EXCLUSIVE — The top housing Republican said there is more work that can still be done after Congress passed the most significant bipartisan housing legislation in decades.
The Washington Examiner spoke with Rep. Mike Flood (R-NE), the chairman of the Financial Services Committee‘s housing subcommittee, this week and discussed his next steps after the landmark housing bill became law.
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Flood, hot off a town hall in his district where he said he heard positive feedback on the housing legislation, noted that there are other housing-related priorities on his agenda, including loosening restrictions on the Federal Home Loan Banks, changes to “Build America, Buy America” requirements, and the use of artificial intelligence in underwriting for mortgages.
The bipartisan housing legislation, the 21st Century ROAD to Housing Act, became law this month without President Donald Trump’s signature. Instead, he allowed a 10-day window to run its course without signing or vetoing the bipartisan bill, which under the Constitution means it is enacted by default.
The bill was overwhelmingly bipartisan. The House voted 358-32 to pass it, and the Senate voted 85-5 to do the same.
The legislation streamlines environmental reviews to speed up affordable housing development and makes it cheaper and easier to build manufactured homes. In addition to easing federal regulations, the bill also encourages states and cities to reform their land use rules, which would mark a significant change in the federalist system with respect to city planning.
But with the housing bill in the rearview mirror, Flood said other housing priorities remain.
For instance, the Nebraska congressman said one of his top priorities is reforms to Build America, Buy America, also known as BABA. Flood said he wished more would have been done with BABA in the 21st Century ROAD to Housing Act.
“That’s one thing we didn’t make enough progress on in the housing bill,” Flood said.
BABA was implemented as part of the bipartisan 2021 Infrastructure Investment and Jobs Act and requires steel, iron, manufactured products, and construction materials for federally assisted infrastructure projects to be produced in the United States. While the measure is designed to help domestic production, it has created regulatory barriers to building more affordable housing.
In June, Flood and Rep. Maggie Goodlander (D-NH) introduced the bipartisan Build Housing Affordably Act. The bill would mandate the Department of Housing and Urban Development to study the effects of BABA on affordable housing development and the BABA waiver process.
It would also stop implementation of BABA for covered affordable housing projects until 60 days after that HUD report is delivered to Congress, and institute a 90-day timeline for reviewing BABA waivers for affordable housing projects.
Flood said another topic of interest is loosening restrictions on the Federal Home Loan Banks, the network of 11 federally chartered institutions that provide funding to mortgage lenders. He said that right now, by law, they are required to invest 10% of their earnings into affordable housing. He noted that they voluntarily said they would go to 15%.
“A lot of the rules that they live under are similar to the ones that we relaxed in the bill that just passed, so the Federal Home Loan Banks getting more flexibility, I think, would deliver more resources into communities wanting affordable housing,” Flood said. “That’s something I’m looking at.”
Additionally, Flood said he wants to encourage the use of AI in underwriting for home mortgages.
The congressman pointed out that a lot of people don’t have credit because they don’t own credit cards or a FICO score that they can be lent money on. But, he said, AI could be used to go into those people’s bank accounts and show that they make timely payments on their rent, their utilities, and their cellphones.
“And they aren’t a credit risk, and you have to get away from the normal FICO-driven credit score world to do that,” Flood explained. “And I’ve had a lot of lenders, mortgage bankers, come in and say they support some of that, and a lot of that could be done at the FHFA level, but that’s something else that needs to be done.”
Looking back at the 21st Century ROAD to Housing Act
Flood also took some time to talk about the 21st Century ROAD to Housing Act, the biggest provisions in it, and the reception it has received.
One provision of the law steers federal grants to localities that permit greater housing construction and away from areas that fail to build. Another promotes zoning codes that allow for greater construction, and essentially grades cities and states on how closely they conform.
Flood said that, looking ahead, he doesn’t think “Congress should or will get involved in telling cities and counties how to zone or govern their land use expectations.”
“We do ask HUD to send guidance to cities and counties to say these are some of the things that cities and counties should do to increase affordable housing in more densely populated areas, but there’s not enough support in Congress to do anything that would interfere with local zoning,” the congressman said.
Speaking about the parts of the bipartisan housing legislation that he thinks will have the biggest impact on affordability, one of those he cited was the provisions that make it cheaper and easier to build manufactured homes.
For instance, he said ending a requirement that manufactured premade homes have a chassis will lower the cost of those homes by up to 30%.
“We can also increase supply quickly with that, and the manufactured housing of today isn’t the trailers of yesteryear,” Flood said.
One provision courted significant controversy in the 21st Century ROAD to Housing Act: a ban on large investors purchasing single-family homes.
That provision, which was added to the bill after Trump demanded it during his State of the Union address, had strong support from some populist Democrats but faced pushback from free marketeers and some in the industry.
But Flood said the provision has proven to be popular with younger voters who are frustrated with the housing market and their inability to buy a home.
“I have no doubt in cities like Atlanta and Dallas, Austin and Boston, and places like that, you do have private equity in there,” Flood said. “You know, playing in those markets, investing in those markets, and this will [effectively end] that. I don’t think it’s as big of an issue in the Upper Midwest, but still, people in their 20s really, really, really care about it.”
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The congressman said the bipartisan housing legislation is getting praise in his district.
“People are excited about it — I had a town hall last night in a very difficult environment, and I got a lot of claps and appreciation for the bill,” Flood said.