At a recent Housing and Insurance Subcommittee hearing in the U.S. House, lawmakers and a panel of witnesses discussed proposed reforms to HUD’s HOME Investment Partnerships Program. The panel focused on streamlining regulations and addressing barriers that hinder affordable housing development under the shadow of proposed severe cuts to the program from the GOP-controlled House Appropriations Committee.
All witnesses and most lawmakers (including Democrats) supported raising the Davis-Bacon labor wage threshold from 12 to 50 housing units and exempting HOME-funded projects from Build America/Buy America (BABA) requirements. They argued these rules increase costs and timelines, particularly in rural areas where contractors often decline to bid. Many also advocated for categorical environmental exemptions for small projects, reuse of existing environmental reviews, and elimination of duplicative NEPA requirements.
Additionally, Eric Oberdorfer of National Association of Housing and Redevelopment Officials (NAHRO) urged broadening eligible uses to include rehabilitation of public housing units, not just new construction. He also supports increasing the construction contract threshold for Davis-Bacon applicability from $2,000 to $250,000 (having not been updated since 1935!) and joined other witnesses in advocating for maintaining local flexibility.
Representative Rep. Janelle Bynum (D-OR) and Ellen Woodward Potts of Habitat for Humanity Tuscaloosa emphasized modular construction as a promising innovation. Bynum hopes that HUD programs evolve to support modular methods as part of broader modernization efforts.
As someone who enjoys the wild claims often made by protectionists and populists, I was entertained by Rep. Sylvia Garcia's (D-TX) sharp opposition to relaxing Davis-Bacon and BABA requirements. Exclaiming "I don't want to see ... lumber, nails coming from another country not the good ol' USA that will fall apart after 2 years..." and lambasted the witnesses for wanting "to build anywhere, anytime, any way [you] want". Garcia also asked why the exemptions are needed since tariffs & "lack of immigrant labor" are going to raise construction costs anyway. Wow.
The hearing revealed strong bipartisan interest in modernizing the HOME program but also near unanimous concern from Democratic lawmakers and witnesses about the proposed funding cuts from the Appropriations Committee. The House Appropriations Committee’s draft FY 2026 budget proposes eliminating all funding for the HOME Investment Partnerships Program, a move that would slash $1.25 billion from the previous year’s allocation.
I'll be tracking progress of the HOME Reform Act of 2025 with its potential changes to Davis-Bacon and BABA, posting about it over on Bluesky where you can find the thread this article is adapted from as well as my other housing and transportation policy insights. This article was adapted from that thread with help of Microsoft CoPilot. A version of this article was also posted to LinkedIn.