Key Land-Use and Zoning Provisions in Landmark Housing Law

The newly enacted 21st Century ROAD to Housing Act directs the Department of Housing and Urban Development to develop voluntary federal guidelines for state and local zoning best practices. Although not mandatory, the guidelines will help shape how communities are evaluated for federal grants and give states a model for developing their own enabling legislation.

These land-use and development provisions are especially important to NAHB members because many state and local zoning rules restrict home building and raise costs. By creating land-use and zoning guidelines with input from a national task force of planning, housing, transit, academic and building experts, this landmark housing law aims to remove regulatory barriers and increase housing production across all income levels.

The following land-use provisions in the 21st Century ROAD to Housing Act are most important to NAHB members:

Section 107: Housing Supply Frameworks

This provision directs HUD to develop national best practices for state and local land-use and zoning reforms that can increase housing production.

The framework will examine many barriers NAHB members face every day, including minimum lot sizes and parking requirements, density and height limits, discretionary approvals, lengthy review timelines, impact fees, environmental reviews and obstacles to missing middle housing.

The legislation also requires home builders and housing developers to be included in HUD’s stakeholder process, giving the industry a direct role in shaping these recommendations.

The voluntary framework could give states, localities and HBAs a valuable tool for advancing pro-housing land-use reforms in their communities.

HUD must publish the best practices within three years, following a two-year stakeholder consultation process.

Section 213: Build Now Act

This provision creates a pilot program that uses Community Development Block Grant (CDBG) funding to encourage eligible communities to increase housing production. Beginning in the third full fiscal year after enactment, communities with housing growth improvement rates at or above the median would receive additional CDBG funding, while eligible communities below the median would see their allocations reduced by 10%.

The program exempts certain communities, including those with relatively affordable housing, above-average rental vacancy rates, recent major disasters, or no legal authority to change zoning and permitting rules. HUD must also provide guidance on policies that reduce regulatory barriers and increase housing supply.

Section 209: Accelerating Home Building Act

This provision establishes a grant program to help local governments, tribal governments and municipal organizations select and adopt pre-reviewed housing designs, or “pattern books,” for small-scale, mixed-income housing. Eligible designs include ADUs, duplexes, triplexes, fourplexes, townhomes, cottage courts and other low- and mid-rise buildings of up to 25 units. The plans would be reviewed for compliance with local building and permitting standards, creating a more predictable and faster approval process for qualifying projects.

Grant recipients must track the number of permits issued and housing units built using the designs, while HUD will collect and share successful approaches as national best practices.

HUD must establish the grant program for state and local governments that use pattern books, and Congress must fund it, but the law does not set a deadline for HUD to launch the program.

Section 208: Innovation Fund

This provision creates a competitive grant program to reward communities that have achieved measurable housing-supply gains and help them sustain that progress. Eligible communities may use the flexible funding for housing and community development, infrastructure investments and other initiatives that expand attainable housing.

The legislation recognizes pro-housing reforms such as expanding by-right development, reducing parking and minimum lot-size requirements, increasing density, streamlining permitting and environmental reviews, allowing more ADUs, and reforming zoning codes.

HUD must prioritize communities that demonstrate innovative housing-supply policies and clear improvement in housing growth.

Nicholas Julian, NAHB director of land use, explains the law’s land-use and zoning provisions in the video below. For more information on land use, zoning and other key provisions in the 21st Century ROAD to Housing Act, visit nahb.org/road.