Housing bill aids affordability through deregulation
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Last night, the U.S. House of Representatives passed by 390-9 the bipartisan Housing for the 21st Century Act. CEI scholars highlight the bill’s most notable deregulatory provisions.
CEI Director of Finance Policy John Berlau praised the bill’s provisions rolling back red tape on the approval process for new (de novo) banks and credit unions – deregulatory changes for which Berlau has long advocated in his writings and congressional testimony:
“The bill’s deregulatory measures on de novo banking are vital first steps in tackling the dearth of new banks and credit unions and a welcome sign that both parties recognize this as a problem for everything from housing to small business capital formation.
“As I have written, only 54 new banks had been approved from 2010 to mid-2025, whereas in the decades before that, more than 100 new banks were approved in a typical year. This lack of competition in the banking sector is creating harmful voids in which many small businesses and consumers can’t find banks and credit unions to meet their needs.
“This bill takes meaningful steps to tackle that problem by requiring financial regulatory agencies to assign a caseworker for each application, having the agencies report frequently to Congress on the status of de novo applications, and encouraging phased-in capital for de novo banks.”
Steve Swedberg, CEI Finance and Monetary Policy Analyst:
“The Housing for the 21st Century Act takes an important step toward eliminating a burdensome requirement for certain manufactured housing.
“Under current rules, every prefabricated home built under the federal Housing and Urban Development Code must include a permanent steel frame, a mandate that limits design flexibility and increases costs. Removing this requirement gives builders greater freedom in design and construction while lowering production costs by an estimated $5,000–$10,000 per unit. By allowing developers to respond more quickly and efficiently to housing demand, this reform represents a clear deregulatory win.”
Related analysis:
Harrison Cerone and John Berlau, RealClearMarkets, “Michelle Bowman’s Reforms Will Help Reverse Dodd-Frank Damage”