Senate Banking Committee advances bipartisan housing reform legislation

Key Takeaways

On July 29, the U.S. Senate Committee on Banking, Housing and Urban Affairs unanimously advanced the bipartisan Renewing Opportunity in the American Dream (ROAD) to Housing Act, representing a significant opportunity for counties to address housing challenges through expanded funding, streamlined regulations and new grant programs. 

What's in the bill?

The bill would reauthorize critical legislation while also providing new flexibility and additional federal investments, which counties would be allowed to access. Specifically, if enacted, the bill would:

• Tie Community Development Block Grant (CDBG) allocations to new construction rates. The bill introduces a bonus allocation for counties exceeding the median housing growth improvement rate among eligible CDBG recipients. However, eligible recipients below this median will be subject to a 10 percent penalty in CDBG funding for a given year, to fund these performance bonuses. Under this proposed definition, counties are concerned that nearly half of county CDBG recipients may see a reduction in key funding.
• Reauthorize the Home Investment Partnerships (HOME) Program and increase program flexibility: Counties are already eligible to receive HOME funds, either directly or through state allocation, and may see increased formula or competitive funding through a reallocation of funds and an expansion of eligible uses. HOME funds can be used for rental and homeownership housing development, as well as tenant-based rental assistance.
• Permanently authorize the Community Development Block Grant – Disaster Recovery (CDBG-DR) Program: Counties would receive consistent housing aid through the newly created Office of Disaster Management and Resiliency within the U.S. Department of Housing and Urban Development (HUD)when responding to disasters, reducing the need for ad hoc legislative relief. Counties can use funds for emergency and transitional housing, particularly for low- to moderate-income households, defined as less than 80 percent of the area median income.
• Streamline inspection requirements for the Housing Choice Voucher (HCV) Program: Housing units financed through the Low-Income Housing Tax Credit (LIHTC), the HOME Program and the USDA Housing Service will automatically meet HCV inspection requirements if they have passed an inspection within the past year. Public Housing Agencies (PHAs) – some of which are county-run – are primary implementers. Counties benefit from an expansion of the number of available units for voucher holders and increased landlord participation.
• Introduce waivers to the 60 percent spending cap on emergency shelter beds and street outreach for counties receiving Emergency Solutions Grant: Counties are explicitly eligible as local government entities and will benefit from increased flexibility to tailor homelessness interventions to local needs.
• Create the Innovation Fund, a competitive grant program to support local zoning reforms to increase housing supply: Counties that demonstrate measurable increases in housing supply and incentivize housing reform can apply for funds directly to address local housing shortages and infrastructure gaps. Funds can be used for construction and rehabilitation of affordable housing units, improvement of community infrastructure and to supplement water and sewer grants. Counties benefit from efforts to revise zoning codes, allowing higher-density or mixed-use development.
• Reform USDA’s Rural Housing Service programs and decouple rental assistance from USDA mortgages: Counties benefit from reforms to the program that preserve affordable housing and decouple expiring USDA Section 515 mortgages from rental assistance. This change would help maintain eligibility for housing assistance even as original loan terms expire, ensuring continued support for low-income rural residents. The proposal aligns with the Rural Housing Service Reform Act (S. 2160), which is supported by NACo.

The ROAD to Housing Act strengthens counties’ ability to tackle critical housing challenges. With new opportunities to invest in affordable housing, improve infrastructure and modernize data systems, counties are better positioned to meet the needs of their communities and build more resilient, equitable housing systems. NACo will continue to monitor these developments as the package makes its way through Congress.