The populists lost
A major housing fight just ended with the better argument winning
Welcome to The Closing Argument, our verdict on the news, plus everything The Argument published and appeared in this week.
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The Verdict, by Jerusalem Demsas
Hello from Aspen, Colorado, where I’m reporting from the Aspen Ideas Festival. I was supposed to be on a plane back by now, but a last-minute announcement of a nonrecorded debate between Peter Thiel and Francis Fukuyama has kept me in town. I’ll be reporting everything for The Argument, so stay tuned.
My big thought this week is that the 21st Century ROAD to Housing act is on the verge of becoming law, and despite all of the hullabaloo from populists about needing to attack private equity and institutional investors in the housing market by restricting the build-to-rent market, in the end, YIMBYs won that argument.
The Road to Housing Act has dozens of different measures, but two of the most significant pieces are:
Setting a framework for incentivizing states and localities to loosen zoning and land use rules
Making it easier to build manufactured housing
At one point, it seemed that the bill’s best measures could be completely undercut by a measure that would have kneecapped the institutional build-to-rent market of single-family homes.
The bill would have required large institutional investors to sell their newly built rental homes to individual buyers after seven years, which would have destroyed the economics of big firms building more housing in a bill that’s ostensibly trying to get everyone to build more housing.
That mandate is gone. The final bill still caps the number of single family homes large institutional investors can buy — but with large exceptions for the aforementioned build-to-rent market, substantial rehabilitation, senior housing, and certain secondary-market transactions. Even that has a pretty big loophole, though, since investors can skirt the 350-home cap by splitting holdings into smaller entities. Firms already over the limit also don’t have to divest anything.
That mandate was the exact provision on which Sen. Brian Schatz gave a floor speech, arguing that, “We have decided, for no particular reason other than what I think is a drafting error, to demonize people who want to build rental housing for folks.” Schatz ended up as the lone Democratic “no” because he worried that this provision would severely undercut the entire bill’s efficacy.
David Dayen, executive editor of The American Prospect, slammed Schatz for this, calling his vote a signal to moneyed interests and private equity that he is their guy. He even quoted an anonymous Hill staffer who claimed that Schatz had a pattern of “undermining bills that take on corporate power.” The Revolving Door Project (RDP) put out a similar hit.
Then, Schatz won. Seventy-six House members signed a letter demanding the build-to-rent provisions be stripped and the National Association of Home Builders warned the provision could hurt industry support for the bill. The House then cut it out, passing a clean version in a 396-13 vote.
Sen. Elizabeth Warren, who fought for the provision, voted for the package anyway and is now out here chanting YIMBY slogans. Good for her! It’s commendable that she helped shepherd through a great bill even if she didn’t get everything she wanted.
But I do want to note: The exact thing the populists said made Schatz a private-equity stooge became the consensus position of both the House and Senate. The very provisions that The Prospect celebrated Warren for are gone or severely limited. So I await with bated breath articles about how Sens. Elizabeth Warren and Bernie Sanders tragically lost to corporate power (or are also in the pocket of private equity?) because they voted for the ROAD to Housing Act.
The Prospect should, of course, not do this, and it is commendable that Warren and others came around here and didn’t let this dispute destroy an otherwise good bill.
The big point I want to make is that people tend to doom about the possibility for persuasion to work, but this was a piece of legislation on a high-salience issue where the slopulism faction lost to reasoned, sustained pressure from people with better arguments.
This wasn’t Secret Congress where a bill’s details get hashed out without any public attention. This was Congress doing the right thing despite getting pressure to do the exact opposite.
This should be a straightforward win for everyone involved — including Trump, who really needs a big win on the economy. Yet, the president is threatening to blow up the housing bill unless Congress first passes the SAVE America Act — a voter-ID law that would require most Americans to present a passport or birth certificate in person to register to vote.
The veto-proof majorities are heartening, but never underestimate Trump’s ability to pull a loss from thin air.
Top stories this week, by Kobe Yank-Jacobs
As we grow, I want to make sure you see everything we’re doing without flooding your inbox with dozens of emails. But for the real libs, you can get every post as it drops by opting into The Mag here.
Milan Singh ran the numbers: Tariffs cost the U.S. 274,000 manufacturing jobs before Trump’s second term (between 2018 and 2024). In an adapted version of his own original research, Milan walks us through why the economists’ broad consensus against tariffs still holds. It’s priceless reading:
Meanwhile, some have started to fret that new housing starts haven’t spiked within a year of California passing housing legislation. Jerusalem Demsas thinks this kind of talk needlessly puts the YIMBY movement on its back foot: Who said a decades-old supply crunch would be fixed in under a year? As she surveys the evidence on housing legislation, she explains why liberals need to be more confident about their wins:
Finally, New York State Assemblymember Alex Bores lost his primary race for a U.S. House district in New York after Leading the Future (a super PAC funded by top figures in the AI industry) targeted him for regulating AI. In the lead up to that race, Kelsey Piper covered the Super PAC’s sleazy tactics, counterproductive efforts, and the implications for the future of AI regulation. Strange world to come. Learn more here:
🌟Abundance Wins of the Week🌟
Utah put a massive solar project online with 400 megawatts of solar and 400 megawatts of battery storage. This means powering up to 110,000 homes and potentially carrying up to 10% of the state’s energy load, according to an official associated with the project.
The NRC renewed both Edwin I. Hatch reactors in Georgia in under 12 months, keeping 1.8 GW of carbon-free baseload on the grid for another 20 years.
Two cheers for basic research: Normal hearing aids amplify everything in your surroundings, but there are signs that a new technology could use people’s brainwaves to amplify specific sounds in their environment, mimicking normal human hearing. I am frequently astonished by modernity.
Worth watching...
History took an awful turn the moment Joe Biden stepped on that debate stage in June 2024, which only confirmed the extreme irresponsibility of his decision to run again. But guess what? Joe made other mistakes, too! Jerusalem and Matt hash out their top five Biden errors on the pod this week.
Try to think of your own top 5 before you listen in:
Top 5 reasons to hate Joe Biden
The Bidens are in the news again, and they are busy desperately trying to salvage their legacy while lashing out at those they deem disloyal.
I am still buzzing from last week’s release of Lakshya Jain’s 2026 election model, which clashed with the outlook from major qualitative ratings institutions. This week, Lakshya brought that debate to a Substack live video with Erin Covey of The Cook Political Report. It’s an incredible back-and-forth that gets at some of the fundamental questions in political forecasting. Please check it out:
What’s News with The Argument
The Argument recommends, by Kobe Yank-Jacobs
I was worried my teammates would give me a tedious list of World Cup matches to write about this week. Thankfully, however, we are not in touch with the masses at all. Maibritt Henkel is literally going to watch Shakespeare tonight.
“My recommendation is buying theatre tickets many months in advance and thereby treating yourself to one of life’s great pleasures: anticipation,” she said with a giddy lilt.
She’s going to see The Shakespeare Theatre Company’s production of Othello. Stay tuned for her reactions next week.
Unfortunately, I’m also bringing a highfalutin recommendation to the table: Being in the World. It’s a documentary that is technically about Heidegger scholar Hubert Dreyfus, but really, the philosophy chatter is like a backing track to lively footage of musicians, jugglers, cooks, and craftsmen interacting with the physical world, embodying their knowledge per the philosophy espoused by Dreyfus. This jazzy, fast-paced film was also shot by someone with a maniac’s sense for a level frame.
Our video producer Justin Zuckerman was actually implicated in this philosophy business with me, but he declined to recommend the movie. Instead, he was a real man of the people and recommended an album that “spans from western country to pop” — Box for Buddy, Box for Star by This Is Lorelei.
Eli Richman was also fairly down-home with a horror comedy recommendation, Widow’s Bay, with great lines like, “The witch trials. Great source of pride. We caught ‘em. We burned ‘em.”
Milan Singh wanted to put both an audiobook (Empire of Liberty) and some Instagram cooking videos (by Hailee Catalano) on the audience’s radar.
“Apparently everyone in 1800s America was drunk all the time — including the kids!” he said of the audiobook.
When I looked back at this list, I considered that maybe we weren’t so elitist after all. Maibritt and I, with our Shakespeare and philosophy, were the main problems. But then someone reminded me: Angela Tracy reads plays.
When I turned to welcome Angela to the highbrow culture clique, she suggested the play Rhinoceros and said, “Mm, thanks for the invitation, but I only read plays. I don’t gooo to them.”
Maibritt Henkel declined to comment.
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I really enjoyed the Prospect back during the Bush II years, but it’s gone downhill in the last 10 years or so. David Dayen is REALLY ANNOYING. Comes across as a caricature of a “purity progressive.” REE! REE! IN THE POCKETS OF DEVELOPERS! REE!
Schatz and Warren are both “progressive” Democrats, yes, but they are ultimately willing to practice “the art of the possible” because people need housing *now*, not when the lamb lies down with the lion and there is peace on earth and blah blah. So good for them for saying “fine, this will do” on the final bill. (Also, Schatz represents Hawaii where housing is insanely expensive; as it is in Massachusetts for that matter.)
Battery storage is measured in megawatt-hours (MWh), not megawatts (MW).