A few weeks ago the 21st Century ROAD to Housing Act became law. This is an enormous housing bill that’s been in the works for roughly a year — I first discussed it on Statecraft back in 2025 — and folks are optimistic that it will, per its description, “increase the supply of housing in America.”
But actually understanding what, specifically, the law will do is tricky. Like many large pieces of legislation, this is an amalgamation of many smaller laws: the Act has 59 individual sections, each of which does something different. Some of these sections create new housing programs; some of these sections modify existing government housing programs in complex ways; and others relax or change various housing laws but have complicated implementation details.
And once you’ve parsed what the law will actually do, you still need to predict how the various participants in the housing market will actually respond to the changes. (As we covered last month, the actual effects of laws can diverge significantly from lawmakers’ intentions.) Much of this law is aimed at changing the incentives around housing production — stimulating the production of housing by relaxing various constraints on producing it. But it’s not always obvious how binding the particular constraints that the law targets are, and how much housing we can expect to be unlocked by easing them.
As this is the biggest US housing bill in living memory, aimed at addressing one of the biggest problems in the US, it’s worth looking closely at the law and trying to tease out what the likely effects on housing supply will actually be.
Because there are so many individual sections, each of which requires drilling somewhat deep on a particular government program or aspect of the housing market, I’m not going to try to do this all in one shot. This will be the first in a series of posts (probably 4–5 total), each of which looks at one chunk of the housing bill.
A high-level look
At a high level, we can sort the individual provisions of the ROAD to Housing Act into three categories:
Provisions that target the construction of new housing, either directly or indirectly.
Provisions that target the preservation of existing housing.
Provisions that do something else.
Despite the ostensible overarching goal of the law being increasing housing supply, most provisions of it actually fall into the third category and won’t realistically have any impact on housing supply. Some of these third-category provisions are totally unrelated to housing: there’s one that prevents the Federal Reserve from establishing a digital currency through 2030. Others are about housing, but won’t do anything to actually touch housing supply, such as a provision that provides grants to install temperature sensors in public housing. So while the law is a sprawling mass of changes, the biggest potential effects on housing supply are concentrated in a smaller number of provisions.
Another key aspect of this law is that no funding is allocated for any of its programs. The very last section, 1202, specifically states that “[n]o additional funds are authorized to be appropriated to carry out the requirements of this Act.” That means that any changes that require money to implement will need to get it from a separate congressional appropriation. For instance, section 208 of the Act creates an Innovation Fund of up to $200 million a year to award to jurisdictions that show increases in the housing supply, but the actual money for this fund will need to be awarded separately. This doesn’t mean these changes won’t be implemented, but it does create another barrier that many of the provisions will need to clear before they can have any effect. (For reference, the science half of the 2022 “CHIPS and Science Act” similarly passed with no funding specifically allocated to it, and anywhere from 60 to 90% of its authorized funding was actually appropriated depending on the year.)
The ROAD to Housing Act is broken into 12 “titles,” each one of which contains a bundle of provisions, but the most important changes are concentrated in titles 1, 2, 3, 5, and 10. In this post I’ll just look at Title I, “Opportunities for Housing.”
Title I — Opportunities for Housing
Title I of the ROAD to Housing Act contains seven provisions and is basically a grab bag of new programs and modifications to existing programs.
The headline items in this section are:
102 — Federal Guidelines for Point-Access Block Buildings. This instructs the Department of Housing and Urban Development (HUD) to create federal guidelines for point access blocks, multifamily apartment buildings with a single stairway and no central corridor. It also allows HUD to set up a grant program for jurisdictions that want to evaluate point access blocks.
103 — Exemption on Construction or Modification of Residential Housing on an Infill Site. This provision exempts infill housing constructed as part of the United States Department of Agriculture’s (USDA) Rural Development program from having to undergo an environmental review (such as required by NEPA).
105 — FHA Small-Dollar Mortgages. This allows (but does not require) HUD to create a program to expand access to inexpensive mortgages (less than $100,000) backed by the Federal Housing Administration (FHA).
These are all positive changes. Point access blocks, also known as single-stair buildings, are widely used in Europe, but disallowed by most modern US building codes, and they’re something that urbanists have been advocating for years. The Center for Building in North America, for instance, has devoted a lot of effort to advocating for single-stair buildings at the state level. Eliminating the requirement for a second stairway means that, for certain building sizes, a lot less of a building’s floorplate is devoted to non-rentable stairs and corridors, effectively reducing construction costs by an estimated 6–13%. I once spoke to a developer who was willing to cover the cost of a new fire truck if a jurisdiction would allow the use of single-stair buildings, such was the magnitude of the projected savings.
Expanding access to small-dollar mortgages is also tackling a real problem. The fundamental issue with small-dollar mortgages is a tension between what a mortgage originator earns on a mortgage and what it costs them to originate. A large chunk of origination costs is fixed — it takes a similar amount of effort to process the paperwork whether the mortgage is for $100,000 or $1,000,000. But earnings on a mortgage are a function of how much is being loaned, so profits are much smaller on small mortgages and originators have less incentive to originate them.
Likewise, it’s been noted over and over again how burdensome federal environmental review requirements can be: reducing them for a federal homebuilding program is a real win.
But we should also be realistic about the magnitude of the impact these changes are likely to have.
For section 102, point access blocks, this is a change that’s part of a much larger trend towards legalizing them. As of 2025, 19 states had introduced bills to study or allow point access blocks, and in May of this year the International Code Council voted to adopt provisions that would allow for point access blocks up to four stories tall in the 2027 International Building Code (a model building code adopted in some form by every US state). So even in the absence of this provision in the new federal law, jurisdictions were already moving in this direction. And on its own, section 102 has little in the way of teeth. It just mandates the creation of federal guidelines regarding point access blocks; it doesn’t require any jurisdictions to actually follow them.
Which isn’t to say that there’s no potential impact. A federal set of guidelines could potentially provide enough legitimacy to push jurisdictions to adopt point access blocks that otherwise wouldn’t. If a grant program materializes, that could also accelerate their adoption in certain jurisdictions. And if the generated federal guidelines allow for buildings with a higher number of stories (the provision allows up to six, rather than the four adopted by the IBC), this could theoretically push states to set their height limits higher than they otherwise would. But overall I expect the impact of this provision to be fairly marginal.
For section 103, environmental review of the USDA’s Rural Development infill housing, the impact of this is blunted by two things. One is that much of the program’s housing construction is already subject to a NEPA categorical exclusion; the other is that the program currently builds very little housing, and this section probably won’t change that.
The USDA’s Rural Development agency administers a collection of programs intended to “improve the economy and quality of life in rural parts of the US.” Many of these efforts are devoted to housing: since 1950 the USDA has funded the “construction, purchase, or repair of over 5.5 million rural housing units.” But currently, this program doesn’t build much housing: it’s hard to get clean numbers because the USDA doesn’t break down which loans go to new construction and which go to purchasing existing housing, but it’s probably building less than 5,000 units per year across single-family and multifamily housing, and possibly less than 1,000. Housing built on infill sites specifically (which are sites already served by infrastructure such as electricity, water, and sewer lines), which are the only projects covered by this provision, will be some smaller fraction of this.
What’s more, much of this construction was already effectively exempt from NEPA’s requirement to produce an environmental report. Repairs to existing housing, construction of single-family homes, and small multifamily projects already had a NEPA categorical exclusion, which means they don’t require a more thorough Environmental Assessment or Environmental Impact Statement. And this provision wouldn’t affect any state-level environmental study requirements, such as California’s CEQA. So in practice removing the requirement for an environmental study will only affect a narrow sliver of an already small universe of housing. It’s conceivable that removing a burdensome federal environmental review process might create an uptick in the number of projects that would fall outside the categorical exclusion, such as larger multifamily projects, but this would surprise me: I expect the impact of this change to be pretty minor.
For section 105, small-dollar mortgages, it helps to remember that the FHA is basically an insurance company: it sells mortgage lenders insurance policies against borrowers defaulting, in order to “incentivize lenders to make loans they otherwise would not.” It sells this insurance to a substantial chunk of the market: roughly 11 to 15% of US home purchases have FHA insurance. Because FHA insurance is so widely used, and because it specifically targets folks who might otherwise have difficulty getting a mortgage, a program to expand access to mortgages below $100,000 could potentially be a big deal for low-income homebuyers, enabling them to get mortgages that might otherwise not be worth a lender’s while to make.
The challenge here is that very few new homes built in the US are sold below $100,000. In 2023 there were only 1,000 new homes sold for less than $150,000 in the entire US. So currently, this would theoretically apply to at most a few hundred new conventional homes built each year.
There’s also a larger universe of manufactured homes that this could apply to: roughly 100,000 manufactured homes are sold each year, and nearly 40% of manufactured home mortgages are FHA-insured (though not all manufactured homes have mortgages). But this universe is also narrowed: a small-dollar mortgage program would only apply to homes titled as real property, which is probably about 20% (~20,000) of new manufactured home shipments. And only a fraction of these would actually fall below the $100,000 cutoff: the average price of a new manufactured home, sans land or installation, is already above $120,000. Once you include land and installation (as you would for any manufactured home titled as real property), you’re even farther above $100,000. It’s thus likely more than half of new manufactured homes titled as real property would be beyond the $100,000 cutoff.
Of course, the question for the effect on housing supply is not how many homes are currently built that cost under $100,000, but how many might be built if it were easier for folks to get mortgages for them. It’s conceivable that lendability of small-dollar mortgages is a major binding constraint, and with it relaxed we’d see a major uptick in the construction of smaller, more affordable houses for less than $100,000. (This might be especially true for manufactured homes, given the cost-reducing changes that are being made to manufactured home regulations in Title III of this legislation, which I’ll cover in a future installment in this series.) This doesn’t seem amazingly likely to me, but neither does it seem impossible. And outside of the impact on housing supply, there would probably also be some social benefits from increasing access to mortgages for existing low-priced homes.
A small-dollar mortgage program could also potentially apply to ADU construction, as long as the remaining mortgage on the primary property didn’t push the combined loan over $100,000. I suspect that’s also a pretty small universe of potential homes — if your mortgage balance is substantially less than $100,000 and you’re considering an ADU, you probably have other financing options available (such as a home equity line of credit) — but it’s another possible avenue for a provision like this to work.
Of course, this all depends on a small-dollar mortgage program actually being created, it being structured in such a way that actually incentivizes lenders to make more small-dollar mortgages, and its effectiveness not being eaten away by inflation (since there’s no provision for raising the $100,000 cutoff over time). None of these is guaranteed. But to me there’s a higher plausible upside to this provision than to the other provisions we’ve looked at.
Sections 102, 103, and 105 are what I consider the headline provisions in this section, but there are several other provisions as well.
101 — Reforms to Housing Counseling and Financial Literacy Programs. This section “clarifies the authority of HUD to evaluate housing counseling agencies” and makes some tweaks to how counseling resources are distributed. This will possibly have some impact on reducing foreclosures by giving counseling resources to help people avoid them (though I doubt it), but the effect on new housing supply is basically nothing.
104 — Database of Publicly Owned Land. This requires any jurisdiction that receives a federal Community Development Block Grant (CDBG) from HUD to maintain a publicly accessible database that identifies all undeveloped parcels of land owned by the jurisdiction.
This is, presumably, to make it easier for developers to find publicly owned parcels of land that might be suitable for development. And this affects a lot of jurisdictions — over 1,200 cities, states, and counties in the US get CDBGs from HUD. But it strikes me as unlikely that finding these parcels of land is a major bottleneck to the development process. GIS-based parcel ownership lookup tools, for instance, are already pretty common. There’s also the problem that this provision excludes a lot of potentially useful publicly owned parcels, because they’d be publicly owned by a government entity other than whoever is receiving the block grant. School districts, for instance, are technically their own special-purpose governments that own things in their own name. So an empty parcel of land owned by a school district wouldn’t necessarily be included in an undeveloped land database administered by the state or county.
It’s possible that the mere act of creating this database causes jurisdictions to look more closely at their land resources and decide to sell some of them for housing development, but that strikes me as not amazingly likely. Overall it’s hard to see this having much, if any, impact on housing supply.
106 — Temperature Sensor Pilot Program. This section requires HUD to create a pilot program to provide grants to housing agencies to install temperature sensors, to ensure public housing doesn’t get too hot or too cold. A positive development, but not one that affects housing supply at all.
107 — Housing Supply Frameworks. This section requires HUD to publish best practices for state and local zoning “to support the production of adequate housing.” This includes things like reducing or eliminating parking minimums, increasing allowed floor area ratios (FAR) to allow for bigger buildings on sites, encouraging transit-oriented development, and so on.
These are all things that urbanists like, but it’s hard to see much upside from publishing a list of best practices when information on these sorts of best practices is already widely available. I have heard, however, that the hope is that a “ROAD 2.0” housing act could include incentives for zoning best practices adoption, and for that it’s helpful if there’s already a set of federal recommendations. So the main impact of this provision might be a function of future legislation. On its own, though I doubt this will have much impact.
Conclusion
Overall the content of Title I in the 21st Century ROAD to Housing Act is fairly representative of what’s in the law. There are a few provisions that are aimed at very real problems in the housing sector — legalizing single-stair buildings, reducing the burden of environmental review, and improving the incentives for lenders to offer small-dollar mortgages — the effects of which will depend on how much that particular constraint was actually binding, and how people respond to the changed incentives. Along with these is a collection of other provisions that make various positive changes regarding housing (new resources, new or improved programs) but that probably won’t affect housing supply at all.
The next post in this series will look at Title II, a long section with lots of relevant housing supply provisions in it. And for more on what jurisdictions can do to take advantage of the various provisions and the federal dollars that will flow from them, my colleagues at IFP wrote a useful explainer.
