On Monday, the U.S. House passed the bipartisan Housing for the 21st Century Act, which aims to boost housing supply and affordability by updating federal programs and reducing regulatory barriers. With the Senate passing a similar version in the ROAD to Housing Act, House, Senate and White House leaders will now negotiate which provisions make the final cut.
Bill Overview
The National League of Cities (NLC) believes this bill, like the Senate version, recognizes the critical role of local governments in addressing the nation's housing needs by updating and improving programs like Community Development Block Grants (CDBG) and Home Investment Partnerships (HOME), removing regulatory roadblocks, and increasing local flexibility.
The bill includes provisions to modernize local development and rural housing programs, expand manufactured and affordable housing, protect borrowers and those utilizing federal housing programs and enhance oversight of housing providers.
Here’s how it does this:
- Permits, for the first time, CDBG expenditures for new housing development. Currently, CDBG only permits rehabilitation for housing expenditures.
- Increases the flexibility of the HOME Program to fund development of both affordable and workforce housing and allows HOME grantees who are ineligible for the CDBG program to use HOME funds for housing-related infrastructure such as water, sewer and road improvements.
- Exempts certain infill and rehabilitation projects from National Environmental Policy Act (NEPA) environmental impact reviews, thereby shortening timelines and reducing costs.
- Supports local government capacity improvements for housing development by establishing new grants for planning agencies and new Department of Housing and Urban Development (HUD) resources to aid localities that voluntarily undertake zoning and land use changes related to housing attainability.
- Updates definitions around manufactured and modular housing to encourage more factory-built homes.
- Expands Veterans Housing Programs and USDA Rural Housing Programs.
- The bill does not preempt state or local governments or contain unfunded mandates.
Key Differences
The path to the President's desk depends on reconciling several differences between the two measures.
Although the House and Senate bills share many similarities, the Senate measure includes a number of grant programs that would expand federal spending – which is something the House sponsor is likely to push back on.
Unlike the Senate package, the House bill does not tie CDBG allocations to local housing production, preserving existing funding formulas and avoiding performance-based penalties.
The House measure also includes a provision aimed at increasing community bank lending, but the Senate sponsor suggests the deregulatory move would make community banks more fragile. This change would allow banks to take more custodial and reciprocal deposits, which could help banks provide more mortgages for potential homeowners, and would make it easier to start new banks and change how the FDIC looks at banking mergers.
President Trump supported the Senate’s ROAD to Housing Act last year and signed an executive order cracking down on institutional investor-owned single-family homes this year, signaling he’s poised to sign major housing reforms into law.