A Housing Bill Surprisingly Works Its Way Through Congress
What's in it? And will it become law?
Author’s Note: Greetings from the hotel lobby of the Residence Inn in Nashua, New Hampshire, where for the fourth straight Saturday night of Memorial Day Weekend I sit in the aftermath of a full day of soccer with my over-sugared kids sleeping upstairs (hopefully) while I finish off this week’s Sunday Morning Post article downstairs. I have literally sat at the same corner table in this exact hotel lobby with NBA playoff basketball on the TV near me each of the past four years. Strange as it may sound, the continuity of this unique Memorial Day Weekend tradition brings me a strange sense of peace.
I’m happy to have these moments with my son and our somewhat reluctant daughter and younger son. I read an article recently that kids remember family vacations vividly well from age 6-12, and trips and family vacations are like emotional anchors for them as they get older. This weekend isn’t exactly a vacation per se, but it makes for some nice family time in what has become an annual tradition.
I’m still working on Part II of my AI series, so stay tuned for that hopefully next week. There was some rare housing news from the nation’s capital this week, so that’s the topic for today. I hope everyone has a nice Memorial Day Weekend and a good start to the summer. Thank you for being here and thank you for reading The Sunday Morning Post.
A Housing Bill Surprisingly Works Its Way Through Congress
One of my first political science courses in college took as its semester-long theme the concept that all politicians are basically motivated by one thing: their own political survival. Every vote they take, every statement they make, even the very things they believe are all shaped around the goal of winning elections and staying in power.
The survival instinct for some, perhaps, is that you need to win elections in order to exert influence. I guess the charitable interpretation of that is that if you have values that you believe will be good for others and for the world in general, you need to win elections in order to advance them. But for others, it is the perks and prestige of their positions for reasons of ego and perhaps some degree of sociopathic need that motivates this political survival instinct. The latter perspective is a cynical take, for sure, but perhaps not without truth.
Election years can make for strange political bedfellows, as typically obstinate combatants will sometimes unite around their shared need for survival. Such is the case now, where perhaps the most significant housing bill in a generation has unexpectedly garnered wide bipartisan support in the House of Representatives. The bill is the 21st Century ROAD to Housing Act (H.R. 6644). Congress loves an acronym; this one is Reform, Opportunity, Affordability, and Development. Surprisingly, the ROAD Act has traction, and it looks like some version of it may make it into law.
So we’ll look at what’s in the ROAD Act because the ideas and proposals therein are significant, but first, why has housing reached the floors of Congress as a top policy priority? It is exactly because the topic has such broad bipartisan support. Per recent polling from the Bipartisan Policy Center, 79% of Americans identify housing affordability as a top issue, and 63% of voters say they would be more likely to vote for someone if they helped pass legislation to make housing more affordable. A recent Ipsos poll found the top concern for American voters this year continues to be rising costs, with healthcare as the top concern, followed by housing as #2, and then food #3. The high hurdles for first-time homebuyers to get into the market, still-high and rising construction costs, long-term frustrations with rising rents and lack of options, rising interest rates, and even the complex questions of homelessness are all housing-related frustrations shared by wide swaths of American voters and among those at all points of the political spectrum.
I started out this week’s article with a cynical perspective on electoral and legislative processes, but let me flip this question on its head: isn’t this how Congress is meant to actually work? Americans have identified housing as a top concern, and now their representatives in Washington are working on it. It almost feels quaint and old-fashion that, maybe, just maybe, this is how it is supposed to go!
So What’s In it?
There is still a long way to go for the ROAD Act to become law. A similar bill is being debated in the Senate, so most likely the two bills will be reconciled so that one shared bill will move forward. That process sometimes waters down key provisions to make them palatable to members of both bodies, which can take the teeth out of the original intent. Whatever bill does emerge from Congress then needs to go to the White House for President Trump’s signature. It’s anyone’s best guess as to what happens there, although to be fair Trump has made a series of key statements on housing this spring including expressing a desire to limit Wall Street purchase of single-family homes. It’s funny how certain far left progressive priorities often end up finding support on the right; in a populist sense, the far left ends up connecting with the far right in some unexpected ways, making the political spectrum look more like a circle, or at least a horseshoe.
Anyway, one of the other surprising things about the ROAD Act is that there are some pretty serious, thoughtful, and impactful pieces to it. It actually might change things! Here are the key parts:
1. Restrictions on Large Institutional Investors Buying Single-Family Homes
This is the provision grabbing the most headlines. The Senate version of the ROAD Act would place major restrictions on large institutional investors purchasing additional single-family homes. The bill targets massive firms that own hundreds of homes, not mom and pops or individual real estate investors with a few rental properties. The underlying political argument here is simple and broadly popular: homes should primarily be for people to live in, not financial assets for Wall Street portfolios. Whether this provision would meaningfully lower prices is heavily debated, but politically it is easy to understand why it resonates with voters on both sides of the aisle frustrated by bidding wars, anonymous corporate buyers, and cash offers from giant investment groups.
2. Zoning and Land-Use Reform Incentives
The ROAD Act also attempts to tackle one of the core drivers of America’s housing shortage: local zoning restrictions. Rather than directly overruling cities and towns by mandating what guidelines local communities must enact, Congress is trying to encourage reform through incentives. The bill promotes ideas like reducing minimum lot sizes, loosening parking requirements, allowing duplexes and accessory dwelling units, and encouraging higher-density housing near transit corridors. If cities and towns comply, they could receive priority treatment for certain federal grants and planning funds.
3. Streamlining Environmental and Permitting Reviews
One of the least glamorous but perhaps most consequential sections of the bill deals with permitting reform. Housing projects in many parts of the country can spend years tangled in environmental reviews, bureaucratic processes, lawsuits, and local hearings before construction even begins. The ROAD Act attempts to speed this up by modernizing and streamlining review processes connected to HUD-funded housing activity. Supporters argue that excessive delays add enormous costs to housing construction (and I would say it blocks some projects from even getting launched because developers just don’t want to deal with the bureaucratic frustrations). On the other side of the coin, critics here do worry about weakening environmental oversight and limiting opportunities for public input. But regardless, Congress is clearly signaling that current processes are too slow and too expensive, a perspective I am sure most developers (certainly the ones I have dealt with over the years in my banking career of financing these types of projects) will agree with.
4. Manufactured and Modular Housing Expansion
Another major theme of the legislation is reducing barriers to manufactured and modular housing construction. For decades, manufactured housing has carried an unfortunate stigma despite offering one of the cheapest ways to add housing supply quickly. As I wrote about a few years ago, the Sears Catalogue homes aren’t coming back, and the closest modern alternative may be mobile homes. The ROAD Act attempts to modernize outdated rules that make factory-built housing harder and more expensive to deploy. The White House itself specifically highlighted this portion of the bill as one of its priorities, arguing that removing unnecessary restrictions could dramatically lower building costs. Again, it is fascinating that Trump is zeroing in on manufactured homes, when tenant ownership of mobile home parks and more flexibility for permitting and construction are simultaneously growing as key issues on the political left.
5. Incentives for Office-to-Housing Conversions
The pandemic permanently altered downtown America. Many cities are still struggling with half-empty office towers and declining demand for commercial real estate. The ROAD Act includes provisions encouraging the conversion of vacant commercial buildings into residential housing. This is one of those rare policy ideas that seems to satisfy almost everyone ideologically: urban planners like it, housing advocates like it, downtown business groups like it, and environmentalists often prefer redevelopment over endless suburban sprawl. Although from many of the developers I have spoken with over the years, it’s much harder than one might think to convert an office building into an apartment building (perhaps a topic for a future article), so we’ll have to see what kinds of incentives the ROAD Act provides to make these types of projects more feasible and therefore more common.
6. Transit-Oriented Development
The legislation also tries to better connect transportation and housing policy. The basic argument is that if taxpayers are spending billions on rail stations, highways, and transit systems, it makes little sense to prohibit housing construction near those investments. The ROAD Act encourages higher-density housing near transit infrastructure while discouraging some of the parking mandates that often make projects more expensive and less feasible.
7. Pre-Approved and Standardized Housing Designs
This is one of the provisions that most interests me, and it is an idea I honestly have never thought of before. One underappreciated contributor to housing costs is the sheer complexity of local approvals and building design requirements. The ROAD Act includes support for pre-approved housing plans and standardized designs that could significantly reduce permitting timelines and architectural costs for smaller developments, duplexes, ADUs, and starter homes. It is not a flashy provision, but it reflects a broader philosophy running throughout the bill: America does not just have a housing shortage problem; it has process problems running through city and town halls and state legislative bodies in all fifty states. Although people like their local control, this idea seems like a good one to help streamline some of these frustrating processes, which can also be very expensive, which then, in turn, raises costs for both builders and end-users (i.e. homebuyers) alike.
What It All Means
Taken together, the ROAD Act is notable because, first and foremost, it is an example of good policy actually working its way through the halls of Congress. Congress doesn’t actually pass that many bills, and the ones they do are often baked into massive omnibus bills with many different parts. So, again, it would be a great success if this bill actually reaches the finish line (even if parts do get watered down by a reconciliation with the similar bill running through the Senate).
Secondly, the ideas at play here do not come entirely from the political left or the political right. Parts of it sound traditionally conservative: deregulation, streamlining, cutting red tape, and loosening zoning restrictions. Other parts sound more populist or progressive: limiting Wall Street ownership of homes and expanding affordable housing initiatives. Undoubtedly that ideological blending is precisely why the bill has momentum. Indeed, two of the Senate’s strongest proponents of their proposed housing bill are Senator Tim Scott, who is a Republican from South Carolina, and Senator Elizabeth Warren, who is a Democrat from Massachusetts.
Housing has become one of the few issues painful enough, visible enough, and universal enough to force politicians from both parties into the same room. Even if the policies are overdue and the bills may be watered down before they make it into law, there are still reasons to feel good about the ROAD Act and the changes the provisions could make to U.S. housing policy.
Ben Sprague lives and works in Bangor, Maine as a Senior V.P./Commercial Lending Officer for Damariscotta-based First National Bank. He previously worked as an investment advisor and graduated from Harvard University in 2006. Ben can be reached at ben.sprague@thefirst.com or bsprague1@gmail.com. Thoughts and opinions here do not represent First National Bank.
Here is a quick video of my son scoring a goal in one of his games yesterday, complete with a bow and arrow celebration. I’m not sure exactly where he pulled that from. Unfortunately the game result was a loss, but there were some good moments, and we love coming down for this tournament each year.
Have a great week, everybody!