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This week: what the new federal housing law changes for the people who administer block grants, run housing departments, and build the units. On July 11, the biggest federal housing law in more than three decades quietly became law, unsigned. The President let the clock run out on the 21st Century ROAD to Housing Act after it passed the Senate 85 to 5 and the House 358 to 32, negotiated by Tim Scott and Elizabeth Warren. Yes, interesting pairing. What did nearly everyone in Washington agree to do about housing? They agreed to change the rules, and to let localities feel the consequences of their own choices. I appreciate the move. Three changes that matter First, Community Development Block Grant funds can now be used to build new affordable housing. For decades, federal rules mostly blocked the block grant from funding new construction. Rehab, land, sidewalks, yes. Homes, no. Now, we can use it to build homes. And, that’s good. Second, every city and county that receives block grant funds must publish an online, searchable, public list of the undeveloped land it owns. Right now that information sits in assessor files almost no resident ever sees. Soon (relatively soon) anyone will be able to look up how much buildable public land their city is holding while saying there's nowhere to build. Third, some localities' block grant funding is now tied to housing production. Build faster, get a bonus. Lag behind, take a small cut. The block grant has never come with a production scoreboard. It does now.
Where's the money? The law authorizes new programs: a $200 million per year Innovation Fund for localities that show measurable increases in housing supply, grants for pre-approved housing designs and vacant building conversions, three more years of the disaster recovery block grant program. But authorizing a program means it legally exists, not that it's funded. The funding language was removed when the House and Senate bills were merged, and the law's final section states that no additional funds are authorized to implement it. Every one of those programs starts with an empty account until appropriators act. Notice the asymmetry. The rewards depend on future budget fights. The requirements don't. The production scoring runs on block grant money that already flows. The land database is a mandate. The rules are live. The money is still a promise. I am personally not much concerned about this. It’s better than nothing, considering our housing crises. Why don't cities build? Here's where the law gets interesting as strategy, because low production has two very different causes. Some communities don't build because they can't. Small towns, disinvested neighborhoods, rural counties without planning staff. For them, a funding cut takes away exactly what they need to improve. But much of the gap comes from communities that won't. The Urban Institute studied the nation's most exclusionary cities, the ones that added the least housing over two decades. These are not struggling places. Their home values sit well above regional averages. They restrict more than three quarters of their residential land to single-family homes only. And, the same research found, many rely heavily on money from state and federal government. Sit with that combination. The places refusing to build are wealthy, refusing by choice, and financially dependent on higher levels of government. That is exactly where carrots and sticks work. You can't shame a wealthy suburb into permitting apartments. You can shrink its block grant every year it refuses, publish the list of land it's sitting on, and offer bonus money the moment it changes course.
But, whether the measurement can tell the refusers from the capacity-constrained is the implementation question that decides if this works or backfires. Hasn't California been doing this already? Yes, and it's the best preview we have. Every California city and county already reports housing production annually to the state housing department, HCD, which tracks progress against assigned targets using building permits and publishes it all in a public dashboard. The state pairs this with a carrot: a Prohousing Designation that gives cooperative jurisdictions an edge in state funding. Head start for California under the federal law? On reporting muscle, probably. But California also shows the hard part: the data is self-reported, and researchers have found it's often inaccurate, because counting units is nobody's main job at a planning counter. A decade in, the state is still working out what to count and how to verify it. And, the housing crisis is just getting worse. What California genuinely proves is this: once the numbers are public, the conversation changes. A city council can dismiss an advocate. It has a harder time dismissing a dashboard showing it permitted 40 homes while the city next door permitted 400.
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