Sponsors (2)
The bill shifts federal housing dollars and introduces clear growth-based rules and reporting to reward fast-growing jurisdictions and push local reforms, but it risks reducing aid to slower-growth, high-need communities while adding administrative complexity and data/privacy concerns.
Local governments in fast-growing jurisdictions (metro cities and urban counties) will receive larger CDBG/Section 106 allocations through a pro rata bonus tied to housing-unit share, increasing funding where housing is expanding.
State and local governments get clearer, standardized eligibility definitions, growth metrics, and improved housing-unit counts (using Census and USPS data), making formula-driven grant allocations more predictable and aligned with current boundaries.
The bill creates incentives (a 10% reduction for below-median growth) plus timely HUD feedback and guidance on reducing regulatory barriers, encouraging jurisdictions to adopt pro-housing reforms that could increase housing supply and eventually help renters.
Jurisdictions with slower housing growth will lose a meaningful share of Section 106 funds (10% reduction), reducing resources for community development and services in many towns and counties.
Redirecting allocations toward high-growth areas risks reducing support for affordable-housing programs in slow-growth but high-need communities, worsening housing inequities for low-income residents.
Jurisdictions that lack authority to change zoning or permitting could be barred from eligibility, shifting funding away from communities that still have housing needs but limited legal tools to increase supply.
Based on analysis of 6 sections of legislative text.
Changes HUD section 106 allocations by cutting 10% from below-median housing-growth jurisdictions and reallocating that pool as pro rata bonuses to higher-growth jurisdictions.
Introduced July 24, 2025 by John Neely Kennedy · Last progress July 24, 2025
Adjusts how HUD distributes annual section 106 community development funds to metropolitan cities and urban counties by measuring recent housing-unit growth. Jurisdictions with below-median housing growth (excluding certain outliers and exclusions) face a 10% reduction in their allocation; the pool of reductions is reallocated as pro rata bonuses to jurisdictions with at-or-above-median or extremely high growth. HUD must calculate housing-unit counts using Census address files, publish an annual report on growth rates and allocation changes, notify jurisdictions of their growth rates, and provide guidance on reducing regulatory barriers. The reallocation formula takes effect starting the second full fiscal year after enactment and runs through fiscal year 2042.