Choice Neighborhoods Initiative Act of 2025
The Choice Neighborhoods Initiative Act of 2025 authorizes the Department of Housing and Urban Development (HUD) to transform neighborhoods with extreme poverty and severely distressed housing into sustainable, mixed‑income communities. The program would provide competitive grants to eligible entities (local governments, public housing agencies, or nonprofits that own a major housing project) to implement transformation plans. These plans combine housing redevelopment with investments in services, education, public assets, transportation, and job opportunities, aiming to improve long‑term economic stability, school outcomes, safety, and overall neighborhood vitality. A core feature is one‑for‑one replacement of demolished or disposed public and assisted housing, a strong emphasis on resident involvement, and protections for residents who must relocate or wish to return. The bill places heavy emphasis on long‑term affordability, resident participation, and coordinated funding. It sets requirements for eligible neighborhoods, required activities (housing rehab or replacement plus supportive services and neighborhood enhancements), relocation protections, and detailed planning and selection criteria. It also introduces explicit limits on how funds can be used (notably restrictions on non‑housing activities and a cap on certain categories) and mandates a 50‑year affordability plan developed with residents. If enacted, the act could significantly reshape targeted distressed areas by leveraging housing redevelopment with broader social and economic investments, while attempting to minimize displacement and maximize resident return and benefits.
Key Points
- 1Affordable housing and eligible activities defined: The bill expands what counts as affordable housing (including public housing, assisted housing, rural housing, tax credit rental housing, and long‑term affordability agreements) and authorizes a wide range of activities, from rehab and replacement of severely distressed housing to economic development, education connections, and energy‑efficient design.
- 2Transformation plans and grants: HUD may award competitive grants to eligible entities to implement transformation plans for neighborhoods meeting criteria of extreme poverty and severely distressed housing. Plans must outline housing transformation, related supports, and long‑term affordability.
- 3Eligible entities and partnerships: Grants may go to local governments, public housing agencies, or nonprofit owners of major housing projects. The act also allows co‑applicants (community development corporations, certain for‑profit entities with local presence) and encourages partnerships with other actors.
- 4Resident rights and involvement: The plan process requires robust resident involvement, including early meetings, feedback on plan amendments, and opportunities for residents to participate in planning and implementation. Residents displaced by redevelopment have a right to return, with preferences for on‑site or replacement housing and continued access to voucher options.
- 5One‑for‑one replacement and relocation protections: If public or assisted housing units are demolished or disposed of, the plan must replace 100% of those units with comparable housing. The relocation process is governed by the Uniform Relocation and Real Property Acquisition Policies Act (with enhanced protections), including case management, relocation counseling, and financial assistance for moving costs, security deposits, and temporary housing as needed.
- 6Long‑term affordability and monitoring: Applicants must present a long‑term affordability plan (covering at least 50 years) with annual updates. The Secretary can regulate performance indicators and require ongoing monitoring of displaced residents until full occupancy of replacement housing.
- 7Funding limits and coordination: For each grant, no more than 25% may be used for certain non‑housing activities, and up to 5% for core non‑housing services. The act promotes coordination with other federal resources (Labour, HHS, Energy, Transportation, Education, and the Attorney General) to maximize funding opportunities.
- 8One‑for‑one replacement specifics: Replacements must adhere to public/assisted housing rules, subject to long‑term affordability, with certain exceptions for project‑based assistance restrictions on income mixing. Replacement housing admissions, management, and evictions follow requirements similar to public housing law.
- 9Planning and selection criteria: Transformation plans must show how they will achieve outcomes (mixed‑income, housing quality, access to jobs and education, etc.), include detailed housing plans, provide for resident input, and demonstrate long‑term coordination of multiple funding sources. Selection prioritizes need, planning inclusivity, building sustainability, transportation access, education links, and resident supports.