Housing Reform: What's Inside the 21st Century ROAD to Housing Law

Officially passed into law on July 11, 2026, the 21st Century ROAD to Housing law is landmark legislation that will help communities tackle the nationwide housing affordability crisis. Key provisions of the law aim to support and incentivize planning and housing reforms that will increase supply, modernize regulations, streamline environmental reviews, and incentivize local zoning reforms. 

Here's a look at what's in the legislation and what it means for planning and our communities.

Jump to: 

General Overview

Funding Concerns 

Institutional Investor Provisions

Environmental Review Reforms

Local Control

Impact on Existing Programs

General Overview

What is this new federal housing law?

It is the bipartisan 21st Century ROAD to Housing law that aims to increase housing supply by improving a range of housing programs and reforming housing regulatory systems and financing tools. The package brings together a range of previously introduced bipartisan housing bills, including several endorsed by the American Planning Association (APA).

After extended negotiations and differing versions approved by the House and Senate, the final compromise bill aims to support local planning and zoning reforms, as well as improve building codes and opportunities for modular and manufactured housing. In addition to critical funding, the legislation also focuses on policy changes to improve the efficiency of federal programs that planners leverage to foster housing supply growth across the country.

What does this federal housing Law mean for planners?

The legislation contains a variety of program changes and incentives that will have an impact on planning. Because the law is centered on changing how housing production and finance systems work, it includes many elements aimed at planning. The package also contains incentives and support aimed at encouraging state and local planning and regulatory reforms.

Key changes include:

• Model codes for zoning and land use reform 
• Federal recognition of code innovation, including single-stair permitting guidelines.
• New tools for faster implementation, including pre-approved plans and pattern books
• Grants to support local planning capacity and innovation
• Incentives for local housing production in Community Development Block Grant (CDBG)
• Changes to federal environmental reviews for targeted housing projects
• Reforms covering modular and manufactured housing
• Pilot program for adaptive reuse and commercial-to-residential conversions
• New Opportunity Zone incentives
• Support for preserving existing affordable housing through renovation and repair, and
• Additional provisions supporting housing supply and affordability

How has APA been involved in this Legislation over time and now? 

The 21st Century ROAD to Housing is composed largely of a series of previously introduced proposals. APA was directly involved in developing many of these proposals that were integrated into the final bill. These ideas included grants for local planning and zoning reform, model codes, support for pre-approved plans, reforms to environmental reviews for infill housing, building code changes, and updates to HOME Investment Partnerships Program and CDBG. APA has worked with both coalition partners and key congressional offices on policy ideas and advocacy for action on housing.

In addition, member advocates have played a big role in encouraging Congress to support planning as a critical element of tackling housing affordability. Recent Planners' Day on Capitol Hill and congressional fly-ins have focused on these issues.

Funding Concerns

If there is no new money, how does the Package intend to lower housing costs?

While there are some new grants authorized in the law (e.g., planning innovation grants), the bulk of the legislation is focused on improving the regulatory and financing system for housing. To tackle affordability, the new law aims to address both increasing production and lowering the cost of production. This differs from traditional demand-side subsidies. Both are important, but the reforms in this legislation acknowledge areas like planning, permitting, standards, and reviews.

The law also makes changes to many federal housing finance programs to make those initiatives more applicable to a broader range of housing types. Taken together, the regulatory and finance changes should bolster overall housing supply and lower costs. Ideally, this approach will be paired with future increases in funding for key programs.

What are the implications of limited funding?

The impacts are not negative per se, but will require continued advocacy. For example, the law authorizes several new grant programs that benefit local planning, but Congress will still need to appropriate those funds on an annual basis. 

Doing so in a tough fiscal environment means continuing to make the case on Capitol Hill. Additionally, advocates will need to encourage Congress to both increase funding for existing housing production programs and improve tax credits and incentives, such as the Low-Income Housing Tax Credit and the proposed Neighborhood Homes Tax Credit.

Institutional Investor Provisions

Why were people concerned about the provisions aimed at institutional investors?

An earlier version of the bill attempted to place limits on institutional investors by requiring corporate owners to divest properties within seven years to individual buyers. The concern voiced to Congress was that such a broad provision would undermine build-to-rent home production and the financing model for a range of multifamily housing development. Congress ultimately dropped that language and instead included a cap on the number of homes owned by a single corporation. Concerns about the impact of institutional investors remain, and Congress may evaluate the impact of the provisions in this law and considering future restrictions.

Environmental Review Reforms

What is the issue with easing the environmental review process?

The law contains some targeted streamlining of federal environmental reviews. However, the law is not a blanket waiver. Instead, it allows for greater coordination when multiple agencies are involved and creates an exemption under targeted circumstances, particularly focused on infill housing development. These measures are intended to improve coordination across federal agencies and speed housing production in specific locations.

Local Control

What's the impact on local control?

The legislation contains no mandates or preemptions of local control over things like zoning and land use. The package does provide a number of incentives and support for communities undertaking reforms in these areas. From new planning grants to model reforms and CDBG funding incentives to rewards for local innovation, the law encourages locally-led solutions. 

The new housing law reflects an appropriate partnership between federal and local governments on housing, with a valuable role for federal action. At the same time, local leadership on housing regulatory and planning systems remains vitally important. 

Impact on Existing Programs

How will this affect existing federal housing subsidy programs?

In some cases, the 21st Century ROAD to Housing law directly modifies existing programs. For example, the law eases restrictions on the use of CDBG dollars for affordable housing and authorizes the CDBG disaster recovery program. The legislation increases the amount that banks can provide for affordable housing. For most programs, however, the law's impact is felt indirectly in either regulation or finance. 

An important next step for Congress would be increasing investment in subsidized production. It was valuable for Capitol Hill to act on the regulatory and housing finance policies to ensure that more diverse housing options can be built in more places, but this doesn't eliminate the need to support production of these housing options, and federal programs can play a big role. 

Congress will need to fund the new programs created in the legislation and expand support for critical existing programs. Reforms that improve housing supply can make investments in demand and production more effective.

How will local governments and housing authorities be impacted by funding changes in the law?

Some changes will be direct, such as changes in the use of CDBG funds, but most are indirect. The law's changes to finance programs should lead to broader potential use of this financing to support 'missing middle' housing types. Programs aimed at home repair or commercial conversions can help cover potential funding gaps in local housing plans and initiatives. Supporters of the measure have argued that improving existing programs and reforming regulatory systems lays the foundation for increasing federal capital investment in not only housing production and supportive infrastructure.

How does this federal action tie into local housing efforts and debates?

Although the law contains no direct mandates on communities, many provisions are designed to either incentivize action or support it. Provisions seek to encourage reforms to zoning, land use, permitting, and building codes. These efforts include direct grants, incentive funding, revised rules, research, and model codes. Changes to federal rules for manufactured and modular housing will increase pressure to adopt or amend state and local rules related to new housing technologies. 

In short, the 21st Century ROAD to Housing is designed to accelerate, but not dictate, state and local housing reforms and planning.

What Comes Next?

Now that the bill is officially law, planners will be key players in ensuring its implementation at the local level will make the intended positive impact on housing supply and attainability. APA will continue providing expert analysis as implementation unfolds, and share the latest practical guidance as it is developed in the days, weeks, and months ahead. 

Check out APA's Housing Reform Resource Hub for the latest on the 21st Century ROAD to Housing law and other housing reform action, and join the Planners' Advocacy Network to stay involved in advocating for federal legislation that supports local planning.

Top Image: iStock/Getty Images Plus - Kirpal Kooner