There is a lot of excitement right now around the 21st Century ROAD to Housing Act, and I understand why people in the housing industry want to be excited. Housing affordability has become one of the most important economic issues in America, supply is still constrained in many of the markets where people actually want to live, first-time buyers are struggling to make the math work, and small to mid-sized builders are trying to figure out how to keep producing homes in an environment where cost, regulation, labor, capital and local approval timelines keep working against them.
So when Congress passes what many are calling one of the most comprehensive housing bills in years, people naturally want to believe it matters. They want to believe Washington finally understands the problem. They want to believe something meaningful is being done. They want to believe this bill is going to help builders build, buyers buy, and communities solve a crisis that has been building for decades.
I wanted to believe that too.
But after reading through the bill, my conclusion is very different.
The Strongest Part of the Bill Still Does Not Hit the Strongest Part of the Problem
One of the areas that gets positioned as a stronger part of the bill is the modernization of federal housing programs. On paper, that sounds meaningful. The bill updates counseling programs, creates small-dollar mortgage pilots, reforms rural housing programs, and evaluates lending barriers. That sounds productive if you are reading it from a policy standpoint, but if you are an operator trying to build homes in real markets, a lot of it starts to feel like word salad.
That may sound harsh, but builders know exactly what I mean.
The problem is not that buyers do not need help. Many buyers absolutely do. The problem is that none of those ideas directly solves the cost structure that is making housing unaffordable in the first place. If a home cannot be produced at a price that works, then more counseling, more evaluation, more studies, and more program modernization do not suddenly make that home affordable.
This is where Washington often loses the thread. It tries to solve affordability at the point of purchase, when the affordability problem was created years earlier through land constraints, entitlement delays, local fees, building code increases, utility requirements, environmental review, labor shortages, capital costs, and political resistance to new housing.
Small-Dollar Mortgages Do Not Help Buyers Purchase Homes That Do Not Exist
The section on small-dollar mortgage access is another place where the intention sounds better than the likely impact. Expanding access to smaller mortgages may help underserved buyers in lower-priced markets, and I am not against that in theory. But we have to ask the obvious question: how many truly lower-priced markets still exist in the areas where supply is most constrained and demand is strongest?
If the inventory is not there, financing does not create it.
This is the same basic reality we saw during COVID when vehicles were hard to find. You could have lowered interest rates, loosened financing standards, and made the monthly payment more attractive, but none of that helped someone buy a car that was not sitting on the lot. Housing works the same way. You cannot finance your way into supply. You have to produce it.
That is why I struggle with celebrating mortgage access as though it is a major affordability breakthrough. It may help some people at the margin, but if the market does not have enough attainable homes to purchase, then expanded financing simply helps more people compete for a product that is already scarce.
Manufactured and Modular Housing Sound Great Until Local Reality Shows Up
Manufactured housing has a real place in many parts of the country, especially in rural markets and areas where the product is already accepted by municipalities and consumers. But if we are talking about solving the affordability problem in suburban or high-demand markets around places like Southern California, Austin, Phoenix or Denver, then we have to deal with the actual barrier: local acceptance.
Most planners, municipalities and consumers in those markets are not suddenly going to embrace manufactured housing at the scale needed to make a major affordability impact.
Modular housing has a different issue. It often looks cool, modern and innovative, and that is why cities like the concept. But after studying modular housing for years compared to site-built production housing, I have not seen enough evidence that it consistently delivers for-sale housing at a lower cost than traditional site-built homes. In many cases, the modular or prefab products that people get excited about are used in modern, customized, higher-end or specialized projects, and the economics do not automatically translate into attainable for-sale housing.
There may be stronger applications in rental housing, multifamily, condo-style products or situations where airspace ownership makes more sense than traditional lot ownership. But that also raises another important point. The American Dream has historically been tied to owning a home and owning the land underneath it. If the solution moves more buyers into products where they own less of the underlying real estate, we need to be honest about what that means for long-term wealth creation.
I Am Skeptical of Giving More Money to Inefficient Systems
One of my concerns with the manufactured and modular push is that it can easily become another version of government-backed funding flowing into industries or companies that have not yet proven they can deliver consistent, scalable, cost-effective housing production. The modular space has a long history of companies raising large amounts of money, generating excitement, promising disruption, and then failing to reach escape velocity.
That should make taxpayers and builders cautious.
I am not interested in dumping taxpayer money into inefficient factories that have not figured out the operations, product, cost structure or execution needed to compete with site-built production housing. If the product works, prove it in the market. If the operation works, prove it through scale. If the cost structure works, prove it against real site-built alternatives.
A better approach would be to support the buyer of new housing in a way that stimulates actual demand for new supply rather than simply funding another corporate experiment. If the goal is to create more housing, then incentives should be tied to the production and purchase of new homes that actually get delivered to buyers.
Federal Streamlining Helps, but Most of the Real Cost Burden Is Local
The bill does include efforts to reduce certain federal review requirements and encourage streamlined review processes, and I will give credit where credit is due. Any reduction in unnecessary review can help, especially where federal requirements are part of the delay. But we cannot pretend that federal review is the main reason housing is unaffordable in many of the markets facing the greatest pressure.
Most of the cost burden in places like California is local.
It is local permitting. Local fees. Local planning departments. Local design requirements. Local environmental review. Local code amendments. Local politics. Local resistance. Local processes that can make housing slower, more expensive and less predictable every step of the way.
That is the machine builders are dealing with.
And those costs are not small. When building codes change every three years, when municipalities add their own requirements, when cities tack on additional standards, and when local governments continue adding costs in the name of safety, sustainability, process or community character, those costs get embedded into the price of the home.
If a new code requirement adds ten thousand dollars to the cost of a house, the buyer does not pay ten thousand dollars. The builder has to maintain margin, which means that cost may become thirteen, fourteen or fifteen thousand dollars by the time it reaches the final price. Multiply that across thousands of requirements, delays and process costs, and then people wonder why homes are no longer affordable.
This is the conversation almost nobody wants to have honestly.
Everyone says they want affordability, but many of the same systems saying they want affordability continue making housing more expensive to produce.
The Real Lesson for Builders Is Not to Wait for Washington
The 21st Century ROAD to Housing Act may be politically significant, but political significance is not the same thing as production impact.
That is the distinction the housing industry needs to make.
If the goal is to produce more housing, then we have to measure this bill by whether it makes housing faster, easier and less expensive to build in the markets that need supply the most. If it does not meaningfully change that equation, then we should be careful about celebrating it as an affordability solution.
Real affordability comes from producing more homes at lower total cost, with less delay, less uncertainty, less bureaucracy and a clearer path from land to keys.
