White House announces new grant program designed to boost homeownership

The White House and the U.S. Department of Housing and Urban Development (HUD) on Wednesday announced a new series of grants designed to boost homeownership by addressing issues of supply and affordability.

Announced by Vice President Kamala Harris and HUD acting secretary Adrianne Todman on a call with reporters, Harris announced the Pathways to Removing Obstacles to Housing (PRO Housing) program. With an initial investment of $85 million and another $100 million to come “later this summer,” PRO Housing aims to help more than 20 cities in their efforts to lower barriers to new construction and affordability.

Developer subsidies

In her remarks, Harris addressed some of the ways that the plan is designed to assist specific localities.

“One such barrier is that it can be difficult for affordable housing developers to be able to afford to buy and develop land,” Harris said. “To address this in Milwaukee, our investment will help the city provide subsidies to builders to help them develop vacant lots and abandoned buildings into affordable housing.”

Insufficient infrastructure is also an issue in various communities and is one of the elements the plan aims to address.

Kamala Harris

“For example, in Denver, there are plots of land available but not yet connected to the electric grid,” Harris explained. “Through this investment, we will help Denver offer loans to developers to build the power lines and water mains that are necessary for new housing.”

Housing has become a more potent political issue this year, with President Joe Biden laying down a broader housing plan during this year’s State of the Union address. The White House has become more visibly involved in matters of housing affordability and inventory, and Harris made reference to the particulars of previously announced plans.

“This investment is part of a larger strategy to lower rents and help more Americans buy a home,” she said. “President Biden and I have proposed a national housing plan to build 2 million units of affordable housing. Our plan will also help millions of families afford to buy their first home. We will give folks who are the first in their family to buy a home $25,000 for a down payment and will give millions of first-time homebuyers $400 a month to help them meet their mortgage.”

‘Build, build, build’

Todman added that a long-neglected focus on housing construction has exacerbated the issues felt in communities across the country. The PRO Housing plan aims to make an impact on the availability and cost of housing, with Todman reiterating a mantra of Biden’s to “build, build, build.”

“Grants will be provided to jurisdictions across 19 states and the District of Columbia, representing a wide range of geographies and demographics, from rural areas to large cities,” Todman said. “Thanks to this new program called Pro Housing, local leaders will be able to create pathways for various types of affordable housing, build resilience, modernize existing homes, and provide opportunities for affordable homeownership.”

There will also be another opportunity for localities who did not get funding from this round to potentially receive it later in the year. The first round is from funds already allocated to HUD by Congress for the 2023 fiscal year, while the next round of $100 million will come from funds allocated for FY 2024, according to a senior administration official.

“The demand for these awards was substantial, with requests exceeding $13 for every $1 available,” Harris’ office reported. “Applications came from more than 175 communities across 47 states and territories, representing diverse demographics and geographic settings.”

Applications, expected timeline

A senior official said that funds are allocated through a competitive application process in which cities, counties, states and multi-jurisdictional entities are encouraged to apply. Applications speak to key elements in play, including the community need for more housing, actions that have already been taken and what the funding would be used for.

While zoning issues were not specifically addressed in the application, applicants are free to include zoning details and what they’re doing to address related challenges, a senior White House official said.

While the timeline for impact from such a proposal may seem long, HUD and the White House expect it to start having a measurable impact by later this summer. This is because some of the grant recipients already have certain housing-related projects underway, and this new funding can go toward immediately supporting efforts in progress, a senior White House official said.

HUD is also seeking to ensure equitable targeting of these funds so that they go toward communities that really need it, according to a senior administration official. An income test will be employed to ensure that federal funds are going toward housing that will impact the lives of low- and middle-income people, the official said.

Harris added that the White House “continue[s] to demand that the United States Congress pass our housing plan,” a tall order considering narrow partisan divisions in both the House and Senate. But lawmakers have also signaled in recent months that housing is an issue they’re hearing more about from their constituents. Thursday is the first presidential debate of this election cycle, and housing may come up as a discussion topic.