The 21st Century ROAD to Housing Act became law on July 11, the first comprehensive federal housing package in three decades. The law lets Community Development Block Grant (CDBG) dollars fund new affordable construction, exempts more housing work from federal environmental review, and makes the permanent chassis optional on manufactured homes, a 1974 requirement that manufacturers say adds four to six thousand dollars to the price of a home.

The ROAD to Housing Act is a serious start toward fixing housing in America. It also, by design, does not build a single home on its own.

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The State of Housing in America

Estimates of the national housing shortage vary widely depending on what is counted. Zillow put the gap at 4.7 million. McKinsey estimated 8.2 million units as recently as 2023. The 2026 Economic Report of the President argued the country would have 10 million or more additional single-family homes had building not collapsed after 2008. 

Regardless of the number, it is clear that the country already faces a housing deficit. The gap between need and demand also continues to expand: In 2025, builders started construction on 1.36 million homes, but roughly 1.41 million new households formed the same year. 

Closing a gap of this size requires building more and faster. Estimates range from needing roughly 30% to 51% more housing annually for ten consecutive years, all while household growth continues.

No permitting reform builds a house. But every one of these homes passes through a local building department that can influence the process.

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What the Law Does at a Glance

Money Now Follows Production

The ROAD to Housing Act changes two things most clearly: where federal housing dollars go and what triggers their release.

The Build Now provisions tie a portion of CDBG funding to housing production benchmarks. Jurisdictions that accelerate production receive bonuses and jurisdictions that lag face reductions. A separate $200 million fund rewards local governments that show measurable increases in supply through faster permitting, density bonuses, and zoning reform.

This differs from prior federal housing money due to the direction of the transaction. Historically, a jurisdiction applied, described a plan, and received funds to execute it. But under Build Now, a portion of the funding responds to what a jurisdiction has already produced.

The formulas aren't written yet. HUD rule-making will decide what counts as production and how it gets counted, which means nobody can optimize for the scoring today. But a department can start today by understanding its own numbers before someone else defines them. 

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Reviews Get Done Faster

In addition to money following production, the ROAD to Housing Act shortens the path from application to approval. Almost all of the new tools are optional, requiring active buy-in from jurisdictions.

Environmental review is the biggest one. The law expands NEPA exclusions for housing work, including rehabilitation, supportive services, and infill development, and expands HUD's authority to delegate environmental responsibility to states and localities. Jurisdictions that take delegation cut a step from the timeline.

Pre-reviewed designs work the same way. Grants are now available to build pattern books of pre-approved plans for accessory dwelling units, duplexes, and townhouses. A common project then gets approved against a design the department already vetted instead of reviewed from scratch every time.

The law also directs HUD to publish model code language and technical guidance for permitting point-access block buildings, single-stair apartments up to six stories, and to coordinate with the International Code Council on incorporating them into the International Building Code. 

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Funding Arrives with New Obligations

The money in this law comes with stipulations. Build Now measures production and the Innovation Fund looks for demonstrated gains. Both provisions require a jurisdiction to report on itself, an administrative burden for departments that have never had to produce these numbers before.

With the ROAD to Housing Act, CDBG grantees also must maintain a publicly accessible, searchable database identifying undeveloped land the grantee owns. CDBG funds may cover setup and upkeep, but somebody on staff still has to inventory the parcels, publish the data, and keep it current.

Before HUD writes the formulas, departments should be aware of which metrics they can produce today to be prepared for available funding.

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What This Means for Local Governments

The ROAD to Housing Act hands municipalities and counties more money and more reason to move. It doesn't change who holds the actual levers. Zoning, permitting, land use approval, and building codes remain entirely local. That makes this a period where local execution, not federal policy, determines if housing availability expands.

Jurisdictions that turn this into housing will be the ones that already modernized how permitting and plan review work day-to-day. In practice:

• Permit intake and tracking. A jurisdiction that can't tell an applicant, in real time, where their application stands is not positioned to compete for Innovation Fund dollars or capture new development interest.
• Interdepartmental coordination. Building, planning, zoning, and engineering working from the same record (rather than email chains and paper files) helps ensure permits are issued on a predictable timeline.
• Plan review turnaround. Faster review cycles are the most direct, controllable lever a department has over whether projects move. 
• Answers at any hour. A contractor filing at nine at night and a homeowner reading a correction notice on a Saturday both have questions. If the only answer is a phone call into town hall, their project loses days over something that should take seconds to explain.
• Operational visibility. A department that knows its current queue depth, its median cycle time by permit type, and its revenue against projection can make faster adjustments to improve its processes. 

Departments working with disconnected systems, manual tracking, and paper-heavy workflows will find it harder to demonstrate the kind of measurable progress this law is built to reward.

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How GovWell Helps Local Governments Act

GovWell is the AI operating system for modern government, designed to simplify public services and streamline work for staff. It’s built specifically to support local communities with the permitting and plan review process that determines how new housing gets built. GovWell is working with hundreds of communities across the country to provide:

• Centralized permit tracking: Every application, review, and inspection lives in one system, so departments can show applicants exactly where their project stands.
• AI AutoCheck for plan review: AI AutoCheck flags common application errors and checks submissions against local code before human review, compressing review timelines without adding headcount. 
• Configurable fee schedules and zoning workflows: Departments can implement density bonuses, updated fee structures, and zoning changes directly in the system applicants use, without waiting on a support team to make configuration changes.
• AI Community Assistant: Residents and contractors get answers to common questions at any hour, at any point in the application process. Anything the Community Assistant is unsure about routes to the right person on staff.
• Native plan review: Staff take measurements, mark up drawings, and send comments back to applicants without leaving their workflow or switching to a separate tool.

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The Big Picture

Congress has opened the door to new funding for housing across the country. This is a big opportunity for much-needed development, but the new legislation is only a start. The ROAD to Housing Act's actual legacy won't be written in Washington. Instead, it’ll be written at the permit counter, one approval at a time, in the local communities that embrace modern solutions and adapt to the moment.

If your department is evaluating how to modernize permitting and plan review ahead of programs rolled out through the ROAD to Housing Act, talk with a local specialist.