In Brief:
- The 21st Century ROAD to Housing Act, which combines elements of two bills with bipartisan support in the U.S. House and Senate, could be voted on this week.
- Cities and states support many of the provisions, which expand eligible uses for federal housing money and streamline some permitting requirements.
- The bill also includes a provision, backed by President Donald Trump, capping Wall Street purchases of single-family homes.
For the first time in years, bipartisan majorities in the U.S. House and Senate have voted to approve a package of changes to federal housing programs, with the aim of making it easier and less costly for localities to build affordable and market-rate housing. This week the two chambers are working to finalize the language of the bills, incorporating priorities of the Trump White House, which has signaled its support. And cities, counties, state housing finance agencies and housing advocacy groups are urging their passage.
The most recent version of the 21st Century ROAD to Housing Act was approved in an 84-6 procedural vote by the Senate on Monday. The bill combines elements of two bills introduced in the House and Senate last year, and incorporates a more recent push from some U.S. senators and the White House to limit the purchase of single-family homes by large corporations. Other aspects of the legislation make technical tweaks to federal programs that have been embraced by cities and counties. They include:
- Expanding eligibility for the HOME Investment Partnerships Program, a Department of Housing and Urban Development-administered block grant program that provides funding for low-income housing
- Waiving some environmental review requirements for urban infill projects that receive HOME funds
- Permitting the use of HOME funds for housing-related infrastructure, like roads and water systems
- Allowing Community Development Block Grant (CDBG) funds, a major source of federal funding to cities, to be used for new construction of housing
- Reauthorizing the Community Development Block Grant — Disaster Recovery program, with the aim of more quickly distributing recovery funds to localities after disasters
Some policies included in the bills were pioneered at the state and local level. California, for instance, made sweeping changes last year to a landmark environmental law that waived some review procedures for urban infill projects. Lawmakers in at least half a dozen states have also considered bills in recent months to cap investor purchases of single-family homes, a policy that President Donald Trump named as a priority in his State of the Union speech last week.
The bills also respond to some long-standing concerns among local leaders, including a hesitancy from some local officials to permit more housing in areas that may lack the infrastructure to support it, says Mike Wallace, a legislative director for community and economic development at the National League of Cities. Making federal funds available for housing-supportive infrastructure could encourage cities to permit more housing. Compared to other recent congressional efforts on housing, the current bills take a more comprehensive approach to updating federal housing programs.
“I think Congress was smart in that they’re looking at the bigger picture and doing what they can through regulation,” Wallace says.
Some components of the Senate version of the bills have raised local concerns in some areas. Localities have embraced a proposal in both bills for the Department of Housing and Urban Development to develop model land-use regulations that could help cities update their own zoning codes. But some have worried about a provision in the Senate bill that would adjust cities’ allocation of CDBG funds based on how much housing they permit, giving more to cities that support lots of new construction and giving less to cities that restrict it.
“If you tie CDBG allocations to the local housing growth rate, from there you’re assigning winners and losers,” says Jared Grigas, an associate legislative director for community, economic and workforce development at the National Association of Counties (NACo).
NACo is urging Congress to remove that provision of the bills, but supports their passage overall. In general local governments and housing advocates say the bills would streamline housing production in some areas and give cities more flexibility in how they use federal funding. Still, it doesn’t provide the thing they want the most: A major federal financial investment in housing maintenance and production. But as a combination of small but wide-ranging regulatory changes with broad political backing, it sets the table for future investments.
“The thrilling part of it is we really wanted a robust housing bill that we could support outright,” Wallace says. “I think if you start stacking up with too much more, you start peeling off support … This is a good structure to have in place so that when it passes, we can go out and say the landscape is ready for an actual infusion of dollars.”
