Housing affordability is poised to dominate the 2026 midterm election campaigns, and Sen. Ruben Gallego wants the organization’s policy to be up to speed.
In a groundbreaking new housing plan, the Arizona Democrat lays out a four-pronged agenda to tackle the problem. According to “The Path Home: Rebuilding the American Dream and Restoring the American Dream and Restoring Housing Affordability,” a series of recommended policy changes could promote at least 8.5 million new and preserved homes over the next decade.
As states from California to Texas to Florida relax zoning and ease permits, Gallego’s plan notes that federal policy is lagging behind and relying on programs designed for today’s housing market.
The first-term senator found inspiration in his growth
In a provided statement, Gallego recalled that his single mother worked regularly to keep a modest two-bedroom apartment for their family, and that a government-subsidized loan later helped her buy a home after graduating from high school.
He said that kind of path to the top is less attainable today, with many Americans struggling to pay the rent.
“A safe, affordable place to call home is the foundation of success in this country,” he said
“We owe it to the young people of this country to make that happen again, and that’s exactly what this program aims to do.”
His plan builds on the law he has already introduced
That record includes a December bill that would lower the investment limit for EB-5 visas from $1 million to $800,000 if tied to affordable housing.
“Some policies are things that we hope will become law this year and go into the future,” his representative told the press Builder’s Day.
Making a housing plan in four pillars
Gallego’s plan places housing as a core economic infrastructure. The first pillar focuses on the development of construction to build and maintain more homes at all income levels.
Underpinning that pillar, the tax code and corporate finance tools do a lot of work
Gallego calls for expanding and improving the Low-Income Housing Tax Credit and creating a new office-to-residential conversion tax credit.
He also wants to modernize FHA loan limits and allow Fannie Mae and Freddie Mac to invest more equity in affordable projects.
The additional provision will open up federal land and underutilized areas, including post and parcel offices near the airport.
Such investments would include federal housing dollars in existing wage laws, apprenticeships, and project worker contracts.
The second pillar addresses the red tape that delays projects and drives up costs
That section of the plan reflects legislation enacted by a growing number of cities and states, while others are considering it, to reduce zoning and building permits.
That increasing local and state pressure has been bipartisan, as housing affordability defines both a common issue and a choice strategy. Democratic-controlled California passed legislation last year, as did Republican-controlled Texas.
Under this pillar, Gallego proposes new “housing” certificates that reward authorities that achieve production goals with household discounts and access to a flexible grant fund.
Those certifications—the “sticks” that empower the “carrots”—will also expose permanent disruptions to potential funding outcomes.
The package also promotes targeted exemptions from the National Environmental Policy Act of 1970 for small projects and cities that may not be properly filled.
Gallego is calling for a joint HUD–USDA environmental review and long overdue reviews of the HOME and Block Development Grant programs.
California took a similar step last year with a sweeping change to its 1970 environmental law, aimed at reinvigorating the development of landfills in urban areas.
Focus on helping the employer and first time buyers
The third pillar of Gallego’s program focuses on helping tenants and potential buyers.
Offers zero or 1% low FHA loans for borrowers with strong payment history
Gallego also wants a special FHA product for teachers and first responders, as well as a first-time refundable consumer tax credit of up to $15,000.
That same pillar would expand vouchers and pay bonuses to homeowners in low-poverty areas.
Additional measures could reduce algorithmic rental scheduling and mass acquisitions of single-family homes by institutional investors.
The plan also looks to restore fair housing and Housing First programs rolled back by the Trump administration.
The crackdown on algorithmic rental rules mirrors what states are doing after settling lawsuits with data analytics firm RealPage and apartment companies accused of price-fixing deals.
The fourth leg of the program aims to “future proof” homes against climate risk and lack of insurance.
Gallego proposes additional funding for pre-disaster mitigation, climate change, housing repair, and water and flood infrastructure.
The climate resilience pillar also supports a sustainable disaster financing framework
Under that method, homeowners can tap the tax deductions and rebates associated with the abatement
Gallego also calls for more funding for federal climate data and mapping to help keep vulnerable communities uninsured
