As my colleague Bob Kuttner explains, Sens. Elizabeth Warren (D-MA) and Tim Scott (R-SC) have moved through a bipartisan housing bill supported by President Trump that if signed would represent the most (only?) progress of the second Trump term. The bill passed 89-10, reflecting awareness that housing affordability is a critical subject to loosen public anger over an economy that doesn’t work for most of them. The bill mostly adds funding to build housing, tackles land use rules, and lifts restrictions on manufactured housing that could lower costs of construction.

But on Wednesday, there was apparently only one provision worth talking about on the shambling mound that used to be Twitter: a requirement that investment companies that build single-family homes in order to rent them out (a strategy that has advanced over the past decade known as “build-to-rent”) and have over 350 properties sell them after seven years of rent collection. This was the subject of forceful objection by Sen. Brian Schatz (D-HI), the heir apparent to Chuck Schumer in the Senate Democratic leadership.

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Schatz called this particular measure “positively Soviet,” described it as “an effort to demonize people who want to build rental housing for folks,” and claimed it was a “drafting error,” presumably to embarrass its authors into a fix. “There is literally no reason to do it this way, and it would take like a two-line fix. But what we were told last week was, I’m sorry, the bill is closed,” he said.

The peroration got a lot of attaboys from the abundance folks, who have decided to magnify what Schatz even admits is a small part of the overall housing construction market and claim that this poisons the entire bill. But Schatz was, frankly, lying to his own supporters. He never filed an amendment to deal with this part of the bill, according to Senate aides, even though first-order amendments were open until this Monday and second-order amendments until this Wednesday. There was never an attempt to make that two-line fix or rally support around it. (Schatz’s office was asked about this and did not respond.)

Instead, Schatz gave a speech that didn’t change a single vote on the Democratic side for the overall bill; in fact, Sen. Cory Booker (D-NJ), who had been voting present on the procedural votes due to a commitment not to allow “business as usual” amid the war in Iran, flipped to yes on Thursday, after the Schatz speech. So if anything, the guy who has locked up the votes to be the Democratic whip, in charge of counting votes and persuading caucus members to vote a certain way, lost votes after his broadside.

That’s because this wasn’t about a policy change, but a signal to the people who actually do build-to-rent for mass amounts of properties, who aren’t families or pension funds as Schatz intimated, but private equity firms. They have been the ones loudly objecting to this measure. He was effectively telling the industry that he was on their side, and in opposition to their most hated opponent, Sen. Warren.

There’s been a lot of effort to claim that this was a Warren provision, but that’s also not true. It was the price that the White House put on the bill to get it passed. The president issued an executive order designed to prevent private equity firms from buying up single-family homes and rent them out. The Warren-Scott supply-focused bill, the ROAD to Housing Act, was operating on a separate track, along with a version from House Republicans. When the House version came up for a vote, a statement of administration policy articulated that it was fine but it “lacks other presidential priorities, particularly a ban on the purchase of single-family homes by large institutional investors.” In other words, without codifying Trump’s executive order, he wasn’t going to sign it.

There was then a careful negotiation among members of Congress to get that in the bill. Warren had her own version of this that was based on the tax code, prohibiting large institutional investors from claiming certain tax breaks for the purchase of housing. That’s not what ultimately got negotiated in the final bill: It’s a straight ban, with an exception for build-to-rent that allows rent collection for seven years before sale.

After that version was released, the White House issued a different statement of administration policy that “highlights the inclusion of presidential priorities to ban large institutional investors from competing with individuals in single-family home markets” and said that the president would sign the bill if it passed, something not in the previous SAP. In other words, this provision was the key to getting the bill done, and if it were taken out, the bill would not pass.

While it’s definitely true that Trump, to quote him verbatim, doesn’t give a shit about housing, he does care about putting his imprint on anything that passes Congress, and the record shows clearly that something on institutional investors owning and buying houses was a red line for White House support of the bill. We’ll see what House Republicans do with this, but legislation with 89 Senate votes and support from the president usually does pretty well.

Elizabeth Warren’s Amazingly Progressive Housing Bill

Schatz was the only Democrat willing to sacrifice the bill for this single provision. But again, this was a free vote for him to signal to the private equity industry that he’s their guy. The importance of this provision to the overall housing market (not much) or whether you think it’s good or bad policy (I think getting seven years of rent and fair market value for a property would be financially positive for the homebuilder, Schatz’s complaints aside) is actually beside the point: This was just a way to affiliate with big money.

Some Democrats are upset about this attack on a bill that had near-universal support and see it as part of a pattern. One former top-level Hill staffer told the Prospect: “In some circles, to ‘Schatz’ something is starting to be used as a verb, by which I mean undermining bills that take on corporate power, pretending to be motivated by progressive concerns, when it is transparent to everyone involved that he is just trying to build chits with powerful industries.”

The staffer noted that something similar happened with the American Innovation and Choice Online Act, a bill cracking down on Big Tech that Senate Democrats tried to pass in 2022. Schatz was part of a group of Democrats who sent a letter to the bill’s author, Sen. Amy Klobuchar (D-MN), asking to fix a provision they said would “hinder content moderation.” Schatz later told me and other outlets that he got assurances from Klobuchar that the content moderation piece would be fixed. But reformers working on the bill believed that his goal was to highlight a controversial piece of the bill that could displease Republicans and upset a carefully negotiated compromise. The winner would be Big Tech, as long as the bill collapsed. That’s indeed what happened, for a lot of reasons, but the content moderation piece didn’t help.

Putting together Schatz’s hyping up a provision designed to kill legislation that would have regulated powerful tech platforms with his loud speech siding with private equity creates the impression that the Hawaii senator is building a case to moneyed interests that they would have a friend with him as Senate Democratic leader, regardless of his self-identification as a progressive. With Chuck Schumer you know exactly what you’re getting; in some ways, this quiet signaling campaign is more dangerous.

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David Dayen is the executive editor of The American Prospect. He is the author of Monopolized: Life in the Age of Corporate Power and Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. He co-hosts the podcast Organized Money with Matt Stoller. He can be reached on Signal at ddayen.90.