Congress just passed a major housing bill. Will it actually lower your home price?

Housing affordability is a top concern for many Americans, and both chambers of Congress have been advancing legislation to help prospective homeowners—though it may take years for those benefits to actually materialize. 

This past week, the House of Representatives passed a bipartisan bill called the Housing for the 21st Century Act, which aims to increase the supply of affordable housing. That sets the stage for some political wrangling ahead. The Senate previously passed its own bipartisan legislation in October as part of a broader package, before it was stripped from the final bill, and it is now considering the stand-alone bill, the ROAD to Housing Act. Ultimately, the two chambers must agree on a final version of a housing bill that will also get support from President Donald Trump.

The legislation targets a top concern for Americans. More than 6 in 10 adults (62%) say they are “very” concerned about the cost of housing—trailing only behind the cost of healthcare (71%) and the price of food and consumer goods (66%), according to the results of a survey of more than 8,500 people conducted by the Pew Research Center in late January.

The House’s legislation marks an important step forward, even if it won’t magically fix a crisis that has developed over time and will be similarly resolved in time, according to David M. Dworkin, president and CEO of the National Housing Conference, a nonprofit that’s focused on affordable housing. 

“We got into this crisis one unit at a time, and we will get out of it the same way—one unit at a time—through a range of coordinated strategies that expand supply, reduce costs, and improve access to affordable homes,” Dworkin said in a statement celebrating the passage of the legislation.

Even though it could take time to benefit prospective homeowners, here is how the House bill addresses housing affordability.

MODERNIZES FEDERAL HOUSING AND DEVELOPMENT PROGRAMS

One of the primary goals of the House’s legislation is to streamline the federal and local housing process so that more housing can be built more quickly. And among the densest sections of the 202-page legislation is the section focused on modernizing local development and rural housing programs.

The legislation takes aim at revising federal housing programs to eliminate regulatory bottlenecks and expand financing for affordable housing. The legislation also expands how funds can be used to include paying for new construction. 

INCREASES ELIGIBILITY FOR GRANT PROGRAMS

Another major goal of the House legislation is to ensure that federal grant programs reach a broader segment of the population. The legislation significantly expands the criteria to qualify for existing housing grants. One such example is adjusting the HOME Investment Partnerships Program so that income eligibility caps are raised to 100% of the median-family income of the area, and so the program can support more middle-income families. 

The bill also introduces new grants that are designed to incentivize local entities to reform their land-use policies and update zoning codes. These grants again target potential local regulatory hurdles that have deterred investment in affordable housing.

FAST-TRACKS ENVIRONMENTAL REVIEW PROCESS

Again targeting potential barriers to construction activities, the legislation streamlines the review process required by the National Environmental Policy Act (NEPA) by exempting certain housing-related activities. Specifically, the bill creates categorical exclusions for certain smaller-scale projects.

The legislation also eliminates duplicative environmental reviews so that housing that’s received approval for one federal assistance program doesn’t have to undergo another review if the scope, scale, and location of the project remain substantially unchanged.

MODERNIZES MANUFACTURED HOUSING STANDARDS

Finally, the bill envisions a future of more manufactured housing by again changing some of the requirements related to this type of construction that might address the availability of affordable housing. 

One of the biggest changes this legislation makes is that it strikes just four words from legislation that’s been on the books for more than 50 years: It eliminates the requirement that manufactured homes must be constructed with a permanent chassis. It also updates the construction and safety standards for manufactured homes.

IMPACT ON HOMEBUYERS

Even though it will take time for these changes to roll through the system and benefit prospective homebuyers, trade groups across the various facets of the housing industry celebrated the passage of the House bill.

That said, there could be some hurdles to getting a final piece of legislation across the line—partly because President Trump is pressing Republicans to include a measure that will curb large investors’ purchases of single-family homes.

Even so, advocates are optimistic that bipartisan support of housing affordability legislation will continue.

“Bold action to expand supply and remove barriers to homeownership has never been more urgent,” Shannon McGahn, executive vice president and chief advocacy officer for the National Association of Realtors, said in a statement. “This legislation takes a comprehensive approach to increasing housing production, modernizing critical federal programs, and strengthening pathways to credit and homeownership.”