Congress opens door to public housing expansion, funds zoning reform
H.R. 9540 — Community Housing Act of 2026 · Filed by Becca Balint (D-VT) · 15 cosponsors · Introduced Jun 30, 2026 · Referred to committee
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What it does
The Community Housing Act of 2026 allocates approximately $1.6 billion in new federal funding to support affordable housing development, preservation, and rental assistance. It establishes a competitive grant program for communities to reform zoning codes, develop housing plans, and implement affordable housing projects; creates a new HUD office focused on land-use and zoning reform; provides down-payment assistance for homebuyers and direct loans for rural homeownership; funds community land trusts and shared-equity housing models; and restructures rural rental housing loan programs to preserve affordability. The bill benefits low-income renters and homebuyers, community development organizations, and local governments pursuing housing affordability strategies.
Why we flagged it
The bill's core mechanism is direct federal appropriation for affordable housing development, preservation, and homeownership assistance, paired with regulatory reform to reduce zoning barriers. It is fundamentally a public-investment and land-use policy bill, not a tax or subsidy carve-out.
What the text implies
- The repeal of the Faircloth Amendment (Section 106) removes a 1998 cap on new public housing construction, potentially enabling significant expansion of public housing stock if Congress appropriates funds—a major policy shift with long-term fiscal implications.
- The bill permits GSEs (Fannie Mae and Freddie Mac) to purchase mezzanine debt for home construction (Section 303), expanding their role in financing affordable multifamily projects and potentially increasing their exposure to construction-phase risk.
The full analysis lists 5 implications of this text.
Who stands to gain
Community development organizations and nonprofits (CLTs, NeighborWorks affiliates); State and local housing authorities; Rural lenders and USDA loan servicers