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The U.S. housing market remains in the grip of a structural affordability crisis, but for the first time in years, the legislative logjam in Washington is beginning to break. With the House recently passing the Housing for the 21st Century Act in a historic bipartisan vote and the Senate Banking Committee moving forward with the ROAD to Housing Act, a rare consensus is emerging: the solution to our national housing shortage lies in increasing production rather than simply subsidizing demand.
In this month's Policy Pulse, we analyze the critical convergences between these two legislative vehicles. These include the transformative potential of manufactured housing modernization and the streamlining of federal environmental reviews. We also take a deep dive into legislative wildcards that could define the final package, which is being considered on Capitol Hill over the coming days.
Inside the issue:
- Bipartisan Momentum on Housing Supply: Following a historic 390-9 House vote for the Housing for the 21st Century Act, the Senate is now poised to take up the ROAD to Housing Act. While the bills differ in their mechanics, both chambers show a rare consensus on addressing structural supply constraints like zoning and regulatory friction.
- Key Advocacy Priorities: Pennymac strongly supports modernizing manufactured housing by removing the "permanent chassis" requirement, a move that could significantly expand affordable inventory. We also prefer the House’s streamlined VA loan disclosure framework and urge policymakers to address small-dollar mortgage gaps through a combination of FHA pilot programs and CFPB regulatory relief.
- Addressing the "Lock-In" Effect: Beyond current legislation, any serious effort to improve affordability must address the capital gains tax treatment for primary residences. Static caps have created a "lock-in" effect for millions of senior homeowners; indexing these limits to house price growth could unlock stagnant housing stock and restore essential market mobility.
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