New actions provide $350 million in federal grants, including incentives to boost supply, preserve affordability, and provide more support for renters
The United States faces a shortfall of millions of affordable homes that has driven up home prices and rents, and has made finding a quality and affordable home out of reach for too many Americans. Over the last four years, President Biden and Vice President Harris have taken action to build more housing, lower housing costs, cut red tape, keep people in their homes, and strengthen communities. After years of under-building, the Administration launched the Housing Supply Action Plan, an all-of-government effort to increase the supply of housing. The Biden-Harris Administration has also stood up for renters, publishing a Blueprint for a Renters Bill of Rights and supporting policies and practices that promote fairness for renters in federal programs. Still, more must be done to build more housing, lower costs, and protect renters.
Today, the Biden-Harris Administration is announcing new actions to:
- Award an additional $100 million in grants to communities that are identifying and removing barriers to affordable housing production and preservation;
- Approve the first residential transit-oriented development (TOD) loan under the Department of Transportation's (DOT) lending programs to support the development of over 300 units;
Boosting Supply by Providing More Federal Funding and Cutting Red Tape
Through the Housing Supply Action Plan, the Biden-Harris Administration has taken dozens of actions to build more housing by incentivizing local and state governments to reduce regulatory barriers, investing directly in communities, and improving federal financing programs. Today, the Administration is announcing the following actions:
Incentivizing local governments to remove barriers to housing construction.HUD is today announcing $100 million in grant awards through its landmark Pathways to Removing Obstacles to Housing (PRO Housing) program, which provides grants to communities to identify and remove barriers to affordable housing production and preservation. The PRO Housing grants have a catalyzing impact and will help unlock billions of dollars in new construction. The grants come on the heels of an initial $85 million in awarded grants that Vice President Harris announced in June.
Approving DOT's first-ever residential transit-oriented development (TOD) financing deal.The Build America Bureau at DOT has approved a loan under the Railroad Rehabilitation & Improvement Financing (RRIF) program, its first TOD project with a residential component. The Colony project in Boca Raton, Florida will construct over 300 units at the Tri-Rail Boca Raton commuter rail station and will generate approximately $2 million per year in land lease revenue for the commuter rail system. Over the course of the Biden-Harris Administration, the Build America Bureau has worked with project sponsors to drive interest in its TOD lending programs, which lend at Treasury rates, and streamline program requirements. As a result of these efforts, there are now dozens of projects representing over 13,000 housing units that have expressed interest in the RRIF and Transportation Infrastructure Finance and Innovation (TIFIA) lending programs. The Build America Bureau has also updated its FAQs to reflect the potential for HUD and the Bureau to make coordinated investment decisions, which could address one of the main statutory requirements for TIFIA loans: obtaining an investment-grade credit rating. This update could help unlock more residential lending through TIFIA's Rural Project Initiative (RPI) in particular, with fixed-rate loans equal to half of the US Treasury rate, which would provide a meaningful advantage to the Bureau's TIFIA borrowers.
These announcements build on the following actions the Administration has taken in recent weeks to help communities build and preserve more housing that working families can afford:
Streamlining federal historic preservation reviews. The Advisory Council on Historic Preservation (ACHP) adopted a streamlining measure to make it easier and quicker to rehabilitate millions of federally-owned and federally-funded housing units. Its Program Comment on Certain Housing, Building, and Transportation Undertakings provides all federal agencies - including HUD, the Department of Defense, the Department of Veterans Affairs, and the Department of Agriculture, among others - with a clear path to upgrade existing housing and to make it more energy efficient, hazard-free, and accessible to people with disabilities. The measure also accelerates the process for approving the solar energy installations on existing buildings, and for approving the installation of "active transportation" elements, including bike lanes and bus shelters, which help connect people and neighborhoods. This measure represents the first time the ACHP has implemented an all-of-government approach to housing, and comes in the wake of its 2023 Housing and Historic Preservation Policy Statement.
Updating underwriting criteria to build more housing.HUD announced updates to its multifamily housing programs' underwriting standards and guidelines to make financing of both existing and new housing units feasible for more properties and encourage the production of housing affordable to middle income households. Specifically, HUD has revised its underwriting policies to lower minimum debt service coverage ratios and increase maximum loan-to-value ratios, making more lending capacity available for affordable housing. These revisions will increase supply without exposing the government to undue risk. HUD also created a new category of underwriting to support the dozens of states and cities that have created "middle income" housing programs which invest in housing that is affordable to individuals making between 60% to 120% of area median income.
Making it easier to repurpose surplus federal parcels for housing. Building on the Administration's work to leverage federal property to build more housing, HUD, the Department of Health and Human Services (HHS), and General Services Administration (GSA) finalized a rule to make it easier for public and nonprofit developers to repurpose federal buildings and land to house the homeless. The Title V program, authorized by the McKinney-Vento Homeless Assistance Act, allows federal agencies to use unutilized, underutilized, excess, or surplus federal properties at no cost to develop housing for people experiencing homelessness. The new rule makes it easier for developers to navigate the process, resulting in additional housing units to address homelessness and affordability challenges. In addition, GSA announced that it will accelerate the disposition of additional federal properties, as part of its ongoing efforts to right-size and modernize the federal buildings portfolio. Many of these properties are suitable for housing. And finally, the United States Postal Service (USPS), through a partnership with the General Services Administration, is in contract discussions with the City of Atlanta and the Atlanta Urban Development Corporation. Assuming the purchase contract is consummated, this city-backed entity will repurpose two USPS-owned sites into hundreds of units of housing, including dedicated affordable units.
Streamlining regulations for HUD's biggest affordable housing supply block grant.HUD finalized a rule to streamline regulations for the HOME Investment Partnerships Program (HOME), the nation's largest annual block grant to support affordable housing supply. The final rule makes HOME easier to use for individuals and families looking for a home to rent or buy, as well as for homeowners making upgrades to their homes such as accessibility improvements, new roofs, and replacement of outdated heating and cooling systems with energy efficient ones. The rule streamlines requirements for grantees administering funding, community development organizations building new homes, and property owners renting to HUD-assisted households. The rule also updates requirements regarding property standards, small scale rental housing projects, community land trusts, homebuyer resale, allowable rents for units receiving rental assistance, and tenant protections.
Devoting additional resources to gap financing. The Treasury Department previously announced that it will devote $100 million over three years in payments resulting from Emergency Capital Investment Program investments to a new program at the Community Development Financial Institutions (CDFI) Fund primarily focused on increasing the supply of affordable housing. In the next few days, Treasury will be announcing more details about the new program. The CDFI Fund projects that this new funding could support the financing of thousands of affordable housing units.
Reward communities with pro-housing policies that compete for infrastructure funding.DOT updated the ratings criteria for its Capital Investment Grants (CIG) program, which provides up to $4.6 billion per year to support investments in rail, streetcars, and bus rapid transit. The updated CIG ratings process enables projects that include more affordable housing in close proximity to planned transit investments to score higher. This CIG evaluation process outlined in the rating guidance further rewards pro-growth housing policies by increasing weighting assigned to housing-supportive zoning, making clear that active support of housing helps jurisdictions attract competitive federal transit dollars.
Launching a pilot to make it easier for rural homeowners to repair or rehabilitate their homes. USDA's Section 504 Direct Single Family Housing Loan and Grant program assists very low-income owner occupants of single-family homes in rural areas to repair or rehabilitate their homes. Loan funds are available for repairs to improve or modernize a home, make homes safer or more sanitary, or remove health and safety hazards. Current regulations around USDA's payment terms within this program make it difficult to hire contractors, since contractors expect some down payment before work begins. This pilot program will enable payments to be made to contractors prior to the site delivery of materials, which will resemble more typical contractor expectations while still protecting applicants from fraudulent contractors that might take downpayment funds and never complete the job.
Supporting Housing Stability
The White House Blueprint for a Renters Bill of Rights laid out the key principles of a fair rental market and has already catalyzed new federal actions to make those principles a reality. Recent actions include:
Preventing unnecessary and avoidable evictions. HUD published a final rule that requires public housing authorities and private owners participating in certain HUD Multifamily project-based rental assistance programs to provide their tenants with written notification at least 30 days prior to initiating eviction proceedings for nonpayment of rent. The final rule also requires that the 30-day notice include: (1) how tenants can cure lease violations for nonpayment of rent and information on how to recertify their income; (2) how to request a minimum rent hardship exemption if applicable to avoid eviction; and (3) an itemized amount, which is separated by month, of alleged rent owed by the tenant, along with any other arrearages allowed by HUD. This rule will help prevent unnecessary evictions and potential homelessness for tenants in HUD-assisted properties each year.
Supporting local eviction prevention programs. HUD awarded $40 million through the Eviction Protection Grant Program to 21 recipients. This program, started under the Biden-Harris Administration, funds nonprofit organizations and government entities to provide no-cost legal assistance to low-income tenants at risk of or subject to eviction. The new funding adds to $40 million in previously-allocated funds which provided legal assistance to over 44,000 households thus far.
