Is This the Beginning of the End?!

The Housing Crisis that we have been helping many communities, states, and regions tackle has finally garnered Congressional attention and ACTION! An overwhelming level of bipartisan action has been taken, and I have not been so excited about a piece of legislation in a long time. Let me tell you why.

The 21st Century ROAD to Housing Act has officially cleared Congress and became law on July 11th, 2026. For local governments, regional planners, and community developers, this isn’t just a housing bill—it’s a massive toolkit for economic development, market modernization, and community stabilization.

Theme 1: Unlocking Supply – Opportunities for Cities & Regional Planning Organizations

These provisions in the law align with the housing-related work we have been doing within communities, regions, and states and will help more places scale their efforts. 

• Incentivizing Local Zoning Reforms: The bill creates a $200 million annual competitive grant program for local governments and tribes that demonstrate a measurable commitment to increasing housing supply through streamlined permitting, density bonuses, and modern zoning changes. (HUD will need to create a new application process, so expect this effort to be implemented early next year).

• Funding for Strategic Planning: Under Section 207, HUD is authorized to award competitive grants directly to state, local, and regional planning agencies to implement affordable housing planning and community development activities. Strong coordination with transportation planning is recommended to address the housing-employment center mismatch.  (HUD will need to create a new application process, so expect this effort to be implemented early next year.

• Commercial-to-Residential Conversions (The RESIDE Act): A new pilot program will help local governments convert vacant commercial or industrial buildings into attainable housing (up to 120% AMI), prioritizing economically distressed areas and Opportunity Zones.

• Expanding CDBG & HOME Program Flexibility: Communities can now dedicate up to 20% of Community Development Block Grant (CDBG) funds directly to new housing construction.

  • The HOME Investment Partnerships Program has been updated to expand income eligibility to workforce-income households (up to 100% AMI) and allows smaller/rural jurisdictions to use HOME funds for housing-adjacent infrastructure. (Beginning October 1)

• Cutting Regulatory Red Tape: The bill dramatically streamlines the NEPA review process by expanding "categorical exclusions" for modest infill, rehabilitation, and small-scale housing projects, significantly shortening project timelines. (Calls for immediate implementation)

Theme 2: Market Fairness & Protections for Renters and Homeowners

• Curbing Institutional Investors ("Homes are for People, Not Corporations"): In a historic move, the bill restricts large institutional investors (defined as those owning 350 or more single-family homes) from purchasing additional single-family properties.

  • Strategic Note: It allows exceptions for "build-to-rent" or "renovate-to-rent" models, but mandates they must be sold to individual homebuyers after 7 years, preserving local homeownership pipelines. (Calls for immediate implementation)

• Whole-Home Repair Pilot Programs: The act establishes a HUD pilot program providing grants and forgivable loans to homeowners and landlords to address structural repairs, health hazards, and energy efficiency in aging housing stocks. (HUD and the CFPB are given a 180-day window to finalize the program frameworks and select the initial round of participating local governments and financial institutions.)

• Opening Access via Small-Dollar Mortgages: Directs a HUD pilot program and CFPB study to expand and support the availability of small-dollar mortgages ($100,000 or less), which are crucial for first-time buyers looking at lower-cost markets.

• Strengthening Housing Counseling: Elevates accountability for HUD-funded housing counseling organizations to ensure high-quality, continuous education for tenants and future homeowners navigating the market.

  
  

Theme 3: Modernizing Construction – Off-Site and Manufactured Housing

I am very excited about these provisions, as they are based on a great deal of smart analysis and will unlock a critical resource for scaling housing production and ownership.

• Eliminating Outdated Building Codes: The legislation officially removes the archaic federal requirement that manufactured homes be built on a permanent chassis (a steel frame with wheels). This is a big win for offsite construction, and we are excited to help communities design an manufacturing-focussed economic development supported housing strategy.

• Parity in Financing and Title: By treating modern manufactured and off-site modular housing on par with traditional site-built homes for financing, sale, and titling, the bill opens up massive private capital and FHA-insured lending to the modular industry. Fourth Economy also sees this as a significant economic development opportunity as off-site modular housing factories can bring new jobs to urban and rural communities. 

• Standardizing Innovative Design (Pattern Books): Directs HUD to establish guidelines for point-access block buildings (allowing single internal stairways for multifamily units up to six stories) and provides grants for local governments to select pre-reviewed housing designs (ADUs, duplexes, townhomes) to slash design and approval costs.

Theme 4: Targeted Support for Vulnerable Populations

• Protecting Veterans' Housing Access: Fixes a long-standing barrier by explicitly excluding a veteran’s disability benefits from HUD’s income calculations for the HUD-VASH supportive housing program.

• Heirs Property Protections: Directs the GAO to establish a comprehensive framework and provide tools to assist owners of "heirs property" (land passed down text-free through generations), preventing displacement and unlocking multi-generational wealth. You can read more about our work in this space HERE (https://www.fourtheconomy.com/post/understanding-and-addressing-heirship-properties) 

• Permanent Authorization of Disaster Recovery (CDBG-DR): Permanently authorizes and reforms the CDBG-DR program to ensure faster, more equitable deployment of long-term recovery funds to vulnerable communities post-disaster.

Are You Excited as I am?

The 21st Century ROAD to Housing Act represents a shift from federal mandates to local enablement. At Fourth Economy, we are ready to help our city, county, and regional planning clients design the strategies, write the grant applications, and reform the codes necessary to capture this historic federal funding. Let’s build what’s next.