Last week, after months of negotiations, both chambers of Congress passed the 21st Century ROAD to Housing Act, and the President is expected to sign it into law in the coming days. This new legislation seeks to address structural problems in the housing market and to lower housing costs in the long term.
This law is a major bipartisan achievement that could represent a turning point for how the federal government approaches the national housing crisis. If implemented intentionally, this law could lay the foundation for a broader national housing affordability strategy.
However, the real work for the federal government begins now. Enacting the legislation’s directives will require expanding, not contracting, federal agency capacity and providing significant new investments to build the millions of housing units needed.
For now, this legislation represents an on-ramp to addressing the nation’s housing affordability crisis. While it could have significant effects on housing supply and affordability, its impact will depend heavily on the federal government’s capacity, the market’s reaction, state and local governments’ response, and Congress’s political will for further investment in the housing market.
Here, we chart the road ahead, from implementation to future strategic steps, that will help shape how much this legislation improves housing affordability for everyday Americans.
ROAD will enable the market to expand housing supply
Housing affordability cannot be accomplished overnight. ROAD pulls the federal government’s levers to increase state and local governments’ capacity and remove barriers for the private sector—from housing developers, to mortgage lenders, to community banks.
Among its many provisions, the legislation includes incentives to unlock housing production capacity through state and local zoning, land-use, and permitting reforms, including eliminating the chassis requirement and providing grants for housing planning. It also takes steps to expand and facilitate capital for housing construction, rehabilitation, and purchase, such as by raising loan limits for multifamily and manufactured housing and tackling barriers to small-balance mortgage origination. Lastly, it seeks to reform housing assistance programs, including increasing oversight of homeownership counseling programs and streamlining the Section 8 program.
Many of these provisions will take time to notably affect housing costs. Most will require agencies to stand up or reform programs before they are deployed, after which it will require time for the market to respond. Over time, the federal government will deploy new regulations and funds stipulated in the legislation as capacity allows. If state and local governments and the private sector respond favorably, the incentives, supply-enabling tools, streamlined development rules, and financing mechanisms may ease constraints on housing production.
In the long term, these changes could bolster housing supply across segments of the housing market and ease cost pressures for many households. But these long-term benefits are only possible if the federal agencies tasked with carrying out these efforts are properly staffed and funded.
Increasing housing affordability depends on federal capacity
As part of the 21st Century ROAD to Housing Act, the US Department of Housing and Urban Development (HUD) is assigned at least 35 new programs, regulations, studies, and responses to congressional oversight, as shown in the chart below. But massive staffing cuts in 2025 have already limited the agency’s functions, and the bill contains no additional money for staffing and operations.
To carry out the provisions in the legislation, HUD will have to pull money from existing programs and redirect staff time if more funds are not appropriated. In theory, many provisions require no money to implement, but updating regulations and program rules will still require time and resources. In addition, two of the legislation’s pilot programs—the Whole Home Repairs program and the Innovation Fund—will first require funding from Congress in a future appropriations bill, meaning there’s no guarantee these programs come to fruition.
Notes: CDBG = Community Development Block Grant; CDBG-DR = Community Development Block Grant–Disaster Recovery; ESG = Emergency Solutions Grants; FHA = Federal Housing Administration; HOME = HOME Investment Partnerships Program; HUD = US Department of Housing and Urban Development; MTW = Moving to Work; PRICE = Preserving and Reinvesting in Communities to Enhance Housing; RAD = Rental Assistance Demonstration; RESIDE = Revitalizing Empty Structures into Desirable Environments. The authors used AI to scan the bill provisions for this table. Please see the Urban Institute’s generative AI policy.
If HUD is to carry out its functions—current and newly authorized—Congress should consider restoring funding for staffing, which was reduced by 24 percent in fiscal year 2026. HUD will need to use these funds to hire trained staff.
What’s next?
The 21st Century ROAD to Housing Act is a start toward fixing the nation’s housing crisis, but more work needs to be done. A comprehensive housing affordability strategy will require policy that unlocks the market for housing production, injects capital for home building and home buying, and protects and assists households who need support to afford and sustain housing.
- Unlock the market. Future legislation can tackle housing cost drivers not addressed in this package. For example, shortages in the construction labor force and high home building material costs make new construction more expensive. Promoting workforce development, apprenticeship programs, and immigration pathways, as well as exempting lumber and steel from tariff policies, would help mitigate these challenges.
- Inject capital. Overcoming high housing costs will require policymaker action that makes the new construction and repair of all housing types profitable for developers and that creates affordable financing options for homebuyers. New, large-scale investment in multifamily housing construction and single-family homes for purchase would help, as would lower-cost financing options such as zero–down payment mortgages.
- Protect and assist households with low and moderate incomes. Building housing takes time, and households need affordable housing today. The federal government can pair supply investments with sufficient rental assistance and homelessness prevention funds so all households eligible for assistance receive it. Targeted down payment and closing cost assistance funds to first-generation homebuyers could help too.
The legislation presents a genuine cause for optimism for those concerned about high housing costs. It may also represent a newfound political consensus around the need for federal investment in housing. But laws don’t build homes. Tackling the housing shortage will require continued collaboration between the private sector and federal, state, and local governments. Now that the legislation has broken ground, the hard work of implementation, investment, and sustained political action must follow.
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