Federal Update: Congress Finalizes Landmark Housing Reform Legislation 

This week, House and Senate leaders reached a bipartisan, bicameral agreement on a final legislative package aimed at boosting housing supply, after nearly a year of negotiations between the two chambers. The legislation – the 21st Century Road to Housing Act (H.R. 6644) – includes dozens of reforms intended to streamline and expedite housing supply, expand housing financing tools, and accelerate disaster recovery.  

  Many of the provisions included in the final package are expected to benefit California counties. These include making new construction an eligible use under the U.S. Department of Housing and Urban Development’s Community Development Block Grant (CDBG) program; establishing a grant program to help communities develop pre-approved housing designs that can streamline local permitting and construction processes; and creating a pilot program within the HOME Investment Partnerships Program to convert vacant and abandoned buildings into attainable housing. 

The package also reauthorizes the HOME Investment Partnerships Program and makes several updates intended to improve program administration and facilitate the construction of more affordable housing. These changes include raising income eligibility for certain HOME projects, exempting certain low-impact rehabilitation and infill projects from full National Environmental Policy Act (NEPA) environmental impact reviews, and allowing grantees that do not also receive CDBG entitlement funds to use HOME funds for housing-adjacent infrastructure. The bill would also expand access to housing finance tools, including the Low-Income Housing Tax Credit (LIHTC), by raising banks’ public welfare investment cap from 15 percent to 20 percent of total capital. 

In a major win for counties, the final package includes a three-year authorization of the CDBG-Disaster Recovery (CDBG-DR) program, which would provide communities with more timely and predictable access to disaster recovery funding. Under current law, CDBG-DR does not have standing authorization or an annual budget and is instead appropriated on a case-by-case basis following qualifying disasters, often resulting in delays in critical recovery assistance. 

The legislation also authorizes a pilot program to provide competitive grants to state, local, and tribal governments for regional housing planning and community development activities. In addition, counties secured key exemptions from provisions that would otherwise penalize direct CDBG recipients for failing to meet certain housing growth metrics. Under the final package, CDBG entitlement counties would be shielded from a 10 percent reduction in their CDBG allocation if the jurisdiction has been subject to a major disaster or emergency declaration in the preceding three years; falls below specified housing or rental cost thresholds; exceeds the national median vacancy rate; or has limited legal authority to influence zoning or land use decisions in the community. 

Additionally, the final package no longer includes provisions that, while intended to limit institutional investor purchases of single-family homes, could have inadvertently discouraged large-scale rental housing projects – an important tool for expanding housing supply – and displaced existing rental households. 

The Senate cleared an initial procedural hurdle earlier this week by a vote of 87-8, with both Senators Alex Padilla (D-CA) and Adam Schiff (D-CA) voting in favor. Final Senate passage is expected early next week, after which the package will return to the House, where a final vote is likely later in the week before the bill heads to President Trump’s desk. 

Gallagher Sworn in to Represent California’s First Congressional District 

On June 10, James Gallagher was sworn in as the new U.S. Representative for California’s First Congressional District, following his victory in the June 2 special election to fill the seat previously held by the late Representative Doug LaMalfa (R-CA). Gallagher, who previously served as Republican leader in the California State Assembly, will serve the remainder of Rep. LaMalfa’s term. 

The swearing-in gives House Republicans another vote in a narrowly divided chamber. Republicans currently hold 218 seats, compared to 212 Democrats, with one independent and four vacancies. It should be noted Rep. Kevin Kiley (I-CA) is the chamber’s sole independent, though he caucuses with Republicans. 

Bipartisan FIRE SMART Act Targets Rural Wildfire Resilience 

On June 17, Senators Alex Padilla (D-CA) and John Curtis (R-UT) introduced bipartisan legislation – the FIRE SMART Act (S. 4812) – aimed at helping small, high-risk rural communities strengthen drinking water infrastructure while improving wildfire response capabilities. 

The FIRE SMART Act would address a longstanding gap in federal support for water infrastructure projects that improve wildfire preparedness. While other federal programs provide assistance for firefighting equipment, staffing, and related needs, communities have limited options for financing infrastructure projects needed to deliver water for wildfire suppression. 

S. 4812 would create a narrowly tailored exception under the Environmental Protection Agency’s Drinking Water State Revolving Fund (DWSRF) to allow states to use low-interest loans for water infrastructure projects that provide both drinking water and wildfire suppression benefits. It should be noted that current DWSRF rules generally prohibit funding for projects “needed primarily for fire protection.” The Padilla-Curtis proposal would allow funding for dual-use projects that serve rural communities with populations of 50,000 or fewer and are located in areas identified as having a high-fire or wildfire risk. 

Examples of projects that could benefit from this change include upsizing aged or undersized pipes to provide adequate firefighting pressure, installing or improving hydrants in the wildland-urban interface, and making storage upgrades such as new water tanks, ponds, reservoirs, or other dual-use storage solutions that support both drinking water reliability and emergency fire response. 

The measure is intentionally narrow to avoid extending DWSRF eligibility to large-scale fire infrastructure projects in urban areas, an expansion that would certainly face opposition from stakeholders who already view the program as overly subscribed. Instead, the bill is focused on small rural communities that often lack the tax base needed to modernize water systems and improve fire flow. The legislation would also prioritize communities that have adopted wildfire protection plans or taken other proactive steps to reduce fire risk. 

Lawmakers Introduce Bipartisan Legislation to Reauthorize the Great American Outdoors Act 

House Natural Resources Committee Chairman Bruce Westerman (R-AR) and Ranking Member Jared Huffman (D-CA) recently introduced bipartisan legislation – the Great American Outdoors Act 250 (H.R. 9250) – that would renew and expand the original law. 

Specifically, the measure would reauthorize and rename the National Park and Public Land Legacy Restoration Fund as the America’s Legacy Restoration Fund, providing $1.9 billion annually – up to $9.5 billion over five years – to address deferred maintenance and improve recreation infrastructure on national parks, forests, wildlife refuges, BLM lands, and Bureau of Indian Education facilities. Funding would be divided among federal land management agencies, with 70 percent going to the National Park Service, 15 percent to the U.S. Forest Service, and 5 percent each to the U.S. Fish and Wildlife Service, Bureau of Land Management, and Bureau of Indian Education. 

The legislation could be particularly important for communities near national parks, national forests, and other public lands, where aging roads, trails, campgrounds, restrooms, visitor facilities, and recreation infrastructure can affect tourism, local economies, emergency access, and the visitor experience. The bill also emphasizes rural gateway communities that rely heavily on public lands visitation and outdoor recreation. 

In addition to traditional deferred maintenance projects, GAOA 250 would create a new outdoor recreation and sportsmen’s access pilot program to support projects such as campgrounds, trails, boat ramps, hunting and fishing access, shooting ranges, and wildlife-related recreation infrastructure. The pilot would be capped at 15 percent of the fund. 

The legislation also includes several project delivery and accountability reforms, including new project selection and reporting requirements, a public project database, limits on administrative costs, and direction to streamline environmental reviews for eligible priority maintenance projects. The bill would not allow new federal land acquisition and would create new funding sources through foreign visitor fees, onshore energy revenues, and incentives for private donations. 

California Lawmakers Press DOT to Release Withheld Highway Funds and Reverse CDL Restrictions 

A group of California lawmakers, led by Senator Adam Schiff (D-CA), recently sent a letter to Transportation Secretary Sean Duffy urging him to restore $160 million in FY 2027 National Highway Performance Program (NHPP) funding that has been withheld from California. The lawmakers argue that the funding freeze, which followed California’s delay in canceling roughly 17,000 commercial driver’s licenses, is punitive and could affect critical road maintenance funding. NHPP is one of the state’s core federal highway programs, supporting projects that preserve and improve the condition, reliability, and performance of major highways and freight corridors across California. 

The letter also raises concerns with a recent Federal Motor Carrier Safety Administration (FMCSA) rule limiting eligibility for non-domiciled commercial driver’s licenses to certain visa holders, including H-2A, H-2B, and E-2 visa holders. 

According to the lawmakers, the rule could sideline nearly 200,000 experienced drivers who are legally authorized to work, including DACA recipients, asylum seekers, and Temporary Protected Status holders. The lawmakers warn that the rule could have major implications for California and the national supply chain, particularly because California accounts for roughly 25 percent of the nation’s drayage capacity. They argue that reducing the pool of qualified drivers could worsen driver shortages, increase shipping costs, and place upward pressure on prices for everyday goods. 

The letter also pushes back on the administration’s safety rationale, pointing to FMCSA data showing that California’s commercial vehicle safety record is stronger than the national average. 

California Lawmakers Introduce Disaster Ready Infrastructure Act 

Last week, Representatives George Whitesides (D-CA) and Jay Obernolte (R-CA) introduced bipartisan legislation – the Disaster Ready Infrastructure Act (H.R. 9235) – that would require state Departments of Transportation and Metropolitan Planning Organizations to identify transportation assets that are most vulnerable to disasters, as well as roads, bridges, tunnels, and other facilities that are critical for evacuations, emergency response, hospital access, and supply chains. 

It should be noted that there is currently no federal requirement for states or regional planning agencies to proactively map which transportation assets are most at risk during disasters or most important to keep operational. The bill would give local governments and emergency response agencies better information to plan improvements, prioritize funding, and prepare for wildfires, floods, landslides, and other extreme weather events.