The midterm stakes for the housing market and federal funding

Transcript:

Allie Barefoot: Welcome back to Data in Context. I'm Allie Barefoot with Cotality. With the 2026 midterm elections taking place, housing policies, affordability, and federal funding sit front and center for real estate professionals, homebuyers, and institutional investors alike. Between the landmark passage of major federal legislation this summer and persistent high interest rates, the real estate landscape is facing an unprecedented turning point. So to help us talk about this, I'm joined today by Cotality's Policy and Industry Relations Principal, Russell McIntyre, to break down the newly enacted 21st Century ROAD to Housing Act, analyze shifting policy platforms, and deliver real data on the eve of this pivotal election. Let's put the data into context.  

Allie Barefoot: Russell, welcome back to Data in Context. Thank you so much for talking a little bit about the 2026 midterm elections with us.  

Russell McIntyre: Yeah, happy to be back. Thanks for having me.  

Allie Barefoot: Of course. Let's go ahead and dive right into this. Can you kind of give us an overview of the ROAD to Housing Act, which passed earlier this summer? You know, what is some of the most critical provisions from that act, and what are your expectations for its implementation post-midterms?  

Russell McIntyre: Yeah, so the—the ROAD to Housing Act is the largest housing bill that we have passed really since Dodd-Frank helped us kind of lead out of the Great Recession back in 2010. And since then, for the past couple of decades, Congress really hasn't enacted many meaningful, large-scale reforms to our nation's housing market. They've made some tweaks here and there, but nothing to really address the biggest issue, which is the undersupply of affordable homes. However, this year, the housing crisis reached a point where even Congress had to act. So, as we've seen in a—a bipartisan manner, Congress was able to pull together a number of ideas, dozens of ideas, that had previously been introduced in standalone legislation or just debated in housing policy circles here in DC, and they took all of those and combined them into a giant omnibus package in an attempt to address the—a number of problems that currently exist in our housing market.  

These range from local zoning challenges to a lack of affordable starter homes, to transit-oriented development, to approval processes, a little bit of everything. So, some quick highlights from this bill—and again, the main goal was to increase supply to make homes that are both available and affordable. So it does that in a number of ways. One, I think very impactful, it requires the Department of Housing and Urban Development, or HUD, to create zoning and land use challenges that—uh, to create zoning and land use guidelines that local governments could adopt to help increase supply. You know, you can think of these as like pre-written playbooks that localities can follow to—to help improve their housing situation.  

It also creates an innovation fund that awards local governments that demonstrate increases in housing supply, so this provides incentives for—for local governments to enact reforms that streamline permitting or increase density, those types of things.  

And then another area where it has a lot of impact is the manufactured housing industry. You know, it gets rid of the chassis requirement, which has been a part of the manufactured housing industry since the 1970s. And the chassis requirement is—has added price, added cost to the, you know, average manufactured home, and getting rid of it really allows for more innovation in design and in placement.  

So of course, all of this requires really robust, objective, property-specific data, which is why our policy team here at Cotality has been paying such attention, close attention to the ROAD Act. And then to your last point, you know, as far as expectations post-midterms, I do think a lot of it depends on the results of the election. Both Democrats and Republicans have their own priorities within the bill. So depending on the makeup of our next Congress, we could see a variety of issues getting prioritized. However, I will say that regardless of which party controls Congress, the current affordability crisis has reached a point where both parties want to address housing costs.  

Allie Barefoot: Right, and I remember you and I broke down the ROAD to Housing Act on another episode of Data in Context right when this got passed over this past summer, so it was great to have a little bit of a refresher. And I know that with the midterms coming up, you know, it's—it's one thing to pass legislation, but a really big question that a lot of people have is when will the 21st Century ROAD to Housing Act actually get funded? You know, do we think that all the provisions will be funded, or will it kind of depend on the balance of power post-elections?  

Russell McIntyre: Yes, that's a really good point. In Congress, you have two types of bills: you have authorization bills, and you have appropriation bills. And—and they do what they say, you know. Authorization bills, they'll establish or modify federal programs, and then appropriation bills provide the actual funding for it. And that's the typical order of events. You authorize something, then you appropriate for it. So the ROAD to Housing Act was an authorization bill, just that.  

Which, you know, on one hand, it does contain a lot of provisions that don't need funding, so if you think of some of the deregulatory aspects of it, you know, you don't really need funds just to cut language out of a—of a law. You know, that takes care of itself. However, there are a number of provisions that do need to be funded, otherwise they really won't amount to much more than words on a page. Some of the items I mentioned earlier: the innovation fund, the zoning guidelines, all of those need funding to get going.  

So looking forward, I do honestly expect the majority of these provisions will be funded. You know, as you noted in your question, it does depend on the political makeup of Congress. But again, everyone, regardless of party, is looking to do something about this current affordability crisis. So I really do think at the end of the day, most, if not all, of these provisions will eventually be funded in some way, shape, or form.  

Allie Barefoot: Yeah, it's definitely something to keep an eye on as we head into this midterm election as well. And I kind of want to switch over to zoning here as well. I hear you talk a lot about the importance of zoning and transportation as a part of development, but it's hard to plan for the future that you can't necessarily see. So my question is, how many people will move somewhere? You know, what do they necessarily need for housing, and how do they get around? For example, you know, how are urban planners and developers going to design a blueprint for transit-rich, increased density communities since it's not technically the standard for today's development?  

Russell McIntyre: Yeah, that's a good point. See, you know, zoning really is like the backbone of housing policy. Unfortunately, it's really hard to address zoning challenges because zoning is always local, and what may work for one town or city or one urban planner may not work for another. All of this is very dependent on understanding, you know, shifts in human behavior, on immigration, out-migration, commuting patterns, traffic, that kind of stuff. Just a lot of information going into these decisions. And as you mentioned, that's a really big challenge for urban planners and developers, especially if they don't have access to all the information they need.  

So how does the ROAD to Housing Act help this? In short, it does aim to close that information gap for planners and developers. So, for instance, it requires HUD to establish and publish best practices in land use and zoning, which will greatly help towns that don't have the resources to conduct this type of research themselves. And some of these best practices are really like blueprints for increasing density, and you really just have to follow the steps.  

For example, you know, how can an urban planner go about identifying parcels that are prime locations for infill development? Well, HUD's looking at providing, you know, a step-by-step guide for, you know, how to scan your municipal tax map, how do you define what an underutilized parcel is, how do you overlay this kind of analysis with transit nodes for transit-oriented development, that kind of thing. HUD can also provide like simulations to show how, you know, specific changes in zoning might affect local property values or your tax revenue, or just increased strain on your infrastructure or increased traffic.  

So these blueprints are really going to be helpful for those urban planners. And of course, again, this is where Cotality really, really shines. So I'm looking forward to, you know, hopefully working with some local governments that might need some parcel-level zoning analytics or site selection intelligence or valuation modeling tools. These types of things are really going to be helpful for urban planners as they look to adopt these HUD blueprints for their specific locality, you know, not trying to mimic what's going on on the other side of the country, but really trying to address the specific problems that they have locally.  

Allie Barefoot: Yeah, absolutely. I know there are a couple of topics in this upcoming midterm election, and affordability is one of them. You know, that's a word that we hear constantly due to a lack thereof in the housing market today. So earlier this year, Congress responded by trying to make manufactured housing into a mainstream solution for affordability. Can you tell us a little bit more about what that means exactly, and how does that affect the future in that effort?  

Russell McIntyre: Yeah, so Congress is really focused on manufactured housing in recent years as a potential solution to the housing supply crisis—you know, not a silver bullet by any means, but something that could still move the needle. And I think this is because the manufactured housing industry has seen a ton of innovation over the past couple of decades, and these innovations have both lowered the production cost, but also increased the speed at which homes can be produced. So we're seeing homes that can be built quicker and cheaper.  

However, one regulation that was still really holding this industry back was the requirement that that every manufactured home be built on a permanent steel chassis. And again, that's been in effect since 1974. And I think the reason for that, back then, manufactured homes were much more thought of as mobile homes, right, and they would probably need to be moved from time to time. Therefore, they weren't placed on a permanent foundation, and they were required to maintain that steel chassis underneath.  

However, over the years, as manufactured homes have gotten better in quality, less and less people are actually moving them. They're not mobile homes anymore; they're just permanent manufactured homes. And this chassis requirement really became more of a hindrance than a help. It adds several thousand dollars to the cost of a manufactured home, and it also really limits the design choices.  

So if you think about, you know, transporting a manufactured home, it's really hard to transport a two-story manufactured home. You know, think of all the bridges you have to go under and that kind of thing. So theoretically, you could transport each level of that home separately, but if each one has to have a permanent steel chassis for transport, then you can't stack them on top of each other once you get to the destination, because that steel chassis is in the way. So that's why you see across the country, all of these manufactured homes are limited to one story, often very rectangular.  

And thankfully, the ROAD to Housing Act removed this outdated, costly steel chassis requirement, which, again, is going to lower the cost of a manufactured home by several thousand dollars, but also really allow for more unique blueprint designs. So yes, you could get those two-story manufactured homes, which will help out a lot, you know, help provide housing to larger families, but you can also look at using manufactured homes to help with infill and density—you know, thinking about lots that aren't a specific, you know, that aren't a rectangle or a square. If you have weird-shaped lots that you want to fit a home in, you know, are there ways to build manufactured homes that could can fit right there? Point being that it allows us to get a lot more creative with infill solutions to help us increase density. So, really looking forward to seeing what happens in the manufactured housing space over the next two, three years.  

Allie Barefoot: And all of this, of course, depends on actually bringing the ROAD to Housing Act to life. So do you think that it's going to happen regardless of how many seats in Congress belong to Democrats or Republicans?  

Russell McIntyre: Honestly, yes, I do. You know, looking forward, I expect the majority of these provisions will be funded at some level. Kind of as we discussed earlier, it does depend on the political makeup. But the ROAD to Housing Act is very uniquely positioned as a bipartisan, compromised piece of legislation. And again, everyone's looking to do something about this current affordability crisis, both Democrats and Republicans, so I do see a lot of money flowing through this law eventually.  

However, those funding levels will likely be very dependent on which party is in power. Just, for example, if Democrats were to take control of Congress, I would expect to see a lot more funds going towards things like transit-oriented development, which has been a priority on the left side of the aisle for years. Or as if Republicans maintain control, I would expect them to focus on more of the deregulatory aspects of the ROAD bill, like streamlining environmental regulations.  

And then, and lastly, you know, we can't forget the important role that Congress has to play in providing oversight, and I think the nature of this implementation changes based on who holds the gavel. So again, if Democrats were to gain control, I would expect much more aggressive oversight of HUD and really focusing on issues of equity or fair housing or green building standards, those types of issues we've seen Democrats care about for the past decade or so. Whereas I think Republican oversight would be much more minimal, simply because they control the administration as well, you know, so they're much more likely to let HUD implement the various provisions as HUD sees fit.  

Allie Barefoot: Right, right. Well, with midterms tomorrow, before you go, can you kind of tell us where you think these elections will have the biggest influence on the property market?  

Russell McIntyre: Yeah, sure thing. I—I've been thinking about this, and I think there's really three pressure points that I'm excited to—to kind of look for where I think these election results could quickly impact the market.  

The first, which we've already touched on, is zoning reform. You know, there are a lot of state and local elections that have ballot initiatives on zoning reform. I know California right now has a proposition on the ballot addressing environmental review process for certain projects. But, you know, these are happening all over the country, and they'll—they'll have a big impact on the local housing, construction, insurance industries for those towns and municipalities.  

The—the second issue I'd point out is the institutional investor debate. We haven't touched on it this podcast, though we did discuss it in depth in a previous episode, so make sure to check that out. But the ROAD to Housing bill has enacted a cap on the number of homes that institutional investors can own, placing that limit at 350. If Republicans keep control of Congress, I don't really see them enacting any additional reforms; I think they'll probably let this play out for a bit and see where it goes. But if Democrats take control of Congress, I could see them taking another look at this issue to see if there's any additional regulations that need to be written, really just looking to tweak it. I don't think it'll be a huge overhaul, but I could see them tweaking aspects of the institutional investor portion.  

And then the last thing I'd touch on is climate risk and insurance markets. You know, we've seen the incredible spikes in homeowners insurance costs over the past couple of years, much of which can be attributed to climate risk. So, you know, if Democrats were to take control, I would definitely expect them to focus on climate resilience and disaster mitigation funding, both of which would have a direct impact on property insurance premiums.  

Allie Barefoot: Right. We'll have to keep an eye out on the midterm elections tomorrow. But thank you so much, Russell, for sitting down with me again and breaking down all of this context on this episode here today.

Russell McIntyre: Thanks for having me.  

Allie Barefoot: Thank you again to Russell for joining me on Data in Context, and thank you so much for listening. If you haven't already, subscribe to Cotality's YouTube channel, and as always, if you want to find out more information, head on over to Cotality.com.