The 21st Century ROAD to Housing Act cleared the Senate 85-5 and the House 358-32. Those are numbers you don’t see in Washington anymore. And for a moment, it looked like the country was finally getting its first serious housing legislation since Ronald Reagan was in office.
On Wednesday morning, the White House announced the president would withhold his signature until Congress passed a separate, unrelated voting bill. My guess is this will eventually become law because of the strong bi-partisan support in an election year. Making housing affordable is something everyone agrees on.
What the bill actually does
The ROAD to Housing Act is a 380-page package of more than 50 provisions. Most of them work on the supply side:
- cutting federal red tape,
- streamlining environmental reviews,
- creating model zoning frameworks that localities can adopt,
- and tying federal grant money to housing production.
Carrots, mostly. A few sticks.
Some of the specific provisions are worth paying attention to. The bill expands the definition of manufactured housing to include units not built on a permanent chassis, which could shave up to $10,000 per unit in construction costs. It raises the Public Welfare Investment cap for banks from 15% to 20%, freeing up more private capital for affordable housing projects. It adds new construction as an eligible use under the Community Development Block Grant program. And it puts a ban on large institutional investors purchasing single-family homes, a provision that survived the final negotiations.
One thing the bill does not do: spend new money. There’s no fresh federal funding for affordable housing in this package. That was the price of bipartisan support in a divided Congress.
Why builders aren’t celebrating
Here’s the tension at the heart of this bill. The federal government doesn’t control zoning. Cities and towns do. And it’s zoning, more than anything else, that has choked off housing supply for decades.
Congress can nudge. It can incentivize. It can create model frameworks and tie grants to production numbers. But it can’t force Phoenix or Denver or Austin to approve more density. That authority stays local.
Ed Brady, president of the Home Builders Institute, said it plainly: “All of this has to be administered at the state and local levels. It’s going to take some time for this to actually filter down, if at all.”
Housing starts in May fell 15% from the prior month and nearly 9% year-over-year. Builders are contending with elevated mortgage rates around 6.5%, higher materials costs, and ongoing uncertainty around energy prices. A federal bill that adjusts NEPA review timelines doesn’t fix any of that in the near term.
Aaron Pechota of NRP Group called the legislation “an appetizer.” Fills a few gaps. Doesn’t address the structural hunger.
The numbers behind the crisis
To understand why a bill this significant can still feel inadequate, you have to look at where housing actually stands right now.
Rents are up nearly 38% from the start of the pandemic. Single-family home prices average roughly 5 times the median household income, according to Harvard’s Joint Center for Housing Studies. That’s well above historical norms. The national housing shortfall, depending on who you ask, sits somewhere between 1 million and 6 million units.
And the Federal Reserve is expected to hold interest rates steady or raise them further, which means that 6.5% mortgage rate may be the floor for the foreseeable future. Michael Fratantoni of the Mortgage Bankers Association said buyers should probably plan around rates at this level for the next couple of years.
Those are conditions a supply-side bill can help with, eventually. The question is whether “eventually” is a year or a decade.
The political reality
This bill became the vehicle for elected officials in both parties to show voters something is being done. Sen. Elizabeth Warren, who led the bill alongside Sen. Tim Scott, said flatly that many of the regulations driving up housing costs cost the federal government zero dollars to reform. That’s true. It’s also why the bill was passable.
But it won’t be felt on the ground before November. Ben Metcalf of UC Berkeley’s Terner Center said as much directly: “Basically nothing in here is going to be felt change on the ground come November.”
The last time Congress moved this meaningfully on housing was 1986, with the Low-Income Housing Tax Credit. That program has financed roughly 4 million affordable rental units since. It also took years to see the results.
What happens now
For investors and developers, the most immediately relevant provisions are the manufactured housing updates, the bank investment cap increase, and the ban on institutional purchases of single-family homes. The last one is already changing how some institutional players are looking at acquisition strategy.
For anyone waiting on broader relief: this bill won’t bend the cost curve in the next 12 months. Maybe not in the next 24. What it does is clear some federal friction from the building process, send a signal to state and local governments that Washington is watching, and create new incentive structures that may actually pull more units into the pipeline over time.
That’s real. It’s just slow.
And right now it’s unsigned, held hostage by a fight over something else entirely. Which, if nothing else, tells you everything you need to know about how hard it is to actually solve this problem.
