Building a Regulatory Framework for Innovative Housing Development

Building a Regulatory Framework for Innovative Housing Development

Regulatory modernization can help facilitate the deployment of housing innovations and help address the challenges of housing supply and affordability, including through code alignment, streamlined processes, and increased coordination between public agencies and private innovators.

The current regulatory environment for homebuilding in the United States contributes to the nationwide affordability crisis. At the 2025 Innovative Housing Showcase in Washington, D.C., government officials and industry leaders discussed how regulatory reform can foster innovation in housing development and promote affordability. Speakers highlighted the need for a flexible, responsive regulatory environment considering new developments in housing construction techniques. Panelists explored strategies to modernize building codes, streamline permitting, and strengthen public-private collaboration in advancing affordable, resilient housing solutions.

Breaking Down Regulatory Barriers

John Gibbs, HUD's Principal Deputy Assistant Secretary for Policy Development and Research, moderated a panel titled "Breaking Down Regulatory Barriers," which featured Lesli Gooch of the Manufactured Housing Institute, Ryan Colker of the International Code Council, and Colt Davis of the Clayton Home Building Group. The discussion focused on how regulatory consistency, efficient code administration, and strong leadership can promote innovation and resident safety.

Panelists discussed how local zoning and land use barriers often restrict the placement of manufactured and modular homes. Davis noted that many communities exclude manufactured housing entirely despite the broad range of housing typologies that offsite construction can support. Entitlement processes often are inefficient and characterized by overlapping municipal regulations that are difficult and time-consuming for builders to navigate. Davis said that local governments can make housing development more predictable and responsive to market needs by addressing these issues.

Significant variation in building codes across jurisdictions presents another challenge. Colker noted that many U.S. building codes are out of date or contradict other codes. These discrepancies create inefficiencies that can complicate efforts to scale innovative housing solutions such as factory-based production. Colker called on regulators at the state and local levels to ensure that regulatory frameworks for manufactured housing are consistent and reflect contemporary evidence.

Gooch highlighted the success of the HUD Code as a leading example of regulatory efficiency. The code's performance-based approach allows manufacturers the freedom to employ innovative construction methods while maintaining high standards of quality and safety. Panelists also noted that policymakers can adapt the code to support new techniques in manufactured home construction. For example, recent bipartisan legislation in the Senate would remove a current requirement that manufactured homes be transported with a permanent steel chassis, potentially saving thousands of dollars from the cost of new construction.

Panelists cited several successful examples of cross-sector collaboration. Gooch and Davis noted that Fannie Mae and Freddie Mac have moved to support the development of CrossMod homes (an emerging housing type that combines elements of factory-built and site-built housing) with access to traditional site-built lending. On the local level, Colker cited the city of Minneapolis' recent implementation of modular construction for infill development, demonstrating how municipalities can reduce regulatory delays while maintaining design compatibility with existing neighborhoods.

Scaling Modular Construction

HUD Deputy Secretary Andrew Hughes moderated another panel, "Innovative Construction: Materials, Design, and Development," that offered further insight into emerging construction techniques and how regulations can evolve to support them. Panelists Brad DeHays of Connect Housing Blocks, Gene Eidelman of Azure Printed Homes, Jess Lohse of the Structural Building Components Association, and Chip Devine of The Home Depot discussed opportunities to expand production capacity while improving cost efficiency and environmental performance.

Panelists emphasized that policymakers must modernize permitting and inspection processes to keep pace with innovations in construction materials and methods. DeHays described how modular construction allows developers to move projects from concept to occupancy on a significantly condensed timeline. By fabricating apartment units in controlled factory environments, DeHays said, his company can ensure higher precision, minimize onsite disruption, and reduce construction waste by more than 70 percent. DeHays noted that regulators can maximize the benefits of this technology by adapting inspection processes to allow third-party inspections, accelerating development timelines. 

Eidelman described his company's work producing 3D-printed homes with recycled polymers and fiberglass. According to Eidelman, Azure Printed Homes can fabricate the structural shell of a unit in just 24 hours using the equivalent of up to 150,000 plastic bottles per home depending on the size of the unit. This technology can adapt to meet diverse housing needs and has been deployed in applications ranging from accessory dwelling units to interim housing for fire victims and people experiencing homelessness. 

In addition to wholesale modular construction, new technologies allow for the offsite assembly of structural building components such as roof trusses, floor trusses, and wall panels, improving precision and accelerating construction timelines. Lohse, whose association specializes in component construction, noted that the technique can reduce material waste and accelerate construction timelines, and it has the additional benefit of scaling to both large and small builders. He underscored the need for early coordination between designers and builders to integrate prefabricated components into the production process so that implementation can be tailored to specific market needs. 

Throughout the discussion, panelists emphasized the key role regulators play in advancing the adoption of these technologies. DeHays and Eidelman urged regulators to continue supporting pilot projects, identifying ways to streamline the permitting process, and providing financial incentives for offsite and modular construction. Devine also suggested investing in training and partnerships to strengthen the construction workforce. 

Aligning for Innovation

The panels underscored the importance of regulatory modernization in expanding housing supply and affordability. By aligning codes, streamlining processes, and strengthening coordination between public agencies and private innovators, regulators at all levels of government can reduce barriers to development while maintaining the safety and quality of America's housing stock.