Layla Zulfa
Nearly three months after the landmark 21st Century ROAD to Housing Act was signed into law, the housing industry is not resting on its laurels. Instead, leaders within the sector are already actively collaborating to develop a successor – a "ROAD 2.0" bill – designed to build upon the initial legislation’s successes and maintain the crucial momentum for addressing the nation’s persistent housing challenges. This proactive approach signals a deep commitment to sustained progress in an area critical to economic stability and individual well-being.
Behind the scenes, the groundwork for this next phase of housing policy may already be underway on Capitol Hill. A comprehensive 95-page document, originating from the 40-member, bipartisan Build America Caucus, offers an early glimpse into the policy proposals that could shape future housing legislation. This extensive document delves into a broad spectrum of interconnected issues, including housing, healthcare, energy, innovation, and transportation, with a significant focus on actionable strategies for the housing sector.
First shared by Politico, the document’s housing-centric proposals are strategically organized around three core pillars: expanding the available sites for housing development, reducing the multifaceted costs and delays associated with building new homes, and enhancing access to capital for housing projects. While many of these proposed solutions would ultimately be implemented at the local level, the document meticulously outlines how the federal government can strategically incentivize state and local governments to adopt and enact these pro-housing reforms. This federal-local partnership approach is seen as essential for overcoming regional variations and ensuring widespread adoption of effective housing policies.
The genesis of this "ROAD 2.0" initiative can be traced back to the discussions and legislative efforts surrounding the original 21st Century ROAD to Housing Act. Many of the ideas now being considered echo provisions that were debated but ultimately omitted from the final version of the first bill. Conversely, other proposals represent entirely new avenues for federal intervention and support, aiming to break new ground in addressing the complex web of factors contributing to the housing affordability crisis.
Opening Up More Sites for Housing Development
A central theme emerging from the "ROAD 2.0" discussions is the imperative to "Expand where housing can be built." This section of the agenda is dedicated to identifying and dismantling local constraints that have historically limited where developers and builders can construct much-needed new housing. The proposed agenda outlines three specific policy avenues aimed at unlocking more sites for residential development, each coupled with federal actions designed to encourage local governments to embrace these changes.
Right to Build Zones: Streamlining Approvals for New Construction
A significant impediment to housing development in many communities stems from outdated zoning ordinances and the potent influence of "Not In My Backyard" (NIMBY) groups. These factors have often resulted in a failure to build enough homes to accommodate population growth, leading to increased housing costs and reduced accessibility. To directly combat this problem, the "ROAD 2.0" agenda advocates for the establishment of "Right to Build Zones" within municipalities. These designated areas would grant housing projects automatic, by-right approval, provided they adhere to a standardized set of zoning and permitting regulations.
The rationale behind this proposal is clear: by simplifying and standardizing the approval process, the agenda aims to significantly cut down on the delays and associated costs that inflate the price of housing. To incentivize local governments to adopt this approach, the federal government would offer a direct financial incentive. This would take the form of a fixed payment for each new home completed within these zones, specifically for units built above the community’s recent historical construction levels. While the precise amount of these payments remains to be determined, the proposal suggests they would be roughly equivalent to the impact fees that developers currently pay to municipalities. This would help offset the costs borne by local governments for essential public services, such as infrastructure upgrades and school expansions, which are often necessitated by new residential development.
Transit-Oriented Development: Maximizing Housing Potential Near Public Transportation
The agenda also highlights the underutilization of land in proximity to existing public transit infrastructure, such as train stations and bus lines. These transit-oriented development (TOD) sites are often ideally suited for new housing due to their accessibility and potential to reduce reliance on personal vehicles. To encourage municipalities to permit more housing development in these strategic locations, the "ROAD 2.0" document proposes directing a greater share of federal transit grants and financing opportunities to communities that actively adopt pro-housing measures in areas around transit hubs.
This concept is not entirely new to federal housing policy. The "Build More Housing Near Transit Act of 2025" previously proposed similar incentives, aiming to encourage local adoption of by-right approval and other zoning reforms specifically for multifamily housing near transit corridors. While that bill was not ultimately included in the final version of the 21st Century ROAD to Housing Act, its underlying principles are now being revisited and incorporated into the broader "ROAD 2.0" strategy, demonstrating a continued recognition of the importance of TOD in addressing housing supply.
Leveraging Federal Property for Housing Development
A substantial, yet often overlooked, resource for increasing housing supply lies within the vast holdings of underutilized federal real estate. Agencies such as the General Services Administration (GSA) and the U.S. Postal Service own millions of square feet of property across the nation that could be repurposed for housing development. The "ROAD 2.0" agenda proposes a housing-focused mandate that would direct these federal agencies to open these underused sites for residential construction. Such a directive could potentially lead to the creation of hundreds of thousands of new homes nationwide, while simultaneously generating valuable revenue for the government. This strategy taps into existing federal assets, offering a cost-effective way to expand housing stock without requiring significant new land acquisition.
Lowering Material and Regulatory Costs
The escalating cost of construction materials and the complexities of regulatory frameworks represent significant barriers to building more attainable housing. The report accompanying the "ROAD 2.0" agenda points to a stark increase in the cost of material inputs for residential construction, which has jumped by an estimated 42% over the last five years. This represents a dramatic acceleration compared to the 7% growth observed in the preceding five-year period. This inflationary pressure, exacerbated by supply chain disruptions and certain federal policies, necessitates targeted interventions to reduce these costs.
Targeted Tariff Relief: Easing the Burden on Construction Materials
In addition to broader inflationary pressures and supply chain shocks, the policy agenda identifies specific federal policies that have amplified cost pressures within the residential construction sector. While not explicitly detailed in the provided excerpt, the implication is that certain tariffs or trade policies may be contributing to higher material costs. The "ROAD 2.0" agenda proposes a two-pronged approach to address this: exempting affordable housing projects from "Build America, Buy America" requirements, which can sometimes increase the cost of domestically sourced materials, and providing targeted tariff relief specifically for residential construction materials. This dual strategy aims to directly reduce the cost of key components needed for building new homes.
Modernizing Building Codes: Embracing Efficiency and Innovation
The existing landscape of building codes is characterized by fragmentation and an overreliance on prescriptive standards. National model building codes are typically updated every three years, but many local jurisdictions lack the capacity or resources to thoroughly evaluate and adopt these newer editions. This results in a patchwork of differing codes across various jurisdictions, which not only drives up costs for builders who must navigate complex and varied requirements but also complicates their operations. Furthermore, overly prescriptive codes can hinder the adoption of innovative, cost-saving materials and construction methods, even when these alternatives meet equivalent safety standards.
To address this inefficiency, the "ROAD 2.0" document suggests that the federal government can play a crucial role in assisting local governments in keeping their building codes current. This includes supporting the adoption of more performance-based standards, which focus on the desired outcome (e.g., safety, energy efficiency) rather than dictating specific methods or materials. By encouraging performance-based codes, the aim is to foster innovation and reduce construction costs without compromising safety.
Targeting Barriers to Transporting Mass Timber
There is a growing interest in the use of mass timber as a sustainable and efficient building material for mid-sized multifamily housing. Mass timber is lighter than traditional concrete and steel, and its use can potentially reduce construction timelines by approximately 25%. However, the transportation of oversized mass timber components across state and local jurisdictions is frequently hampered by inconsistent regulations governing oversized loads. This regulatory friction can significantly slow down projects and add to costs.
The "ROAD 2.0" agenda proposes utilizing federal incentives to encourage states to streamline and coordinate their approval processes for transporting oversized mass timber loads. By fostering greater uniformity and efficiency in these transportation regulations, the goal is to facilitate the wider adoption of this innovative building material and its associated benefits.
Filling Financing Gaps for Housing Construction
The current economic climate, marked by tight credit conditions and elevated interest rates, has significantly impacted housing starts, with builders and developers reporting a sustained tightening of credit for over four years. Developers and homebuilders are facing a range of financing barriers, including extended processing times, restrictive underwriting standards, and a general lack of flexible financial products for projects that do not fit conventional lending models. To address these critical financing challenges, the "ROAD 2.0" agenda proposes three key strategies to improve capital access for housing development.
Creating a Federal Revolving Loan Fund
A significant financing gap exists for housing projects that are deemed too small, too complex, or too unconventional for standard underwriting, even when they are financially sound. To bridge this gap, the agenda proposes the establishment of a federal revolving loan fund. This fund would provide crucial capital for these overlooked projects, with repayments being reinvested to finance subsequent rounds of development. This model, already successfully implemented by several states and localities such as Oregon, New York, Kansas, Hawaii, Arizona, and Virginia, allows public dollars to be stretched further and provide sustained support for a diverse range of housing initiatives.
Modernizing FHA Financing for Infill Development
The Federal Housing Administration (FHA) offers construction loans that can provide more favorable terms than conventional debt. However, these FHA-backed loans are often described as too slow and administratively burdensome for many developers, particularly those focused on infill development – building within existing urban or suburban areas. To accelerate multifamily lending and make FHA financing more accessible for infill projects, the "ROAD 2.0" agenda suggests that the federal government should modernize HUD’s systems and underwriting processes. Additionally, the proposal includes implementing new categorical exclusions for infill housing to streamline environmental reviews, a common bottleneck in the development process.
Expanding Federal Financing Options for Accessory Dwelling Units (ADUs)
Accessory Dwelling Units (ADUs) are increasingly recognized as a vital strategy for increasing housing density on existing lots without requiring new land acquisition or large-scale development projects. This is particularly relevant in land-constrained states like California, where ADUs are seen as a crucial tool for adding much-needed housing units. However, many homeowners face significant financial hurdles in building ADUs due to limited financing options. Currently, most ADUs are financed by homeowners with substantial cash reserves.
To address this affordability barrier, the "ROAD 2.0" document proposes that the federal government should offer federally backed second-mortgage products specifically designed to finance ADU construction. These products would be structured to account for the future value and potential rental income of the ADU, making them a more viable financing tool. A key feature of this proposal is that it would allow borrowers to preserve their existing, potentially lower, mortgage rates on their primary residence, further reducing the financial burden of adding an ADU.
The proactive development of "ROAD 2.0" legislation, stemming from the foundational work of the 21st Century ROAD to Housing Act, underscores the urgent and ongoing commitment of housing industry leaders and bipartisan lawmakers to tackle the nation’s housing crisis. By focusing on expanding development sites, reducing construction costs, and improving access to capital, these proposed policies aim to create a more sustainable and affordable housing market for all Americans. The detailed proposals, originating from the Build America Caucus, offer a concrete roadmap for future legislative action, signaling a continued and evolving effort to innovate and deliver solutions in the critical housing sector.
