Will the ROAD Act change what pencils for multifamily rentals?

While the 21st Century ROAD to Housing Act remains in Oval Office big yawn limbo, its game-changing relevance to multifamily developers, apartment builders, rental housing investors and capital providers is clear.

The bill has passed both chambers of Congress by historic bipartisan margins. What it has not yet done is become law.

That leaves four live possibilities. President Trump could sign it. He could veto it, forcing Congress to decide whether to override. He could do nothing for 10 days, excluding Sundays, while Congress remains in session, in which case the bill becomes law without his signature. Or, if Congress adjourns in a way that prevents the bill from being returned during that 10-day window, the bill could die by pocket veto.

Pocket veto, lightning round: The Constitution gives the President 10 days, excluding Sundays, to sign or return a bill. If he does neither while Congress is available to receive a veto, the bill becomes law. If Congress adjourns and prevents return of the bill, the President can effectively kill it by taking no action. That is the pocket veto. It cannot be overridden because there is no formal veto message for Congress to act on.

In practice, Congress often avoids this outcome by staying technically available through pro forma sessions or designating agents to receive veto messages.

Is ROAD, then, likely to perish in the pocket?

Probably not, unless congressional leaders allow the calendar and adjournment mechanics to produce that outcome. Given the overwhelming House and Senate vote counts, the stronger working assumption for business leaders remains that the bill either becomes law or, if vetoed, triggers a politically charged override fight.

That is enough reason to keep reading the ROAD Act as a business inflection document. Forget the political theater aspect for the moment. For multifamily, the central question is whether the bill’s red-tape provisions reach the cost centers that actually determine whether a rental development pencils.

The 40.6% bright line challenge

Single-family builders have their own regulatory-cost burden. Multifamily developers carry an even more complicated one.

A 2022 NAHB/NMHC analysis found that regulation imposed by all levels of government accounted for an average of 40.6% of multifamily development costs. That burden included zoning approval, site-work fees and studies, development requirements beyond ordinary practice, land dedication, building authorization fees, affordability mandates, building-code changes, labor rules and delay.

Here’s how that looks in a stack.

The largest single component was changes to building codes over the prior 10 years, at 11.1% of total development cost. Costs when site work begins – including fees, required studies, and related items – increased by 8.5%. Development requirements beyond ordinary practice added 5.4%. Fees charged when construction is authorized added 4.4%. Zoning approval added 3.2%. Affordability mandates added 2.7%.

Those numbers clarify where the ROAD Act merges into opportunity lanes to bend cost barriers and where it forks off in directions that cannot affect those barriers.

Multifamily affordability is not simply a rent-versus-income problem. It is a feasibility problem. Each additional development cost requires higher rents, more subsidy, more density, lower land costs, cheaper capital or a developer willing to accept a thinner return. When too many of those inputs move in the wrong direction, the project is not value-engineered. It is canceled.

Julie Smith, chief administrative officer of The Bozzuto Group, captured that operating reality in testimony before the House Financial Services Committee late last year. She said barriers to development, high construction and operating costs, and regulatory burdens make it difficult, if not impossible, for developers to help address the housing shortage. She also highlighted the need for 4.3 million new apartment homes by 2035.

That is the backdrop against which ROAD should be measured, not by how many times it says the word affordability. By whether it changes feasibility.

Where ROAD could matter most

The bill’s multifamily impact appears strongest in four areas.

FHA multifamily finance

ROAD raises outdated FHA-insured multifamily loan limits and indexes them to a multifamily construction cost measure going forward. That is not a slogan. That is underwriting machinery.

For developers working in cost-heavy markets, loan caps that do not reflect current construction economics can subtly or not so subtly block projects that otherwise meet demand. Updating those limits will not fix zoning, labor, insurance, or property taxes. But it can improve some apartment projects’ ability to access federal credit support at a moment when capital costs remain a choke point.

Environmental review

ROAD establishes categorical exemptions for certain HOME-assisted activities, including infill housing projects, affordable-housing acquisition and rehabilitation, and new construction projects with 15 or fewer units. It also directs HUD to reduce duplicative reviews when a project’s scope, scale and location remain substantially unchanged.

This is meaningful. Multifamily development is a calendar-sensitive business. Delay is not just delay. It is interest carry, construction-cost exposure, expiring financing terms, entitlement risk, and investor patience.

CDBG and HOME flexibility

ROAD would allow Community Development Block Grant funds to be used for new construction of affordable housing, subject to limits, and would require grantees to maintain public databases of undeveloped public land. It also creates grants for planning and implementation associated with affordable housing, including zoning-code updates, housing plans, inspection capacity, and efforts to reduce barriers to housing supply elasticity.

That is not the same as forcing local governments to approve apartment projects. But it does turn some federal housing and community-development money toward supply-oriented activity rather than only downstream mitigation of scarcity.

Land-use transparency and pressure

ROAD requires certain jurisdictions to report whether they have adopted or plan to adopt land-use policies such as expanding by-right multifamily zoning, allowing apartments in retail or office zones, creating transit-oriented development zones, shortening permitting timelines, reducing parking requirements, allowing office-to-apartment conversions, increasing floor-area ratios, relaxing height limits and using property-tax abatements to enable higher-density and mixed-income communities.

For apartment developers, that roster of requirements reads like a catalog of levers for project feasibility. The big catch is that submitting those reports is not binding. The information cannot be used as the basis for enforcement action.

That makes this section more flashlight than hammer.

The code-cost collision

One of the more important data points for rental developers comes not from the bill itself, but from HUD’s recent look at multifamily code revisions.

HUD’s PD&R-backed research with Purdue University reviewed International Building Code revisions from 2009 to 2021 and found that specific code changes affecting a prototype three-story apartment building increased construction costs by 9.9%. Those higher costs translated into break-even rent increases ranging from $134 in Charlotte to $222 in Los Angeles for a two-bedroom unit.

Findings such as this one should reframe the policy discussion. Housing affordability debates tend to focus on zoning because zoning determines whether apartments can be built at all. But building-code changes determine how expensive they are once allowed.

That creates a difficult policy balance. Many code changes improve life safety, resilience, energy performance, durability, or long-term risk mitigation. The issue is not whether safety matters. It does.

The issue is whether policymakers are consistently measuring the affordability trade-off when they layer code changes onto a market already constrained by land cost, capital cost, labor scarcity, insurance, taxes, and local opposition.

ROAD gestures toward that issue by calling for cost-effective and appropriate building codes in its zoning-framework guidance. But guidance is not preemption, and one could argue that such guidance without teeth only intensifies frustration. Multifamily code adoption and enforcement remain fragmented across state and local systems.

So, for rental developers, this is one of the bill’s most important limitations. ROAD recognizes the code-cost problem. It does little or nothing to solve it.

Operations count as well

Multifamily housing is unlike for-sale housing in one crucial respect.

The regulatory burden does not stop when construction is finished.

The MetroSight study, “Behind the High Cost of Rent,” examines how rental housing laws affect multifamily revenue and expenses. Its conclusion is straightforward: source-of-income laws, eviction regulations and resident-screening restrictions can raise operating costs, reduce revenue, and ultimately discourage new construction or reinvestment.

Conversely, state preemption laws can reduce regulatory complexity and support operating stability.

This is not an argument that renter protections have no value. It is an argument that renter protections carry economic effects that must be weighed against the need for more supply.

Attention to this set of cost intolerances matters. Most of the ROAD bill is aimed at production, finance, planning, land use and federal process. It is less focused on post-completion operating regulation, even though operating stability is part of the capital stack. Investors underwrite not only what it costs to build, but what it will cost to operate, lease, insure, collect, maintain, and comply.

If local or state policies make apartment operations less predictable, development capital will price that risk or go elsewhere.

Roadmap, not ground-up multifamily engine

The ROAD Act could be meaningful for multifamily development. It could improve FHA financing alignment, reduce some environmental-review friction, make CDBG and HOME tools more supply-oriented, encourage public-land transparency, and create federal pressure for local land-use reform

Those are real provisions. But the bill is not a machine that’s going to start bending the cost barriers for would-be renters.

It does not directly remove rent-control regimes. It does not override local zoning. It does not force cities to reduce parking mandates or impact fees. It does not preempt local design review. It does not standardize building-code adoption. It does not eliminate NIMBY delay. It does not lower insurance premiums, property taxes, or construction labor costs.

ROAD may improve the odds that certain projects pencil. It may give pro-housing state and local officials a better federal toolkit. It may help developers point to a national bipartisan consensus that more rental housing is essential. It may turn some public funding and planning energy toward supply rather than scarcity management.

But apartment production still depends on city councils, planning boards, neighborhood politics, state preemption choices, building departments, lenders, insurers, and capital markets.

The bill points in the right direction. But will enough jurisdictions follow it?

For multifamily, the ROAD Act’s promise is not that Washington can solve the rental affordability crisis by itself. Washington can stop adding friction where it controls the process and start rewarding the places willing to remove friction where they do. That is not the end of the road. For apartment investors, developers, builders, property owners and managers, it may be the first high-occupancy lane.