A significant, comprehensive housing package is advancing in Congress that could accelerate local leaders’ efforts to improve housing affordability. The Housing for the 21st Century Act in the House, and the ROAD to Housing Act in the Senate, have been combined into a single bill, the 21st Century ROAD to Housing Act. It retains substantial bipartisan backing and includes housing priorities championed by the White House.
The new comprehensive housing package is primarily a policy bill, not a new funding bill. It aims to boost housing supply through improving existing programs, unlocking private capital and reducing federal regulatory barriers. Just as important for local governments, the package does not preempt local land-use or zoning authority and avoids unfunded mandates. NLC worked closely with Members of the House Financial Services Committee and the Senate Banking Committee on their respective bills and later on the assembly of the comprehensive legislative package. NLC supports the 21st Century ROAD to Housing Act, as highlighted in a Myths vs. Facts document (PDF) made available by the Senate Banking Committee, which says, in part,
“Chairman (Tim) Scott (R-SC) believes zoning decisions are best made locally, not in Washington.”
For local governments, that means new program flexibility to address housing and related infrastructure, reductions in federal regulatory requirements and better opportunities for public-private partnerships.
Federal Grants
The comprehensive package reauthorizes the HOME Investment Partnerships Program, which provides annual grants to eligible local governments for rental and homeownership housing development. Among other things, the bill makes it easier to allocate HOME funds for both affordable and workforce housing, authorizes a HOME pilot program to convert vacant buildings into attainable housing and permits HOME grantees that are not eligible for CDBG funds to make HOME expenditures for infrastructure improvements necessary for new housing, including installation or repair of water and sewer lines, sidewalks, roads and utility connections. According to NLC’s 2025 survey on Infrastructure’s Role in Housing Development, 80 percent of municipal leaders report that infrastructure needs impede housing production.
The Community Development Block Grant program, the largest annual federal grant for local governments, would also gain key new flexibility sought by NLC when allocated for local housing projects. Currently, CDBG housing expenditures are limited to repairs, rehabilitation or reconstruction of existing affordable housing. The comprehensive housing package would permit the use of CDBG for new housing construction for low- to moderate-income residents. Such flexibility will provide a modest but ongoing source of funds for cities and towns that have spent down their ARPA State and Local Fiscal Recovery Fund grants. Another change would come into effect three years following the bills enactment, a change to the CDBG allocation formula, which would be adjusted to raise or lower CDBG grant funds by 10 percent for grantees based on housing production. The adjustment is targeted at the highest and lowest ends of housing improvement efforts. Grantees closer to the median rate of housing improvement will not be affected by the adjustment. Lastly, the package would permanently authorize the Community Development Block Grant–Disaster Recovery (CDBG-DR) program, another important NLC policy priority.
Among the new grant programs authorized by the package are:
- Pattern Book Grants for cities seeking funds to incorporate pre-approved housing designs, also called pattern-book homes, into the permitting process;
- An Innovation Fund offering highly-flexible funding for communities to finance construction and rehabilitate housing, or housing adjacent infrastructure needs including water and sewer;
- A Whole-Home Repairs pilot program allowing funding for Lead Hazard Reduction to cover additional home rehabilitation needs;
- Affordable housing Planning and Implementation Grants for state, regional and local governments seeking funds to review and update building code requirements or develop regional housing plans;
- The PRICE program (Preservation and Reinvestment Initiative for Community Enhancement), authorized to award grants to communities for necessary maintenance for manufactured housing communities.
Additionally, the package gives localities more control over homeless assistance grants by authorizing HUD to waive the 60 percent spending cap on emergency shelter beds and street outreach activities upon request.
Streamlining Federal Requirements
The comprehensive package seeks to reduce regulatory costs by excluding certain small-scale and infill housing development from costly NEPA environmental review requirements, and streamlining federal, state and local environmental requirements by deferring to state and local environmental reviews in cases where such reviews largely satisfy federal requirements.
The bill also directs better coordination and alignment between HUD, USDA and VA housing programs, and environmental reviews for projects funded by multiple agencies; excludes veterans’ disability compensation from annual income calculations to qualify for veterans housing under the HUD-VASH program; and puts into law new prohibitions on large institutional investors from purchasing certain single-family homes as called for in the Presidents’ Executive Order, Stopping Wall Street from Competing with Main Street Homebuyers.
Unlocking Private Capital
Outside the scope of local government operations, the comprehensive package aims several incentives at private capital, including increasing FHA multifamily loan limits; coupling HUD grants with Opportunity Zone investments in housing; streamlining inspection requirements for landlords participating in the Housing Choice voucher program; modernizing policies related to factory-built homes; examining the availability of small-dollar mortgages; and measures to bolster the appraisal industry.
Dropped Provisions
As a result of negotiations to combine House, Senate and White House priorities into a single legislative package, some prior provisions are no longer included in the bill. Principally for local governments, the Housing Supply Frameworks Act was dropped from the 21st Century ROAD to Housing Act. The proposal, included in prior iterations of the housing bills in the House and Senate, would have directed HUD to develop best practices for state and local governments on zoning and land-use policies related to housing outcomes.
About the Author
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