Federal Transit Grants Now Reward Cities That Scrap Parking Minimums and Speed Up Housing Approvals

The "Build More Housing Near Transit Act of 2025" is essentially a policy bribe—a smart one—aimed at fixing two problems at once: housing shortages and transit access. It changes the rules for federal capital investment grants (that big pot of money used to fund major transit projects like new subway lines or bus rapid transit) by adding an incentive. If a city or state applying for this grant can prove it has adopted "pro-housing policies," it gets an extra point on its application score. That extra point can be the difference between getting funded and going back to the drawing board.

The Golden Ticket: What Counts as "Pro-Housing"?

This isn't just about building 10 more units; the bill lays out specific, high-impact changes the local government must make. If you've ever been frustrated by zoning laws, this is where it gets interesting. A "pro-housing policy" is defined as any action that removes roadblocks to building, especially affordable housing. The list is straight out of a planner's wish list:

• Scrapping Parking Minimums: Eliminating or reducing the requirement that developers build a certain number of parking spots per unit. Think about it: fewer mandatory parking spots means more room (and less cost) for actual apartments. For a developer, this is huge, and for a resident, it means cheaper housing near transit.
• Eliminating Lot Size Minimums: Allowing builders to put more housing on smaller pieces of land, increasing density.
• "By-Right" Approval for Multi-Family Housing: This is a game-changer. It means if a developer's plans meet the clear, published rules (like height and setback), the city must approve it. No more endless, subjective hearings where neighbors can veto a project because they don't like the design. This cuts years and millions of dollars off development timelines.
• Public Land Commitment: Dedicating significant publicly owned land specifically for building or preserving housing for low-income households.

Why This Matters to Your Commute and Your Rent

This legislation links transportation funding directly to local housing policy. If your city wants that new rail line or transit center, they now have a massive financial incentive to make it easier to build apartments around it. Why? Because transit works best when people live near it. If you’re a busy professional who wants to take the train to work, this bill encourages your city to make sure there’s housing available within walking distance of the station, potentially cutting down your commute time and reducing traffic congestion for everyone else.

For renters, the goal is supply. By forcing cities to remove regulatory barriers like minimum parking and subjective approval processes, the bill aims to increase the sheer volume of housing built. More supply, especially near transit hubs where demand is highest, should theoretically help stabilize or even lower rent prices over time. The bill specifically requires the Department of Transportation (DOT) to consult with HUD to measure whether the policies adopted will actually produce the necessary amount of new housing, including units affordable below the area median income.

The Catch: Who’s Measuring Success?

The bill is mostly straightforward, but there are a couple of points to watch. First, the definition of "pro-housing policies" is broad enough that the Secretary of Transportation, after talking with HUD, can count policies not specifically listed. This gives the DOT a lot of discretion in deciding what counts as a legitimate housing reform—which could be good for flexibility, or bad if the standards aren't rigorous.

Second, local governments that refuse to change their zoning laws will find themselves at a competitive disadvantage when applying for these crucial federal transit grants. If your town is clinging to single-family zoning and mandatory two-car garages per unit near the proposed light rail station, they might lose out on federal funding to the next town over that decided to adopt streamlined, pro-housing rules. This is a subtle but powerful way the federal government is using its purse strings to influence local land use decisions, pushing cities toward denser, more transit-friendly development patterns.