Congress has passed the largest housing bill in decades, with the House of Representatives approving the landmark legislation 358-32 on Tuesday.
Passed by the Senate a day earlier, the 21st Century ROAD to Housing Act brings together a wide range of provisions aimed at making housing more affordable and encouraging housing construction.
The legislation is expected to be signed by President Trump on Wednesday.
“The 21st Century ROAD to Housing Act will help increase the nation’s housing supply by reducing regulatory barriers and encouraging local governments to reform zoning and land-use policies that have limited home building,” said Bill Owens, chairman of the National Association of Home Builders and a remodeler from Worthington, Ohio. “By expanding homeownership and rental housing opportunities nationwide, this legislation will help ease the housing affordability crisis.”
The final version of the bill contains key priorities for the affordable housing industry, including raising the public welfare investment (PWI) cap from 15% to 20%. This opens the door to banks increasing their investments in affordable housing.
“The 21st Century ROAD to Housing Act would substantially increase our ability to finance more affordable housing,” said Dudley Benoit, president of the Affordable Housing Tax Credit Coalition’s board of directors and senior managing director at Walker & Dunlop. “In particular, the PWI cap increase would serve as a welcome boost, allowing banks to more effectively leverage the [low-income] housing credit and increase their investments in affordable housing nationwide.”
The bill also calls for the Federal Housing Administration to increase multifamily loan limits to better match housing market costs and enhance affordability.
One of the most debated points was around banning institutional investors from buying single-family homes. While the final version includes restrictions on institutional investor buyers, it removes some of the language that would have limited the development of build-to-rent properties, according to housing advocates.
The bill also calls for the Department of Housing and Urban Development to evaluate the Build America, Buy America program’s impact on housing with HOME funds.
“With both the House and Senate now having approved the legislation, the bill is on its way to the president’s desk. This achievement reflects years of work by housing advocates, industry leaders, community organizations, and policymakers from both parties who recognized the urgent need for action,” said David M. Dworkin, president and CEO of the National Housing Conference. “This legislation reflects a broad, bipartisan commitment to expanding housing opportunity. It combines leading House and Senate proposals to increase housing supply, modernize federal programs, strengthen community development and disaster recovery, support affordable housing production, and improve access to rental housing and homeownership. By reducing barriers and updating outdated policies, the bill will also help existing federal investments deliver greater long-term impact.”
Once the legislation is signed, it will be “meaningful step forward but is just one component of a longer-term strategy,” according to Michael T. Pugh, president and CEO of the Local Initiatives Support Corp.
“The housing crisis impacts working families, seniors, and communities across the country, and warrants a sustained, comprehensive response to ensure that every American has access to a safe, stable, and affordable home—the foundation from which opportunity and prosperity grow,” he said.
The bipartisan bill was led by Senate Banking Committee chairman Tim Scott (R-S.C.) and ranking member Elizabeth Warren (D-Mass.) and House Financial Services Committee chairman French Hill (R-Ark.) and ranking member Maxine Waters (D-Calif.).