A sweeping federal housing package just passed Congress. Here in DC, the real test isn't in the bill text. It's in whether local policy gets out of the way.
Yes. But probably not for the reasons many people think.
After nearly two years of bipartisan negotiations, Congress passed the 21st Century ROAD to Housing Act, a sweeping package of housing reforms described as one of the most significant federal housing initiatives in decades. The legislation touches nearly every corner of the housing ecosystem, from expanding financing opportunities and supporting first-time homebuyers to encouraging local governments to reduce barriers to new housing construction.
On paper, it's exactly the kind of legislation the country needs.
But here in Washington, DC, the question isn't whether Congress is trying to address the nation's housing shortage. The real question is whether a federal housing law can overcome local policies that often make building, owning, and operating housing more difficult than almost anywhere else in the country.
For property owners, investors, REALTORS®, and housing providers, that's where the conversation gets interesting.
Federal Policy Can Open Doors. Local Government Decides Whether You Walk Through Them.
One of the biggest misconceptions about federal housing legislation is that Congress can simply “create more housing.”
It can't.
The federal government doesn't approve zoning changes. It doesn't issue building permits. It doesn't decide whether accessory dwelling units are permitted on a neighborhood block. It doesn't establish tenant protection laws. And it certainly doesn't determine how long it takes to obtain a Basic Business License or complete a local housing inspection.
Those decisions belong almost entirely to states and local governments.
What Congress can do is make housing easier to finance, encourage innovation, reduce regulatory hurdles at the federal level, and reward communities that choose to increase housing production. That's exactly what this legislation attempts to accomplish.
The challenge is that cities must decide whether they want to take advantage of those opportunities.
Washington, DC Already Has One of the Most Regulated Rental Markets in America
Anyone who has owned rental housing in the District already knows this. Operating rental property in Washington isn't simply about collecting rent and maintaining a property. Today's housing providers are expected to navigate:
- Basic Business Licensing requirements
- Rental registration
- Housing inspections
- TOPA compliance
- Rent control (where applicable)
- Tenant relocation requirements
- Source of income protections
- Fair housing requirements exceeding federal standards
- Detailed eviction procedures
- Increasing disclosure requirements
- Expanding reporting obligations
Each individual policy may have been created with good intentions. Collectively, however, they create one of the most heavily regulated housing environments in the country.
MOST REGULATED RENTAL MARKETS IN AMERICA
Washington, DC | ||
New York City | ||
San Francisco | ||
Los Angeles | ||
Seattle | ||
Portland |
Based on multiple national studies of rental housing regulation. Illustrative ranking, not a precise index.
That doesn't necessarily make these policies wrong. It does mean every additional regulation adds cost, complexity, uncertainty, or delay.
Eventually those costs show up somewhere. Sometimes it's higher rents. Sometimes fewer rental units. Sometimes owners simply decide to invest elsewhere.
Compare DC to States Competing for Housing Investment
Contrast that with states such as Texas, Florida, North Carolina, Tennessee, Utah, or Indiana. While every state has its own regulations, many have focused on reducing barriers to development.
High Friction — DC & Peer Metros | Built for Investment — TX, FL, NC, TN, UT, IN |
Extended permitting timelines Unpredictable approvals Restrictive zoning Limited ADU flexibility Lengthy environmental review | Faster permitting Predictable approval timelines Expanded zoning flexibility ADUs encouraged Streamlined subdivision approvals |
Those jurisdictions aren't necessarily “anti-tenant.” Instead, they've recognized that increasing supply requires making development economically feasible.
Capital follows predictability.
Developers and investors naturally gravitate toward markets where projects can be approved with greater certainty. Washington, DC often struggles to provide that predictability.
DC Has Made Progress—but Often Sends Mixed Signals
To be fair, the District deserves credit for recognizing its housing shortage. Mayor Bowser has repeatedly emphasized the need for additional housing production. The District has supported office-to-residential conversions, encouraged mixed-use redevelopment, and established ambitious affordable housing goals.
More recently, the Council has debated legislation aimed at improving enforcement against illegal occupancy while also considering proposals designed to better protect responsible property owners.
Those conversations matter. But at the same time, the District continues considering additional tenant protections, new disclosure requirements, expanded reporting obligations, and increased compliance responsibilities.
The result can feel contradictory. On one hand, policymakers acknowledge the need for more housing. On the other, many new legislative proposals increase the operational burden placed on those expected to provide that housing.
That's a difficult balance to maintain.
THE BOTTOM LINE Housing gets built when projects make economic sense. If construction costs rise, if financing becomes more difficult, if regulatory timelines become unpredictable, if operating risks continue increasing—eventually fewer projects move forward. |
What the Federal Legislation Actually Targets
The federal legislation recognizes this reality. Many provisions focus specifically on:
- Expanding access to construction financing
- Supporting affordable housing investment
- Encouraging modular and manufactured housing
- Helping local governments modernize permitting
- Preserving existing housing stock
- Reducing unnecessary barriers to housing production
Those are meaningful tools. But they're only tools. Communities must decide whether to use them.
Could the Federal Law Benefit Washington?
ABSOLUTELY.
Several provisions could help the District over time. Greater access to development capital may improve project feasibility. Expanded financing options could create more opportunities for first-time buyers. Support for rehabilitation and preservation aligns well with Washington's aging housing inventory. Federal incentives encouraging zoning modernization may also influence future local policy discussions.
But none of those changes automatically override local law.
If permitting still takes too long… If development approvals remain uncertain… If compliance costs continue increasing…
The federal benefits become much harder to realize.
Where DC Can Lead
This isn't an argument for eliminating tenant protections. Strong consumer protections absolutely have a place in the housing market. Professional housing providers want safe housing, fair rules, and accountable operators.
The better question is whether every new regulation actually improves housing outcomes.
- Does it increase supply?
- Does it encourage responsible investment?
- Does it preserve naturally occurring affordable housing?
- Or does it unintentionally discourage the very investment needed to address the housing shortage?
Those are the questions policymakers should continue asking.
The District has an opportunity to become a national leader—not by choosing landlords over tenants or tenants over landlords—but by creating a regulatory framework that protects residents while encouraging long-term housing investment. Those goals are not mutually exclusive.
MY TAKE The 21st Century ROAD to Housing Act is an important step in the right direction. It recognizes something many of us in the housing industry have been saying for years: America doesn't have a demand problem—it has a supply problem. But Washington, DC won't solve its housing challenges through federal legislation alone. Real progress will require local policymakers to evaluate how zoning, permitting, licensing, inspections, tenant protections, and operational requirements work together—not individually, but as a complete system. As someone who works with property owners every day, I can tell you that most aren't looking for fewer rules. They're looking for clearer, fairer, and more predictable rules. Because when responsible housing providers have confidence in the system, they invest. When they invest, housing is preserved. New housing gets built. Communities grow. And ultimately, affordability improves. The federal government has handed local jurisdictions a new set of tools. Now the question becomes whether cities like Washington, DC are willing to use them in a way that encourages investment while continuing to protect residents. That's a conversation worth having—and one we'll continue to engage in as legislation evolves, because the future of housing in the District won't be determined by Congress alone. It will be shaped block by block, project by project, and ordinance by ordinance right here at home. |
EJF Rentals | Washington, DC · Maryland · Northern Virginia | ejfrentals.com | 202.756.4000
