Tuesday, 28 July 2026, 13:14
After months of political maneuvering, the most significant federal housing bill in decades has quietly become law. The legislation, known as the 21st Century Road to Housing Act, contains 56 regulatory tweaks, pilot programs, and funding mechanisms. It automatically took effect after midnight on Saturday, July 11, 2026, following President Trump's refusal to sign it. While the law lacks a single sweeping reform, supporters believe its cumulative impact could begin to address California's severe housing shortage.
The law's most notable feature for California is a novel carrot-and-stick approach targeting high-cost cities that fail to build enough housing. Under the revised Community Development Block Grant program, cities with high median prices and low vacancy rates—like Los Angeles ($48.4 million in 2024 CDBG funds) and San Francisco ($18.9 million)—could see a 10% cut if they continue to underbuild. The savings would go to municipalities that construct housing more rapidly. David Garcia, deputy policy director at UC Berkeley's Terner Center, called this a 'small nudge' but noted it sets a precedent: for the first time, the federal government is penalizing cities for not building, not just for failing to plan.
Other provisions include expanded flexibility for CDBG spending, new incentives for manufactured housing (often called 'chassis change' units), and grants for local urban planning. The law also establishes a pilot program for low-cost loans to developers of affordable housing. Additionally, it includes a provision to limit institutional investors from purchasing certain single-family homes, aiming to curb large-scale corporate ownership that has driven up prices. The law also launches a pilot program to aid local governments in converting vacant commercial buildings into affordable housing, and eliminates a rule that requires homes to be built on a permanent foundation, facilitating the use of factory-built homes. It also authorizes a pilot program to offer grants and forgivable loans to fix older homes that have fallen into disrepair.
Despite the lack of public pushback from local government groups, the provision has not engendered much controversy. In an online summary, Michael Wallace, a lobbyist with the National League of Cities, applauded the overall housing bill as an example of the federal government “choosing partnership with local governments over preemptions.” He singled out other provisions of the bill that provide expanded flexibility for Community Development Block Grant spending, new incentive programs for adding supply, and new supports for local urban planning.
The National League of Cities, which has long urged Congress to increase federal support for local governments confronting housing shortages, welcomed the legislation’s enactment. “The National League of Cities thanks Senator Tim Scott, Senator Elizabeth Warren, Rep. French Hill and Rep. Maxine Waters for their leadership on the bipartisan 21st Century ROAD to Housing Act,” said NLC President Kevin Kramer, a Louisville, Kentucky, councilmember. Kramer said the law “expands the attainability of homeownership for residents across the country and strengthens the tools that local governments need to support their residents in achieving this goal.” He added, “We are particularly pleased that this legislation preserves local zoning authority, avoids unfunded mandates for local governments and aligns with local infrastructure needs. Local governments will have the tools they need to be an effective partner to the federal government as this is rolled out across the country. Starting today, local leaders are ready to put this law into action to meet the housing needs of their residents.” National League of Cities CEO and Executive Director Clarence E. Anthony likewise praised the legislation’s bipartisan support. “We have seen strong, bipartisan efforts in Congress and the Administration to address the housing crisis through pragmatic, locally informed policy solutions that local leaders will put to use at the local level,” Anthony said. “With this legislation, Congress has delivered the most comprehensive housing package in more than three decades. On behalf of NLC and the more than 19,000 cities, towns and villages we represent, we celebrate the 21st Century ROAD to Housing Act becoming law on July 10.”
Among the law's many provisions, several aim to reduce home prices and increase housing supply. One reduces the cost of manufactured housing by eliminating the requirement to include a steel chassis that can be attached to wheels. This is expected to reduce building costs by around US$5,000 to $10,000, or about 4% to 8% of the average cost of a new unit. Other cost-saving elements include streamlining environmental reviews for proposed housing developments and encouraging new designs for midsize apartment buildings that would allow for just one stairway. Fire safety regulations have long required multifamily buildings to contain two or more staircases, but improvements in fire safety have largely eliminated the need for the second staircase in midsize buildings. By eliminating the two-stairway requirement, developers can reduce their construction costs and have more flexibility in their architectural designs. Another component requires the Department of Housing and Urban Development to issue guidelines and “best-practice frameworks” for zoning and land-use policies, presumably to nudge cities and towns to allow developers to build smaller homes on smaller lots. To further facilitate housing construction, the bill requires local governments that receive federal funding for community development to publish a “searchable online database of undeveloped land parcels,” intended to make it easier to identify potential low-cost development sites. The bill also encourages the Federal Housing Administration and other lenders to issue “small dollar mortgages” of less than $100,000. Currently, when low-priced homes are available, it can be difficult for interested homebuyers to obtain financing because it is more profitable for lenders to underwrite larger mortgages. Finally, the law reauthorizes for three years the Community Development Block Grant Disaster Recovery program, which helps cities, counties and states recover from disasters declared by U.S. presidents, focusing on low- and moderate-income households.
While most of the legislation focuses on homeowner housing, a couple of provisions address important challenges for subsidized rental housing. One seeks to encourage landlord participation in the Housing Choice Voucher Program by making it easier for landlords to satisfy the federal government’s housing inspection requirements. Another provision helps protect low-income rural renters from losing their homes when the federally funded mortgages on their buildings expire. Currently, these rent subsidies, which are provided by the Department of Agriculture, can only be used in the buildings it finances. Many of these mortgages are due to expire over the next few years, putting residents at risk.
The law also creates a national renter resource center, including a complaint hotline and public website, for disputes involving large institutional landlords. Additionally, it allows banks to put more money into affordable housing construction and preservation projects before hitting their federal investment limit, and expands support for community banks, credit unions, CDFIs, and rural financial institutions that provide mortgage lending and affordable housing financing.
California's urban centers are prime targets for the law's enforcement mechanism. Los Angeles and San Francisco have long struggled to meet state-mandated housing goals, and the new federal penalty adds another layer of pressure. However, the amount at stake—$48.4 million for LA and $18.9 million for SF—is relatively small compared to their overall budgets. Laura Foote of YIMBY Action emphasized that the real impact may come from the precedent: 'Little nudges add up.' The law also benefits from strong California representation in Congress, where a growing 'Yes In My Backyard' caucus helped push it through.
California Sen. Alex Padilla sharply criticized Trump’s refusal to sign the legislation while noting that the bill would become law regardless. “Donald Trump and his reckless policies have made gas, groceries, and housing much more expensive,” Padilla said. “And when given the opportunity to deliver the bipartisan housing relief Americans have been waiting for, Trump instead threw a tantrum and refused to sign it into law.” Padilla continued, “The bipartisan 21st Century ROAD to Housing Act will become law thanks to Congress and the Constitution — and in spite of Donald Trump’s inaction. This compromise bill is a step in the right direction, helping to expand homeownership opportunities and address the national housing affordability crisis nationwide.” Padilla highlighted several provisions included in the final legislation that he said will directly benefit California and vulnerable populations nationwide. “I am proud that the new law will include my provision to ensure veterans experiencing homelessness and receiving VA disability benefits can still qualify for housing assistance,” Padilla said. “This package will also help Californians rebuild their homes and lives after disasters, unlock millions of dollars in federal funding for local governments for new housing construction, and strengthen rural housing programs that support millions of Americans.” He added, “While this legislative package provides additional resources to invest in housing, our work is far from over. I will continue pushing to address the housing crisis facing California and the entire nation through comprehensive legislation like my Housing for All Act.” Among the legislation’s California-specific provisions is Padilla’s Housing Unhoused Disabled Veterans Act, which permanently excludes disability payments received by homeless veterans from income calculations used to determine eligibility for housing assistance through the HUD-VAS.
California Congressman Jim Costa (CA-21) also condemned President Trump's refusal to sign the bill. “San Joaquin Valley families are feeling the strain of rising housing costs every day. For most American families, owning a home is the single largest investment they will ever make. Yet for too many young families, that opportunity is slipping further out of reach. That is why I worked to pass one of the most significant housing affordability bills in a generation. This bipartisan legislation will help build more homes, increase housing supply, and make homeownership more attainable especially for our rural communities here in the Valley. President Trump called this bipartisan housing bill 'a yawn' and is now refusing to sign it over an unrelated political dispute involving the SAVE Act, legislation that would disenfranchise eligible American voters. The president has a choice to make: sign this bipartisan bill, let it become law without his signature, or veto one of the most significant housing affordability measures in a generation.”
Rep. Mike Thompson (CA-04) also applauded the law's enactment, calling it a “huge first step in tackling our housing crisis in California.” Thompson, who voted “yes” on the bill, said it will “help us build more housing, lower mortgage and rental costs, and expand home ownership.” He pledged to work to ensure the law is rolled out quickly so communities can get the support they need.
Median home prices nationally reached a new all-time high of $440,600 in June, according to new data released by the National Association of Realtors. That would be a steal in California, which also saw a record high a month earlier: $930,260. Supporters are hoping the new housing law will add up to more than the sum of its parts and get the country building.
While Bay Area congressional lawmakers played a key role in drafting the bill, it contains no provisions specifically tailored to the region. It does, however, condition some federal grants on the progress local communities make in building more housing, and aims to help homeowners take out loans for accessory dwelling units, or ADUs, which have become increasingly popular in the Bay Area. Silicon Valley Rep. Sam Liccardo, who introduced several provisions in the bill, including the ADU measure, acknowledged it will likely take years for many of the reforms to have a tangible impact on local housing markets. Still, he described the legislation as a blueprint for future bills to tackle what he sees as a defining issue facing the Bay Area and, increasingly, the entire country. “This is one of the few areas we have an opportunity for bipartisan progress,” Liccardo said.
While housing advocates are encouraged to see Congress finally take up housing issues, they say the most consequential land-use decisions are still to come at the local level. That means it’s up to state lawmakers and regulators, who have greater authority to influence local policies, to continue pushing California cities and counties to approve more homes, said Matthew Lewis, communications director for California YIMBY. “No matter what happens, you still need an environment within the state that is friendly to homebuilding,” he said.
One of the bill’s main provisions, dubbed the “Build Now Act,” makes a portion of a key grant program for local infrastructure and economic development projects contingent solely on communities building more housing. Expensive cities and counties that continue to see below-average construction could lose up to 10% of their share of the funding from the Community Development Block Grant program. That could include pricier parts of the Bay Area, though it’s still up to regulators to identify areas subject to the rule. The withheld funding would then go to jurisdictions where homebuilding moves faster. Still, the amount local governments currently receive from the program is relatively small relative to their budgets. San Jose, for example, received $7.8 million in 2024 while Santa Clara County was awarded $1.5 million, according to federal data. Even so, housing advocates say it could still nudge local officials to ease building regulations and pursue policies to encourage construction.
California Gov. Gavin Newsom (D) on Monday said President Trump refused to sign the bipartisan housing bill because what the legislation proposed “looks … like California.” Newsom brought it up while he signed a state bill for affordable housing in California, telling state officials and stakeholders that the cost of construction needs to go down and that the state needs “to build more damn housing.” “The president may not be familiar, because he didn’t take the time to sign the bill, that what we were promoting –– and by the way, take a look at that housing bill that was done federally,” Newsom said at a press conference. “Looks a lot like what we’ve been doing here in the state of California.” Newsom referred to executive orders designed to reform the enforcement of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA), two federal regulatory acts that critics have said cause too much red tape and hinder construction on new housing in the state. The governor, a potential 2028 Democratic presidential contender, said he applauded the 21st Century ROAD to Housing Act, a comprehensive measure aimed at addressing housing affordability by increasing the supply of homes and lowering costs by limiting major investors from purchasing single-family homes, among other aspects. “And I wasn’t joking when I said, ‘Looks a lot like California.’ Which may have been one of the reasons Trump didn’t sign it,” Newsom said later during the press conference. “But I thought there was a lot of good thinking and a lot of smart work that was done on it.” He noted that there have been “a couple good things that are actually happening in Washington, D.C.,” referring to the housing bill. “What they did, what we’ve done, is going to feed very nicely into what the counties and cities will be doing all across this nation,” Newsom added.
The housing bill originated as a joint proposal from Sen. Tim Scott (R-SC) and Sen. Elizabeth Warren (D-MA), reflecting rare bipartisan consensus on the need to boost housing supply. It passed Congress with large margins last month after lengthy negotiations between Democrats and Republicans. The bill faced a delay when President Trump demanded a voter ID bill first—the Save America Act, which would impose new restrictions on voters and state election officials nationwide. That bill has stalled in the Senate. On Friday, Trump vowed again not to sign the housing bill in protest. Even so, because Trump did not veto the housing package, it automatically became law on Saturday just after midnight, as per terms specified in the U.S. Constitution. The last comparable federal housing legislation was passed in the 1970s.
Trump had previously called the bill a “disaster” and said it would “destroy our suburbs.” He also criticized the bill for including provisions that he claimed would “pack” communities with low-income housing. Despite his opposition, the bill passed with bipartisan support and became law without his signature.
Democrats pilloried Trump for not signing the measure, with the House minority leader, Hakeem Jeffries, writing on X: “Republicans would rather make it harder to vote than easier to afford a home.” The Senate’s top Democrat, Chuck Schumer, said: “His priorities couldn’t be clearer: higher costs for families and more power for himself.”
Trump had tied the housing bill to the Save America Act, which would impose new restrictions on voters and state election officials nationwide ahead of November’s midterm elections. A version of the Save America Act passed the House in February, but it is opposed by Senate Democrats and lacks the votes to overcome the filibuster. Last month, Trump canceled a signing ceremony for the housing bill, denying his Republican allies an opportunity to publicly highlight their efforts to address housing affordability. The president later called the measure “a big yawn” and “so unimportant” compared with the Save America Act. On June 29, House Speaker Mike Johnson sent the housing bill to Trump’s desk, triggering a 10-day countdown after which it would become law without his signature. In a Friday-morning post on Truth Social, Trump wrote: “I will not sign the Housing Bill, which has been fully approved by Congress and sent to the White House, in PROTEST over the fact that the United States Senate is not capable of passing THE SAVE AMERICA ACT.” The president gave no indication he would veto the housing bill, and the White House declined further comment. Trump’s focus on the Save America Act has compounded concerns about how his administration is preparing for the midterms. On Thursday, the president fired the last three commissioners on an independent federal body that assists election administration nationwide.
“We don’t often gather to celebrate federal housing legislation,” said Stephen Russell, president of the San Diego Housing Federation, at a press conference on Thursday. “I think the last time Congress passed anything of this magnitude, many of you were not even alive … it is almost a once-in-a-lifetime event.”
“I think this will be a small nudge,” said Laura Foote, executive director of YIMBY Action, in an email. “Which taken across the country could still have a good impact! Little nudges add up.” More dramatic than the number of dollars involved may be the precedent the policy sets. Even in California, where the state government has aggressively incentivized cities to plan for more housing development and penalized those that don’t, lawmakers have never punished municipalities for failing to actually grow — an outcome that may not always be under a city government’s control. Such an idea would have been “inconceivable in previous congresses,” said Garcia.
That’s thanks in part to a growing caucus of lawmakers aligned with the “Yes In My Backyard” movement that helped push the bill into law. Many hail from California, a state that has had more experience than most contending with wildly unaffordable housing.
Massachusetts Democratic Sen. Elizabeth Warren, the chief proponent of the legislation in the Senate, harshly criticized the president's refusal to sign the bill. “At the stroke of midnight, a huge bipartisan bill to lower housing costs became law without the President's signature. Why did President Trump sit on the landmark housing bill for more than 2 weeks? Maybe because there was nothing in it for him personally — no gold-encrusted ballroom, no Qatari jet, no $2 billion crypto deal. Nothing in the 21st Century ROAD to Housing except ways to make housing more affordable,” she said in a statement. “Donald Trump couldn't pick up the pen because he just isn't interested in lowering costs for American families.”
The president's decision put his Republican allies in Congress in a difficult position, depriving them of an opportunity to tout their efforts to address concerns about affordability that have remained top of mind for Americans. And despite pressure from the president in recent months, Senate GOP leaders have repeatedly stated that the elections bill does not have enough support to pass. The housing bill's passage came after months of work and represented a rare moment of bipartisan consensus ahead of the midterm elections. But the president called the bill “a yawn,” while making clear that he wants the focus to be on his push to ban voting by mail, requiring proof of citizenship to register to vote and photo ID to cast a ballot. Despite the president's refusal to sign the bill, he also didn't veto it, allowing it to become law automatically. House Speaker Mike Johnson, who met with the president multiple times on the issue late last month, sent the bill to the president on June 29, starting the 10-day clock. That day, when asked what he planned to do about the housing bill, Mr. Trump told reporters he didn't know, adding, “I think it's so unimportant” in comparison to the SAVE America Act. A day later, Johnson responded to Mr. Trump's comments by saying that “the president has a lot going on and I think it's safe to say he's not read through every line of that piece of legislation.” The Louisiana Republican said there's “a lot to it and a lot of great things,” and added that he and the president had “spoken about it quite a bit.” “What he was saying is in comparison to ensuring election integrity, which is now represented by the SAVE America Act, nothing is as important,” Johnson said. “That's not to say that there are not also incredibly important issues, and the cost of living and affordability is among them. It's top of mind.” Johnson ultimately expressed confidence that the bill would become law, noting that he had encouraged the president to sign it with “the fattest black marker you have,” while telling him the results of the legislation “are going to be very, very good for the American people.” “So I hope he does sign it. If he doesn't, it's still law; we'll still celebrate it,” Johnson said. “But he's trying to make a point and I think he's making it very effectively.”
White House press secretary Karoline Leavitt called the new law “one of the most significant pieces of housing affordability legislation in American History,” in a social media post last month.
Yonah Freemark, a housing research associate at the Urban Institute, noted that immediate relief may not come just yet for homeowners and renters. Building new homes takes time, and the law gives short-staffed federal government agencies a new workload to manage. “We’re talking about a situation where not only will the federal government have to make changes, but then state and local governments also will have to make changes and then businesses, developers, etcetera will have to make investments, which itself takes time,” Freemark said.
Many housing experts point to local zoning and red tape as the root of the slowdown in homebuilding. It is difficult for the federal government to intervene, since local governments make their own rules, but the law includes provisions to encourage states and local governments to adopt land use and zoning policies that are more supportive of housing development. If land-use regulations were relaxed, an extra 2.5 million housing units could be added to the United States in the next decade, according to a 2025 report from Goldman Sachs. The success of that provision depends on whether these local communities decide to build, though. Many face opposition from so-called NIMBYs, who are often homeowners who oppose more building to preserve home values. “The legislation can play an important role in encouraging states and localities to make changes to expand housing supply, but it doesn’t require them to make those changes,” Freemark said. “Congress has chosen not to preempt local and state governments and tell them what to do.”
Despite the bipartisan support, even supporters say the law doesn’t do enough to ease America’s housing affordability crunch. Many of the 60 provisions in the wide-ranging bill are regulatory in nature, such as streamlining environmental impact reviews and reducing the frequency of inspections for homes with tenants receiving federal rental assistance. Others seek to make it easier for homebuyers to acquire financing. These elements and more could help move the needle on the nation’s housing morass. But as housing policy scholars note, the improvements will be only marginal. That’s because the reforms do not address the main source of the nation’s housing problem: that millions of renters and homeowners lack the income necessary to cover their housing costs.
Rep. Josh Harder (D-CA), who has been heavily involved in championing the bill, called it the most important housing legislation since 1974, when Congress approved Section 8 and Community Development Block Grants. “It's been a long time since then, and it is desperately needed. I think it's going to do a tremendous amount of good,” Harder told Multifamily Dive. Harder is the founder of the bipartisan Build America Caucus, which he said originated almost all of the ideas that ended up in the final package. The group believes it has become too difficult to build infrastructure and housing projects in the U.S. “We have been really shepherding it through every step of the way, especially when the Senate added the build-to-rent ban and some of the institutional investor provisions. We got heavily involved and led a bipartisan letter that 76 members ended up joining,” Harder said. “Ultimately we were successful in removing the most harmful pieces of that provision.” That measure, added by the Senate, would have forced institutional investors to sell build-to-rent single-family homes within seven years. The housing industry sounded the alarm, saying it would effectively eliminate the practice. The final version instead limits institutional investors from purchasing certain single-family homes, a compromise that aims to curb large-scale corporate ownership without banning build-to-rent entirely.
A coalition of 227 pro-housing organizations sent a letter thanking members of Congress for their work on the legislation: “This is the bill the pro-housing community hoped for and fought for. It is the best initial federal action we could have asked for to maximize housing supply.” National Housing Law Project CEO Shamus Roller told Multifamily Dive the measure should help get more homes built and make housing programs more functional. However, Roller said more needs to be done to address affordability, particularly for those most in need. “This bill is no silver bullet, right? It's not going to dramatically change what the housing market looks like for most people around the country,” Roller said. “Structural challenges remain and aren't really addressed by the bill.” Nonetheless, Hugh Frater, chairman of the board at a mission-driven real estate firm Vessel Technologies and board member at the Bipartisan Policy Center, thinks the law is a major step in the right direction. “There's a clear theme [in the legislation], which is a recognition that we have not been producing enough housing, and there are things that we can and should do to try and change that,” Frater said. “Much of the housing challenge needs to get resolved at the state and local level, rather than the federal level, but I think this is a terrific recognition of some of the things that the federal government can actually do to make it possible to produce more housing.”
Dennis Shea, executive vice president at the Bipartisan Policy Center’s Terwilliger Center for Housing Policy, said the legislation demonstrates what's possible when Congress works together. The organization has been advocating for many key measures reflected in the legislation. “This bill becoming law is a genuine milestone—and I don't use that word lightly. Getting Congress to move on housing supply and affordability has been a long time coming,” Shea said in a statement. “But this moment calls for urgency as much as celebration. The hard work of implementation starts now, and there are still many issues to be tackled.”
A generation of young people is living on their parents' sofas because they can't afford a home of their own, Harder said, and the fact that this housing legislation is the only major new bill that is likely to pass this entire Congress suggests that it is something Americans are demanding. “This is a time when Congress is notoriously polarized and unproductive, and so getting something like this done, I think it's a huge, huge statement that we can still do important work,” Harder said.
While no single element of the law will solve California's housing crisis, the combination of incentives, penalties, and pilot programs represents the most ambitious federal effort in decades. For Californians struggling with high rents and home prices, the law's effects may take years to materialize, but it signals a new era of federal involvement in local housing policy.
