Last week Congress did something it hasn’t done at this scale since 1990: it passed a comprehensive, bipartisan housing bill. The Senate cleared the 21st Century ROAD to Housing Act 85–5 on Monday; the House followed 358–32 on Tuesday. Those aren’t typical margins for anything in Washington right now, let alone housing.
I want to walk through what’s actually in House and Senate passed bills and how this may affect the mechanics of getting housing built in Michigan. The national coverage has fixated almost entirely on the one provision that matters least to most of us, and skipped the ones that could change how we work to solve the housing shortage across the Midwest.
This is a supply-side, deregulatory, structural-reform bill. Roughly fifty provisions, most of them stitched together from the Senate’s ROAD bill and the House’s 21st Century Housing Act, plus a handful of new sections. The diagnosis is correct, and Congress deserves credit for understanding the primary issue: we are short four million homes across the country, and the biggest problem is that we don’t build enough of the kinds of housing people can actually afford where most people actually want to live. Most of the bill is an attempt to remove federal friction from building. It does not authorize or appropriate new subsidies.
ROAD to Housing treats conversion and infill as real strategies, not novelties. The RESIDE provision creates a pilot to help local governments turn vacant commercial and industrial buildings into housing, explicitly prioritizing distressed areas and Opportunity Zones. For those of us who’ve been making the case for adaptive reuse on tired commercial corridors — motel conversions, dead strip retail, and half-empty office complexes — the federal government has signaled that they see these opportunities as viable as well.
Opportunity Zones. The bill encourages HUD to prioritize OZ-based or OZ-serving projects in its competitive housing grants. With OZ 2.0 nominations moving through the OBBBA framework right now, this could be important. The census tracts we designate aren’t just a tax-incentive map anymore, they become a preference in the grant world too.
For anyone currently in the process of prioritizing census tracts for nomination, we have developed a scoring tool to help local and state officials understand which tracts are most in need of investments, and which tracts are most likely to actually see new investments as a result of Opportunity Zone status.
ROAD to Housing rewards many of the local reforms we spend most of our days advocating. The new Innovation Fund — a competitive grant for jurisdictions that can show measurable supply gains — is designed to reward streamlined permitting, density bonuses, and zoning changes. When paired with the Build Now provision tying a slice of CDBG to housing production, there’s now a federal incentive structure behind the missing-middle and zoning-reform conversations. When a planning commissioner asks “why should we upzone?” there’s a new federal incentive to answer that question. If $50,000 in federal funding is all it takes to get local communities to take action, so be it. But don’t forget the same arguments for right sizing local regulations that we’ve been making for over a decade - its a more financially sustainable way to fund community infrastructure, it allows more choice and variety in the marketplace, it offers more opportunities for people to connect with one another socially, and supports greater economic opportunity.
ROAD reauthorizes and loosens restrictions on HOME funds. The HOME reauthorization with added flexibility — including using funds for housing-related infrastructure — is the kind of unglamorous fix that will likely support more investments in places with limited infrastructure. At Flywheel, we strongly encourage clients to use existing infrastructure fully before considering any extensions or expansions. However, we do work with rural clients that are heavily limited by a lack of sewer and water service. This provision could help to resolve some of those service strains.
It cuts genuine federal friction. Streamlined NEPA categorical exclusions, delegation of environmental review to local governments, automatic acceptance of recent LIHTC/HOME/USDA inspections for voucher units, higher FHA multifamily loan limits, the end of the permanent-chassis rule for manufactured homes. All of these will shave incremental time and cost off the deals we’re trying to close.
None of these provisions is anything close to a silver bullet. However, taken together, all of these provisions create a chance to make a meaningful difference. And equally important is the seemingly durable political support for ROAD. A bill that passes 85–5 and 358–32 isn’t likely to be unwound by the next Congress. When so much of the federal government appears to swing wildly from one extreme to the other every four years, this could be a welcome sign of future stability (at least in this narrow field of vision).
No new money has been authorized. The bill explicitly authorizes no additional appropriations to carry out its own programs. The Innovation Fund, the planning grants, RESIDE — these are authorizations that have to go win funding in the FY27 appropriations fight against everything else.
The marquee provision is the least useful one. The restriction on institutional investors owning 350-plus single-family homes is the political centerpiece and got most of the coverage. It addresses something like three percent of the single-family rental market. I understand the politics — nobody wants private equity outbidding a family with a cash offer — but as housing policy it’s close to a rounding error in the vast majority of communities, and there’s a credible argument it chills much of the existing capital that rehabs marginal stock and puts it back in service. The attention it’s absorbed is out of all proportion to what it does.
Washington can’t make a local government upzone. If you have concerns about local control being preempted by big government, this bill does not impact a local community’s ability to self-regulate. It simply incentivizes different choices.
There’s a capacity trap baked into the bill. Competitive grants reward jurisdictions that already have the staff and sophistication to chase them. Small cities and townships that need the help most are often the least equipped to win these dollars. Without deliberate technical-assistance support, there is a risk that the gap widens between places that already have momentum and places that don’t.
It’s thin where the need is deepest. This is a supply-and-homeownership bill. It does comparatively little for the lowest-income renters, where the shortage is most severe and where the federal government actually has the most leverage. Supply matters enormously over the long run, but it doesn’t directly provide new affordable housing to a family that is cost-burdened today.
If you run a city or a county, don’t hold your breath waiting for big government funding. Do start getting ready for the types of reform that make sense for your community so that you can compete when the appropriations are available. This means you should assess your zoning ordinance for opportunities to implement best practices for a community of your size. Start documenting the permitting timeline from application to certificate of occupancy. Understand how many more homes could be built in your community if you are able to leverage future federal funding to support reform and process improvement. The Innovation Fund and Build Now both reward places that can show improvement over time. Establishing a measurable baseline and a dashboard for ongoing metrics can take some time to build.
If you’re a developer or a funder, the conversion and OZ provisions are the ones to watch. They line up with where some of the biggest opportunities are going to be - especially on underdeveloped corridors. OZs will reward patient capital.
If you’re tempted to read the coverage and conclude Washington just solved housing: it didn’t, and the people who wrote the bill would tell you the same. Prices haven’t come down, rates are still near six and a half percent. This package will make building easier at the margins and signals that housing is a federal priority again. Both of those are important. Neither of them is a solution.
The most useful thing about this bill might simply be the precedent: Congress proved housing can still move on a bipartisan basis. That’s not nothing. But the work that actually determines whether housing gets built still happens at the local City Council and Township Board, in the statewide QAP, and along local corridors. This bill helps. It doesn’t do the work for us.
More soon. As always, if you want to talk through what might be possible in a specific place, my inbox is open.
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