By: Amy Peltier, Coalition & Advocacy Director
Federal Housing in Focus: A Three-Part Series
Part 1: The 21st Century ROAD to Housing Act: Why Implementation Matters
Housing policy is often shaped by headlines about rising rents, housing shortages, and affordability challenges. Less visible—but just as critical—are the federal laws that influence how affordable housing is financed, preserved, and expanded across the country.
This summer, Congress enacted the 21st Century ROAD to Housing Act (21st Century ROAD), the most comprehensive federal housing legislation in decades. Rather than creating a single new housing program, the law modernizes dozens of existing federal housing programs, removes barriers to housing production, preserves affordable homes, and updates policies affecting renters, homeowners, public housing, disaster recovery, and rural communities.
Because the legislation is broad and implementation will unfold over the coming months and years, we’re launching a blog series and newsletter updates to explore what federal housing laws mean for affordable housing and stakeholders advancing this work in Connecticut.
In this first edition, we’ll cover an overview of 21st Century ROAD— some relevant provisions, what it accomplishes, and why implementation matters. Next installment will offer a closer look at Build America, Buy America (BABA)—why the law has become a significant challenge for affordable housing development and how 21st Century ROAD didn’t go far enough to address BABA’s unintended negative consequences on our national housing supply
While 21st Century ROAD represents an important bipartisan step forward, passing the legislation is only the beginning. Many provisions require new federal regulations, agency guidance, and working with the Office of Management and Budget (OMB) and their attorneys to clear and publish documents. Most significantly, Congressional appropriations must be made before full benefits of the Act can be realized. Any actual budget would likely not be seen until at least April 2027, depending on how mid-term elections play out this November. 21st Century ROAD’s primary focus is increasing housing supply and easing affordability. Sustained funding and intentional localized planning changes will be essential to creating meaningful progress.
Why is it considered the most significant federal housing package in decades? Our current housing and affordability crisis didn’t happen overnight. Nor did 21st Century ROAD come together quickly. Prior to the Senate passing the ROAD to Housing Act in March 2026 and the House having previously passed its 21st Century Housing Act, both proposals ping ponged through Congressional Chambers and rounds of debate and negotiation for almost 10 months. The legislation was ultimately combined into an amended package and renamed the 21st Century ROAD to Housing Act. In spring 2026, the bill moved through the appropriate approvals, the House agreed to some final amendments in May, and the final version of the bill went into effect on July 11, 2026. Even with both Chambers aligned, unexpected challenges arose. Attempts to stall the bill were made as a negotiating tactic by the current administration who were and continue to propose passing sweeping voter registration limitations before supporting any other legislation. In fact, the president refused to sign the bill. It became law through a rarely used constitutional provision: when a president doesn’t sign or veto a bill within 10 days of receiving it while Congress is in session, the bill automatically becomes law. It is highly uncommon for legislation to take effect this way.
21st Century ROAD combines over 60 pieces of legislation, made by both Democratic and Republican lawmakers, that aim to create supply, demand affordability and increase access and stability to a variety of housing opportunities. There are 124 implementation actions prescribed in the Act. Almost half of the 124 implementing actions are statutory requirements, meaning they are established in federal law, but that does not necessarily mean every action is immediately or independently enforceable. Many require further agency action—such as rulemaking, guidance, or implementation decisions—to give the statutory direction practical effect. Most of these actions are due within the first year of implementation.
Only 4 divisions within the Department of Housing and Urban Development (HUD) are responsible for 88 or 71% of the implementing actions. Collectively those 4 Divisions have lost, on average, 30% of their staff in just the last year1. 60% of the implementing actions involve report and notice creation that will require intense data collection and analysis from HUD’s capacity-limited team. The 21st Century ROAD also adds nine rulemaking responsibilities to HUD’s agenda, on top of the 54 proposed or final rules already on the agency’s lineup for the year. This adds another layer of work and could affect the pace at which states receive the guidance and regulations needed to implement the law.
Finally, 11 of the 124 actions are dependent on appropriations. While the legislation may authorize or envision these activities, they cannot move forward in practice without Congress providing the necessary funding. Until that funding is appropriated, these provisions remain more of a policy direction than an operational program. Six new programs are established, with a quarter of them due to kick off in Year 1 of implementation. For example, notice of the new Community Development Block Grant Disaster Relief (CDBG-DR) formula methodology in section 504 of the bill was due to be issued August 10, 2026. With additional notices due 60, 90 and 120 days after enactment, and many other proposals, bans and disclosures rolling out by January 2027. Several other programs and actions that HUD is responsible for will sunset entirely after only a few years. Without additional funding, HUD may need to extract support and redirect staff from its current bailiwick of programming, or they will be starting at a disadvantage to implement the different studies and regulations that the law sets out to produce.
Within the first 2 years of implementation, HUD must release notice of public comment and form a Task Force that will be responsible for identifying best practices in zoning and land use policies that will assist states and local governments in pro-supply development. The statute includes several policies the Task Force must address: minimizing lot sizes, increasing by right uses, streamlining and directly connecting permitting and infrastructure spending, updating building code regulations, parking mandates and even a model zoning appeals process that mirrors CT’s own Affordable Housing Appeals process. There is also a mandate to provide guidelines for production of adequate housing to meet the needs of residents at every income level within both state and local zoning frameworks and preventing displacement in low-income communities.
Why the ROAD Act Matters? “This is a bill that changes rules and regulations. It will unlock funding, but most of the provisions are only as good as the implementation,” Shaun Donovan, the CEO of Enterprise Community Partners, said.2
For housing advocates, the next phase is ensuring these reforms are implemented efficiently, equitably, and in ways that increase and expand housing opportunities for all, especially those with the greatest needs. For successful federal housing reform to happen quickly, local governments will need to streamline land use and the private sector will need to use new financing incentives to increase housing supply and unlock additional production. The Act sets up a need for trickle down cooperation at almost every level of state and municipal government. Connecticut is already asking municipalities to plan for housing growth, making the timing of the federal Housing Supply Framework particularly relevant
The very next chapter of 21st Century ROAD in CT lays with our city leaders and local planners in putting these tools to work. Benchmarks to meet the requirements of CT Housing Growth Plans mandated by HB 8002 are beginning to roll out. There is an upcoming milestone in December 2026 for the Office of Policy and Management (OPM) to publicize its statewide and regional housing growth targets. It would be wise for local leaders to position themselves and their Housing Growth Plans in alignment with the new federal best practices in order to benefit right away when grant opportunities and Appropriations are made available. Municipal leaders should expect that encouragement to ease local zoning policies without the pre-emptive teeth of accountability will be challenging in CT where exclusionary zoning has allowed for 97% of developable land to be zoned for single family homes as of right.3 However, municipal governments adopting and amending land use policies that allow more development is the essential first step to realizing ROAD results.
CT is not unique. Exclusionary zoning and land use laws are leading causes of our limited housing supply in communities across the country. While 21st Century ROAD includes incentives to encourage local communities to support more housing development, it does not mandate these changes or establish strong accountability for adopting them. Local land use, zoning restrictions and NIMBYism may therefore continue to create barriers to the law’s proposed housing supply and development provisions.
At the same time, while communities are not required to change their policies, the incentives may give municipalities a compelling financial reason to participate. The 21st Century ROAD offers tools and cost-saving strategies that could help CT communities reduce the cost of local government, potentially freeing up resources and easing pressure on property taxes that support essential education, social, and public services. Additionally, the Act sets up a $200 million annual Housing Innovation Fund that will award competitive grants ranging from $250,000 to $10 million to at least 25 communities nationwide, who can show that they have increased their “attainable” housing. By-right multifamily uses, accessory dwelling unit (ADU) and parking reforms among other polices are eligible initiatives for the Fund to consider.
The Goal? Create More Supply
One substantive planning tool 21st Century ROAD discusses to increase supply may save smaller towns and housing planners in CT tens of thousands of dollars. As part of the standard-setting anticipated from the Task Force, experts believe that encouraging the use of pre-approved building design standards or pattern books, could make it easier to identify housing models that are well-suited to particular localities but may be difficult for the local market to provide on its own. Connecticut policymakers have already explored preapproved plans and pattern books as a way to reduce design and approval costs, meaning this federal emphasis could reinforce an approach already under discussion here. Pre-approved plans act as an incentive; they bring down the cost for the developer, drastically reduce approval processes, engineering and architectural reviews and approvals, and save funds usually spent on consultants who pull plans together. Additionally, pattern books make it easier for housing projects to connect pre-approval of a “product” with other pro-development building models, like as-of-right building, incorporating environmental efficiency or including designs that are allowable under local land-use and building code regulations. Municipal planning becomes streamlined and staff have more time to implement plans of action rather than spending work hours reviewing & amending projects. Preapproved plans also reduce builders’ overall development costs by about 1%-2%. This amounts to $5,000-$10,000 on a $500,000 single-family home and a multiple of that amount for a small multi-unit building4. Under the new law, if a local government is following guidance to ease building restrictions and authorize development, in return they can apply for federal funding to address their unique infrastructure needs, like a new sewage treatment plant or transit-oriented development infrastructure.
Relaxing of certain regulations may take longer than others. Several provisions of 21st Century ROAD share guidelines for rolling back National Environmental Policy Act (NEPA) review requirements, which can often make infill and smaller developments more difficult and time consuming to complete. The new legislation allows HUD to re-classify qualifying housing-related development and designate “special projects”, with the goal of better coordinating and clarifying which projects may qualify for exemptions or streamlined environmental review. In CT, local planners can leverage NEPA exemptions for rehabilitation and adaptive reuse projects both of which are encouraged by Historic Rehabilitation Tax Credit Programs5 and other zoning reforms for commercial and institutional conversions. Incentives like Groton’s Historic/Institutional Adaptive Reuse regulation6 grant flexibility in moving functionally obsolete buildings to be re-imagined as neighborhood-compatible housing and is a model worth replicating.
However, new developments must keep in mind that a federal statute establishes the legal authority and direction; it does not by itself change how federal agencies administer their programs. HUD must still translate the new statutory authority into regulations, guidance, and implementation procedures. While reducing NEPA’s procedural requirements and expanding its categorical exclusions may shorten timelines and speed up permitting processes, coordination with the Environmental Protection Agency (EPA) or other federal agencies will still be required in many cases. For example, projects that may have impact on disrupting local groundwater, stormwater construction permits are necessary or soil remediation is required, additional federal and state mandates may be triggered . Despite the new statutory authority 21st Century ROAD provides, , it will likely take time for HUD to develop and provide states with a useful implementation framework on adjusted NEPA guidance.
Proposed changes to CDBG and HOME could strengthen local incentives for housing development. Community Development Block Grants (CDBG) and the HOME (HOME) Investment Partnerships Program, are block grant funds that make up some of the largest federal investments toward housing in state and local governments for low and very low-income households.
The Reforming HOME Program/Section 501 reauthorizes and modernizes the program by replacing the per-unit funding cap with new limits that accommodate construction costs that differentiate by location and account for inflation, raising the income limit for families receiving HOME homeownership assistance to 100% of area median income, and repealing the 24-month deadline for obligating HOME funds. The new regulation allows jurisdictions to maintain rather than forfeit money they could not commit to a particular housing development in time. The provision also exempts certain small- and medium-sized projects from certain labor rules and allows jurisdictions that do not receive CDBG funds to use HOME funding for infrastructure that supports subsidized housing. For CDBG, the statutory cap on allocations being used for new home construction is expanded, allowing municipalities to use up to 20% for new building. There will also be bonus CDBG awards for localities increasing housing supply while reducing the awards of those who do not show housing growth (with some exemptions). Taken together, these changes solve many of the pain points for jurisdictions seeking to use their HOME & CDBG funds to improve housing affordability.7
In Connecticut, these changes could affect resources municipalities already use for housing and infrastructure. Recent CDBG Small Cities awards in communities such as Guilford and Ledyard have supported infrastructure tied directly to new affordable housing. Greater flexibility around housing construction could expand what Connecticut communities are able to accomplish with these funds.
Manufactured Housing/Section 301: Prior to ROAD’s passage, federal law mandated manufactured homes be built on a chassis. A Latin term referring to a box or case that held smaller pieces, it was during the rise of automobile production that the term chassis was used to refer to the foundational framing, or structural skeleton of a car. For decades regulations have dictated that homes built in factories, that often come together quickly and more affordably than on site, are required to be built on a permanent chassis, or box with wheels, that allows mobility. The previous mandate increased cost and created zoning law compliance challenges. 21st Century ROAD effectively removes the chassis requirement and an additional financing provision for manufactured homes, becoming a major win for these structures , one of the fastest growing methods nationally of addressing the housing supply shortage, despite a previous lack of strict compliance with HUD or other inspection code. HUD must also now establish minimum energy efficiency standards for manufactured housing.
Removal of the chassis requirement also removes thousands of dollars from the cost of each manufactured or modular home built and opens up an opportunity to make broader reform around manufactured housing and the opportunities it provides for particularly affordable homes. In fact, there has already been publication of a proposed public rule that allows upper level additions to manufactured housing, lacking a chassis, to be transported. The rule suggests options for manufactured home design that allow for greater design flexibility, creating up to four multistory/multifamily units per building while reducing construction costs. For states, including here in CT, new certification will be required certifying equal treatment of manufactured homes’ financing, title, insurance and taxation. In Section 303, the limits on Federal Housing Administration (FHA) loans for manufactured homes is increased and HUD is directed to study the cost-effectiveness of off-site building practices.
Modular homes, highly customizable housing also constructed in factories, often in just a matter of a few months, already must conform to local and state building code and be structurally approved by an inspection. In Section 302, the “Modular Housing Production Act”, HUD is directed to review construction financing and initiate rulemaking to establish alternative financing structures.
In section 304, the “Preservation and Reinvestment Initiative for Community Enhancement” (PRICE) provision, at this time unfunded but authorized for seven years, recommends making grants to manufactured housing communities and municipalities to weatherize and make accessible and safe manufactured homes that are considered long term affordable and are resident owned. PRICE further expands loan limits and construction financing for Federal Housing Administration (FHA) insured manufactured and off-site homebuilding, components that will significantly reduce barriers to offsite housing. Before 21st Century ROAD, residents in manufactured housing communities were regularly excluded from federal public investment due to the unique private land and lease structure of their financing and tax base differences8. CT already gives residents of many manufactured home communities an opportunity to organize and purchase their park when it is sold, with state agencies able to support financing. PRICE could provide an additional federal resource for preservation, rehabilitation and resident ownership in some CT manufactured home communities. PRICE also now offers an opportunity for mission driven financing to play a critical role in federal investments by lending to preserve affordable housing, address infrastructure needs that support manufactured housing and expand homeownership. In fact, nationally, Community Development Financial Institutions (CDFIs) were influential advocates in ensuring PRICE was included in the final version of 21st Century ROAD, an example of the impact advocacy can have. Connecticut’s CDFIs have an important opportunity to build on that advocacy and position themselves to help bring these resources to communities across the state.
As stated above, 21st Century ROAD is currently without appropriations and all this development won’t be cheap. One provision, the Community Investment and Prosperity Act/Section 203 stands out for boosting private funding efforts. It increases the rate by which banks can use their capital and surplus on public welfare investments (PWI) from 15 to 20%. The PWI cap sets limits on how banks can invest in projects that support low and middle income communities and families. Developments utilizing this provision will see a low-effort, high-impact action that would unlock billions more in equity investments in Low Income Housing Tax Credit (LIHTC) developments, particularly as it also complements the LIHTC provision from the One Big Beautiful Bill Act (OBBB) passed in 2025. The OBBB LIHTC expansion is projected to finance over 1.2 million new affordable rental units over the next decade and meeting that production will require additional tax credit investment and investor capital each year. The Affordable Housing Tax Credit Coalition found in a survey that over 42% of LIHTC investments come from banks nearing their 15% cap9 and that lifting it could allow for billions of dollars more in investment for LIHTC. Unfortunately, a new proposed rule to the Community Reinvestment Act10, a federal law that requires banks to meet credit needs of low and moderate income neighborhoods, if enacted, would severely reduce any impact the newly expanded PWI cap could have. Banks’ motivation to actually use the credit is likely to be reduced due to the proposed narrowing of the pool of banks that make these investments thus removing their mandatory examination of community development activities. Large and medium-size CT banks, CDFIs and other affordable housing investors can contribute comments to the rule, voicing concern about the loss of lending and investment in communities that need it most.
A briefing on several other provisions dedicated to Preserving & Stabilizing Existing Affordable Housing:
- While investor purchases of single-family homes have become a national policy concern, the scale and nature of the issue varies considerably by market and the trend appears to be declining11. The 21st Century ROAD prohibits firms that already own 350 or more homes from purchasing additional single-family homes. That threshold may have limited relevance in Connecticut, where investor ownership is far more decentralized. Most investor-owned single-family homes in CT are held by landlords with 10 or fewer properties, rather than large institutional investors. While institutional investment is present in Connecticut, it is not the dominant model of single-family home ownership—and policymakers should be mindful of that distinction when considering how the federal provision will affect our state.
- For the lowest income earners, a pilot program & several competitive grants are proposed to expand municipal planning efforts associated with rehabilitation of older homes in need of preservation, weatherization and energy efficiency. Section 202/the Whole Homes Repair Act codifies the yet unfunded 5 year $30 million pilot grant program for homeowners with incomes of up to 80% AMI. The section also applies to small, qualifying landlords who can receive assistance through forgivable loans and meet more stringent compliance rules than those applied to homeowners. The grants could be administered by local governments, tribal nations or nonprofits.
- Section 405, incorporates the Choice in Affordable Housing Act and addresses the need to reform the Housing Choice Voucher (HCV) inspection process. Under this provision, if a unit is or has received assistance from another federal program such as HCV, LIHTC, HOME or Rural housing Service programs and has successfully passed an inspection within the last 12 months, that inspection meets PHA inspection guidelines allowing a tenant to move in with HCV renal assistance without administrative delay. Additionally, if a landlord renting to a tenant with rental assistance is brand new to the system, that landlord can now have their unit inspected and approved even before a HCV lease agreement is finalized. If the housing is remote, the law now also accepts video inspections.
- Section 503, titled Incentivizing Local Solutions to Homelessness, permits upon request and in agreement with local Continuum of Care Programs (CoCs), a waiver to the 60% spending cap on emergency shelter beds and street outreach (until 2030) that Emergency Solutions Grants traditionally have.
What Happens Next? Looking Ahead and Opportunities for Advocacy
Passing the 21st Century ROAD to Housing Act is an important step—but implementation will determine how much of its promise becomes reality. Congress must provide sufficient funding not only to authorize programs, but also to staff and administer them effectively. Federal agencies must meet implementation deadlines and prioritize efforts that expand housing supply and increase affordability, particularly programs with the most immediate needs or those set to expire first.
There will also be important opportunities for advocacy. Advocates can participate in the rulemaking and administrative processes that will shape how these new policies are implemented, while working with lawmakers to secure adequate, sustained funding. Local governments will need to prepare to assess and, where necessary, change local policies and zoning to take advantage of new federal funding and incentives.
But implementation is not simply about funding and rulemaking. As the federal government takes a more active role in supporting housing production, the requirements attached to that funding will matter, too. One of the most consequential issues is the implementation of the Build America, Buy America Act (BABA). While intended to strengthen domestic manufacturing, current BABA requirements have created significant challenges for affordable housing development. In Part 2, we’ll explore why housing developers, advocates, and national organizations are calling for changes to ensure these requirements support—not slow—the production of affordable homes.