The emerging federal approach—across legislation and executive action—is familiar to city leaders and housing researchers. It focuses on expanding supply by reducing regulatory friction and improving financing tools. But while Washington may now be moving in that direction, the most consequential barriers to housing construction remain largely local.
Two developments in the U.S. Senate illustrate how broad the consensus has become. A bipartisan housing package advanced through the chamber and later passed by an overwhelming 89–10 vote. The legislation includes roughly 40 provisions aimed at boosting housing supply and lowering costs. Among them are measures to expand financing for affordable housing, increase mortgage insurance limits for multifamily projects, and streamline environmental reviews for new construction.
The bill also encourages converting vacant commercial buildings into residential units and expands financing options for manufactured and modular housing—two approaches that can add units more quickly than traditional development pipelines. Housing industry groups and municipal advocates have long argued that federal regulations and financing rules slow projects and raise costs, particularly for multifamily construction.
The scale of the Senate vote matters. Housing policy has historically fractured along partisan lines, with debates often centered on subsidies, tenant protections, or tax incentives. The current proposal instead emphasizes supply-side reforms—removing regulatory barriers and expanding the types of housing that can be built.
Even so, the bill’s future remains uncertain. It must still pass the House of Representatives, where internal party disagreements may complicate the path forward.
At the same time Congress is debating housing policy, the White House is moving through executive authority. Two executive orders issued this week direct federal agencies to identify and reduce regulatory barriers that slow housing construction and to revisit mortgage rules that may restrict lending by smaller banks.
The directives include exploring ways to accelerate permitting processes and reviewing building mandates and environmental requirements that can delay projects. They also encourage agencies to expand mortgage access by adjusting rules that govern smaller lenders.
Federal officials argue that regulatory requirements—both federal and local—have contributed to rising housing costs by slowing the pace of construction. The executive orders reflect an attempt to use federal authority to address those constraints where possible.
For cities, the implications are complicated. Federal policy can shape housing supply in several ways: through financing tools, tax incentives, mortgage markets, and environmental review requirements. These factors affect project feasibility and the availability of capital for development.
But the most decisive constraints on housing production typically arise much closer to home.
Local zoning rules determine whether multifamily housing is allowed. Height restrictions limit how many units can be built on a parcel. Parking mandates increase construction costs and reduce density. Permitting timelines and discretionary approval processes introduce uncertainty that can discourage projects before they begin.
Even when federal financing expands or regulatory reviews accelerate, those local frameworks continue to shape what actually gets built.
That reality helps explain why the federal government’s housing agenda increasingly echoes reforms already underway in states and cities. Several states have begun preempting restrictive local zoning rules to allow accessory dwelling units, duplexes, or multifamily housing in areas previously limited to single-family homes. Others have reduced parking requirements or streamlined permitting timelines.
Washington’s emerging housing strategy appears to follow a similar logic: remove barriers where possible and encourage more housing types to enter the market.
Still, federal policymakers face an inherent limitation. Land-use authority in the United States largely sits with local governments. Congress can expand financing and adjust regulatory frameworks, but it cannot rewrite municipal zoning codes.
That leaves cities in a pivotal position.
If local governments treat the new federal initiatives as an opportunity—using expanded financing tools, encouraging conversions of underused buildings, and revisiting regulatory barriers—they could accelerate housing production in ways that federal policy alone cannot achieve.
If they do not, the national effort to increase supply will run into the same constraints that have limited housing growth for decades.
Washington may finally be aligning around the idea that housing affordability depends on building more homes. Whether that consensus translates into meaningful change will depend largely on decisions made in city halls.
Cities still control the rules that determine how much housing gets built.
