The biggest housing reforms are happening in your backyard
One of the most satisfying parts of remodeling a home is demolition day. Ripping out a cabinet, tearing out drywall, or demolishing a wall is a satisfying feeling. The change is drastic, and the feeling of accomplishment is almost immediate. But then you stand in the room realizing how many nails need to be removed from the studs and how much debris needs to be swept off the floor. The detailed clean-up is painfully slow.
The recent bipartisan passing of Congress’s 21st Century ROAD to Housing Act in June 2026 is an effort more akin to demo day clean-up versus the satisfaction of demolishing walls.
The key efforts of the 21st Century ROAD to Housing Act reduce red tape and expedite permitting, modernize manufactured housing definitions, ease financing constraints, and limit large institutional investors from owning more than 350 homes. Some of the biggest accomplishments of the federal effort are in what it did not do.
Historically, federal intervention in the housing market has resulted in a myriad of bad deals for America. Racially discriminatory housing policies decimated mostly black neighborhoods, leaving slums in their wake; federal housing vouchers incentivized single-parent households and created long-term dependence by punishing income increases, and the establishment of Fannie Mae and Freddie Mac helped create the framework responsible for the 2008 financial crisis. These are just a few examples.
The federal government’s role in housing usually leaves a bigger mess. However, in the 21st Century ROAD to Housing Act, the federal government approached its role in the national housing concern correctly. The federal government cannot wield a sledgehammer to create large amounts of housing supply changes in your backyard.
Congress is better equipped to use its clean-up tools to fix previous federal policies that hurt the housing stock, remove regulations from technology pipelines (like manufactured homes), encourage financial freedom, and limit predatory behavior of large institutional purchasers.
It is important to note that the limits on institutional investors distract from the issue at hand in improving housing supply. Institutional investors create a negligible impact on housing supply, rental costs, and homeownership. Many studies find that the presence of institutional investors can help lower rental costs. Less than 1% of homeownership is attributed to the presence of institutional investors nationwide, with certain more desirable counties never peaking above 10%.
As politicians capitalize on the fear of capitalism’s presence in the market, it is only distracting the public from the much bigger role governments played in regulating housing supply into the disaster it is today, thanks to land use regulations and other housing policy failures.
The states and local governments are using sledgehammers to create shocking changes quicker than the federal government can. Montana, Idaho, and Washington have already been acting on this concept.
Montana led the way in 2022 with Governor Gianforte’s Housing Task Force, which led to a package of reforms passed in 2023 and 2025, addressing lot size and ADUs. Estimates predict an increase in housing of 2,770 homes per year for Montana.
Idaho followed in 2025 with a legislative housing task force, and bills passed in 2026 allowing for smaller lot sizes for starter homes and ADUs, which would result in a projected increase of 5,000 units per year.
Washington also eased commercial restrictions to allow for residences and ADUs in more growth management zones , a projected increase of over 40,000 units per year.
America’s housing policy needs changes by communities, not the nation’s capital. Western policymakers who experienced the doubling of housing costs in the last ten years recognized that the major solutions easing supply had to come from the very communities experiencing the supply restrictions. Policymakers who can best help design these housing supply changes are the ones closest to your backyard – your city, county, and state policymakers.
The massive surge in home prices nationally, especially the doubling of Mountain West home prices is staggering. But states and local governments are the policymakers holding the sledgehammers to significantly address the housing crisis by removing barriers to supply. The federal government is just the clean-up, hammer-and-broom-wielding crew removing some poorly placed efforts and regulations from years past.
