Thank you, Duke. And thank you to Groundwork for bringing all of us together. Chairman Hill couldn't be with us today but I'm grateful that Jeff Pitchford, who leads the Chairman's Arkansas office, will join me in a few minutes for a conversation. But first, I want to frame the question I think is in front of us.

I was born here in Little Rock and grew up in central Arkansas, so being back here today means a lot to me. I also won't pretend that I know today's Arkansas housing market as well as the people in this room do. I’ve spent about twenty years working in housing: the first decade in development and finance, and the last decade working on federal housing policy. So I’ve seen this problem from both ends, how policy gets made and what actually has to happen for a home to get built. And increasingly, I think the most important question sits in the space between those two worlds: What has to happen between Congress passing a housing law and more homes actually getting built? Because that is where policy becomes real. Not when the bill is signed or when HUD publishes a rule. It becomes real when a local government changes a process, when a lender makes a loan, when a developer can make a project pencil, and ultimately when somebody has another place to live. That is the lens I want to use today as we talk about the 21st Century ROAD to Housing Act and what it could mean here in Arkansas.

Up for Growth is a national, nonpartisan coalition of builders, lenders, owners, advocates, and others across the housing sector working to address America's housing shortage through federal policy. We worked hard to help advance ROAD to law. Now the question is whether the law changes outcomes. I've started calling this next phase ROAD 1.5: the work between enactment and whatever Congress eventually does next. Congressional appropriations matter. Federal agency implementation matters. But so do the decisions made here in Arkansas by cities, lenders, developers, housing providers, and others who ultimately determine whether a federal policy produces another home.

Several housing markets

You heard a lot of numbers this morning. I want to add a few of ours, because they point to something important: Arkansas is not one housing market. At the statewide level, Up for Growth’s latest estimate, using 2023 Census data, puts Arkansas about 6,400 homes short. But that statewide number hides very different housing markets underneath it. Northwest Arkansas is the clearest example. Our estimate puts that region alone about 4,300 homes short. And that is after building at an extraordinary pace. From 2019 to 2023, the region added about 28,000 homes and 27,000 households. It built fast and essentially held its ground. Since then, new supply has begun to catch up. Apartment vacancy has risen and rent growth has cooled.

Central Arkansas and the River Valley look different. Our measure does not show the same degree of underproduction there. But that does not mean the housing problem disappears. Statewide, rents rose about 26 percent from 2019 to 2023. In places with enough homes in the aggregate, the harder problems may be affordability, condition, preservation, or whether new construction can pencil at all. And in parts of the Delta and rural Arkansas, that last problem can dominate. You can have demand for a home and still not be able to build it because the finished house may be worth less than the cost of construction. Add a thin builder market, and supply becomes very difficult to replace.

So when we say Arkansas has a housing shortage, we have to be precise about which shortage, where, and for whom. Northwest Arkansas may need one set of tools. Little Rock another. Rural Arkansas another. And deeply income-constrained households need resources that supply growth alone cannot provide. Supply is the correct long-term solution, but we must also protect families today while we build those homes for the future. But there is a common thread: wherever supply is constrained, every other housing intervention has to work harder.

What ROAD does

So what's in ROAD? Start with the vote. The Senate passed it 85 to 5. The House passed it 358 to 32. Members representing very different housing markets agreed on something fundamental: we do not have enough homes, and too many things stand between demand for housing and the ability to produce it. That matters for Arkansas, because ROAD is not one program aimed at one market. It works on several of the places where housing gets stuck, where housing deals die.

Local rules: planning grants that can pay to update zoning codes, HUD guidelines for state and local zoning, and pre-reviewed designs, or pattern books, so a builder can start from a plan the city has already approved. Building itself: guidance on single-stair apartment buildings, and updated rules for manufactured and modular homes. Tools communities already have: CDBG can now help build new affordable housing, and grantees must publish a searchable list of the vacant land they own. Rural housing: no environmental study for certain USDA projects on infill sites that already have water, sewer, and roads. And capital: an entire title on community banks. I'll come back to that. What I find most interesting is that much of this law isn't new spending. It goes after the conditions under which housing gets built: the rules, the design, the review, the land, and the capital.

How to judge a law like this

Which brings me to how I think we should judge a law like this. Federal law does not build houses. It changes decisions. Congress passes a statute. An agency turns it into a rule, a notice, a formula, or a funding decision. A state or a city responds. A bank decides whether to lend. A developer or an owner decides whether a project works. And somewhere at the end of that chain, a home gets financed, built, preserved, converted, or repaired. Or it doesn't. Every link in that chain is a place implementation can break down.

So here is the test I would offer this room: Did ROAD change the decisions that determine whether a home gets built, preserved, converted, repaired, financed, or lost? Because passing the law was the achievement. Changing those decisions, and ultimately changing housing outcomes, is the result.

Where the chain breaks in Arkansas

So let's walk that chain here in Arkansas, because this is a good place to see where it holds, where it is silent, and where it breaks. The first step is permission. What are you actually allowed to build? And on this front, Arkansas is not waiting for Washington. State law now requires municipalities to allow at least one accessory dwelling unit by right on a lot with a single-family home. Bentonville adopted a new community code this spring. Rogers launched a pattern-zone program with more than 15 pre-approved residential designs that builders can download for free. And Little Rock is now exploring its own permit-ready infill program for vacant residential lots near the urban core. Those are meaningful changes. But permission is not production. A code can create the opportunity to build. Somebody still has to make the project work.

The second step is capacity. Sometimes that means the capacity of local government. Plenty of larger Arkansas cities have professional planning departments. Smaller communities may not have the staff or resources to rewrite an aging zoning code, administer a new program, or chase a federal grant. And sometimes capacity is physical. In Gentry, a nonprofit planned 120 affordable homes. The project did not stop because of zoning or financing. It stopped because the sewer system could not take them. That is an important reminder: housing policy eventually runs into infrastructure.

The third step is feasibility. Does the deal pencil? In parts of rural Arkansas and the Delta, zoning may not be the binding constraint at all. You can have land. You can have permission. You can even have somebody who wants the house. But if it costs more to build the home than the finished property will appraise for, the project can die at the financing table before anyone ever opens the zoning code. At the other end of the spectrum, look at McAuley Place in Bentonville: 160 affordable homes, about $35 million, built from tax-credit equity, philanthropy, public and private financing, and discounted land. Zoning alone didn't build McAuley Place. A capital stack did.

And then we can look at what happens when more of the chain actually works. Northwest Arkansas added about 1,700 new apartments in the first half of this year. Multifamily vacancy rose from 3.7 percent to 7.3 percent, and developers report newer properties offering concessions to fill units. That does not mean the region has solved affordability. But it gives us something important to watch: when a market produces enough new housing to give consumers more choices, the balance of power in that market can begin to change. The last link is measurement. And right now, almost no one is counting what these new rules produce. I'll come back to that.

Where ROAD meets those breaks

Now let’s overlay ROAD. Some of the law lands directly on the places we just identified. Some of it helps at the margin. And some of the hardest problems in Arkansas sit largely outside it. Start with small-town capacity. This may be one of the places where ROAD fits Arkansas especially well. The planning grants can pay for things like updating zoning codes and increasing local housing capacity. And importantly for a rural state, Congress made regional planning agencies eligible to apply. Arkansas already has eight Planning and Development Districts covering the state. They work across county lines and already help communities with things like grant writing and administration. So for a town that does not have a planner on staff, the question may not be, "Can we build an entire housing department?" It may be, "Can we use the regional capacity we already have?" That is an implementation question I would watch very closely here.

Then infrastructure and land. ROAD does not build a wastewater treatment plant. But CDBG can now help build new affordable housing, and as of today it can pay for the public land list, so a community can put land, infrastructure, and housing in the same conversation. Then codes. HUD has 18 months to write guidance on single-stair buildings, it has to look at what states and cities have adopted or considered, and it cannot preempt local codes. With Arkansas moving now on single stair, it becomes part of the evidence HUD has to examine. Rural review is more immediate. For qualifying infill projects under several USDA rural housing programs, the environmental-study requirement is already removed. I want to ask Jeff in a minute what that could actually mean in the smaller communities he works with, because again, the statutory change is only the first link.

And then measurement. This is one of my favorite small provisions in the law. The pre-approved-design grants require recipients to report not simply which plans they adopted, but how many permits were issued and how many homes were actually produced using them. That sounds like a reporting requirement. I think it contains a much bigger idea: Don't just count the policy. Count what the policy produced. And then there are places where ROAD is less direct. It does not, by itself, close an appraisal gap in the Delta. It does not transform the capital stack for the next McAuley Place. Those are reminders that federal housing policy can remove some barriers without removing every barrier. And then there is capital. That is where I want to spend the next few minutes.

Capital is part of supply

Arkansas has 78 FDIC-insured banks headquartered in the state. By the FDIC's definition, 71 are community banks, and the typical one has about half a billion dollars in assets. So when a builder in Searcy needs a construction loan for eight homes, or a family in Monticello needs a mortgage on a modest house, there is a good chance the institution on the other side of that transaction is a community bank. And ROAD spends an entire title on them. Title IX, "Strengthening Community Banks' Role in Housing," gives smaller banks more flexibility on certain deposits, lets more of them move to a longer exam cycle, and lowers barriers to starting new banks. Some of it is already in effect.

Why is a housing-supply law talking about deposits, bank exams, and bank charters? My YIMBY friends ask me. Because capital is part of supply. A zoning code can allow a home. A permit can authorize it. But somebody still has to decide to put capital at risk to build it. Chairman Hill made the community-banking provisions a priority as the House assembled its version of ROAD. That makes sense given his background as a community banker here in Arkansas. The theory is that giving smaller banks more flexibility around deposits, reducing supervisory burden for qualifying institutions, and lowering barriers to new bank formation can strengthen the institutions that provide credit in local markets.

But here is the part I think matters most. Read the FDIC's reciprocal-deposit rule and it looks like a banking rule, because it is one. There is no requirement that the additional capacity become housing credit. The statute changes the conditions under which the bank operates. The bank still decides what to do with that capacity. So the housing test comes later: Do we see more construction lending? More small-dollar home-purchase mortgages? More credit reaching places where viable projects were previously going unfunded? That is where a banking provision becomes a housing outcome.

What Arkansas controls

So what does this room control? Congress can change federal law. It cannot issue a building permit in Arkansas. It cannot create capacity in a sewer system. And it cannot make a lender approve a loan. A lot of what determines whether ROAD reaches an actual home happens here. Local governments decide how to use the tools. Utilities decide where they can serve growth. Lenders decide what they will finance. Builders decide what they can build. Employers, foundations, and public agencies sometimes provide the patient capital that makes the hardest deals possible.

This afternoon, across town, a legislative committee is taking up housing. Those are decisions for Arkansans, and I am not here to tell you how to make them. I would ask something different: Whatever you change, count what it produces. Count the accessory dwellings that actually get permitted under the new law. Count the pre-approved plans that become homes. Count the projects that get a will-serve letter and the ones that do not. Count the loans that get made. Because if we only measure the policy change, we will know what government did. We will not know what changed in housing.

ROAD 1.5

Think of enactment in July as ROAD 1.0. Congress changed the law. Now we are in ROAD 1.5: implementation. Agencies write the rules, Congress decides what to fund, and right now the government is on a continuing resolution through December 11. And eventually Congress will come back to housing. When it does, I hope the next agenda starts with evidence.

Some of that evidence is going to come from places like Arkansas. Did a small town use regional planning capacity to rewrite an outdated code? Did a permit-ready design fit a Little Rock lot and become a home? Did a community bank make a construction loan it otherwise would not have made? That is ROAD 1.5. Not simply implementing the law. Learning from what happens when we do.

Closing

So if you remember three things from today, remember these. Arkansas does not have one housing shortage. It has several, and different markets need different tools. Permission is not production. Changing the rule matters only if the rest of the chain allows somebody to build. And capital is part of supply. Housing policy reaches the ground through decisions about whether someone is willing and able to finance a home.

Congress passed ROAD. Now Arkansas gets to help prove whether it works. When Congress comes back to housing, we want what you learn here to shape the next law. Go to upforgrowth.org and get involved. It is good to be home.