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Jasmine Laws

By Jasmine Laws

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A sweeping bipartisan housing bill passed by the Senate on Monday could reshape America’s strained housing market, although its impact is likely to vary widely across the country.

The legislation, known as the 21st Century ROAD to Housing Act, which would seek to increase housing availability and reduce competition from institutional investors in the single-family market among dozens of other measures, passed with a vote of 85-5.

The bill, one of the most significant federal housing overhauls in decades, comes ahead of the U.S. midterms where affordability is likely to be at the forefront of voter's minds as they cast their ballots.

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The housing network Up for Growth assessment estimated in 2025 that the gap between supply and demand remained at around 3.78 million homes in 2023. At the same time, millions of households are already stretched.

According to the Harvard University Joint Center for Housing Studies, 43.5 million households were cost burdened in 2024, meaning they were dedicating more than 30 percent of their income each month to housing costs–this was an additional 589,000 households compared to the year prior.

That combination, of limited supply and high cost pressure, is what the new legislation is designed to address.

What's In The Act?

The bill would bring in a restriction on large institutional investors buying single-family homes, aimed at leveling the playing field for individual buyers, while boosting housing supply, updating the long-standing Community Development Block Grant (CDBG) program–a key pipeline of federal funding for local housing and infrastructure projects–preserving several pilot programs administered by the Department of Housing and Urban Development (HUD) and other measures.

Roberto Quercia, a professor of city and regional planning at the University of North Carolina at Chapel Hill, told Newsweek that "rather than directly preempting zoning authority, the act encourages jurisdictions to expand housing supply through rewards and imposes penalties on those that do not."

He added a central feature of the legislation is its "encouragement of zoning reform and the streamlining of permitting processes," and it "promotes the expansion of so-called 'middle housing,' or moderate-density housing types, which could be particularly impactful in areas currently dominated by single-family zoning."

States Likely To See The Biggest Impact

Quercia said that given the act's structure, its effects are "likely to vary significantly across states" based on factors including housing demand and how significantly states and localities depend on federal funding tied to housing production.

The states most likely to experience "substantial impacts are high-cost, supply-constrained markets such as California, New York, Massachusetts, Washington, and Oregon," he said,

He also said that "fast-growing states with strong demand" such as Texas, Florida, Arizona, and Colorado may also benefit from the act, "even if they are already adding to their housing stock at meaningful rates."

Quercia said that the legislation is likely to have more limited effects in states with "relatively flexible housing markets, lower regulatory barriers, moderate demand growth, and less acute supply shortages."

This includes parts of the Midwest, such as Ohio and Indiana, he said, and some Southern states with "fewer zoning constraints, where federal incentives may produce smaller marginal impacts." Also rural areas with "weak demand are unlikely to see major changes under the act’s primary mechanisms."

"Overall, by expanding housing supply, the act is expected to contribute over time to a moderation of housing prices and rents, improving affordability for American households," he said.

To determine which states would be the most affected by the bill, Newsweek reviewed three indicators, the scale of housing shortages (using data from Up for Growth), housing cost burden (using data from United Health Foundation on americahealthrankings.org) and the prevalence of investor activity (using data from the real estate brokerage Redfin).

Analysis suggested states, particularly on the coasts and in high-growth Sun Belt markets, could be most exposed to the changes targeted by the legislation.

Among the states emerging at the top of the analysis included:

Other states like to experience notable impacts from the bill include New Jersey, Washington, Colorado and Oregon, where large shares of income already go toward housing costs and supply constraints remain a persistent issue.

States Likely to See Less Immediate Impact

At the other end of the spectrum, several states would likely to see less immediate impacts from the act, largely because housing costs are lower relative to incomes:

States such as Tennessee, Virginia and North Carolina fall into the middle: housing costs are rising, but pressures remain below the levels seen in coastal markets.

What Happens Next

The act now heads to the House of Representatives for another vote. While lawmakers have framed the bill as a major step toward improving affordability, if the act is turned into law, results may take time to appear.

Much of the legislation depends on local governments easing zoning rules, developers responding to incentives and supply increasing over several years. In other words, the bill may shift the direction of the housing market, but it may not deliver immediate relief everywhere.

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