Dive Brief:
- State and local governments, metropolitan planning organizations and multi-jurisdictional entities can now apply for a $100 million federal grant program to remove barriers to local housing production, the U.S. Department of Housing and Urban Development announced on Aug. 13.
- Such barriers vary among communities but can include zoning decisions, land-use policies, inefficient procedures, lack of neighborhood infrastructure and increasing threats from natural hazards, according to HUD.
- The department will accept applications until Oct. 15 for the Pathways to Removing Obstacles to Housing program. It said it will prioritize communities that acutely need affordable housing and have shown a commitment to overcoming barriers to it, especially by enacting new laws and regulations.
Dive Insight:
The U.S. affordable housing shortage has been a focal point for the Biden administration, with President Joe Biden saying he wants to spur the construction and renovation of millions of homes, help first-time buyers afford homes and bring rents down. The White House touted its progress in an Aug. 13 statement, saying that units under construction are at a 50-year high and the rate of housing starts is up 17% compared with the rate during the Trump administration.
This is the second round of funding that HUD’s PRO Housing program has offered. The 21 communities funded in the first round received a total of $85 million, HUD announced in June. At the time, Vice President Kamala Harris said that a lack of supply contributes to high housing costs.
“Building rental units and homes faster means lower costs for consumers: not only will more units get to the market faster, but increasing the speed of construction lowers building costs,” the White House said in its Aug. 13 statement.
However, congressional Republicans differ from the administration on housing policy. The GOP-controlled House tried to kill the PRO Housing program with a spending bill last year, libertarian magazine Reason reports. In June, the House Appropriations Committee released a fiscal year 2025 appropriations bill that would cut HUD grant programs by $937 million, 44% below the fiscal year 2024 enacted level. “Unprecedented spending levels cannot continue in perpetuity, which is why this legislation ensures agencies prioritize their core mission,” House Appropriations Transportation, Housing and Urban Development, and Related Agencies Subcommittee Chairman Steve Womack, R-Ark., said in a statement at the time.
The first round of PRO Housing applications revealed trends in the types of barriers that communities face, HUD said in a news release. Common affordable housing challenges include high land and development costs, underutilized vacant land, aging housing stock, climate change risks, high energy costs and outdated land-use and permitting policies and processes.
For example, “discretionary” permitting, which requires a development proposal to get the approval of a public body, can significantly slow down housing production by adding costs and long wait times to projects, the White House Council of Economic Advisors said in an analysis published Aug. 13.
The analysis points to methods states and cities have recently used to address this challenge. These include requiring affordable housing developments to be approved or rejected in 60 days, limiting the number of required public hearings for some developments and allowing developers to use third-party reviewers.
The first-round grant winners have wide-ranging plans for their funds. With more than $6.6 million, Hawai’i plans to expand its work with counties that are revamping housing rules as well as establish a statewide bank to finance housing infrastructure. Los Angeles County will use a similar amount of funding to update land-use policies and update transit-oriented development plans.
“This funding is designed to cut red tape,” HUD acting Secretary Adrianne Todman said in a statement. Second-round grant winners can expect to receive between $1 million and $7 million each, with HUD planning to make about 30 awards.
