Can Congress Get ‘YIMBY Grants’ Right?

Happy Tuesday, and welcome to another edition of Rent Free. This week’s stories include:

• The House’s near-unanimous vote on a housing bill that includes a number of pro-supply policies.
• The Florida Senate’s unanimous passage of an accessory dwelling unit bill.
• New York City Mayor Zohran Mamdani’s “show trials” for bad landlords.

But first, we cover the revival and reform of the federal government’s nascent “YIMBY grant” program.

Last week, Congress renewed funding for a new “YIMBY grant” program with a few statutory tweaks that might finally make the nascent program work as an effective incentive for state and local deregulation.

The $77 billion appropriation for the U.S. Department of Housing and Urban Development (HUD) signed into law last Tuesday included $50 million for a third round of Pathways to Removing Obstacles to Housing (PRO Housing) grant awards.

The PRO Housing program was created by Congress as part of the FY 2023 continuing resolution passed in December 2022 with the intent of using federal money as an incentive for local and state governments to remove regulatory red tape on new home construction.

But, as Reason has covered previously, the first $85 million in grant awards were poorly targeted to this purpose. Cities received money for vague planning activities that had no obvious potential for increasing housing production. Others received money for adopting “inclusionary zoning” policies that reduce housing production.

The second $100 million round of grant awards released in January 2025 showed some improvement, with more awards going toward places that were adopting deregulatory zoning reforms.

Even so, the second round of grants still showed little rhyme or reason as to which jurisdictions were getting awards. Fast-building Austin, Texas, received a $6.7 million award to continue its zoning reform work, as did supply-starved, reform-hostile San Francisco.

The program’s poor targeting of awards was not unpredicted. The original legislative language creating the PRO Housing program was incredibly vague.

The HUD secretary was directed to prioritize grants to jurisdictions that “demonstrate progress and a commitment to overcoming local barriers to facilitate the increase in affordable housing production and preservation.”

Notably lacking is any real definition of what policies or housing market outcomes HUD was supposed to be encouraging. Likewise, saying that grant applicants need only show “progress and a commitment” to removing local barriers seemed to imply that jurisdictions didn’t need to adopt any policy changes. Many grantees were awarded money for promising to merely study potential reforms.

The language authorizing the second round of grants was equally imprecise.

Interestingly, the language authorizing this latest third round of PRO Housing grants is a lot more specific.

It says HUD shall give grants to jurisdictions that “have enacted or implemented (or caused another entity to enact or implement) less restrictive zoning, land use, or permitting laws and regulations, that are reasonably expected to preserve or produce new housing units.”

“It’s absolutely a step in the right direction,” says Will Poff-Webster, the director of infrastructure policy at the Institute for Progress, and a former staffer for Sen. Brian Schatz (D–Hawaii), who has long been a champion of the PRO Housing program.

He says the new language is both more explicitly deregulatory and is required to go to jurisdictions that have already enacted reforms. “It can’t be something where they promise something that happens in the future,” Poff-Webster tells Reason.

HUD has another 120 days to issue a Notice of Funding Opportunity that lays out more precise funding criteria for grant applicants.

These will be the first PRO Housing grants awarded by the Trump administration, which has a more expressed commitment to deregulation than its predecessor.

In crafting the new round of the program, Poff-Webster says the current administration “really [has] an opportunity to make the program more focused on deregulation.”

Time will tell.

On Monday evening, via a lopsided 390–9 vote, the House of Representatives passed H.R. 6644, a.k.a. the “Housing for the 21st Century Act.”

The sprawling piece of legislation includes a range of policies touching everything from federal community banking regulations to veteran benefits. The bill also includes a number of policies intended to increase housing production and liberalize local land-use rules.

The bill folds in the Housing Supply Frameworks Act, which would direct HUD to develop best-practice zoning reforms that states and localities could then choose to adopt.

It would also repeal the current federal requirement that manufactured housing units sit on a permanent steel chassis—a policy that housing wonks say drives up the cost of manufactured housing for no real benefit.

Similarly, another part of the bill would instruct HUD to provide model building code guidelines for single-stair apartment buildings.

Most state and local building codes require multifamily buildings to have two staircases, which critics contend drives up development costs and prevents the construction of smaller apartments on smaller lots.

H.R. 6644 contains many of the same or similar policies as the Senate’s bipartisan ROAD to Housing Act, which the upper chamber passed last year. The Bipartisan Policy Center has a helpful explainer breaking down the differences in the two bills.

The Senate’s bill includes provisions that would either tweak existing grant programs or create new ones that (similar to the YIMBY grants discussed above) are intended to reward jurisdictions that liberalize their land-use laws and increase housing production.

The inclusion of new money in the Senate bill makes it marginally more ambitious, but also a potentially tougher sell, as Politico noted in its reporting on the bill yesterday.

Some conservative and libertarian policy wonks have also raised federalism objections to new federal spending aimed at encouraging local policy changes. Notably, most of the “no” votes on H.R. 6644 in the House came from Republicans such as Reps. Andy Biggs (R–Ariz.) and Thomas Massie (R–Ky.).

Most states just getting into zoning reform normally start with accessory dwelling units (ADUs), often called in-law suites or granny flats, before moving on to liberalizing rules governing larger developments.

Florida is predictably doing things in the reverse order.

Back in 2023, the state quietly passed zoning reforms that preempted local density rules on apartment buildings that included affordable units. That’s enabled hundreds of multifamily projects, including large high-rises.

With that big reform out of the way, the Sunshine State is now focusing on smaller-scale ADUs. Last week, the Florida Senate unanimously approved a bill that would require localities to allow these units on single-family properties.

“ADUs can increase workforce housing because ADUs cost less to build, they cost less to rent and are often located in areas where workers need to live and be close to their jobs,” the bill’s sponsor, state Sen. Don Gaetz (R–Niceville), told CBS News.

The bill would also limit local governments’ abilities to impose parking mandates or special permitting requirements on ADUs. They also could not require that the owner of the property live on-site in order to construct an ADU.

Those provisions eliminate many of the common poison pills that local governments can adopt to stymie the construction of state-legal ADUs.

New York Mayor Zohran Mamdani is making good on his promise to host a series of listening sessions for New Yorkers to complain about their landlords.

This morning, he unveiled the dates of five “rental ripoff” series events to be held in each of the city’s five boroughs. The Mayor’s Office to Protect Tenants, the revived office run by far-left housing activist Cea Weaver (who has a long history of opposing private property), is organizing the series.

New York City: The time has arrived. Finally, a chance to tell the city EXACTLY what your landlord’s been getting away with. NYC’s first Rental Ripoff Hearings are happening in all five boroughs, and we want to hear from you. Real New Yorkers. Real stories. Real policy changes. 

— Mayor Zohran Kwame Mamdani (@mayor.nyc.gov) 2026-02-10T14:31:27.267051578Z

“Show trials may make good theater, but they don’t solve problems,” said Kenny Burgos, CEO of the New York Apartment Association, in an emailed statement.

As Mamdani’s administration has conceded in court filings, many of the housing quality issues afflicting New York’s apartment stock are the direct result of rent control laws that limit landlords’ ability to raise rents to pay for needed repairs.

• The White House weighs opening an antitrust probe into U.S. homebuilders, reports Bloomberg.
• Federal immigration raids in South Texas leave behind half-built subdivisions with no workers to finish them.

WSJ article today paints picture of what happens after ICE raids a new home construction site:

Building slows down, crews avoid the area, homes sit half-finished, and local suppliers lose sales. pic.twitter.com/bckntzlSow

— Eric Finnigan (@EricFinnigan) February 9, 2026

• Household mobility fell to a record low in 2024, finds a new report from Harvard’s Joint Center for Housing Studies.
• The Manhattan Institute’s John Ketcham writes about the “daily choices that sustain the urban bargain.”