Congress is advancing the most significant federal housing legislation in decades. Two major bills, the Housing for the 21st Century Act (H.R. 6644) and the ROAD to Housing Act (S. 2651), are moving through the House and Senate with bipartisan support and a shared goal: increasing the supply of housing by reforming how communities plan for and regulate development.

For the municipalities, regional agencies, and states that CommunityScale works with, these bills represent both an opportunity and a call to action. Here’s what you need to know.

Federal zoning guidelines: a national playbook

Both bills direct HUD to publish federal guidelines on state and local zoning best practices. A task force of planners, architects, developers, community members, and local officials will draft recommendations covering:

• Reducing or eliminating parking minimums
• Expanding by-right multifamily development, including duplexes, triplexes, and quadplexes
• Legalizing accessory dwelling units
• Increasing allowable floor area ratios and building heights
• Transit-oriented development
• Streamlined, nondiscretionary development review
• Reducing minimum lot sizes and setbacks
• Eliminating barriers to manufactured and modular housing

The guidelines will be advisory, not mandatory. But they will set the standard against which communities are evaluated when competing for federal grants, and they will provide a framework that states can use to develop their own enabling legislation.

For communities already pursuing these reforms, this is validation. Massachusetts’ MBTA Communities Act, which required 177 municipalities to adopt by-right multifamily zoning near transit, anticipated many of these federal recommendations. CommunityScale worked with 13 communities on MBTA Communities compliance, and the lessons from that experience are directly applicable as federal guidelines emerge.

New money for housing plans and zoning reform

The House bill creates a new competitive grant program for housing planning and zoning reform. Regional planning agencies, states, cities, and counties can apply for funding to:

• Develop housing plans and housing strategies
• Update zoning codes
• Reduce barriers to housing supply
• Coordinate housing and transportation planning

This is a direct federal funding source for the kind of data-driven, community-specific planning work that produces results. Our work on housing needs assessments from downtown Syracuse to Stowe, Vermont to Northern Kentucky’s eight-county region shows what happens when communities invest in understanding their housing landscape: they develop actionable strategies that attract investment and build support for change.

Your CDBG allocation may depend on your housing growth rate

The Build Now Act adjusts Community Development Block Grant allocations based on whether a community is growing its housing supply faster or slower than before.

Every CDBG-receiving metropolitan city and urban county will be evaluated on a “housing growth improvement rate,” calculated as the ratio of recent housing unit growth to prior housing unit growth. Communities with above-median improvement receive bonus funding. Those below the median face a 10% reduction in their CDBG allocation.

This is significant. CDBG is a foundational federal program that funds everything from infrastructure improvements to public services. A 10% cut is a real financial consequence that creates real urgency for communities to identify and remove barriers to housing production.

The metric rewards improvement, not absolute volume. A small town that goes from building 10 units a year to 20 units a year shows the same improvement rate as a city that goes from 1,000 to 2,000. What matters is whether you are accelerating. Communities that have been losing ground can turn things around by adopting the kind of regulatory reforms and housing strategies that CommunityScale helps implement.

As the Build Now Act is formalized, CommunityScale will add the relevant metric to our Housing Forecast app.

$200 million per year for Innovation

The Senate bill also creates an Innovation Fund, authorized at $200 million per year, that awards competitive grants to communities that have demonstrated measurable improvement in housing supply growth. Grants range from $250,000 to $10 million, and the program explicitly prioritizes communities that have adopted zoning reforms like expanding by-right development, reducing parking requirements, legalizing ADUs, and streamlining permitting.

This creates a positive feedback loop. Communities that do the hard work of modernizing their zoning receive federal investment that makes their communities even better. The grants can fund community development activities, infrastructure improvements, and initiatives that expand attainable housing.

The data imperative

A thread running through both bills is the emphasis on data. The Build Now Act requires housing unit counts at the block level. The Innovation Fund requires applicants to document housing supply growth characteristics. CDBG recipients must report on 22 specific zoning reform categories.

Read the H.R. 6644 Sec. 202 (CDBG zoning reporting requirement) 22 land use policy categories

1. Other relevant high-density, single-family, and multifamily zoning policies the recipient chooses to report
2. Expanding by-right multifamily zoned areas
3. Allowing duplexes, triplexes, or fourplexes in areas zoned primarily for single-family residential
4. Allowing manufactured homes in areas zoned primarily for single-family residential
5. Allowing multifamily development in retail, office, and light manufacturing zones
6. Allowing single-room occupancy (SRO) development wherever multifamily housing is allowed
7. Reducing minimum lot size
8. Coordinating historic preservation requirements with housing creation in historic buildings and districts
9. Increasing allowable floor area ratio (FAR)
10. Creating transit-oriented development zones
11. Streamlining or shortening permitting processes and timelines (including one-stop and parallel-process permitting)
12. Eliminating or reducing off-street parking requirements
13. Ensuring impact and utility investment fees accurately reflect required infrastructure needs (and mitigating affordability
    impacts)
14. Allowing off-site construction, including prefabricated construction
15. Reducing or eliminating minimum unit square footage requirements
16. Allowing conversion of office units to apartments
17. Allowing subdivision of single-family homes into duplexes
18. Allowing accessory dwelling units (including detached ADUs) on all lots with single-family homes
19. Establishing density bonuses
20. Eliminating or relaxing residential property height limitations
21. Using property tax abatements to enable higher density and mixed-income communities
22. Donating vacant land for affordable housing development

Communities that invest in housing data infrastructure will be best positioned to respond. This means:

• Tracking building permits and certificates of occupancy in real time
• Monitoring housing unit growth against 5-year and 10-year baselines
• Benchmarking affordability metrics against HUD income limits and fair market rents
• Documenting zoning reforms and their impact on housing production
• Maintaining publicly accessible databases of publicly owned land

CommunityScale has built our practice around data-driven housing analysis, and we continue to develop new tools (including interactive dashboards and open-source mapping capabilities) to help communities understand and communicate their housing landscape.

What communities should do now

Regardless of the final legislative outcome, the direction of federal policy is clear. Communities that take the following steps now will be best positioned:

1. Assess your zoning. Evaluate your code against the 22-item checklist that CDBG recipients will be required to report on. Where do you stand on parking, ADUs, by-right multifamily, height limits, lot sizes, and permitting timelines?
2. Know your numbers. Calculate your housing unit growth rate over the past 5 and 10 years. Is it accelerating or decelerating? What is driving the trend?
3. Plan proactively. Develop or update your housing plan or housing needs assessment. This is both good planning practice and a prerequisite for many of the new federal programs.
4. Coordinate regionally. The federal programs emphasize regional approaches. Work with your regional planning agency, neighboring jurisdictions, and transit agencies to develop coordinated strategies.
5. Document your reforms. If you have already adopted progressive zoning or housing policies, make sure they are well documented. This evidence will be critical for competitive grant applications.

The federal government is recognizing what forward-thinking communities have known for years: housing supply is a national priority, and local regulatory reform is the key to unlocking it. At CommunityScale, we have helped communities across the country build the evidence base, update their zoning, and develop strategies that produce results. Contact us to discuss how these federal reforms affect your community.