When Senator Elizabeth Warren of Massachusetts went to her fellow Democrats last year during their weekly lunch to suggest working with Republicans on a major new housing bill, she was met with trepidation and doubt.
Members of her party had long wanted to tackle the housing crisis, but most assumed that there was no way they could overcome deep divisions with Republicans to agree on the kind of landmark legislation Ms. Warren envisioned.
“There was kind of this sense of, ‘Yeah, you’ll put it together, and then we’ll all look at it, we’ll say yay, I’m a co-sponsor of a bill that will go nowhere,’” Ms. Warren said in an interview in the Capitol, reflecting on the improbable process that had led to the enactment of the measure this month.
“They’ve been taught around here that it will all be for nothing, that the bills that you put together are just kind of for show,” she added. “Especially on the Democratic side, when Republicans are in control.”
Instead, against seemingly impossible odds, the bill succeeded and won bipartisan support, overcoming the polarization of Congress, G.O.P. infighting, the bitter politics of the midterm campaign season and an utter lack of enthusiasm from President Trump, who ultimately refused to sign it. At a time when bipartisan legislating has become a lost art, its proponents managed to push through the biggest piece of housing legislation in three decades, assembling a broad coalition across both houses of Congress to address an affordability issue that is front and center for voters.
It very nearly did not happen. This account of how the 21st Century Road to Housing Act became law after several near-death experiences was drawn from interviews with a dozen lawmakers and aides who played key roles.
It started with an unlikely partnership between Ms. Warren, the progressive top Democrat on the Banking, Housing and Urban Affairs Committee and Senator Tim Scott, Republican of South Carolina, the panel’s ultraconservative chairman. They had forged a rapport sitting side by side on the dais of the panel, chatting quietly when a meeting would drag on, or when a witness had something compelling — or obnoxious — to say.
“Everyone else comes and goes, except for the witnesses and the two of us,” Ms. Warren said. “So you end up whispering a little in between. Someone will say something and it triggers a thought. And I’d lean over and say, ‘You know, it makes me wonder why we couldn’t do this,’ or, ‘What a jerk.’”
Mr. Scott, whose mother bought her first home at age 40, shared Ms. Warren’s zeal for a big new housing bill — Congress had not passed one since 1990 — and as the chairman of the Senate Republicans’ campaign arm, he had a powerful political incentive to try to make it happen before the midterm elections.
Mr. Scott declined to comment.
The politics were tricky: Republicans would never agree to Democrats’ goals of pouring major new spending into housing programs and expanding the Department of Housing and Urban Development, and it would be a tough sell to get them to accept Ms. Warren’s priority of rewarding communities that were building housing with funds for infrastructure.
Democrats would have to embrace a housing bill with limited money for housing programs in it. And, they would have to be willing to hand Republicans a victory they could cite in their fight to keep control of Congress.
But there were upsides for both parties. The high cost of housing had been a relentless burden in heavily Democratic cities like New York, Boston and Los Angeles for years. But since the pandemic, conservative states like Idaho and Montana had also experienced stratospheric increases in rents and home prices, transforming what had been a regional issue into a national one.
‘I Can’t Support That’
By last October, Mr. Scott and Ms. Warren had an agreement and hatched a strategy to speed it through the Senate in a way they thought would guarantee its quick enactment. They attached it to the annual defense policy bill, which is considered a must-pass item, in a bid to prod the House to accept it without changes.
The move touched off a feud within the G.O.P. Representative French Hill, the Republican chairman of the Financial Services Committee who had been focused on banking legislation, was blindsided.
He called Mr. Scott and told him he needed to pump the brakes.
“The process was premature,” Mr. Hill, of Arkansas, said in an interview. Over a series of conversations, he said he told Mr. Scott, “You know, if you’d like to negotiate and take House input, I’d be happy to do that.”
But the senator was not interested in making changes.
“Well, this is what I’ve got in the Senate, and this is the way it’s going to be, and this what I can do,” Mr. Hill recounted Mr. Scott telling him. “And I said, ‘Well, I can’t support that.’”
House Republicans stripped the housing measure from the defense bill, dealing it a major setback.
In early January, Mr. Trump provided an opening to revive it. He posted on social media that he planned to curb the role institutional investors play in the single-family housing market, addressing an issue that was a priority for Senate Democrats and riles home buyers, particularly in markets like Atlanta and Charlotte, N.C., where people are often outbid by investors making all-cash offers on starter homes.
She saw an opening to get ahead of the president, with a bill shaped by Democrats that would drive the debate.
“I was electrified,” Ms. Warren said, adding, “If I’d been a cartoon, there would have been a lightbulb above my head.”
The next morning, Ms. Warren was on the phone with Democrats,, working to pull together a proposal that could be introduced before Mr. Trump’s State of the Union address.
Soon, the White House was negotiating directly with Mr. Scott and Ms. Warren.
But the House was working on its own, far narrower, housing bill, which it passed in February with overwhelming bipartisan support.
The next month, the Senate passed a measure that was meant to merge the two chambers’ bills, including the new private equity piece, by a lopsided margin of 89 to 10.
Legislative ‘Pingpong’
Mr. Trump, with his attention focused on the war in Iran, a White House ballroom and a sweeping voting restriction bill, largely ignored the process. But once again, House Republicans balked.
Responding to a wave of criticism from the building industry, they said they could not accept a provision in the Senate bill that set strict limits on single-family homes built as rentals.
“Now it has a fatal problem,” Mr. Hill said.
Mr. Hill and Representative Maxine Waters of California, the ranking Democrat on the Financial Services Committee, called for bicameral negotiations. But once again, senators refused to engage, noting the overwhelming support their measure had drawn in the otherwise polarized chamber.
The only alternative, Mr. Hill said, was yet another round of legislative “pingpong.” And so in May, the House passed yet another version of the bill that watered down the private equity provision.
Ms. Warren saw it as catastrophic because Senate Democrats would not support a bill that failed to meaningfully address private equity in the housing market.
“They just ripped the heart out of it,” Ms. Warren said. “I thought, ‘Oh, now we’ve lost something that really matters.’”
The standoff finally broke when, over a series of phone conversations in early June, Ms. Warren and Ms. Waters began hashing out a deal to satisfy both chambers.
“The real breakthrough came when Elizabeth Warren and I got together,” Ms. Waters said in an interview. “And then we got Tim Scott to say yes.”
While their compromise softened the build-to-rent provisions, it still targeted the private equity industry by capping at 350 the number of single-family homes an investor could own. With more than 50 provisions, the final legislation addressed the housing crisis by boosting supply, which is considered the crux of the crisis, with rules that aimed to ease federal regulations, to make it easier to borrow money and to update federal programs to encourage development.
A Canceled Signing Ceremony
On June 23, the House gave final approval to the bill, clearing it for Mr. Trump. Republican leaders quickly arranged for a celebratory signing ceremony the next morning at the Capitol. But as industry and congressional leaders arrived at the Capitol and as Ms. Warren was being interviewed on CNBC crowing about the bill, Mr. Trump announced in a social media post that he would not sign it after all.
“I thought it was a joke,” Ms. Warren said.
The president singled her out in the post, referring to her with a derisive nickname and describing the legislation as “the Elizabeth ‘Pocahontas’ Warren centric housing bill, which is of minor importance.”
Mr. Hill, walking into a news conference when he saw the social media post, took the turn of events in stride.
“I play the cards as they’re dealt out on the table,” he said. “We moved on to yet another twist in the story of this legislation.”
The next day, Mr. Hill and Speaker Mike Johnson went to the White House to meet with Mr. Trump. They urged him to sign the legislation and made it clear that the House had the votes to override a veto. The president, Mr. Hill said, “was aware of the strengths of the feelings about that bill in both chambers.”
Mr. Trump ultimately refused to sign the measure, but allowed it to become law, which it did automatically and without fanfare at midnight on July 11.
“I’m still disappointed he didn’t sign it,” Mr. Hill said.
Three days later, Ms. Warren again went before Democratic senators at their weekly luncheon at the Capitol, this time to celebrate the bill’s enactment.
“I said, ‘Start thinking about Road 2.0,” she said, “because we’re going to do this again.’”
Robert Draper contributed reporting.
