Every few years, Washington announces a new piece of housing legislation that promises to fix the housing crisis by cutting red tape, encouraging investment, and making it easier to build homes. The latest proposal, the 21st Century ROAD to Housing Act, is being described as landmark deregulatory legislation designed to lower housing costs and increase supply.
On paper, it certainly sounds promising. The bill addresses several long-standing issues that developers, builders, lenders, and housing advocates have complained about for decades. Regulations today account for roughly 25% of the cost of building a single-family home and about 40% of the cost of multifamily housing. Those are staggering numbers, and they help explain why so many projects stall before the first shovel ever hits the ground.
But as anyone who has spent time in the housing industry knows, the real question is not whether a federal bill reduces regulations. The real question is whether state and local governments will simply replace them with new ones.
The Promise of Deregulation
At its core, the ROAD to Housing Act aims to remove several federal barriers that many believe have slowed housing development.
One of the most talked-about provisions is the Housing Supply Expansion Act, which would eliminate the permanent chassis requirement for manufactured homes. That single regulation has long been criticized by the industry because it artificially separates manufactured housing from other forms of residential construction. Estimates suggest removing the requirement could reduce costs by as much as $15,000 per unit.
For those of us who have watched the lines blur between HUD-code homes and IRC-based modular construction over the years, this could be a meaningful shift. It would allow manufacturers to rethink designs, reduce steel usage, and potentially create more hybrid housing products that compete more directly with site-built homes.
Another component of the legislation focuses on streamlining environmental reviews. The BUILD Housing and Unlocking Housing Supply through Streamlined and Modernized Reviews Acts aim to simplify environmental approvals, particularly for smaller infill projects that often get bogged down in reviews originally designed for large developments.
If implemented as intended, that could shave months—or even years—off project timelines.
Fixing the Financing Bottlenecks
The bill also tackles a less visible but equally important barrier to housing development: financing.
Provisions encouraging small-dollar loan originators could help expand mortgage access for homes under $100,000, a price range that has largely disappeared from traditional lending programs. For affordable housing, ADUs, small manufactured homes, and entry-level housing, this could open new doors.
Meanwhile, the Appraisal Industry Improvement Act attempts to address a looming shortage of licensed appraisers by reducing barriers to entering the profession. Anyone who has waited weeks for an appraisal during a real estate transaction knows how serious this problem has become.
There are also measures aimed at improving coordination between federal housing agencies such as HUD, USDA, and the VA, an area where inefficiencies have long frustrated developers trying to use multiple housing programs on the same project.
On paper, these are sensible adjustments.
The Question Nobody Likes to Ask
But here’s the uncomfortable reality.
Even if the federal government removes a layer of regulation, housing is still overwhelmingly controlled at the state and local level.
Zoning rules.
Building codes.
Local design requirements.
Parking mandates.
Impact fees.
Permit reviews.
These are the regulations that often add the most cost and delay to housing projects, and they are rarely affected by federal legislation.
In other words, Washington may remove one layer of red tape, only to see local jurisdictions quietly replace it with another.
Anyone who has worked in modular, manufactured, or off-site construction has seen this happen repeatedly. Federal policies attempt to streamline housing production, while local authorities respond by tightening zoning definitions, increasing design requirements, or adding new approval processes.
The result?
The regulatory burden shifts rather than disappears.
A Step in the Right Direction
That doesn’t mean the ROAD to Housing Act lacks value.
There are several provisions in the bill that could genuinely help move the needle. Removing outdated manufactured housing requirements, simplifying inspections for properties financed through multiple programs, and modernizing long-stagnant federal housing programs are all worthwhile efforts.
And eliminating federal obstacles is certainly better than adding new ones.
But it would be a mistake to believe that federal deregulation alone will suddenly unlock the housing supply.
The housing shortage in the United States is not caused by one single regulation. It is the result of thousands of small rules layered on top of each other over decades, many of them created by well-intentioned policymakers trying to solve individual problems.
Together, those rules have created a system where building homes has become slower, riskier, and more expensive than ever before.
The Real Road Test Ahead
If the ROAD to Housing Act becomes law, the real test will begin afterward.
Will state and local governments follow the same spirit of deregulation?
Or will they simply expand their own regulatory frameworks to fill the vacuum?
Until that question is answered, housing legislation like this will always carry a certain amount of uncertainty.
Still, if the bill succeeds in removing even a few meaningful obstacles, it could help move the industry forward.
And right now, when millions of Americans are struggling to find housing they can afford, even small improvements in the system are worth paying attention to.
Because in housing, progress rarely happens in giant leaps.
More often, it happens one regulation at a time.
Gary Fleisher—known throughout the industry as The Modcoach—has been immersed in offsite and modular construction for over three decades. Beyond writing, he advises companies across the offsite ecosystem, offering practical marketing insight and strategic guidance grounded in real-world factory, builder, and market experience.
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