How the 21st Century ROAD to Housing Act will Contribute to Southern California Housing Goals

The 21st Century ROAD to Housing Act, which became law on July 11, is the largest housing package enacted by the federal government in decades. It is designed to increase housing supply, modernize federal programs, reduce regulatory barriers to development, expand access to financing for home construction across the country, and increase veterans’ access to federal housing programs. 

The legislation comes as communities nationwide continue to grapple with housing affordability challenges driven by a significant housing shortage. The U.S. House Committee on Financial Services reports a national housing deficit of up to 5.5 million units. At the same time, rising construction costs, regulatory delays, and financing constraints have increasingly hampered the ability to build enough housing to meet demand. 

In Southern California, where housing affordability remains one of the most pressing economic and quality-of-life issues, many of the bill's provisions align with efforts to accelerate housing production, encourage innovative housing types, and assist local governments in expanding housing opportunities. 

The legislation would increase production of both single-family and multi-family housing by reducing development barriers and costs. The bill authorizes new programs, and promotes pre-approved housing designs, streamlines processes, and directs the U.S. Department of Housing and Urban Development (HUD) to develop best-practice frameworks for zoning and land use. Many of the new programs authorized through this legislation are expected to be available to state, regional, and local governments over the next year, pending funding allocations through the annual appropriations process. 

Key provisions of the 21st Century ROAD to Housing Act include: 

• Innovation Fund – Authorizes a new competitive grant program that would distribute up to $200 million annually to reward local and Tribal governments that successfully accelerate housing production through pro-housing reforms, including permit streamlining, zoning updates, and density bonuses. Because this bill only authorizes the creation of the program, no funds can be distributed until funding is formally secured through the annual appropriations process, specifically via the upcoming fiscal year 2027 Transportation, Housing and Urban Development (THUD) annual appropriations bill. Following a formal appropriation, HUD would issue program guidelines, outlining application requirements, eligibility thresholds, and performance metrics.
• Single-Staircase/Point-Access Block Housing Pilot – Establishes a federal research initiative pilot program focused on federal framework to facilitate the construction of point-access block buildings, including single-staircase multifamily designs up to six stories. This framework is designed to increase architectural flexibility, reduce construction costs, and optimize smaller urban infill lots. HUD would also be authorized to award competitive grants, once funding is appropriated via the FY27 THUD appropriations bill, to fund pilot programs to assess the feasibility of point-access block buildings.
• Public Land Inventory Requirements – Requires jurisdictions receiving Community Development Block Grant (CDBG) funding to create and maintain a publicly accessible database of undeveloped, publicly owned land. These inventories must identify land suitable for future housing development. This provision increases regional transparency and allows public agencies, nonprofits, and private developers to more effectively collaborate on affordable housing site selection.
• Housing as an Eligible CDBG Activity – Significantly reforms the CDBG program by permitting funds to be used directly for new affordable housing construction. This represents a major shift from traditional rules that limit CDBG money to land acquisition and rehabilitation. This new authority is capped at 20 percent of a recipient's total allocation. Grantees must now wait for HUD to issue implementation guidance before modifying their action plans to include affordable housing construction projects.
• Environmental Review Streamlining – Modernizes the project delivery pipeline by streamlining federal environmental review requirements for small-scale and urban infill housing developments. This mechanism is modeled directly after existing statutory authority at U.S. Department of Transportation, which can designate certain projects as “special projects” to expedite infrastructure delivery. It also expands the use of categorical exclusions to accelerate National Environmental Policy Act (NEPA) compliance and empowers HUD to delegate review responsibilities directly to states, local governments, and Tribes. Grantees must now wait for HUD rulemaking to define eligible project archetypes and administrative procedures before utilizing this streamlining authority. 

Specifically of note for Southern California in the 21st Century ROAD to Housing Bill: 

• Opportunity Zone Prioritization – Directs HUD to grant additional weight and consideration to competitive housing applications for projects located within or directly benefiting qualified Opportunity Zones. This prioritization creates a strategic advantage for the SCAG region, which already contains various Opportunity Zones. Furthermore, the SCAG region could see an increase in the number of Opportunity Zones following the U.S. Treasury Department's launch of a new designation cycle in July 2026.
• Planning and Community Development Grant Program – Authorizes a new competitive HUD grant program to help state, local, Tribal, and regional planning agencies implement community development activities, update regulations, and coordinate housing and transportation planning. This bill only authorized the creation of this new program, meaning  funds cannot be awarded until appropriations are secured through the upcoming FY27 Transportation, Housing and Urban Development (THUD) spending bill. Once funded, HUD will issue subsequent guidance defining eligibility criteria, performance metrics, and application requirements.
• CDBG Disaster Recovery Program Temporary Reauthorization and Reform – Reauthorizes CDBG-Disaster Recovery (DR) for three years and establishes a new Office of Disaster Management and Resiliency within HUD to administer the program. This would replace the current approach where Congress must write new rules into each individual CDBG-DR grant authorization, typically issued after each natural disaster. While this legislation reauthorizes CDBG-DR, it does not provide direct appropriations, which through future legislative packages, such as the FY27 THUD or emergency supplemental bills, before HUD can incorporate these new requirements into post-disaster allocation notices. HUD will have one year to issue final regulations for CDBG-DR. Once the regulations are in place, grantees will have 90 days after a natural disaster to submit an action plan. 

Supporters believe these reforms will help communities deliver new housing more quickly while preserving local decision-making. SCAG will continue to provide updates as funding opportunities, federal guidance, and policy reforms take effect.