Sponsors (14)
The bill expands CDBG use to support new housing construction—boosting local ability to build affordable units and empowering community organizations—while creating trade-offs of potential fund diversion from other services, higher public costs, and risks that new units may not remain affordable without strong local controls.
Low- and moderate-income households gain access to newly constructed affordable homes because CDBG funds can be used to finance residential construction.
Local governments and tribal entities can use flexible federal CDBG funds to increase housing supply in high-need areas, enabling targeted local planning and development.
Neighborhood nonprofits can participate in or lead federally funded construction projects, strengthening community-based development and local capacity.
Expanding CDBG to support new construction could divert limited funds away from existing community services or infrastructure projects that low-income residents rely on.
If affordability controls are weak at the local level, new units financed with CDBG may not remain affordable long-term and could end up benefiting developers more than intended low-income beneficiaries.
Using CDBG funds for new construction could increase costs for taxpayers or strain government budgets compared with prioritizing rehabilitation or other services.
Based on analysis of 2 sections of legislative text.
Permits Community Development Block Grant formula funds to be used specifically for construction of new residential housing for low- and moderate-income persons.
Allows Community Development Block Grant (CDBG) funds to be used explicitly to build new residential housing for low- and moderate-income people. The change adds a specific eligible activity to the existing CDBG statute so metropolitan cities, counties, states, units of general local government, insular areas, and tribal entities may use CDBG formula funds for new construction, with or without nonprofit partners.
Introduced September 3, 2025 by Sam T. Liccardo · Last progress September 3, 2025