New Housing Act Creates Grants to Force Zoning Reform and Boost Affordable Housing Supply

The “Housing Our Communities Act” establishes a competitive grant program administered by the Department of Housing and Urban Development (HUD) to tackle the affordable housing crunch. Within one year of enactment, HUD must start handing out these grants to states, cities, counties, and regional planning agencies. The core purpose is simple: get federal money into the hands of local governments willing to plan for, and actually implement, strategies that increase housing supply and affordability.

The Carrot: Federal Cash for Local Change

Think of this grant program as a big incentive for local governments to finally deal with the red tape that often blocks new housing. For regional agencies, the money is strictly for planning—things like developing new housing strategies, updating outdated zoning codes, and increasing the capacity to inspect new housing. For states and cities, the funds are for implementation: administering those new strategies, funding community investments that support housing goals, and enforcing reformed zoning codes. This is a direct play to get local governments to reduce regulatory barriers and increase capacity, which is often the biggest hurdle for developers trying to build new homes.

What This Means for Your Rent and Commute

If your city or state successfully secures one of these grants, you could see some real changes. For example, a city might use the funds to completely rewrite its zoning laws to allow for more multi-family housing near public transit—a concept the bill specifically encourages through “location-efficient community development goals.” This shift could eventually mean more housing options closer to where you work, potentially easing your commute and slowing down the rate at which your rent increases. The bill also requires coordination with the Federal Transit Administrator, meaning that planning for new housing must be linked to access to public transportation.

The Fine Print: Where the Money Goes

The bill is pretty clear about keeping the focus on the ground level. Only 10% of any grant can be used for administrative costs, which is a tight leash designed to ensure the vast majority of the money goes directly into planning or implementation. The bill also allows for funds to be used for the new construction of housing, but only for eligible entities. One interesting detail is that funds can also be used for non-federal government buildings, but only if they are part of a natural hazard mitigation project. While this is a small carve-out, it means some grant money could be used for, say, rebuilding a town hall if it’s part of a larger, post-disaster housing strategy.

The Implementation Challenge

While this grant program throws much-needed cash at a huge problem, there's a catch: it’s competitive. Not every city or state will win, and HUD will have to decide who gets the funds. The bill requires grantees to “substantially improve” their housing strategies, but without super-clear metrics, there’s a risk that funds might not go to the places that need the most help or that have the most innovative plans. Still, by offering a clear path to federal funding for local zoning reform, this act puts pressure on every jurisdiction to rethink how they plan and permit housing.