The Climate Stakes of the Senate’s Big Housing Bill

On Thursday, the Senate overwhelmingly approved the 21st Century ROAD to Housing Act, which has been touted by pundits and commentators across the ideological spectrum as the most significant housing package in decades. The bill is the result of eight months of work by legislators, beginning last July with the introduction of South Carolina Republican Senator Tim Scott and Massachusetts Democratic Senator Elizabeth Warren’s ROAD to Housing Act; continuing with the House’s Housing for the 21st Century Act, which passed in February; and concluding with Scott and Warren’s updated and unified bill, which was approved by the upper chamber Thursday by 89 votes to 10.

The bill still faces an uncertain future in the House, but its passage is nevertheless a milestone for U.S. federal housing policy — and, in less obvious ways, for climate policy. In addition to provisions addressing zoning and financial literacy, the 21st Century ROAD to Housing Act takes on a number of issues on the wishlist of climate and housing advocates. It also complicates or sets back other climate-related housing goals.

“For the climate community, which I consider myself firmly a part of, it’s really important to see the areas of the bill that don’t come anywhere close to talking about climate but have such a huge benefit,” Andrew Rumbach, a senior fellow in the Housing and Communities Division at the Urban Institute, told me.

Here’s our breakdown of the biggest climate-related provisions in the bill:

The so-called ‘build-to-rent’ ban

One of the most contentious parts of the Senate’s housing bill is section 901, which focuses on “build to rent” housing — that is, single-family and duplex communities that developers construct for the purpose of renting rather than selling as individually owned homes. The bill would restrict investors who directly or indirectly own 350 or more units from purchasing additional single-family homes; for homes that do meet certain exemptions, as well as for new build-to-rent construction, investors would be required to sell the home to an individual buyer within seven years. The rules are restrictive enough that opponents have taken to describing Section 901 as a build-to-rent “ban.”

Hawaii’s Democratic Senator Brian Schatz, a self-described climate hawk, is one of the leading voices advocating to nix the ban. (He was one of the 10 votes against the bill on Thursday.) In a floor speech on Wednesday night, Schatz said he considers the ban to be a “drafting error,” adding that it is “bananas” and “Soviet” to distinguish between single-family homes (which are described as two or fewer dwelling units, and include duplexes) and triplexes, and force their sale.

M. Nolan Gray, the senior director of legislation and research for California YIMBY, concurs. “The best case scenario is, we play weird shell games about which entity owns what,” he told me. “The worst case scenario is capital is scared off, and a lot of this housing production just stops.”

Mike Kingsella, the CEO of Up for Growth, a housing advocacy group that has pushed for an amendment to section 901 to soften the ban, told me, “What we’re saying to multi-family home developers is that it is fine if you do a garden-style apartment, but if you take the exact same property and you want to build houses on it, that’s not allowed.”

The implication, Kingsella said, is essentially that two-bedroom apartments should be built, but you cannot build three- to four-bedroom homes for a young family without the money for a down payment. Section 901 “takes a rung out of the ladder from the small studio you live in when you leave school and get your first job to when you eventually own your own home,” Kingsella said.

Another argument, however, is that the ban would push developers to create more high-density housing, such as apartment buildings, which are more energy-efficient and better for the environment than sprawling suburban single-family home developments. A ban on build-to-rent homes could also encourage greater investment in multi-bedroom apartments, which ought to be seen as a valuable housing solution in their own right rather than just as a stepping-stone to owning a single-family home, the argument goes. (Schatz’s team did not respond to a request for comment about this.)

Gray, however, was skeptical: “Maybe investors who are building townhouses in suburban Atlanta suddenly start building five-over-ones downtown,” he said, referring to buildings that consist of four residential floors over retail space, a common mixed-use construction. “But I wouldn’t assume it without any basis.”

A risky new categorical exclusion

Section 208 reclassifies smaller-scale projects funded by the Department of Housing and Urban Development into categories that require less extensive review under the National Environmental Policy Act, ostensibly to speed up housing construction. An expert I spoke to who requested anonymity to avoid retaliation by the government cautioned, though, that the reclassification doesn’t just cut red tape; it also removes the mechanism that requires HUD to ask questions like, “Is this site contaminated?” or “Is this building in a floodway?”

As written, the bill grants acquisitions of property a categorical exclusion under NEPA so long as whatever the agency does with the property does not “materially alter environmental conditions.” But not materially altering environmental conditions is meaningless in practice without a definition under NEPA, the expert explained, and it would allow regulators to interpret the law as waiving all site contamination and flood-risk requirements for acquisition projects that do not involve physical construction.

Let’s say a HUD grantee acquires a housing complex that was constructed on a polluted site — they would no longer have to screen for contamination because they aren’t physically altering the environment. Likewise, the bill would allow “Camp Mystic-style scenarios,” the expert said, referring to the July 4 Texas flood that killed 27 people, including 25 young campers. Under the Senate bill, acquiring an existing building in a flood zone would not require any environmental screening or adaptation measures.

Further, the bill does not waive liability under the Comprehensive Environmental Response, Compensation, and Liability Act, better known as the Superfund law. So if a grantee acquires a contaminated site and does not conduct environmental reviews, as permitted by section 208, they would still face federal liability for any contamination.

In practice, NEPA environmental reviews on HUD projects almost never generate public comments or result in litigation, meaning that this provision will not actually do much to speed construction. Section 208 is a “paper tiger,” the expert told me, exposing the low-income housing residents HUD is meant to help protect from contaminants and flood risk.

Grants for home weatherization

Section 203, a.k.a. the Whole-Home Repairs Act authorizes a five-year pilot program to offer grants and forgivable loans to qualifying homeowners and small landlords to fund upgrades related to energy and water efficiency, weatherization, habitability, and accessibility measures like ramps and grab bars. “The intention is to fund home repair and rehabilitation specifically for low- and moderate-income homeowners — think Michigan, Wisconsin, Minnesota, the north Great Lakes region, Allegheny County, Pittsburgh, and so on,” Kingsella told me. “It’s for homes that are not in great repair, and that there’s not really an easy way to finance rehabilitation.”

The grants also address climate-related issues without using the radioactive word itself. Though the section doesn’t go into much detail about what energy and water efficiency or weatherization upgrades might entail, one named credentialing organization is the Energy Star program, the federal government’s energy efficiency standard-setting organization, which the Trump administration tried to kill last year. Congress later rescued the program in its 2026 budget, and the Senate reaffirmed its commitment to Energy Star in the housing bill. That’s significant in places like Appalachia, where the cost of energy can rival that of rent.

Kingsella also noted that experts anticipate Americans will move north over the next 10 to 15 years to places with cooler climates, putting a strain on the region’s older housing stock. “This type of resource positions those communities to proactively increase or boost attainable homes with the expectation that a lot more people will be moving into these places,” he said.

Retrofitting abandoned buildings

Another pilot outlined in the section 212 of the bill would establish a grant program to convert vacant or abandoned industrial and commercial buildings (think former warehouses, factories, hotels, and strip malls) into affordable housing. Grants would run between $1 million and $10 million — for reference, the conversion of an abandoned textile mill in Philadelphia’s Kensington neighborhood into 51 units of affordable housing cost $17.8 million in 2017 — and prioritize areas facing “economic distress.”

While cities like New York have explored converting empty office buildings into affordable housing, developers run into the problem that larger floor plans lack central window access, requiring either fewer units or expensive, extensive modifications, such as light wells down the core of the building. The RESIDE Act won’t support those kinds of conversions; it is more limited in scope and ambition, focusing instead on the types of conversions that are already happening in places like Cleveland and Pittsburgh — “northeastern cities with older commercial stock, which have smaller floor plates, which is critical,” Kingsella said.

The program’s budget comes from excess funds in the Home Improvement Partnerships Program, an existing HUD program. “The approach this bill takes is to set aside monies from home investments to property owners to do the conversion work,” Kingsella told me.

Expanding the definition of manufactured homes

The Housing Supply Expansion Act in section 301 of the bill extends the definition of a manufactured home to include units that lack a “permanent chassis,” the steel frame that allows a home to be attached to wheels and move. The language makes the distinction between manufactured homes and modular homes much thinner, which advocates say will make the homes more socially acceptable and affordable.

“It lowers the cost of manufactured housing; it improves the resilience of manufactured housing — it’s great if it does not blow a hole in manufactured housing efficiency standards,” Mark Kresowik, a senior policy director at the American Council for an Energy-Efficient Economy, told me.

About those efficiency standards: Section 301 also stipulates that “no energy efficiency standards for manufactured homes developed by any Federal agency shall have legal effect unless adopted by” HUD. That plays into a long-running tug-of-war between HUD and the Department of Energy over which agency has authority to set energy standards for this class of homes. The DOE issued stricter (and much-delayed) standards in 2022, while HUD has not updated its regulations since 1994. “If the HUD standards for manufactured housing are to have sufficient insulation, air sealing, efficiency requirements — then great,” Kresowik said. “If they aren’t, then this is a big problem.”

More resources for disaster recovery

Section 501 formally establishes an Office of Disaster Management and Resiliency at HUD, creates a long-term disaster recovery fund in the U.S. Treasury, and establishes a permanent Community Development Block Grant Disaster Recovery program. “This is something that survivors, communities, and experts have been hoping for for many years,” Rumbach told me.

Though the language dances around extreme weather — the term, along with the word “climate,” appears not a single time in the bill — it is designed to more nimbly respond to catastrophes that are part and parcel with a warming atmosphere. Section 501 sets a 90-day clock for delivering disaster funds, compared to the years it would sometimes take previously, and requires that up to 18% of CDBG-DR allocations go toward mitigation.

… And RIP to incentives to locate housing near transit

One major loss for the climate coalition in the ROAD to Housing Act is the elimination of the Build More Housing Near Transit Act, which was included in the House’s version of the bill. The provision would have provided more incentives for building housing, which “seems like a common-sense reform to me,” Nolan Gray told me.

Though it’s not clear precisely why the Build More Housing Near Transit Act was a victim of compromise in the Senate bill, the House is reportedly rankled by liberties the upper chamber seemed to take with its version of the legislation. But despite voicing some drawbacks and reservations, advocates say the bill largely gets housing right. “There’s been a lot of good work put into this bill by countless people, and we continue to fight to ensure that this bill gets across the finish line,” Kingsella told me.