Congress passed the biggest housing bill in a generation, and no one signed it.
The 21st Century ROAD to Housing Act became law at midnight Saturday without a signature from President Donald Trump, who let a 10-day constitutional deadline expire in protest of unrelated voting legislation stalled in the Senate, according to NPR.
It is an unusual way for a law this size to take effect. The 21st Century ROAD to Housing Act is the broadest federal housing package since the Cranston-Gonzalez National Affordable Housing Act of 1990, according to The New York Times, and it touches nearly every corner of the housing market, from institutional investors to manufactured home builders to local zoning boards.
Here is what agents, builders and lenders need to know.
How the bill became law without a signature
Both chambers of Congress passed the bill in June with broad bipartisan support, and House Speaker Mike Johnson sent it to the White House on June 29, starting the 10-day clock the Constitution gives a president to sign or veto legislation. Trump did neither.
Instead, he attempted to use the housing bill as leverage. Friday on Truth Social, he wrote that he would not sign the bill “in protest” of the Senate’s failure to pass the SAVE America Act, a voter identification measure with no relationship to housing policy. Without a signature or veto, the bill became law on its own at midnight.
What the law does
The legislation bundles more than 40 provisions covering housing supply, financing and oversight, according to NPR. A few provisions stand out for the real estate industry.
For the first time, the law limits how many single-family homes large institutional investors can buy. Investors who own 350 or more single-family homes are barred from buying additional ones, with exceptions carved out for certain build-to-rent projects, according to the Bipartisan Policy Center. The provision addresses a popular target for both parties, even though large investors hold only about 3 percent of the single-family rental market nationally, according to NPR; their footprint is larger in some individual metro areas.
Manufactured housing gets a boost, too. The law removes the longstanding federal requirement that manufactured homes sit on a permanent steel chassis, a rule that made those homes harder to finance and build. Housing policy experts say the change could cut construction costs by $5,000 to $10,000 per home, according to NPR.
On the local level, a new $200 million annual grant program will reward cities and counties that streamline permitting and zoning rules, according to the Bipartisan Policy Center. The law also expands categorical exclusions from environmental review for smaller infill projects, cutting one of the slower steps in getting new housing built.
Lenders will feel the law, too. It raises FHA multifamily loan limits for the first time in more than two decades and directs the Consumer Financial Protection Bureau to study small-dollar mortgages under $100,000. It also raises the cap on public welfare investments in community development by banks, including affordable housing, from 15 percent to 20 percent, freeing up more capital for those projects.
Further down the bill, disaster recovery and rural housing programs get a permanent home. The law permanently authorizes HUD’s Community Development Block Grant Disaster Recovery program and updates several USDA rural housing programs, according to the Bipartisan Policy Center.
None of this comes with new money attached. The law does not appropriate additional federal funding for any of these programs, according to the bill text.
What the law does not do
The bill leaves the biggest lever on housing supply untouched: local zoning.
Cities and counties still control what gets built where, and the federal law does not change that. Mortgage rates are also outside the bill’s reach. A 30-year fixed loan was running near 6.5 percent as of early July, and nothing in the legislation touches the Federal Reserve’s rate policy.
Even the supply-side provisions will take time to show up in listings. Sarah Brundage, president of the National Association of Affordable Housing Lenders, said any effect on housing supply will take years to materialize, since a single development can take longer to complete than an elected official’s term in office, according to NPR.
Home prices reflect why the pressure to act built up in the first place: the median existing home sold for $440,600 in June, according to the National Association of Realtors.
Not everyone is convinced the bill will help. The Wall Street Journal editorial board panned an earlier version of the legislation in an opinion piece titled “A Bipartisan Housing Fiasco,” writing that the House bill would “raise costs and give more power to regulators.”
Read the bill
For the full text of the 21st Century ROAD to Housing Act, read here.
