In today’s podcast, I discuss the passage on Monday of the U.S Housing Policy Act.
For additional information, here is Kevin Erdmann’s take on the bill.
Here is a New York Times article on the topic from last week.
Here is a slightly revised transcript of the episode.
Welcome to the Fair Deal Democrats Podcast, I’m your host Josh Kilroy. Today, we’re going to discuss an extraordinary piece of legislation that just passed the U.S. House of Representatives this week, the Housing for the 21st Century Act. This bill passed on Monday, February 9th, 2026, with remarkable bipartisan support: 390 votes in favor and only 9 against. In a time of deep political division, this overwhelming support tells us something important, housing affordability has become a crisis that transcends party lines, and Congress is finally taking meaningful action.
This is long-overdue federal leadership that mirrors the bold reforms we’ve seen at the state level, particularly in California, which has been pioneering innovative housing solutions for the past several years.
Before we dive into the specifics of the bill, let’s understand why this legislation is so critically important. America is facing a severe housing shortage and affordability crisis that threatens the very fabric of our communities. Across the country, from major cities to smaller towns, people are struggling to find affordable places to live. Families are being priced out of neighborhoods. Young people can’t afford their first homes. Essential workers - teachers, nurses, firefighters - can’t afford to live in the communities they serve. Renters are spending increasingly large portions of their income on housing, often exceeding the recommended 30% threshold.
This isn’t just an economic issue, it’s a quality of life crisis that affects health, education, family stability, and economic opportunity. The shortage has been decades in the making, created by restrictive zoning, outdated federal programs, and regulatory barriers that make it expensive and time-consuming to build housing. The sponsors of this bill, Representative French Hill, a Republican from Arkansas who chairs the House Financial Services Committee, and Representative Maxine Waters, a Democrat from California who serves as the ranking member, recognized that solving this crisis required bipartisan cooperation and comprehensive reform.
Importantly, this federal legislation follows a model that’s already been proven effective at the state level, particularly in California, which has led the nation in housing reform.
The Housing for the 21st Century Act takes a smart, evidence-based, two-pronged approach to addressing the housing crisis. First, it aims to dramatically boost housing supply by removing unnecessary regulatory barriers and red tape that make it expensive and time-consuming to build new housing. Second, it modernizes federal housing programs that haven’t been substantially updated in decades. The underlying philosophy is straightforward and correct: we need more housing, we need it faster, and we need it to be more affordable.
This approach is grounded in basic economics - when supply is constrained and demand is high, prices rise. By removing barriers to construction and streamlining approval processes, this bill will unleash housing production across the country. This is exactly the kind of bold, practical reform we need.
Let’s start with one of the bill’s most significant components - reform of the HOME Investment Partnerships Program. Now, you might be wondering, what is HOME? Created in 1990, HOME is a federal program that provides grants to states and localities to fund affordable housing activities. It’s been a cornerstone of federal housing policy for over three decades.
Here’s the problem: the program hasn’t seen major reform since its creation 35 years ago. Over time, it’s accumulated layers of bureaucratic requirements, particularly around environmental reviews. These reviews, while well-intentioned, can significantly delay housing projects—sometimes by years. This is exactly the kind of outdated regulatory burden that’s been holding back housing production nationwide.
The Housing for the 21st Century Act proposes the first substantial reform to HOME since 1990. Specifically, it would:
Limit duplicative environmental reviews - if a property has already been reviewed under one federal program, it won’t need to go through the same review again
Exempt new construction on infill lots from NEPA review - that’s the National Environmental Policy Act. Infill lots are vacant parcels within already-developed areas, where environmental impact is minimal
Exempt smaller projects of 15 units or fewer from certain reviews - recognizing that small-scale development poses less environmental risk
Exempt the acquisition of real property for affordable housing from some reviews - speeding up the process of converting existing buildings to affordable housing
The goal here is to cut down the time and cost of developing affordable housing without compromising genuine environmental protections. This mirrors reforms California enacted in 2025 with AB 130 and SB 131, which created sweeping CEQA exemptions for infill housing. California recognized that environmental review was being misused to delay housing projects for reasons unrelated to environmental protection. Governor Newsom called those reforms “a game changer,” and early results suggest California’s approach is working. The federal government is now following California’s lead, and that’s excellent news for housing production nationwide.
The second major component addresses one of the most critical barriers to housing: restrictive local zoning laws. Many communities have zoning codes that prohibit density, ban certain types of housing like duplexes or apartments, or create other barriers to new construction. These rules often date back decades and don’t reflect current housing needs. Exclusionary zoning has been a primary driver of the housing shortage.
The bill creates two innovative types of grants:
First, planning and implementation grants for regional agencies that want to update local codes. This is important because it provides financial incentives for communities to modernize their zoning without forcing them to do so. It respects local control while encouraging much-needed reform.
Second, the bill would fund what are called “pre-approved housing pattern books.” Think of these as catalogs of housing designs that have already cleared regulatory hurdles. Local governments could choose designs from these pattern books, dramatically speeding up the permitting process. Instead of reviewing every project from scratch, communities could fast-track projects using these pre-approved designs.
This approach is particularly clever because it reduces both time and uncertainty for developers, making housing projects more financially viable. It’s also similar to strategies California has been implementing. California’s 2025 legislation (SB 79) allowed by-right development near transit stops, and numerous bills have streamlined permitting processes. California has also created standardized application forms and limited the number of hearings local governments can hold on housing projects. The principle is the same: reduce unnecessary delays and make it easier to build the housing we desperately need.
Now let’s talk about manufactured housing - often called mobile homes, though that term is outdated. Manufactured housing represents one of the largest sources of affordable, unsubsidized housing in America. These are homes built in factories and transported to sites, which can be significantly less expensive than traditional construction. For millions of Americans, manufactured housing offers a path to homeownership that would otherwise be out of reach.
However, manufactured housing has faced significant and often nonsensical regulatory challenges. Currently, there’s a rule requiring these homes to have a permanent chassis—essentially, they must be built on a frame that can be moved, even if they’ll never actually be relocated. This requirement adds substantial cost without providing any real benefit for most manufactured homes. It’s exactly the kind of outdated regulation that drives up housing costs unnecessarily.
The Housing for the 21st Century Act would rightly revoke this permanent chassis rule, reducing costs. Additionally, it would establish the Department of Housing and Urban Development - HUD - as the chief federal regulator of manufactured housing construction and safety standards. Right now, regulatory authority is somewhat fragmented, creating confusion and inefficiency. Consolidating this authority under HUD should streamline the approval process and create more consistent, sensible standards.
By making manufactured housing easier and cheaper to produce, this bill opens up an important avenue for affordable homeownership. This is smart policy that recognizes we need diverse housing options at different price points to meet America’s needs.
The final major provision I want to discuss involves leveraging private sector investment - a smart approach to expanding housing production without requiring massive new government spending. Currently, banks face caps on their public welfare investments - essentially, limits on how much they can invest in community development projects. The bill proposes lifting these caps, which could unlock billions of dollars in additional private sector investment.
This is particularly important for the Low-Income Housing Tax Credit program, which is the federal government’s primary tool for incentivizing private development of affordable rental housing. By allowing banks to invest more, the bill could significantly expand the financing available for affordable housing projects. This is fiscally responsible policy that multiplies the impact of every federal dollar by catalyzing private investment. It’s the kind of innovative approach we should be pursuing more broadly in housing policy.
So where does the bill go from here? It now moves to the Senate. Interestingly, the Senate has already passed a similar bill called the ROAD to Housing Act back in October. Over the coming weeks, both chambers will likely work to reconcile these two bills into a single piece of legislation that can be sent to President Trump’s desk for signature.
One notable element that’s not included in the current House bill is President Trump’s proposal to restrict institutional investors - large companies and investment firms - from acquiring single-family homes. This has been a contentious issue, with some arguing that corporate buyers drive up prices and compete with families for homes.
The Housing for the 21st Century Act represents a significant, bipartisan breakthrough in addressing America’s housing crisis. This is the kind of bold, practical reform we’ve needed for decades. By reforming outdated programs, reducing regulatory barriers, modernizing manufactured housing rules, and unlocking private investment, the bill takes a comprehensive, evidence-based approach to increasing housing supply and improving affordability.
What makes this legislation particularly exciting is that it’s following a proven model. California has been leading the way with similar reforms—streamlining environmental review, limiting excessive hearings, creating by-right development near transit, and removing barriers to housing production. California’s 2025 CEQA reforms under AB 130 and SB 131, which Governor Newsom called “game changing,” demonstrate that these approaches work. The federal government is now applying these lessons nationwide, which is exactly what we need.
Will this solve the entire housing crisis overnight? No. But it represents a fundamental shift in how we think about housing policy—moving from a mindset of restriction and delay to one of abundance and action. The overwhelming bipartisan support suggests a genuine recognition that we must build more housing, and we must do it faster. This legislation gives us the tools to do exactly that.
