Senate Expected to Resume ROAD to Housing Talks, Following NDAA Impasse

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 program support, new incentive grants, and streamlined post-disaster funding access. The bill also includes a provision threatening key community development funds for grantees that do not meet certain performance criteria. 

On October 9, the bill's language was included as a floor amendment to the Senate's National Defense Authorization Act (NDAA) of 2026. Instead of including ROAD language in their respective version of the NDAA, the U.S. House of Representatives opted to consider their own housing package, the Housing for the 21st Century Act. With the two chambers failing to agree on its inclusion in the NDAA, ROAD is expected to be considered by the full Senate as a standalone bill in the coming months. 

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's Build Now Act 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 community development funding. Unpredictable funding levels stand to threaten counties' ability to leverage these funds, particularly for multi-year projects.
• 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 timelier housing and infrastructure aid in the wake of federally-declared disasters. Under the current system, CDBG-DR funds are appropriated by Congress on an ad hoc basis following a disaster declaration, often leaving county recipients to fill capacity gaps in the interim. This bill would institutionalize the program, allowing for more streamlined access to key recovery funds. Counties can use funds for a broad range of recovery activities, including housing and infrastructure repair, essential service support, and economic revitalization.
• 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.

As the two chambers work to resolve differences in their respective housing packages, NACo will continue advocating for strong federal investments in housing and community development programs, while limiting threats to key funding streams.