What's Happening?
The 21st Century ROAD to Housing Act became law in July 2026, marking a significant shift in federal housing policy by addressing local land use, a domain traditionally left to states and localities. David Garcia, Deputy Director of Policy at the Terner
Center for Housing Innovation at UC Berkeley, highlighted that the bill passed with bipartisan support, 85-5 in the Senate and 358-32 in the House, and became law automatically after the ten-day constitutional window expired without a presidential signature or veto. The Act introduces several provisions, including increased flexibility for cities to use Community Development Block Grant (CDBG) funds for affordable housing construction, reforms to the HOME program, and an expansion of the Rental Assistance Demonstration (RAD) and Moving to Work (MTW) programs. Notably, it also removes the requirement for manufactured homes to be built on a permanent steel chassis and mandates HUD to develop expertise in land use and zoning.
Why It's Important?
This legislation represents a fundamental change in how the federal government approaches housing supply and affordability. By allowing cities to use CDBG funds for affordable housing construction and reforming the HOME program, the Act provides new financial tools for local governments to address housing shortages. The removal of the steel chassis requirement for manufactured homes is expected to lower construction costs and enable new multi-story typologies, potentially expanding affordable housing options. The expansion of RAD and MTW programs offers public housing authorities greater flexibility in preserving and rehabilitating units and deploying vouchers. HUD's new mandate to develop land use expertise signifies a federal recognition of the importance of local zoning and planning in the national housing crisis, aiming to provide technical assistance to localities. This could lead to more standardized and effective housing development practices across the country.
What's Next?
Several steps are required before the full impact of the ROAD Act is realized. HUD rulemaking processes, including public comment periods and internal reviews, will take time, with the Build Now Act formula not expected for three years. States will need to align their laws with the new federal standards, as California has already done for manufactured housing. Cities must make active decisions regarding the redirection of CDBG funds, which involves political tradeoffs with other constituencies. Furthermore, many of the new programs created by the ROAD Act, such as the $200 million Innovation Fund, currently lack funding and will require future appropriations from Congress to become operational. Practitioners are encouraged to identify federal rules creating barriers and advocate for changes with their legislators.
Beyond the Headlines
The ROAD Act's bipartisan passage underscores the growing national consensus that housing affordability is a critical issue affecting diverse communities across the U.S. The shift in federal policy to engage with local land use, traditionally a state and local prerogative, could lead to a more integrated national housing strategy. However, the effectiveness of the Act will depend on HUD's capacity to implement its new mandate, especially given ongoing workforce reductions. The legislation also highlights the tension between federal mandates and local autonomy, as cities will need to make political decisions about reallocating funds. The exclusion of demand-side tools like expanded housing choice vouchers and tenant protections indicates the political compromises necessary to achieve bipartisan support, suggesting that future legislative efforts may be needed to address these aspects of housing affordability.
