New $1 Billion Neighborhood Grant Program Guarantees Housing Replacement and Resident Return Rights

The Choice Neighborhoods Initiative Act of 2025 establishes a major competitive grant program, authorizing $1 billion in funding for fiscal year 2026, aimed at transforming neighborhoods struggling with extreme poverty and severely distressed housing. This money is targeted at local governments, public housing agencies (PHAs), and certain nonprofits that submit a comprehensive “transformation plan.” The core purpose? To turn deeply troubled areas into thriving, mixed-income communities with safe, affordable housing, better job access, and strong supportive services.

The One-for-One Guarantee: Your Right to Return

If you live in public or assisted housing and your building is slated for demolition or major overhaul under one of these grants, this bill has your back. The most important provision is the mandatory one-for-one replacement rule (Sec. 9). For every unit torn down, the grantee must build, fix up, or buy a replacement unit that maintains the same tenant eligibility and long-term affordability rules as the original. This is a huge deal because it prevents the net loss of affordable housing units, a common problem in past revitalization efforts.

Even better, the bill includes a guaranteed right of return (Sec. 8). If you are displaced, you get preference to move back into the new on-site or off-site replacement housing, provided you followed your lease when you left. Grantees must provide comprehensive relocation assistance, including renewable rental help (like Section 8 vouchers), counseling, and covering moving costs and security deposits. They can’t even start demolishing a building until every resident has been relocated, and they must give you at least 90 days’ written notice before moving day.

Where the Money Goes (And Where It Doesn’t)

Grant money can be used for a wide range of activities, but the transformation plan must cover three core areas: housing, people (supportive services), and neighborhood improvements (Sec. 6). Grantees must include plans for job training, financial literacy, and connecting residents to schools and health services. This is designed to help residents achieve economic self-sufficiency.

However, the bill places tight limits on how much money can be spent outside of housing and direct services. No more than 25% of the total grant can go toward activities like improving transit, retail, or community facilities (Sec. 6(e)(2)(A)). This cap ensures that the vast majority of the $1 billion goes directly into housing transformation and resident support, rather than general community development projects. Furthermore, grantees are explicitly banned from using grant money to acquire property through eminent domain (Sec. 6(d)(2)).

Long-Term Commitment and Federal Oversight

Any housing assisted by this grant must maintain affordability for at least the existing period, or 30 years, whichever is longer. Grantees must also submit a long-term plan for keeping housing affordable for 50 years, developed with input from current residents, and update it every five years (Sec. 7). This is a serious commitment to ensuring the benefits last well beyond the construction phase.

For those busy professionals leading these revitalization efforts—be warned. The Secretary of HUD is given significant power to oversee these projects. If a grantee fails to meet the performance goals outlined in their plan, the Secretary can force them to arrange for a different organization to take over the project (Sec. 13). They can also withdraw any uncommitted funding if the project isn't moving forward in a reasonable timeframe (Sec. 14). This creates a high-stakes environment where performance is strictly monitored, and failure to execute means the federal government can step in and replace you. It’s a mechanism designed to prevent stalled projects, but it concentrates a lot of power in the hands of the Secretary.