Draft legislation introduced to improve quality and accessibility of affordable housing

Key Takeaways

On April 30, U.S. House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) introduced draft legislation that would improve the quality and accessibility of affordable housing, while providing new funding and program resources to counties. The draft bill, titled the Housing Infrastructure Act , would repair the nation’s existing affordable housing stock, create new affordable housing units and establish a set-aside in the Community Development Block Grant (CDBG) program to streamline the housing development process, among other measures.

The draft legislation proposes approximately $92 billion in new funding for affordable housing. Specifically, the bill includes:  

• $70 billion to address the public housing capital backlog;
• $10 billion for a CDBG set-aside to incentivize state and local governments to eliminate impact fees and to streamline the affordable housing development process;
• $5 billion to support mitigation efforts to protect communities from future disasters and reduce federal spending on disaster recovery; and
• $5 billion for the Housing Trust Fund to develop new housing units that would be affordable to the lowest-income households.

In addition, smaller funding streams included in the legislation would go toward meeting housing needs on tribal lands ($1 billion) and helping low-income elderly individuals in rural areas age in place ($100 million). These new federal funding resources would offer critical support to counties, which play a central role in the coordination and planning of housing development in our communities. Legislators have not yet identified potential budgetary offsets that would fund the proposals outlined in the draft bill. 

Though the $10 billion set-aside will run through CDBG, this new funding would be distributed through a different structure than the traditional CDBG program. Specifically, the $10 billion would be awarded on a competitive basis to states and localities, compared to the current program that awards funding to states and localities on a formula basis. In addition, the funding may only be used for the development and preservation of qualified affordable housing, including construction of housing, as well as any project or entity eligible for a discretionary grant under the U.S. Department of Transportation (DOT).

To qualify for CDBG funding under the draft legislation, applicants would need to demonstrate that they meet the following criteria:

1. Responsibly streamlining the process for development of qualified affordable housing;
2. Eliminating or reducing impact fees except for purposes of developing affordable housing; and
3. Supplementing federal assistance provided with non-federal sources for costs of qualified affordable housing or infrastructure.

NACo supports the CDBG program, which provides direct resources to counties for local community and economic development projects and will work with committee staff to ensure this section enhances the current program and provides additional opportunities for affordable housing and infrastructure development.

Going forward, the draft legislation must still be considered in the House Financial Services Committee. On the Senate side, senators are also proposing affordable housing legislation, such as Sen. Elizabeth Warren’s (D-Mass.) American Housing and Economic Mobility Act. NACo will continue to engage with key congressional committees to ensure counties have the resources necessary to meet the housing needs of our local communities.

Additional NACo resources:

NACo Presentation: CDBG: A Guide for Counties

NACo Policy Brief: Restore Funding for HUD Home Investment Partnerships (HOME) Program

NACo Policy Brief: Support Local Development and Infrastructure Through the Community Development Block Grant (CDBG) Program

NACo Report: Affordable Housing Toolkit for Counties