Championed as one of the most consequential and bipartisan federal housing laws in decades, the 21st Century ROAD to Housing Act enacted this month makes significant changes across federal housing policy.

Included in the 139-page law are a host of provisions that will restrict some institutional investors from buying homes, ease rules for manufactured housing and expand assistance for veterans. But some of its most notable provisions give local governments greater flexibility in using federal grants while introducing new financial rewards and penalties tied to housing production. 

This is especially important because states and cities — not the federal government — control most housing choices through zoning and land use regulations. So the law tries a new approach to nudge cities toward more housing.

The law allows certain federal block-grant funding to pay for new affordable housing construction, which previously had been forbidden. And for the first time, it provides incentives and penalties for cities to build faster.

“The federal government is going to give you a whole lot of carrots, a whole lot of support, and just a couple sticks, in order to encourage these communities to start building more housing,” said Ben Harrold, senior manager of public policy at the National Apartment Association.

The measure made it through a divided Congress in part because it “doesn’t actually come with a ton of new money for these programs,” said Andy Winkler, the managing director of housing and infrastructure policy at the Bipartisan Policy Center.  

“There’s not one huge idea that’s going to change the dynamics of the housing market, but there are tons of small bills and provisions and programs that collectively really could have an impact.” 

The most immediate impact of the law could be making existing federal housing dollars easier to use for municipalities. 

Mark Kudlowitz, senior policy director for the Local Initiatives Support Corporation — a national nonprofit that finances affordable housing and other projects in urban and rural communities — said localities can now make decisions on where to spend existing federal dollars to increase supply. They also can start readying their local policies for potential funds from new incentive-laden programs.

“When we make it easier for the jurisdictions to deploy the funding, it’s doing everyone a favor, from the jurisdictions that have to manage these dollars to the federal government and then the developers that are ultimately receiving it,” said Kudlowitz. “It’s just decreasing costs and creating more efficiencies within the process.” 

Although Hartford, Connecticut, Democratic Mayor Arunan Arulampalam wishes the law contained more new funding for programs, he praises a $200 million annual competitive grant program for municipalities that increase housing supply. He also welcomes a pilot grant project to help more municipalities convert vacant and abandoned buildings into housing. 

“The thing that this bill actually does is make existing federal dollars more efficient and maybe more useful,” Arulampalam said. 

The new Innovation Fund will reward communities that demonstrate increases in housing supply with $200 million in annual competitive grants from fiscal 2027 through 2031. The housing increases can come from local governments and tribes reducing parking requirements, revising minimum lot sizes and building height, creating incentives for dense development, changing zoning laws, streamlining regulatory and environmental requirements, or eliminating restrictions on accessory dwelling units. 

“The Innovation Fund for flexible spending, which I think is the core of what the federal government should be doing for communities like Hartford that are actually building housing, it’s an exciting program,” Arulampalam said.

Block grant changes

The new law also makes significant changes to the Community Development Block Grant program that could make it easier to use the money to build affordable housing. The CDBG program helps states, cities and counties finance improvements to housing, but funds also can be used for infrastructure, economic development and other projects that are geared toward low and moderate-income residents. 

The new law now allows some grants to be used for construction. And it will reduce the money given to cities that don’t meet certain construction thresholds.

Under the CDBG State Program, states receive federal money and distribute grants to eligible smaller communities. Jenna Pomponi, director of advocacy and federal programs at the Council of State Community Development Agencies, said cities under 50,000 residents and counties with fewer than 200,000 residents, known as non-entitlement communities, especially rely on state agencies to conduct environmental reviews and administer complicated federal requirements.

“In a lot of small communities, they don’t have the capacity to do all the compliance work that’s required for a government to review, so the state agencies do that for them,” Pomponi said. 

The new law now allows the construction of affordable housing to be eligible for CDBG grants, capped at 20% of the amount allocated to a recipient. Before the law, CDBG funds were used for public facilities and infrastructure, rehabilitation of existing housing, public services and economic development.  Congress provided $3.3 billion for the CDBG program in fiscal year 2026. 

“It streamlines some really outdated requirements that were adding administrative burdens onto administering these grants, so I think essentially it’ll just make the money that we have go further in communities,” Pomponi said. “In the past, folks mostly used CDBG just to repair older homes, but now they can construct new affordable housing.”

Under the law’s Build Now provision, which applies to cities and urban counties receiving CDBG entitlement funding, funding will be based on the rate at which housing has grown. Recipients at or above the median growth rate will receive bonuses, while recipients below the median generally will face a 10% reduction. 

Exemptions apply to municipalities that meet its thresholds for both lower rents and home values, places where rental vacancy rates are above the national average, areas recently impacted by a major disaster or emergency declaration within the previous three years, and those that lack legal authority to update zoning or permitting ordinances. 

“This is the first time to my knowledge that the federal government will condition resources on the actual construction of new homes,” said David Garcia, deputy director of policy at UC Berkeley’s Terner Center for Housing Innovation. “So this goes even a step further from other programs, which provide money to cities and states to just do reforms. This is actually tying money to outcomes.” 

Garcia said that the Build Now provision and changes to CDBG funding will make cities, notably bigger and high-cost cities, motivated to do what’s necessary to get housing production moving and avoid any loss of funding.

Ultimately, zoning can only go so far, as Garcia noted that economic conditions and the price of building could still make construction very costly.

“Cities don’t control interest rates, they don’t control tariffs, they don’t control the labor pool … so there may be instances where you actually have cities working in really good faith to try and get more homes out of the ground, but the broader economic conditions are just not in their favor.” 

Before the law passed, six organizations representing states, counties and local development agencies urged Congress to remove the Build Now provision, warning that tying CDBG dollars to short-term housing growth could make funding less predictable and that the metrics used to gauge growth could be slow and misleading. 

“The idea was to put the squeeze on local governments to play ball, so to speak, as far as, looking at some of their zoning reform or their local housing strategies,” said Jared Grigas, associate legislative director for community, economic and workforce development at the National Association of Counties, which signed the letter.

These funding conditions don’t factor in until fiscal year 2029 and remain in effect through fiscal year 2043.

Grigas said the final version of the law, with the three-year implementation window and exemptions, made the provision more agreeable.

“That gives us three years to get the word out to our folks that, ‘Hey, you might find yourself in this new universe where this might impact your CDBG allocations,’” Grigas said. “And here’s how you can plan ahead.” 

‘Next battle’

Federal funding for U.S. Department of Housing and Urban Development staffing was reduced by 24% in fiscal year 2026. And the guidance and implementation of at least 35 new or updated programs and regulations from the new law will be assigned to HUD — including the Innovation Fund and the Build Now provisions, according to the Urban Institute. 

Winkler, from the Bipartisan Policy Center, said the “next battle” in the realization of the ROAD Act is swift implementation of the new law from HUD to the local agencies.

Some are skeptical that HUD — without new funding for staffing — can manage the workload that comes with such an expansive to-do list.

“A lot of this will hinge on HUD’s ability to implement this law,” Pomponi said. “Some of us are concerned because HUD cut back so much of their staff last year when the administration changed over, and now they’re being handed this huge law to implement.”

Arulampalam, the Connecticut mayor, said Hartford will continue pursuing options such as  office conversions and vacant lot development while waiting to see whether Congress funds the law’s new programs.

“We are coming up with as many creative solutions as we can to solving the housing crisis,” he said. “The thing that limits us the most is the dollars we can put into it.”

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org. 

The Trump administration is continuing its pushback against state artificial intelligence laws that it views as ideologically biased, proposing a new Federal Trade Commission policy.

The proposed policy statement, which is open for public comment through July 31, would affect how the FTC regulates AI companies. The agency said it’s meant to address concerns that “AI companies that distort their systems’ outputs to achieve undisclosed ideological objectives” could be deceiving consumers in violation of federal law.

“The FTC wants to hear from businesses and consumers about their experiences and concerns regarding the subversion of AI systems for ideological ends,” Chairman Andrew N. Ferguson said in a statement.

The proposal specifically mentions a first-of-its-kind Colorado law that had banned “algorithmic discrimination,” or AI output that might lead to decisions disfavoring people on jobs, loans or healthcare based on their race, religion, gender and other protected categories. But the Colorado legislature already has repealed that provision. The revamped law instead focuses on regulating technology that results in “consequential decisions” for consumers. 

The controversial law prompted a lawsuit from xAI, Elon Musk’s artificial intelligence company, which the U.S. Department of Justice supported.

In December 2025, President Donald Trump issued an executive order targeting state AI laws, including creation of a Department of Justice AI Litigation Task Force to challenge state AI laws. His order also directed the FTC to issue a policy statement on regulation of state laws that “require alterations to the truthful outputs of AI models.” 

Stateline asked the FTC if there were any state and city laws that officials felt were currently in violation of federal laws, but received no response.

Tyler Thompson, a Denver-based lawyer with firm Reed Smith who tracks emerging technology law, said the FTC proposal is important because it raises the possibility that companies could face deceptive-practices claims based on how they tune, weight or steer AI models, which could also prompt state policy on the issue.

“Just the fact that companies could be tweaking their models and that could lead to a deceptive trade practice, I think is huge news,” Thompson said.

Thompson believes the legal battle and the FTC’s focus on restricting similar laws will lead to “a more niche” policy focus on AI – such as deepfakes, nonconsensual sexual content, children’s safety, companion chatbots and data centers — areas where there is bipartisan agreement.

Noah M. Kenney, founder and principal consultant of Digital 520, an AI governance, security and privacy consultancy, who also responded to the FTC’s request for public comment, said the proposed statement carries more political pressure rather than being an enforceable federal regulation.

“The real effect of this statement is signaling and pressure, not legal preemption, especially paired with the December executive order’s AI litigation task force.”

Kenney said there is also an irony in the federal government’s argument.

“A federal effort to dictate what counts as a ‘neutral’ or ‘accurate’ output raises its own First Amendment concerns about compelled speech,” he said.

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org.

Dozens of public housing authorities, tribes, property owners and community groups have joined a new coalition organized by the U.S. Department of Housing and Urban Development to promote work requirements and time limits for people who receive federal housing help.

HUD is currently finalizing a rule that would allow public housing authorities and property owners who participate in federal housing voucher programs to impose work requirements and time limits on work-ready adults, or working-age adults (younger than 62) who are not disabled.

The federal agency says members of the coalition support the idea of giving housing authorities and providers discretion to require work of up to 40 hours per week for nonelderly, nondisabled adults, supplementing those rules with job training and other supportive services.

HUD argues that current housing policies discourage work and self-sufficiency, and extend the amount of time that people remain on housing assistance. In a social media post, Public and Indian Housing Assistant Secretary Ben Hobbs said the new requirements could generate over $500 million in new resident income.

In 2023, 31% of the people receiving federal housing assistance were nonelderly, nondisabled adults. Of that group, 44% were working and 56% were not, according to a 2025 report by the Congressional Research Service.

More than a hundred public housing authorities, tribes, property owners and community groups have joined the Work & Dignity Coalition, according to HUD. The National Housing Law Project, a nonprofit that advocates for more low-income housing, produced a list of 58 entities, including the public housing authorities in Fort Worth, Jacksonville, Orlando, Philadelphia, Pittsburgh and Tampa.

Less than 1% of public housing authorities, known as Moving-to-Work agencies, are currently allowed to impose time limits or work requirements on people receiving housing assistance. HUD cites Champaign County, Illinois — which requires each able-bodied adult to work or be in school for at least 15 hours per week, and each household to generate 30 hours of work income at the minimum wage.

“I think that the important thing to note is that this is all about self-sufficiency, even if there might be some fear over what is required and how that would affect their housing,” said Peyton Pannell-Johnson, a spokesperson for the Housing Authority of Champaign County. “There is a team that needs to connect people to work, and then a team that follows up with each client.”

But housing advocates argue that the proposed requirements will make it more difficult for people to keep their housing assistance. The Congressional Research Service also warned in its 2025 report that imposing work requirements on federal aid recipients often trips up people who are working already.

“Work requirements can increase the burden for working recipients to prove that they remain eligible for benefits by requiring that they produce additional or more frequent information about their wages and hours,” the research agency stated. “There is an inherent tension between helping families meet their basic needs and promoting work in low-income assistance programs.”

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org

Two years after the U.S. Supreme Court’s Grants Pass v. Johnson decision  — which allowed governments to enforce public camping bans without violating the Eighth Amendment prohibition on cruel and unusual punishment — more than 350 cities and 14 states have adopted laws or measures to crack down on street homelessness.

States have varied in their approaches toward street homelessness since the 2024 ruling, including imposing statewide camping bans on public lands, setting mandates for local governments to enforce those bans and, in some cases, allowing property owners to sue their local government if they do not comply with enforcement of statewide camping bans, according to details gathered by the National Homelessness Law Center.

This year, Louisiana made unauthorized public camping a crime and created a Homelessness Court program, where an unhoused person charged with a crime could seek treatment as an alternative to jail time. Indiana’s new law, which bans unauthorized camping, sleeping and sheltering on state or local public land, goes into effect in July. 

Georgia and Oklahoma enacted Safe Neighborhood laws, which allow property owners to seek compensation from local governments if they fail to enforce laws tied to public camping, loitering and panhandling. Some measures have been modeled after legislation drafted by groups such as the conservative think tanks Cicero Institute and the Goldwater Institute.

There were fewer homeless people in the United States on a single night in January 2025 than in January 2024, but homelessness increased in 28 states, according to the latest federal count. 

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org.