In November, we reported on a new bill making its way through Congress, the Senate's ROAD to Housing Act. And we suggested that "it contains some seriously helpful ideas."
The bad news is that the bill seems to have died. The good news is that its successor, the bipartisan Housing for the 21st Century Act, shares similar aims and incorporates most of its best ideas.
On Dec. 18, the new bill passed the House Financial Services Committee markup by a 50-1 vote, according to the National Association of Realtors®. "The National Association of REALTORS® is supporting the bill, which focuses on modernizing outdated housing programs, reducing regulatory barriers and increasing flexibility for local communities," says the NAR.
Why a New Law Is Necessary
"This housing affordability challenge affects everyone, from young people saving up to buy their first home, to middle class workers trying just to make the rent," said Rep. French Hill (AR-02), the committee's chair, in a statement. Hill goes on mention that this bipartisan bill aims to address one of the root challenges of housing affordability: the lack of an affordable housing supply.
Subcommittee on Oversight and Investigations Chairman Dan Meuser (PA-09) added, "Today, it costs roughly $100,000 before the shovel hits the dirt, and home builders cannot economically build a new home for, in many cases, less than $250,000. By eliminating duplicative reviews and fixing outdated programs, this legislation directly lowers those costs."
The Housing for the 21st Century Act was co-introduced by Hill, a Republican, and Democratic Congresswoman Maxine Waters (CA-43), who is the ranking member of the House Financial Services Committee, among others, reinforcing its bipartisan credentials.
Summarizing the Housing for the 21st Century Act
As a bill, the Housing for the 21st Century Act is long and detailed. But the Bipartisan Policy Center summarized some of its main provisions:
- Directs the Department of Housing and Urban Development (HUD) to publish guidelines and best practice frameworks for state and local zoning and land-use policies.
- Provides for grants to local governmental entities and tribes to select and implement pre-reviewed housing designs (i.e., pattern books) to streamline the construction of mixed-income housing, including accessory dwelling units, duplexes, and townhouses.
- Directs HUD to establish guidelines for point-access block buildings to help states, tribes, territories, and localities permit residential buildings with a single internal stairway for up to five stories.
- Streamlines the National Environmental Policy Act (NEPA) review process for a broad range of federally supported, housing-related activities—including small-scale construction, rehabilitation, and infill development—by expanding categorical exclusions to reduce delays and lower administrative burdens.
- Directs HUD and the Department of Agriculture (USDA) to align and coordinate their environmental review processes, guided by a memorandum of understanding and an Advisory Working Group.
- Updates statutory maximum loan limits for Federal Housing Administration (FHA) multifamily mortgages and reforms the formula used to set them.
Bill Seeks To Update Regulations, Increase Housing Supply
New frameworks for state and local zoning and land-use policies are intended to reduce the stranglehold of NIMBYism (not-in-my-backyard-ism) over local development plans. Existing homeowners have an incredibly influential voice over these plans, not least because they take every opportunity to vote in elections.
And many of them like things just the way they are. So, they effectively block attempts to increase population density through developments in their area that deliver more affordable homes in the form of townhouses, duplexes, condos, apartments, manufactured housing, tiny homes and accessory dwelling units.
The new frameworks should force local officials to permit more such developments, regardless of the electoral consequences, especially when these follow previously approved designs.
Another innovation would allow small apartment buildings to have only a single stairwell instead of the current two. Earlier this year, Pew concluded, "A first-ever analysis of fire death rates in modern four-to-six-story buildings with only one stairway shows that allowing these buildings to have only one staircase does not put residents at greater risk: Single-stairway buildings as tall as six stories are at least as safe as other types of housing."
Other measures include easing environmental control processes to cut red tape, restructuring government-backed funding to facilitate more multifamily developments, and changing rules concerning the mobility of manufactured homes.
Will This Bill Actually Improve Housing Affordability?
Rep. Monica De La Cruz (TX-15) reckons, “Our country has an affordable housing crisis, driven by decades of underdevelopment that has left us over 5 million housing units short."
We think it unlikely that any single piece of legislation will lead to 5 million new, affordable homes being quickly built. However, if enacted, the Housing for the 21st Century Act could do more to bridge the gap than any bill in recent decades.
