the banking provisions that didn’t always sit well with the Senate, but I think we got that absolutely ironed out, knock on wood,” Matt Stross, NAR director of government advocacy said. “There’s six provisions that the Senate wants to get in there, that the House seems like they’re okay with after some tweaks.”
NAR lobbying in support of the bill
NAR is the second-largest lobbying organization by spending in DC, spending $54 million in 2024, according to OpenSecrets. It is using affordability as a talking point this week, McGahn said.
“We’re going to continue to push, not only with Congress but this Administration for them to make the case for us,” Harris said. “It’s been a very productive and helpful sort of interaction and partnership in terms of keeping this issue front and center.”
Trump is attuned to interest rates, but NAR is focusing its message on affordability. While two of its major advocates on housing policy—Sen. John Cornyn (R-Texas) and Sen. Michael Bennet (D-Colorado)—are 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 a bill signing, homeownership month and the like,” Harris said. “There is just such a feeling when you’re talking to members of Congress, they all agree that it has to get 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 do think it’s going to get done.”
Separate push to reform taxes on profits from home sales
NAR is also advocating for Congress to change the current capital gains tax rules in order for home sellers to make a bigger profit at sale without owing taxes.
The group has spent the year pressing for updates to the code, set in 1997, that caps the capital gains tax exclusion at $250,000 for single people and $500,000 for joint filers.
A significant fraction of homeowners have risen above those thresholds with the appreciation of home values in recent years. NAR says that the outdated scheme locks people in their homes, discouraging them from selling and exacerbating the inventory shortage.
The More Homes on the Market Act, introduced by Rep. Jimmy Panetta (D-California), has over 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, in a prior NAR event, acknowledged there’s been some resistance because altering the exclusion could put a huge dent in federal tax revenue, expanding the deficit. Panetta tried and failed to advance similar legislation last year.
Government analysts estimated a wholesale change to the scheme could cost $46 billion in tax revenue. More targeted changes, such as an exception for seniors, still lose the government billions.
But NAR engaged early and often, including at the Real Estate Caucus, a large and bipartisan group of Congress members who are concerned about housing policy.
NAR believes that Congress has an appetite to take that issue up later this year. The group has pushed to rebrand capital gains taxes as a “home equity tax,” so it’s clearer it’s not a new tax break but rather an expansion of an existing exemption, McGahn said.
“The good news is, when we go into these offices to talk about capital gains, we’re met with a lot more enthusiasm, even than what we were met with last Congress,” Harris said. “A lot more people are talking about it, a lot more staffers are aware of the issue.”
