The 21st Century ROAD to Housing Act is one of the most significant housing packages enacted in recent years, bringing together dozens of housing-related initiatives aimed at addressing affordable housing. As discussed on a recent Tackling Tax podcast, the legislation reflects a growing bipartisan view that housing affordability challenges stem largely from a shortage of available housing. Rather than creating a single new housing program, the act seeks to encourage housing construction and redevelopment through a combination of streamlined development and regulatory processes, expanded financing opportunities, and updates to existing federal housing programs. For developers, lenders, investors, and businesses alike, the legislation could create new opportunities while reshaping how housing projects are financed, approved, and delivered.
Insight from Forvis Mazars: While the legislation introduces numerous reforms and expands flexibility within existing programs, it also includes a “No Additional Funds Authorized” provision. As a result, the act’s impact may depend less on new federal spending and more on whether its regulatory reforms, financing enhancements, and streamlined development processes can meaningfully accelerate housing production.
Adaptive Reuse, Opportunity Zones, & Streamlined Processes
The act seeks to increase housing supply by making development projects easier to bring to market. One area of focus is adaptive reuse, or the conversion of underutilized commercial properties into housing. By reducing barriers and expanding incentives for these projects, lawmakers hope to encourage redevelopment while adding new housing inventory.
The legislation also encourages housing development in Opportunity Zones and supports alternative construction methods, including manufactured and modular housing. These approaches are intended to expand housing options while helping communities add housing more efficiently.
In addition, the act aims to shorten development timelines through streamlined environmental reviews and other process improvements. By reducing delays associated with approvals and project development, the legislation seeks to make housing projects more feasible and accelerate the delivery of new housing supply.
How the Act Expands Housing Financing Opportunities
Increasing housing supply requires more than identifying and streamlining development opportunities. It also requires access to capital. To support additional housing construction, the act expands and updates several financing tools used by developers and lenders.
One notable change allows Community Development Block Grant funds to be used for new affordable housing construction, expanding a program that historically focused on rehabilitation activities. The legislation also creates additional grant opportunities tied to housing planning, infrastructure, and community development efforts.
The act also seeks to improve access to homeownership by expanding support for small-dollar mortgages and increasing multifamily lending opportunities. In addition, changes to public welfare investment rules may provide greater flexibility for banks to support affordable housing and community development projects. Together, these provisions are intended to improve access to financing across the housing ecosystem, from individual homebuyers to large-scale multifamily developments.
How to Prepare for Housing Grants & Incentives
While many provisions of the act are now law, implementation will take time. Housing organizations, developers, local governments, and community stakeholders should begin evaluating which programs and incentives align with their projects and long-term goals.
Preparation may be just as important as eligibility. Organizations pursuing housing-related grants or financing opportunities may need to identify development-ready projects, build strategic partnerships, and ensure they have the personnel and systems necessary to meet future program requirements.
The legislation also serves as a reminder that funding opportunities often come with reporting, documentation, and compliance obligations. As new programs and guidance emerge, organizations that have already assessed their needs and developed implementation plans may be better positioned to take advantage of available opportunities.
Organizations should also pay attention to the act’s treatment of large institutional investors. The legislation does not require investors to divest existing single-family homes. However, it restricts certain future acquisitions by investors that exceed specified ownership thresholds. As a result, real estate funds, investors, and housing stakeholders may want to evaluate how these restrictions could affect future acquisition and growth strategies.
Insight from Forvis Mazars: Beyond housing development and financing, the act also carries important grant administration implications. New funding opportunities may require organizations to strengthen project management, procurement, financial tracking, subrecipient oversight, and reporting processes. Entities that evaluate their administrative capacity now may be better positioned to compete for and manage future housing investments as federal agencies release implementation guidance and funding opportunities.
Tax Considerations & Planning Opportunities
Although the act does not directly amend the Internal Revenue Code, its provisions may create new planning opportunities for developers and investors. As housing projects move from concept to execution, existing tax strategies such as Opportunity Zone investments and low-income housing tax credits may become increasingly important.
The act’s focus on adaptive reuse, affordable housing, modular construction, and Opportunity Zone development may encourage organizations to re-evaluate projects that previously faced challenges. As additional guidance and implementation details emerge, taxpayers should consider how existing tax provisions may work together to support project goals.
How Forvis Mazars Can Help
The 21st Century ROAD to Housing Act touches numerous areas, including housing development, financing, Opportunity Zones, grants, and community investment. As agencies implement the legislation and release additional guidance, organizations may benefit from evaluating how these provisions align with their projects and long-term objectives. Professionals at Forvis Mazars can help clients assess potential opportunities, navigate available incentives, evaluate financing and tax considerations, and address the compliance and reporting requirements that often accompany housing-related initiatives. Contact us to learn more.