The Renewing Opportunity in the American Dream (ROAD) to Housing Act was approved on July 29 by the Senate Banking, Housing, and Urban Affairs Committee. The act was the first markup of its kind in almost 10 years, and passed unanimously in a 24-person committee. The bill incorporates elements from over 27 previously introduced legislative texts, 23 of which were sponsored by bipartisan lawmakers.

The bill encompasses multiple policy approaches to address housing affordability and increase supply, including streamlining financing options for homeowners, reducing regulatory barriers, and promoting economic mobility. The bill is on track to be the most comprehensive and impactful piece of legislation since the Great Recession. 

Affordable housing is harder to come by more than ever

The pace of selling and buying homes has been at its slowest in 30 years in the United States, and hopeful homeowners have been particularly feeling the squeeze over the last three years. Renters are struggling to afford the costs of homeownership, and homeowners are reluctant to switch to new mortgage rates. 

This is significantly impacting the outlook of construction developers. As more renters opt to stay where they are, builders are having to slash prices and boost incentives in hopes of attracting the small pool of people on the hunt. Developers are now expected to scale back construction in some areas, particularly in the residential sector, as they anticipate a drop in demand. 

New homes, of course, have historically been the pricier option. However, many neighborhoods are now seeing new developments as the “more affordable route” because prices have had to decrease significantly. Even then, the homes don’t drop in price enough to lure in the quantity of buyers they had initially anticipated. 

Tactical ways the ROAD to Housing Act makes the dream of homeownership a reality

Photo courtesy of https://www.shutterstock.com/

Cutting the red tape around environmental law

The ROAD Act would bypass many tedious environmental reviews currently required for most residential construction. This would allow local Native American tribes, as well as governments and states, to accelerate home building. 

The bill will also “right-size” the National Environmental Protection Act to expedite the approval of construction projects.

Shaking up restrictive land-use and zoning policies

The U.S. Department of Housing and Urban Development will also be instructed to create frameworks that re-examine current land-use and zoning policies. The aim is to break down barriers that previously prevented new housing construction.

The act, according to the National Association of Home Builders, will include favorable provisions for zoning and land use for multifamily and rural housing, which will stimulate new construction.

Encouraging prefabricated and modular construction

Another primary focus of the ROAD Act is to boost modular and prefabricated housing. Modular and prefabricated homes are largely constructed off-site, and the manufacturing process is cheaper, faster, and still provides reliable housing options for homeowners of all income levels. 

The bill aims to update mortgage-lending standards and expand financing options for these homes, potentially giving homeowners new hope for making their first purchase or growing their families. 

Is this Bill enough to fix America’s housing crisis?

While the bill proposes new ways to cut red tape for developers and support alternative ways of building homes, the economic outlook still looks gloomy. With the recent government shutdown stretching well past a month, the timing of the legislation’s ambitions becomes much less certain. According to the National Association of Home Builders, a shutdown that drags on “several weeks or a month or more could have significant impacts on mortgage accessibility and reduce housing demand.”

One survey from Redfin found that 45% of Americans say they are now less likely to make a major purchase such as a home because of the shutdown, which is double the figure from early October. According to Reuters, if the shutdown continues, each month it could delay over 108,000 closings and threaten nearly $48 billion in housing market value. For developers, this has a major impact on their confidence to build more homes and invest into commercial real estate.

So, is the ROAD to Housing Act enough to fix America’s housing crisis under these conditions? The legislation is certainly ambitious. But ambition alone doesn’t guarantee results and the shutdown shows how external shocks can undermine intent. Passing the bill is only the first step of rying to fix this ongiong issue. Unless the legislation is enacted and implemented at pace with full federal agency staffing, the gap between policy promise and delivered homes may widen.

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