The U.S. House surface transportation reauthorization proposal introduced earlier this month contains key provisions that would support affordable housing and economic development activities important to counties, if enacted. As drafted, the legislation – titled the INVEST in America Act (H.R. 7095) provides a five-year, $494 billion reauthorization of key federal highway and transit programs through FY 2021 – and places new emphasis on transit-oriented development programs under Subtitle G of the bill. Specifically, the legislation would:

• Establish a new Office of Transit-Supportive Communities with key resources for local governments: Sec. 2701 of the legislation creates a new office to make grant programs, provide technical assistance, coordinate transit-housing policies across the federal government and implement strategies that promote equity for underrepresented and underserved communities. Grant programs would allow eligible grantees with activities such as designing or building a transit line and servicing an existing transit line or station that is part of the transit system, among other activities.
• Create a new grant program for counties to plan economic development projects: Sec. 2701 of the bill would also establish a competitive grant program under the U.S. Department of Transportation (DOT) for assistance with development projects. Counties would be eligible to apply for the program. Eligible projects include those that have the potential to enhance economic development, facilitate multimodal connectivity, increase access to transit hubs for non-motorists and include private sector participation, among others. The legislation requires that eligible projects be completed at an 80 percent federal share.
• Permit property disposition for affordable housing development: Sec. 2702 of the legislation would allow a transit grantee to transfer property no longer needed to a local government authority including a county, non-profit, or other third party for the purpose of transit-oriented development projects, so long as at least 15 percent of the housing units developed be offered as affordable housing. Federal interest on those assets would be released.
• Create new incentives for the construction of affordable housing: Sec. 2703 would direct USDOT to weight favorably applications for projects from capital investment grant (CIG) sponsors that preserve or encourage affordable housing nearby. Counties would be eligible to apply directly to DOT for CIG funds. Sec. 2703 would also allow a local government to use funds from the U.S. Economic Development Administration (EDA) Public Works grant program or the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program to satisfy the local match requirement.

NACo welcomes these new housing and economic development provisions included in the U.S. House version of the surface transportation bill. However, the timetable for final passage of legislation remains unclear, especially as major differences remain in the U.S. House and U.S. Senate versions of the bill. Legislators in the U.S. House are expected to mark-up H.R. 7095 this week, however further action in the U.S. Senate has stalled, although the U.S. Senate Environment and Public Works Committee approved a bipartisan surface transportation reauthorization (S. 2302) in summer 2019.

For additional information on counties’ role in economic development, please see the following links:

• EDA announces availability of CARES Act funding (NACo blog)
• U.S. Economic Development Administration (EDA): Support Essential Seed Capital/Gap Financing (NACo policy brief)
• Support Local Development and Infrastructure Projects Through the Community Development Block Grant (CDBG) Program (NACo policy brief)
• Affordable Housing Toolkit for Counties (NACo toolkit)
• NACo testifies on the role of EDA in economic development and recovery (NACo testimony)