Housing affordability is a top priority for many Americans, and both chambers of Congress have advanced legislation to help potential homeowners – although it may take years for these benefits to actually materialize.
Last week, the House of Representatives passed a bipartisan bill called the Housing Act for the 21st Centurywhich aims to increase the supply of affordable housing. That sets the stage for a number of political arguments ahead. The Senate previously passed its own bipartisan legislation in October as part of a broader package before dropping it from the final bill, and is now considering the standalone bill, the AWAY to the Housing Act. Ultimately, the two chambers must agree on a final version of a housing law, which also receives support from President Donald Trump.
The legislation is aimed at providing top healthcare for Americans. More than six-in-ten adults (62%) say they are “very” concerned about the cost of housing – which trails only the cost of healthcare (71%) and the price of food and consumer goods (66%), the report said. results of a survey of more than 8,500 people, conducted in late January by the Pew Research Center.
The House legislation marks an important step forward, even if it won’t magically solve a crisis that has developed over time and will eventually be resolved the same way, said David M. Dworkin, president and CEO of the National Housing Conference, a nonprofit focused on affordable housing.
“We got into this crisis one unit at a time, and we will emerge from it the same way – one unit at a time – through a series of coordinated strategies that increase supply, reduce costs and improve access to affordable housing,” Dworkin said in a statement statement celebrating the passage of legislation.
While it may take some time for potential homeowners to benefit, here’s how the House bill addresses housing affordability.
MODERNIZES FEDERAL HOUSING AND DEVELOPMENT PROGRAMS
One of the main goals of the House legislation is to streamline the federal and local housing process so that more housing can be built faster. And one of the densest parts of the 202-page legislation is the part that focuses on modernizing local development and rural housing programs.
The legislation aims to overhaul federal housing programs to remove regulatory bottlenecks and expand funding for affordable housing. The legislation also expands how funds can be used to pay for new construction.
INCREASES ADMISSION FOR GRANT PROGRAMS
Another important goal of the House legislation is to ensure that federal grant programs reach a broader swath of the population. The legislation significantly expands the eligibility criteria for existing housing subsidies. An example of this would be adjusting the HOME Investment Partnerships Program to increase income limits to 100% of the area median household income and so that the program can support more middle-income families.
The bill also introduces new grants intended to incentivize local entities to reform their land use policies and update zoning codes. These grants refocus on potential local regulatory hurdles that have deterred investment in affordable housing.
FAST TRACKS ENVIRONMENTAL REVIEW PROCESS
The legislation refocuses on potential barriers to construction activities and streamlines the review process required by the National Environmental Policy Act (NEPA) by excluding certain housing-related activities. In concrete terms, the bill creates categorical exclusions for certain small-scale projects.
The legislation also eliminates duplicative environmental assessments, so that homes that receive approval for a federal aid program do not have to undergo a new assessment if the scope, scale and location of the project remain substantially unchanged.
MODERNIZES MANUFACTURED HOUSING STANDARDS
Finally, the bill envisions a future of more manufactured housing by once again changing some of the requirements related to this type of construction, which could address the availability of affordable housing.
One of the biggest changes this legislation brings is that it skips just four words of legislation that has been on the books for more than fifty years: It eliminates the requirement that manufactured homes be built with a permanent chassis. It also updates construction and safety standards for manufactured homes.
IMPACT ON HOME BUYERS
Although it will take some time for these changes to move through the system and benefit potential homebuyers, trade groups across various facets of the housing industry celebrated the passage of the House bill.
That said, there may be some hurdles to getting a final piece of legislation across the finish line — in part because President Trump is putting pressure on Republicans to introduce a measure that will curb purchases of single-family homes by major investors.
Still, advocates are optimistic that bipartisan support for housing affordability legislation will continue.
“Bold action to expand supply and remove barriers to homeownership has never been more urgent,” said Shannon McGahn, executive vice president and chief advocacy officer of the National Association of Realtors, in a statement statement. “This legislation takes a comprehensive approach to increasing housing production, modernizing critical federal programs, and strengthening pathways to credit and homeownership.”
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