Federal policymakers offered new measures aimed at boosting housing supply this week, including bipartisan tax legislation to encourage rental construction and new Department of Housing and Urban Development (HUD) recommendations to reduce state and local regulatory barriers to homebuilding.

Rental Housing Investment Act

• Reps. Claudia Tenney (R-NY), Linda Sánchez (D-CA), Darin LaHood (R-IL), and Jimmy Panetta (D-CA) introduced the Rental Housing Investment Act, bipartisan legislation to increase the supply of long-term rental housing by modernizing the tax code and incentivizing new construction. (Press Release, May 21)

• The bill would allow builders to immediately deduct up to $150,000 per rental unit in construction costs for qualifying long-term residential rental housing developments, with an increased deduction of up to $250,000 per unit for qualifying affordable housing projects.

• The legislation includes safeguards to ensure properties remain in long-term rental use and would apply to newly constructed housing placed in service after enactment.

• “This bipartisan legislation takes a practical, market-driven approach to expanding housing supply, reducing development costs, and helping make housing more affordable for hardworking Americans,” said Rep. Tenney. (Press Release, May 21)

• The bill’s bipartisan co-sponsors emphasized that high construction costs and limited rental supply are driving affordability challenges in communities across the country.

•  A similar bill was previously introduced in the Senate by Sen. Lisa Blunt Rochester (D-DE). A Tax Policy Advisory Committee (TPAC) panel will discuss the bill and other housing tax incentives at The Real Estate Roundtable’s Annual Meeting in June.

HUD Regulatory Best Practices

• HUD this week announced its State and Local Best Practices for Home Construction Report, outlining regulatory actions state and local governments can take to reduce housing costs, unlock land for new supply, and accelerate construction timelines. (Report, | HUD Press Release, May 20)

• HUD Secretary Scott Turner said the agency is encouraging state and local partners to review their regulations and policies to “lower the cost to build and enable more efficient housing supply growth.”

• HUD noted that regulatory costs account for more than $100,000 of the final price of a new single-family home, while certain state and local green energy mandates can add up to $30,000 to construction costs. (HousingWire, May 20)

• The report is part of HUD’s implementation of President Trump’s March 2026 Executive Order, Removing Regulatory Barriers to Affordable Home Construction, which directs federal agencies to identify and reduce regulatory burdens that constrain housing supply. (SmartCities Dive, May 21)

Housing Momentum

• The housing debate was also front and center at an Axios event this week, where lawmakers highlighted growing bipartisan momentum around supply-side reforms, deregulation, zoning flexibility, and alternative construction methods. (Watch, May 20)

• Rep. Ritchie Torres (D-NY) said “housing is having a moment in Washington, D.C.,” while Rep. Mike Flood (R-NE) emphasized that housing supply is also an economic development issue tied to workforce shortages and regional growth. (Axios, May 21)

These new legislative and regulatory actions reflect growing bipartisan attention to the core drivers of housing affordability: supply shortages, high construction costs, land-use barriers, lengthy permitting timelines, and financing constraints. RER will continue working with policymakers to advance supply-side reforms that encourage private capital, reduce construction barriers, and expand housing supply nationwide.