AUG NIBJ: Tackling affordability and housing accessibility

I spent a week recently in Washington, D.C., meeting with various members of Congress.  I am the federal political coordinator for Senator Mike Crapo, R-Idaho, which is a real estate lobbyist role on behalf of the National Association of Realtors.

In addition to Senator Crapo and Senator Jim Risch of Idaho, I was able to meet other members of Congress and their staff to discuss two important pieces of legislation that address housing issues.  The housing affordability crisis stems from many factors:  as far as government solutions go, it will have to be solved by cooperation from the federal, state and local governments.  The two pieces of legislation are the 21st Century ROAD Act, and the More Homes On The Market Act.

The 21st Century ROAD to Housing Act (H.R. 6644) is a major bipartisan law enacted on July 11, 2026.  It was drafted to expand housing supply, streamline development, modernize federal housing programs, and improve access to affordable homeownership. It passed the Senate 85–5 and the House 358–32 before becoming law without the President’s signature.  The Constitution enables legislation passed by Congress to become law if it is not signed by the President within ten days of his receiving the bill, provided Congress remain in session during that time.

President Donald J. Trump did not oppose the bill per se, although calling it a “big yawn.” He tried to bundle the approval with his voter rights legislation (“SAVE Act”) but that proved to be a non-starter.  The legislation is in place now and will have immediate effect on a myriad of federal programs.  It is the most comprehensive federal housing legislation in decades, aiming to address housing shortages, high costs, and regulatory barriers. It incorporates provisions from more than sixty bills and spans multiple titles covering housing supply, zoning reform, manufactured housing, financing, and program modernization.

The second piece of legislation, The More Homes on the Market Act, aims to increase the supply of existing homes by updating the capital gains exclusion on home sales, making it less of a tax burden for homeowners to sell. The More Homes on the Market Act (H.R. 1340) was introduced in the 119th Congress on February 13, 2025.  It is designed to amend the Internal Revenue Code to increase the exclusion of gain from the sale of a principal residence. Specifically, it raises the capital gains exclusion limit from $250,000 to $500,000 for single filers and from $500,000 to $1,000,000 for married couples filing jointly, with adjustments for inflation in subsequent years

This change is intended to reduce the tax penalty for long-time homeowners, encouraging them to sell and thereby increase housing inventory.  The capital gains thresholds were established in 1997. Since then, home values have more than tripled. There are about 520,000 homeowners in Idaho, and 55% of these have built equity in excess of the $250,000 limit, and another 15% have equity in excess of the $500,000 limit.  The federal Office of the Budget scoring system calculated this change would represent foregone tax revenue of only $44 billion over the next ten years.  The US spent that amount last week in the Iran War.  The legislation has not yet passed Congress, but it’s an idea whose time has come, and I expect it to generate sufficient bipartisan support.

These two bills are important in that they formalize in a way, the housing market distress. After years of the imbalances building up, it has finally dawned on the politicians that something must be done.  I don’t think any members of Congress worry about their own personal affordability crisis, like too many Americans must these days. But drafting and debating bills like these raise the level of awareness and consciousness.

Each member of Congress represents constituents back home who are trying to navigate through the toughest real estate market we have ever seen, folks who are still believing in the great American Dream. Homeownership is the primary source of wealth generation for most Americans.  A healthy market allows first-time buyers to gain entry and build equity through the disciplined monthly paying down the mortgage: good habits to develop.

As family formations grow, the first-time buyer upgrades, and eventually as seniors, they can feel comfortable with nest egg retirement funds.  But if the market has blocked out first-time buyers, there is no ripple effect moving thru the system, and if seniors cannot sell because of severe capital gains effects, or locked-in super low mortgage rates,  then the top of the market suffers too. It’s like a tree with both root disease and beetles on the top section: not good.

The initiatives at the federal level are much needed, but zoning regulations are most often a local phenomenon.  The Feds nor the State of Idaho can dictate zoning ordinances that affect the housing supply.  Issues like density limits and permit approval times are particularly contributing to pricing and inventory levels, but these issues are specific to and controlled by, each municipality. Sandpoint, Ponderay, Kootenai, and Dover each have a separate planning department. Sagle is governed by Bonner County regulations.

Each of these places has its own identity, and its own standards for acceptable growth, often influenced more by local politics than planning principles.  The Feds can only move the needle so much. In 2016, the median home price for Bonner County was $220,000, the median household income then was $48,097.  That represents a Price-To-Income Ratio of 4.6x. In 2026, the median price is $648,000 and the median income $76,000. That’s a Price-To-Income Ratio of 8.5x.  

I like to end an article on a positive note (after giving you 800 words of sometimes not-so-positive stuff) but that order of magnitude boggles my mind and I really don’t know what to say. What will it be in another five years?

Thank you to Brent Stevens of Century 21 Riverstone for great data analysis. Raphael Barta is an Associate Broker with an active practice in residential, vacant land, and commercial/investment properties. He can be reached at [email protected].