Senate’s 21st Century ROAD to Housing Act combines elements of existing House and Senate Housing packages

Key Takeaways

On March 2, Sens. Tim Scott (R-S.C.) and Elizabeth Warren (D-Mass.) introduced the 21st Century ROAD to Housing Act (bill number pending), a bipartisan legislative package aimed at expanding and modernizing the nation’s housing supply. The proposal combines key provisions from the Senate’s ROAD to Housing Act  (S. 2651), released last year, with elements of the Housing for the 21st Century Act  (H.R. 6644), which previously advanced in the U.S. House of Representatives. The bill also includes a moratorium on large institutional investors buying single family homes—a priority of the White House. 

Notable provisions of the package include:

• Home Investment Partnerships (HOME) Program reforms that would raise the program’s income eligibility threshold to help communities better address gaps in workforce housing. The proposal also authorizes the use of HOME funds for housing-adjacent infrastructure in jurisdictions that do not receive direct Community Development Block Grant (CDBG) entitlement funding, helping expand development capacity in smaller and rural communities. To reduce administrative barriers and streamline construction, the bill categorically excludes certain low-impact rehabilitation and infill projects from more rigorous National Environmental Policy Act (NEPA) requirements. These provisions are included in the Housing for the 21st Century Act previously advanced in the U.S. House of Representatives.
• Expanded use of Community Development Block Grant (CDBG) funding for housing development, including allowing communities to dedicate up to 20 percent of CDBG funds to new housing construction, increasing local flexibility to respond to housing shortages. This provision was previously included in the Housing for the 21st Century Act.
  • However, the bill also ties CDBG allocations to housing growth. The legislation’s Build Now Act introduces a bonus allocation for counties exceeding the median housing growth improvement rate among eligible CDBG recipients. At the same time, eligible recipients below the median will be subject to a 10 percent penalty to fund these performance bonuses. Unpredictable funding levels may threaten counties' ability to leverage these funds, particularly for multi-year community development projects. Note: based on NACo’s estimation, a majority of entitlement counties would likely be exempt from this risk-reward calculation—however, we continue to work with Congress to express concerns over the remaining impacted counties. The bill’s exemptions include: lack of statutory zoning authority; high rental vacancy rates; low median home values and low fair market rental prices; or position within a federally declared disaster area in the preceding 365 days. This provision was previously included in the ROAD to Housing Act.
• $200 million in housing innovation grant funding to support high-performing counties and local governments in implementing innovative housing supply strategies and scaling effective local housing policies. 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. The bill also authorizes HUD to develop a planning and implementation grant program, for counties to review and update their local housing strategies for opportunities for housing growth. This provision was previously included in the ROAD to Housing Act.
• The most notable new provision within the bill would ban large institutional investors in possession of 350 or more single family homes from purchasing additional homes. This represents a major priority of the current administration. The President previously issued an Executive Order titled “Stopping Wall Street from Competing with Main Street Homebuyers,” directing the Federal Trade Commission to investigate anti-competitive activity from large institutional investors in the housing market.
  • The bill provides a series of exemptions to the purchasing ban for qualified built-to-rent, rent-to-own, and renovate-to-rent programs—however, investors are still required to divest from these properties within 7 years. This may come with an indeterminate administrative cost for counties: built-to-rent communities are often zoned for multifamily residential use. As large institutional investors divest from each detached property, they may require rezoning as single-family residential from the jurisdictional local government. This is a new provision under the 21st Century ROAD to Housing Act, and was crucial to securing White House support for the legislation.
• The Revitalizing Empty Structures into Desirable Environments (RESIDE) Act, which would help local governments convert abandoned or vacant properties into attainable housing (defined as 120% area median income or less). Funds may be used for construction, rehabilitation, demolition or health hazard remediation of abandoned or vacant properties. This provision was included in both the ROAD to Housing Act and the Housing for the 21st Century Act.
• Introduction of 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. These provisions were included in the ROAD to Housing Act previously advanced in the U.S. Senate.
• Rural Housing Reforms, including decoupling rental assistance from expiring U.S. Department of Agriculture Section 515 mortgages. In other words, residents would maintain eligibility for housing assistance even as original USDA loan terms expire, ensuring continued support for low-income rural communities. The proposal aligns with the Rural Housing Service Reform Act (S. 2160), which is supported by NACo. The bill also directs USDA and HUD to conduct joint environmental reviews for housing projects receiving funding from both agencies. These provisions were included in the ROAD to Housing Act previously advanced in the U.S. Senate. 

The bill is expected to be considered on the Senate floor in the coming week. Assuming floor passage, the House will then consider the bill as passed by the Senate or request a conference to resolve outstanding differences.