President Donald Trump surprised everybody on Wednesday by refusing to sign the ROAD to Housing Act unless the Senate also passes the SAVE America Act. He is right to tie them together. It would be even better if he refused to sign the bill outright if the SAVE Act passes.
It is a bold move, to be sure. The press has widely characterized the housing bill as a bipartisan “win” for the Republicans and the election-security legislation as an unpopular partisan move. As soon as Trump announced his decision to tie the two bills together, housing bill cosponsor Sen. Elizabeth Warren (D-MA) and the media attacked Trump as a political hit man who doesn’t care about affordability.
They are wrong. The SAVE America Act would do much, much more for affordability than the ROAD to Housing Act. The latter, in fact, would probably do far more harm than good.
The nation’s affordability crisis is caused entirely by government overspending that has unleashed inflation and driven up interest rates. That overspending results from the very election system that the SAVE Act would reform, and the bill’s opponents are trying to protect.
Although Trump has long claimed to like the housing bill, and still says so, he is right to hold it hostage for the real affordability triumph that the election security bill amounts to.
The housing bill is an uneven mixture of deregulation, re-regulation, and new spending that leans hard toward government intervention.
The bill would establish a four-year pilot program, costing $200 million, to give taxpayer money to financial institutions “to incentivize the origination of small-dollar mortgages” of $100,000 or less. It would provide “direct grants for mortgagors [home buyers] who obtain small-dollar mortgages to cover costs associated with … down payments, closing costs, appraisals; and title insurance.”
That will raise housing prices, not lower them, by pouring more money into the demand side of the price equation.
This spending is accompanied by a provision for “adjusting terms and costs imposed by the Federal Housing Administration with respect to small-dollar mortgages.” That might turn out to be mildly beneficial, but it’s certainly a very meager tradeoff. The Democrats and GOP big spenders won that round decisively.
The legislation would also revise the federal government’s treatment of state and local “zoning frameworks,” defined as “zoning codes and other ordinances, procedures, and policies governing zoning and land-use.” The bill directs the Assistant Secretary of Housing and Urban Development to “publish documents outlining guidelines and best practices to support production of adequate housing to meet the needs of communities and provide housing opportunities for individuals at every income level across communities.”
These “guidelines and best practices” for zoning policy would recommend ways to reduce “obstacles, regulatory or otherwise, to a range of housing types at all levels of affordability, including manufactured and modular housing.” Specific measures include simplifying zoning codes, requiring timely decisions on building applications, establishing “cost-effective and appropriate building codes,” reducing or eliminating impact fees, increasing access to appeals and zoning variances, and “streamlining of State environmental review policies.”
Although those are all improvements on the current system, they fall far short of the only justifiable course: removal of all federal government interventions in the housing market. All the federal subsidies, regulations, and monetary manipulation intended to increase homeownership are economically destructive and unconstitutional. They have been barnacled to the ship of state through an absurdly wrong, infinite interpretation of the Constitution’s “general welfare” clause.
They should all be eliminated.
Many other elements of the housing bill explicitly expand federal restrictions on housing. These include the recommendation to “limit disruption of low-income communities, and prevent displacement of existing residents,” meaning preventing “gentrification.”
Although it is possible the current administration would recommend that states and localities loosen these restrictions, the provision is nothing more than feel-good talk. The states face no consequences for refusing to comply with the recommendations, and a subsequent president could change them all, unilaterally, anyway.
Writing on X, U.S. Republican Rep. Chip Roy (TX-21) correctly argues the housing bill is “full of big government garbage & spending.” In addition to reauthorizing and expanding the HOME grant subsidy program, Section 101 of the bill “reforms’ housing counseling agencies (HCAs) to provide rental dispute services to bad tenants facing lawful eviction,” and Section 106 “establishes an eviction helpline program,” Roy notes.
“There is no reason we should be providing government-funded counselors to help people derail lawful evictions,” Roy says. Those policies reduce the stock of available housing by discouraging people from renting out properties. That raises rent prices on the remaining rental properties.
The bill even retains the COVID-era moratorium on evictions, a policy that was blatantly unconstitutional, economically destructive, and a gross violation of individual rights, which suppressed the housing market instead of expanding incentives for building. Reductions of taxes, regulations, and interest rates are the only ways to expand the housing supply.
Roy is right in his criticisms of the bill. Nationalizing the immensely damaging restrictions that crony-socialist goons have imposed on benighted housing markets such as New York City for decades will do enormous damage nationwide while further undermining people’s morale and trust in government.
The legislation also reauthorizes and increases the Rental Assistance Demonstration (RAD) program that provides vouchers for localities to raise private-sector money to convert units into long-term Section 8 housing. That subsidizes inferior housing, taking investment money away from better projects. Like most of the bill, it will harm the housing stock, not improve it.
The legislation also does nothing to limit, much less reverse, foreign ownership of the nation’s housing stock, and it allows localities to keep subsidizing housing for people in the country illegally while law-abiding Americans struggle to find places to live in great part because of the enormous demand increase mass immigration has caused.
Using this sloppy housing bill to force the Senate to pass the SAVE America Act is a good idea. Rejecting it altogether would be an even better course, once the election integrity bill is safely on the president’s desk.
S. T. Karnick (https://stkarnick.substack.com/) is a senior fellow at The Heartland Institute and author of the Life, Liberty, Property weekly e-newsletter.