How Will the 21st Century ROAD to Housing Act Affect Housing Supply? Part II

SubscribeSign in

How Will the 21st Century ROAD to Housing Act Affect Housing Supply? Part II<br>Brian Potter<br>Aug 14, 2026

49

Share

This is the second installment of my look under the hood of the recently passed 21st Century ROAD to Housing Act, looking at what each provision actually does and trying to suss out its actual impact on housing supply. You can read my previous essay on Title I of the Act here. This time I’ll look at Title II, “Building More in America,” and Title III, “Manufactured Housing For America,” which have 13 and 4 individual provisions respectively. Some of the most consequential chunks of this legislation are in these two titles.<br>The sections in this title mirror the act overall: only a small number of these changes are likely to be of major consequence, and how much they increase housing stock will depend a lot on whether the constraints they modify were actually binding, which is often hard to tell.<br>Title II — Building More In America

This is the largest title in the act, with 13 sections, each one of which targets housing production or preservation in some way. We’ll look at each section one by one.<br>Section 201 — Increasing Housing in Opportunity Zones. This section allows HUD to give additional weight when awarding housing grants to projects that will be built in Opportunity Zones: areas that are economically distressed and that have tax incentives available for investing in them.<br>The likely impact of this section on housing supply is almost definitely zero. It just shifts which housing projects HUD decides to allocate money to. It doesn’t increase the size of the pot of money, or the number of projects that can be funded.<br>Section 202 — Whole-Home Repairs Act. This section establishes a HUD pilot program for providing grants to homeowners and landlords for home repairs. This is potentially a useful program — some people get funds to make housing repairs that maybe otherwise wouldn’t be able to afford them — modeled on earlier, state-level programs like Pennsylvania’s. But it seems more about increasing housing quality than housing stock: improving energy efficiency, weatherization, safety, general habitability, etc.<br>That said, there might be a “it’s easier to keep an existing customer than finding a new customer” logic to this. If you want to turn dollars into housing supply, in some cases a dollar probably goes farther repairing an existing home than it does building a new home. Typically homes fall out of the housing stock at a pretty slow rate, but if there’s damage (say, a leak in the roof) that probably greatly accelerates the rate at which it happens. Funding those sorts of repairs is probably pretty useful from a cost/benefit point of view. Depending on how the repair money is distributed, this could potentially be a meaningful amount of homes, though probably not a huge number. I suspect mostly this will be about addressing quality-of-life more than keeping homes from falling out of the housing stock.<br>Section 203 — Community Investment and Prosperity Act . This section raises the cap of how much banks are allowed to invest in public welfare projects, most of which are Low Income Housing Tax Credit (LIHTC) housing projects. The LIHTC program is a federal housing subsidy program. Each year the federal government awards several billion dollars worth of tax credits to states, who in turn award them to housing developers for completing housing projects rented to low-income families. Roughly 70,000 LIHTC housing units are completed each year.<br>These projects are typically funded by banks, who take essentially all the project’s equity in exchange for funding it, and get the tax credit attached to it in return. (The tax credit reduces the amount of federal income tax you owe, and thus is most useful for organizations that have a lot of tax that could be reduced.) Banks are limited in how many of these sorts of projects they can invest in at once; this section raises those limits.<br>I had a hard time understanding the exact mechanics of these sorts of funding requirements, but as I understand it this change is more about preventing these limits from becoming binding in the future than them being constricting right now. So this section is possibly a big counterfactual deal (in the sense that we would get fewer LIHTC units in the future without it), but not one that will boost housing supply over current levels.<br>Section 204 — Addition of Affordable Housing Construction as an Eligible Activity. This section allows affordable housing projects (including LIHTC housing) to be funded by Community Development Block Grants (CDBG), a pot of money HUD hands out every year for states and other jurisdictions to do various community improvements. CDBG funding is fairly large, $3.3 billion each year, and this lets up to 20% of a jurisdiction’s CDBG funding be used for housing, so it’s a potentially large amount of...