INTRODUCTION
In today’s political environment, it is increasingly out of the ordinary for substantial policy legislation to sail through Congress with overwhelming support from both parties. But against modern conventions, the 21st Century ROAD to Housing Act became law earlier this month (without the President’s signature), demonstrating that housing affordability is not just the defining issue in the Gallatin Valley, but also nationally. As communities across the US grapple with the painful realities of the housing crisis (with homeownership increasingly out of reach and the number of renters who are cost burdened at a record high) lawmakers of both parties have offered their response.
The bill leans heavily into tools aimed at supporting nationwide affordability by boosting the national supply of market rate housing (think permitting reform and encouraging best-practice land use). This represents a meaningful step forward, while leaving more work to do at both the federal and local level to invest in permanently affordable housing and boost protections for tenants and homebuyers against exploitation and displacement.
Let’s dive in!
POLICY BREAKDOWN
At Headwaters, we think about housing policy through the general framework of supply, stability, and subsidy. Each of these principles is essential for a dignified and affordable housing ecosystem that can serve households at every income level.
Policies that support a healthy housing supply serve to keep housing costs in check. Subsidy tools allow the creation and stewardship of affordable housing that the market can’t provide. Stability policy supports households against displacement and predatory practices. A stable and affordable community uses all of these tools to support the housing needs of all its residents.
So, through this framework, how does the ROAD Act measure up?
SUPPLY IN THE ROAD ACT
The ROAD Act has a lot of supply-focused provisions. Several policies incentivize or enable communities to build infill housing, smaller forms of homes, and manufactured homes. Other provisions support municipalities with best-practice land-use guidelines and streamlining review standards. There are a few sections that support the repair and revitalization of existing buildings.
One provision feels particularly relevant to Bozeman. The “Accelerating Home Building Act” (Sec. 210) provides grants to municipalities to create and implement pre-approved housing designs to encourage infill projects like ADUs, duplexes, and cottage courts no larger than 25 units. There has been some discussion about a project like this in the Bozeman City Commission to make community-led projects more abundant, practical, and cost-effective. The rollout date of this federal program is not yet known but may be worth keeping an eye on!
SUBSIDY IN THE ROAD ACT
The ROAD Act dodges serious action in the “subsidy” bucket. No additional funds were authorized to implement the bill at large, meaning that most of these changes come from stretching the impact of existing funds and moving money from one program to another. The bill reduces the cost of some financing by expanding small-dollar mortgages, raising loan limits, and lowering regulatory costs for community lenders – while it’s not direct subsidy, these can all help lower overall project costs. Additionally, reforms to some existing programs like Community Development Block Grant funding aim to make federal dollars go further.
On an interesting note, the bill enables more existing public housing units to be converted into voucher-based private housing units. The rationale rests on the fact that public housing has been severely underfunded for decades – and there is little political will to change that – leading to deplorable conditions for tenants and the demolition of public housing units. With this maneuver, legislators are hoping to attract investments from the private sector to repair these public housing units. In turn, they plan to direct government funds into subsidizing rents for low-income tenants who live in these buildings.
The move demonstrates a bipartisan agreement that existing public housing programs have not been successful. Whether the right policy solution is to move public housing off the government’s books (as opposed to rebuilding and adequately funding these programs) is a matter for a future debate.
STABILITY IN THE ROAD ACT
This bill is relatively sparse on direct “stability” measures, but includes a one provision worth noting. Section 1001 of the bill prevents “institutional investors” who own from owning more than 350 single family homes, with some exceptions. The idea here is that these large entities box would-be buyers out of the market, distort housing prices, and subject tenants to predatory practices.
There’s a lot to unpack here (Why just single-family homes? Are larger property owners worse actors than smaller property owners? Is it more effective to try to limit the size of an entity, or to set universal rules that target bad practices?)
As a matter of “stability” policy, we think this attempt falls short when measured up against things like stronger tenant protections, right-of-first refusal for renters, or more robust health and safety enforcement of rental properties. That said, it is interesting to see bipartisan discomfort with housing consolidation. More on that in a future blog!
CONCLUSION
This is the most significant housing bill in the last 30 years and is cause to celebrate. That said, the bill is not a quick fix and lacks heft in the subsidy and stability categories..
Housing development takes time, and it will take many years to see the impacts of many of the supply-side interventions. There’s also a real capacity question sitting underneath all of this. In CNN, The Urban Institute has pointed out that HUD will need to implement 35 different programs, regulations, and studies as this law takes effect, at a time when the agency is short-staffed.
And for renters at the bottom of the income ladder, the bill mostly isn’t built with them in mind. In a conversation with PBS, Libby O’Neill, senior public policy analyst at the National Low Income Housing Coalition said her organization supports the bill overall, including many of its individual provisions, but “so much more investment is needed in programs” for the lowest-income renters.
Put simply: this is a supply bill first, with some financing tools bolted on, and comparatively little for stability – especially for our lowest income neighbors. Whether it delivers depends heavily on implementation, and that part hasn’t happened yet.
Still, the fact that we are seeing national bipartisan consensus and urgency on housing is good news and lays the groundwork for further reform at both the national and local level.
Let us know what you think, and what you want us to cover next! Email info@headwatershousing.org.
If you want more detailed information on each provision, check out this source: Inside the Deal: What’s in the Final 21st Century ROAD to Housing Act • Bipartisan Policy Center