After a brief delay, the 21st Century ROAD to Housing Act has become law. The bicameral, bipartisan bill passed the House 358-32 and the Senate 85-5 but has been sitting in the Oval Office since the start of the month. However, the President refused to sign or veto the legislation. As such, as of July 10th, the legislation passed into law without the President’s signature.
This final version, the fifth iteration of the package, follows a year-long effort by Senate Banking and House Financial Services leadership to craft a comprehensive housing bill. (See bill text and section-by-section summary)
This landmark legislation includes dozens of policies across the housing market, but there are a few sections that are particularly important for affordable housing. The biggest success of this legislation is its increase of the public welfare investment (PWI) cap from 15 to 20 percent, effective immediately. This change will meaningfully increase bank investment in affordable housing at a time where that investment has never been more needed. This section also requires the Comptroller of the Currency and the Federal Reserve Board of Governors to submit a report to Congress on the use of PWIs. (See Sec. 203 – the Community Investment and Act)
Lifting the PWI cap from 15 to 20 percent will expand private capital available for affordable housing by increasing banks’ capacity to invest in the Housing Credit. The Affordable Housing Tax Credit Coalition (AHTCC), Affordable Housing Investors Council and National Association of Affordable Housing Lenders recently surveyed 22 banks, representing more than $14 billion in 2024 Housing Credit investments. The survey found that over 42 percent of the represented investments ($6.1 billion) came from banks approaching the current 15 percent PWI cap. Expanding banks’ capacity to invest in the Housing Credit could help sustain demand for the additional credits made available through the program’s historic expansion in the One Big, Beautiful Bill Act (H.R. 1) earlier this year. Read more in AHTCC’s fact sheet outlining how the PWI cap increase will impact affordable housing production.
This legislation also streamlines National Environmental Policy Act (NEPA) reviews for small and infill housing projects. (See Sec. 206 – Unlocking Housing Supply Through Streamlined and Modernized Reviews Act)
Another key section of this legislation bans institutional investors from buying single family homes. Previous drafts of this section applied this standard to all housing development, including built-to-rent (BTR) properties and would have harmed some Housing Credit properties. Many housing organizations, including TAAHP, insisted on the inclusion of an exemption for BTR. This proposed change was also supported by a bipartisan group of 76 Representatives who signed onto a letter urging House leaders to revise this language. These concerns lead to the final draft of the bill including these critical exemptions. (See Sec. 1001, Homes Are For People, Not Corporations)
The final notable section of the 21st Century ROAD to Housing Act is its requirement that HUD conduct an evaluation of Build America, Buy America (BABA). TAAHP has long supported efforts to streamline and simplify BABA requirements, which have adversely impacted affordable housing development. There was also an industry proposal recommending changes to current BABA implementation in order to reduce uncertainty and administrative burdens and a letter urging Congress to incorporate provisions from the HOME Reform Act (H.R.5798) into this bill. While those proposals did not make their way through congress, this section is a strong next step. When the report is complete, it keeps the door open to future change. In fact, there was new legislation (Build Housing Affordably Act) introduced last week by Reps. Flood (R-NE) and Goodlander (D-NH) to streamline the BABA process for housing, as well as language addressing BABA in the House Transportation, Housing and Urban Development (THUD) appropriations bill. (See Sec. 501 – HOME Investment Partnerships Reauthorization and Reform Act)
“The 21st Century ROAD to Housing Act would significantly expand our capacity to finance affordable homes,” said TAAHP President Meghan Cano. “The bill’s PWI cap increase will help banks better leverage the Housing Credit and increase investments in affordable housing in Texas. Importantly, the legislation directs HUD to evaluate BABA as it relates to HOME funds and issue updated guidance — a critical step toward addressing costly compliance burdens, development delays, and administrative hurdles. Recognizing that many housing materials aren’t produced domestically and that residential construction differs from traditional infrastructure will help protect and accelerate housing supply when it’s needed most.”
“TAAHP commends Congress for passing the 21st Century ROAD to Housing Act — an important step toward expanding quality, safe, affordable housing and modernizing key programs,” said TAAHP Executive Director Roger Arriaga. “This historic legislation will help channel affordable investment through the Housing Tax Credit, which was recently expanded and remains the primary driver of affordable housing production in the U.S.”