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What It Does
This bill ties Community Development Block Grant (CDBG) funding to how fast a city or county is growing its housing stock.
Jurisdictions that are building housing faster than they used to get a bonus on top of their normal CDBG allocation; jurisdictions building more slowly than their peers take a 10% cut. The goal is to use federal grant money as a carrot-and-stick to push local governments to remove zoning and permitting barriers to new housing.
Measures each eligible city/county's 'housing growth improvement rate' — essentially how much their building pace has changed over two consecutive 5-year windows
Awards bonus CDBG funds to jurisdictions at or above the median growth improvement rate; the bonus is funded entirely by cuts from the underperformers
Cuts CDBG allocations by 10% for jurisdictions whose housing growth improvement rate falls below the median
Exempts jurisdictions that are already affordable (rents and home values below national medians), already have high vacancy rates, recently had a federally declared disaster, or lack legal zoning authority
Requires HUD to notify all eligible recipients of their growth rate standing within 60 days of enactment and provide best-practices guidance on reducing regulatory barriers
Requires HUD to publish an annual public report listing who got bonuses and who took cuts
Uses Census Master Address File data (block-level) to calculate housing unit counts
Takes effect the third full fiscal year after enactment and expires after FY 2043
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Who Benefits
Fast-growing metros already building a lot of housing — they get additional CDBG dollars on top of their standard allocation
Cities and counties that successfully deregulate zoning or speed up permitting between now and when the clock starts — they can improve their growth rate and capture bonus funds
Homebuyers and renters in high-cost metros if the incentive actually drives new construction and moderates prices
HUD's policy agenda for supply-side housing reform — gives the agency a data-driven enforcement lever without requiring new legislation
Jurisdictions already exempt from cuts (low-cost markets, high-vacancy areas, disaster-affected communities) — they keep their full CDBG allocations regardless of building pace
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Who Gets Hurt
Slow-growing cities and counties — lose 10% of CDBG funds they currently rely on for community development, infrastructure, and affordable housing programs
Older Rust Belt or economically distressed cities that may be building slowly not because of bad policy but because of population loss, weak demand, or fiscal incapacity — penalized for structural conditions outside their control
Low-income residents in penalized cities whose social services, housing rehabilitation, and public infrastructure are funded partly by CDBG
Cities facing political opposition to zoning reform — their federal funding shrinks even if state law or local politics (not just negligence) is the obstacle
Rural communities — not covered by this bill at all; CDBG rural formula is untouched, so rural housing gaps remain unaddressed
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Hidden Riders
None identified.
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Framing Analysis
Framed as a supply-side housing reform to cut red tape — the bill never actually requires any jurisdiction to change a single zoning rule; it only adjusts CDBG dollars, so a city can absorb a 10% cut and never reform anything
The 'bonus pool' is described as a reward for good actors — but the pool is entirely funded by cutting the grants of slower-growing cities, meaning HUD spends no new money; this is a redistribution, not new investment
Framed as a bipartisan housing bill (Republican McClain + Democrat Himes) — the substance largely tracks conservative housing deregulation goals (reduce 'regulatory barriers'), though the exemptions for low-income and disaster-affected communities are meaningful concessions
The exemption criteria are framed as protecting genuinely non-housing-constrained markets — this is accurate; jurisdictions with vacancy rates above the national natural rate or with below-median rents and home values are legitimately excluded from a policy targeting affordability pressure
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Red Flags
⚑The 10% penalty applies based on relative performance against other jurisdictions — in any given year, roughly half of eligible recipients will fall below the median and lose funding by design, regardless of whether any of them are actually blocking housing
⚑No floor on how small a city's bonus can be — a huge metro with millions of units already built could capture a disproportionate share of the bonus pool simply due to its size (bonus is weighted by existing unit count, not marginal improvement)
⚑The growth rate measurement window is 5 years lagged — cities will be rewarded or penalized based on building activity from years ago, not what they're doing now, weakening the direct policy incentive
⚑'Extremely high-growth recipients' (≥4% annual growth) automatically get a bonus regardless of improvement — rewards cities already booming without requiring any change in behavior
⚑No definition of 'high-growth outliers' in Section 3(b)(2), which references them in the median calculation — this term appears in the penalty provision but is never defined in Section 2, creating a legal ambiguity in who is excluded from the penalty median
⚑CDBG funds are a general community development tool used for water systems, blight removal, small business loans, and social services — tying them to housing growth rates means non-housing priorities get cut when housing policy underperforms
⚑Sunset in FY 2043 is 18 years out — long enough to create significant dependency on bonus funds for high-growth cities, making future reform politically difficult
⚑No appeals process or hardship waiver for cities penalized due to circumstances outside zoning control (e.g., severe recession, state preemption of local zoning authority mid-cycle)
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Current Status
H.R.
6363 was introduced in the House on December 2, 2025, by Rep. McClain (R-MI) and Rep. Himes (D-CT). It was referred to both the House Committee on Financial Services and the House Committee on Oversight and Government Reform. No committee action, markups, or floor votes have been recorded as of the introduction date.
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