Federal Update: Bipartisan 21st Century ROAD to Housing Act Becomes Law

The bipartisan bill, passed by the U.S. House and Senate in June, includes several city priorities championed by local government groups.

On July 10, at midnight, the 21st Century ROAD to Housing Act became law without the president’s signature after the 10-day deadline expired to sign the bill, veto it, or allow it to take effect without approval.

The bipartisan housing package combines nearly 60 standalone bills aimed at increasing housing supply, lowering housing costs, and modernizing federal housing programs and regulations that impact housing attainability.

The law also authorizes several new programs and importantly does not include any local government preemption or establish any unfunded mandates.

View the 21st Century ROAD to Housing Act (pdf).

Path to becoming law

Following a year of negotiations between the House, Senate, and Trump administration, both chambers passed identical versions of the bill in June. The Senate approved the measure 85 to 5, while the House passed it 358 to 32, giving it veto-proof margins in both chambers of Congress.

Before final passage, the White House issued a series of Statement of Administration Policy (pdf) notices supporting the bill and indicating the administration would recommend that the president sign it. Although President Trump reportedly canceled the signing ceremony to pressure the Senate majority to advance the “Save America Act,” the legislation became law without his signature after the 10-day period expired following formal transmission of the bill.   

What’s in the package

The 381-page package includes several provisions championed by the League and its federal partners, including the National League of Cities. Those provisions include:

• Streamlined or waived federal environmental review and approval requirements for certain development projects.
• Greater flexibility for grant programs, such as the Community Development Block Grant (CDBG) and HOME, which are allocated directly to local governments.
  • CDBG-eligible expenditures now include new construction.
  • HOME-eligible expenditures now include workforce housing and, under certain conditions, housing-related infrastructure.
• New resources to address infrastructure needed to support additional housing development.
• New capacity-building assistance for local governments seeking to evaluate and amend local ordinances to make housing more attainable.
• Increased sources of private capital for housing development.
• By design, the 21st Century ROAD to Housing Act does not preempt local or state zoning authority. As stated in Banking Committee documents, “Chairman Scott believes zoning decisions are best made locally, not in Washington.”

Other notable provisions supported by local government groups include:

• Permanent authorization of the Community Development Block Grant Disaster Recovery program and creation of an Office of Disaster Management and Resiliency within the U.S. Department of Housing and Urban Development (HUD) to administer it.
• Exempting Rural Housing Service-funded projects on infill sites from National Environmental Policy Act (NEPA) requirements related to residential construction or modification.
• Right-sizing NEPA requirements for small infill housing, and adaptive reuse projects.
• Authorizing of a five-year pilot program to provide grants and forgivable loans to low- and moderate-income homeowners and small landlords to address repair needs and health hazards.
• Creating of an Innovation Fund through the HUD to provide grants to communities demonstrating housing supply growth to improve infrastructure supporting residential development

Provisions that may raise concerns for cities

Section 107, “Housing Supply Frameworks,” directs HUD to develop best-practice frameworks for zoning and land-use policies. Specifically, the provision requires HUD to develop resources for state and local governments related to land use and zoning and includes a prescriptive list of issues HUD must consider when developing those resources.

The section also states that “state and local governments are proactively exploring solutions for reforming regulatory barriers” and recognizes that “while land use regulation is the responsibility of state and local governments, there is Federal support for necessary reforms, and there is opportunity for the Federal Government to provide support and assistance to State and local governments that wish to undertake necessary reforms in a manner that fits their communities’ needs.”

Section 213, “Build Now Act,” creates a pilot program to incentivize housing development in jurisdictions that receive CDBG directly through the federal formula. HUD will measure housing unit growth in each participating jurisdiction over a five-year period. Jurisdictions that exceed the median Housing Growth Improvement Rate will receive bonus funding of up to 10% of their annual CDBG allocation, while jurisdictions that fall below the median will see their annual allocation reduced by 10%.

Although local government organizations raised concerns about this provision, the legislation does not change the underlying CDBG allocation formula, unlike several other proposals considered by Congress.

LMC staff take

Overall, the package represents meaningful progress and serves as a positive example of Congress partnering with local governments rather than preempting local authority, to advance the shared goal of increasing more housing opportunities.

Read more news articles.