Choice Neighborhoods Initiative Act of 2025
The Choice Neighborhoods Initiative Act of 2025 would authorize the Department of Housing and Urban Development (HUD) to transform neighborhoods facing extreme poverty into sustainable, mixed-income communities. The core approach is to revitalize severely distressed public or assisted housing and pair it with investments in housing affordability, services, education, public assets, transportation, and local job access. HUD would run a competitive grant program, awarding funds to eligible local governments, public housing agencies, or nonprofit entities (often with a major housing project) to develop and implement comprehensive transformation plans. Plans must emphasize long-term affordability (about 50 years, with updates every 5 years), meaningful resident involvement, and coordination with multiple funding streams. The bill also places strong protections for residents: a right to return after displacement, robust relocation assistance, and requirements to prevent racial segregation and preserve access to education and services. It prohibits the use of grant funds to acquire property through eminent domain and requires one-for-one replacement of demolished or disposed units, among other protections.
Key Points
- 1Grant authority and eligible applicants: HUD may make competitive grants to local governments, public housing agencies, or non-profit entities that own major housing projects to implement transformation plans in eligible neighborhoods. Co-applicants and partnerships (including community development corporations and certain for-profit entities with a community presence) are allowed, with rules ensuring public housing agencies retain appropriate roles for projects involving public housing.
- 2Definitions and targeted areas: The act defines what counts as affordable and assisted housing and sets criteria for “extreme poverty” and “severely distressed housing.” Eligible neighborhoods must show a concentration of extreme poverty and housing with severely distressed conditions.
- 3Required activities in transformation plans: Plans must include housing transformation (rehabilitation, preservation, or demolition and replacement), one-for-one replacement of demolished public/assisted units, economic self-sufficiency supports, preservation of affordability, relocation with return rights, fair housing and accessibility compliance, service coordination, resident involvement, and links to local education efforts. Plans may also include energy-efficient design and community improvements.
- 4Resident rights and relocation protections: Residents have a right to return to replacement housing if they were displaced, provided they meet lease terms and occupancy standards. The act requires robust relocation counseling, timely notices, and protections under the Uniform Relocation Assistance and Real Property Acquisition Policies Act. It also requires clear opportunities for residents to participate in planning and amendments to plans, with appropriate public meetings.
- 5Funding limitations and oversight: For each grant, no more than 25% may fund non-housing activities (and no more than 5% for certain sub-activities). The act encourages coordination with other federal departments and programs. It also requires a long-term affordability plan (about 50 years) developed with resident input and periodic updates, and sets criteria for plan selection emphasizing need, collaboration, data, sustainability, and the ability to deliver outcomes. A notable prohibition is that grant funds cannot be used to exercise eminent domain to acquire property.