Congress Funds New ‘YIMBY’ Grants for Zoning Reform

from Planning.org

The final act of Congress in 2022 included passage of a new $85 million grant program aimed at zoning reform. The $1.7 trillion omnibus spending bill created a "Yes In My Backyard" competitive grant program at the U.S. Department of Housing and Urban Development.

Led by Senate Transportation-Housing and Urban Development Appropriations Subcommittee Chairman Brian Schatz (D-HI), the funding represents a new and significant incentive and support for local zoning reform and planning for housing affordability.

The Road So Far

HUD is still in the process of drafting specific timelines, criteria, and eligibilities for the new funding with formal guidance for communities expected soon. Grants would be made before the end of the federal fiscal year on September 30, 2023.

However, we do know from the statutory language that Congress intends for the funding to be provided to local governments and regional planning organizations to identify and remove barriers to housing production and preservation.

Report language accompanying the bill noted a variety of land use reforms that the funding would be aimed at helping communities address, including:

• Increasing density
• Reducing minimum lot sizes
• Creating transit-oriented development zones
• Streamlining or shortening permitting processes and timeline
• Expanding by-right multifamily zoned areas
• Allowing mixed use and multifamily development in retail, office, and light manufacturing areas
• Allowing accessory dwelling units on lots with single family homes
• Eliminating or relaxing residential property height limitations
• Eliminating or reducing off-street parking requirements, and
• Donating vacant land for affordable housing development

Ensuring Impact

The legislation also makes clear that local progress and commitment to reform will be key elements in determining who receives grant funding.

HUD will determine how applicant communities and regions will need to demonstrate their progress and commitment. According to congressional staff, the goal is to ensure that the funding leads to tangible, implemented zoning and land use reforms.

Funding will also be targeted at communities experiencing 'acute' demand for affordable housing. Eligible uses of the funding will include:

• Development, updating, or evaluation of housing plans
• Creation of new housing strategies
• Analysis of regulatory barriers, and
• Drafting new codes, ordinances, and procedures to support expanding housing opportunity

The inclusion of the new funding capped a year where zoning reform and housing supply were high on the agenda for policymakers across the country. Many communities identified and implemented key reform solutions, and several states passed zoning-related legislation aimed at zoning and local land use.

Looking Ahead

In Washington, after seeing a proposed 'Unlocking Possibilities' program dropped from reconciliation legislation, the Biden administration announced a housing plan that included incorporating zoning reform considerations into criteria for competitive infrastructure funding.

Congress also saw growing support for the Housing Supply and Affordability Act. This bipartisan legislation, supported by APA, would formally authorize a HUD grant and technical assistance program focused on zoning reform. Inclusion of $85 million in funding in FY23 sets a solid foundation for further progress this year.

Whether focused on the benefits for social equity and affordable housing or reducing regulations and spurring development, zoning reform has appeal across the political spectrum that will be essential in a divided Congress.

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Related: Schatz Goes YIMBY