Congress zeroes in on housing supply

Driving the news: The Housing for the 21st Century Act passed the House of Representatives on Monday night on a 390-9 vote. A similar Senate bill passed that chamber's banking committee unanimously last year.

• To become law, two versions will need to be reconciled, pass both houses of Congress, and then be signed by President Trump.

Catch up quick: Both the House bill and the Senate's ROAD to Housing Act are aimed at using the weight of the federal government to incentivize more homebuilding.

• Among the provisions in both are a call for best practices for state and local land use policies; a streamlining of environmental review for housing development; and an increase to the Federal Housing Administration's limits on loans for multifamily real estate.
• Both also remove a regulation that manufactured homes have a "permanent chassis," a provision that increases the cost of mobile homes and has stood in the way of prebuilt homes becoming a more widespread option.

Between the lines: No one provision in the bills is likely to create a radical rewiring of the U.S. housing market. But each chips away at obstacles to housing availability.

By the numbers: Homebuilders have started work on around 1.4 million units in each of the last three years.

• That compares with a recent high of 1.6 million in 2021 and highs of over 2 million at several points in the decades before that — when the U.S. population was smaller.
• That helps explain why national home prices have risen by about 88% over the last decade, per the S&P Cotality Case-Shiller Index.

What they're saying: "By encouraging smarter zoning practices and streamlining federal requirements, this legislation could help unlock more housing supply, particularly in high-demand markets," Redfin chief economist Daryl Fairweather tells Axios.

• "Ultimately, increasing the pace of homebuilding and making it easier for communities to build a wider range of housing types should help ease upward pressure on prices and improve affordability for both renters and buyers," she adds.

Yes, but: There are factors going into high home prices that the current round of legislation probably wouldn't do much about.

• Construction costs have risen in part due to shortages of skilled labor and rising costs of inputs like drywall, lumber and copper. And builders are challenged by high interest rates.
• Ultimately, states and localities oversee zoning, and the ground-level politics varies widely in who prevails in NIMBY vs. YIMBY battles over building more.
• "The reality is that many of the burdensome zoning and land-use restrictions are mandated on the local level," Libby Cantrill, head of public policy at the asset management firm Pimco, said in a note, "so there is only so much the federal government can do to unwind the red tape."

Of note: The Trump administration has focused on using executive authority to address housing affordability, though its proposals and executive actions have, in some cases, focused more on demand and financing than on supply.

• The administration has directed Fannie Mae and Freddie Mac to buy billions in mortgage securities, for example, and floated introducing 50-year mortgages.
• The president has also called for prohibiting large national investors from buying up single-family rental homes and for allowing people to access retirement funds for a down payment.

What to watch: The White House has been supportive of the legislative push, but Congressional Republicans have rebuffed efforts to add a ban on Wall Street investment in single-family homes, the Wall Street Journal reports.

Go deeper: The Bipartisan Policy Center compares the contents of the House and Senate versions of the housing legislation here.