Congress finally acted on housing. Now the real work begins.

For years, housing affordability was a problem hiding in plain sight. Rents were climbing faster than wages. First-time buyers locked out of markets their parents once could afford. Families doubling up, moving away or simply giving up on the idea of owning a home. The numbers were damning. The causes were well understood. And yet Washington did almost nothing.

That changes with the enactment of the 21st Century ROAD to Housing Act.

A builder’s view of a problem that was never really hidden

I spent decades building multifamily housing across this country. I know what it takes to get a project off the ground—the financing, the regulatory hurdles, the workforce—and I know how much harder all of it has gotten. More than a decade ago, it was clear to me that the U.S. had stopped building enough housing for our lowest-income families and for the large generation of Millennials and younger households entering the market for the first time.

The reasons are several. The Great Recession put many homebuilders out of business, housing starts slowed to a trickle and the skilled construction workforce disappeared as a result. Restrictive zoning and land-use policies have made it very difficult to build smaller starter homes as well as duplexes, triplexes and other forms of “missing middle” housing. The COVID-19 pandemic compounded the problem by wreaking havoc on the supply chain for critical homebuilding materials.

All of these factors conspired to create a shortage of homes measured in the millions.

The law of supply and demand took over from there. Fewer homes meant more competition for the ones that existed, and more competition meant higher prices. The shortage drove up rents and home prices. It pushed homeownership further out of reach for people who, a generation ago, would have had no trouble buying their first house. The math was never complicated. We simply chose not to do anything about it.

Congress finally heard what the American people were saying

Housing is not a partisan issue—and the American people have been saying so loudly for some time. The mandate from voters to Congress was clear: build more housing, lower costs and do it now. 

To its credit, Congress responded. Lawmakers came together, worked across party lines and got it done. The 21st Century ROAD to Housing Act removes regulatory obstacles that have been strangling homebuilding for years and creates real incentives for localities to reform the zoning rules that have made it nearly impossible to build the kind of housing the market desperately needs. It modernizes federal housing programs that haven’t kept pace with how people actually live and work today.

Critically for the multifamily sector, the law provides new tools designed to close the gap that has made apartment construction increasingly difficult to pencil in markets across the country. Anyone who has tried to develop a multifamily project recently knows the math can be brutal—construction costs up, financing costs up and rents that still can’t support the numbers in too many markets. These tools won’t solve every deal, but they will move the needle on projects that would otherwise never get started. 

These changes, along with recent congressional action to expand and strengthen the Low-Income Housing Tax Credit—the nation’s most important affordable rental production tool—will take time to play out. But they will have a meaningful impact on housing supply and costs for years to come.

Legislation opened the door — the industry has to walk through it

No single piece of legislation will solve a housing affordability crisis that’s been years in the making. And it will take more than Washington to get there.

It will take mayors and local leaders who see this problem up close every day and are already doing something about it in their own communities. It will take governors willing to move land-use policy reform at scale. It will take the private sector and philanthropy—recent commitments from financial institutions and philanthropic organizations to support new affordable housing construction and preservation are exactly the kind of leadership this moment demands from those working outside government.

And it will take the industry. The people reading this publication know better than most what’s been missing—and what’s now possible. The 21st Century ROAD to Housing Act gives developers, builders, lenders and local governments a stronger hand to play. The question now is whether we play it.

With the enactment of the 21st Century ROAD to Housing Act, we’re a step closer to the country we should be—one where a decent, affordable home is within reach of every American, regardless of their zip code or their income. That’s real progress. The road ahead is long, and the work continues.

Ron Terwilliger is the founder of the J. Ronald Terwilliger Center for Housing Policy at the Bipartisan Policy Center, and Chairman Emeritus of Trammell Crow Residential, one of the nation’s largest multifamily developers.