Federal Funding Lapses Add Pressure to Housing Programs
The U.S. Senate passed a bipartisan funding package late last week aimed at avoiding a prolonged government shutdown, but because the House was not in session before the deadline, funding briefly lapsed for several agencies, including HUD and the CDFI Fund. Congressional leaders are expected to act quickly to finalize the agreement.
Even short disruptions can create uncertainty for housing and community development programs, delay grant administration, and slow work on the ground in communities already facing housing and affordability challenges.
HUD Programs Face Continued Uncertainty
Once enacted, the pending funding package would maintain or modestly increase funding for key programs such as HOME, CDBG, rental assistance, and homelessness services. It would also include safeguards intended to prevent gaps in Continuum of Care funding if awards are delayed — a recurring concern for service providers operating on tight timelines.
Banking & Interest Rate Watch
President Trump announced plans to nominate Kevin Warsh as the next Chair of the Federal Reserve, setting the stage for potential shifts in monetary policy and interest rate strategy. Confirmation could face delays in the Senate, and questions remain about the transition timeline as current Chair Jerome Powell’s term ends in May.
Recent Federal Housing Actions to Watch
The Trump Administration took several notable housing-related actions in January:
Institutional Investors: An executive order directs federal agencies and housing finance entities to prioritize owner-occupants over large institutional investors when selling federally backed single-family homes. The impact will depend heavily on how agencies define “large institutional investors” and implement the policy.
Mortgage Markets: The Administration directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities in an effort to lower mortgage rates — a move that could have broad implications for mortgage availability and affordability if fully implemented.
Fair Housing: HUD proposed rescinding its disparate impact rule under the Fair Housing Act, shifting enforcement largely to court interpretations. Public comments are open, and the proposal raises serious concerns about the future of fair housing enforcement and civil rights protections.
Homelessness Funding: HUD reissued its Continuum of Care Notice of Funding Opportunity (NOFO) amid ongoing litigation, limiting it to renewal projects only. Communities with grants expiring before awards are made could still face funding gaps.
Pennsylvania Budget Update: Housing Policy Takes Shape and Public Transit Funding in Focus
Gov. Josh Shapiro delivered his 2026–27 budget address on February 3, outlining a series of proposed investments and policy changes affecting housing, transportation, and economic development across the Commonwealth. The budget included new funding proposals and legislative initiatives aimed at stabilizing public transit systems and addressing Pennsylvania’s housing challenges.
As part of the rollout, the administration signaled that a forthcoming Pennsylvania Housing Action Plan, originally ordered in the fall of 2024, will provide a more comprehensive framework for increasing housing supply, improving affordability, and supporting local implementation. The budget proposal includes funding and policy concepts related to tenant protections, housing stability, planning reform, and major capital investments in housing and infrastructure.
PCRG continues to advocate alongside regional and statewide partners for housing policies that prioritize affordability and community stability, including support for homeownership, home repair and preservation, and resources that help local governments pursue zoning reform and equitable development strategies.
Public transportation was once again a central issue in this year’s budget. The governor proposed a long-term funding mechanism intended to provide dedicated, recurring revenue for mass transit systems statewide, building on prior actions taken to prevent service cuts and fare increases. As transit agencies continue to face operational and capital challenges, decisions made during the budget process will play a critical role in determining whether communities experience more reliable service and improved access to jobs, education, and essential services — or continued strain on systems many Pennsylvanians depend on.
Read PCRG’s full statement on the governor’s 2026-27 budget proposal here.
Permitting & Code Enforcement Reform in Pittsburgh
Mayor Corey O’Connor recently issued an executive order directing the Department of Permits, Licenses, and Inspections (PLI) to conduct a 60-day review and develop recommendations to make the permitting process more efficient, transparent, and predictable. The review is expected to focus on timelines, internal coordination, and customer experience — all critical factors for responsible reinvestment and neighborhood stabilization.
Delays and inconsistencies in permitting continue to be a barrier for small property owners, nonprofits, and mission-driven developers working to bring vacant and distressed properties back into productive use.
Short-Term Rental Legislation Advances
City Councilwoman Deb Gross has introduced two companion pieces of legislation to strengthen Pittsburgh’s short-term rental framework. One bill would require short-term rental operators to obtain a business license, while a second includes zoning-related changes that must go through the City Planning Commission, making it a longer and more deliberate process.
PCRG supports this legislation alongside the majority of City Council, advocacy organizations, and even short-term rental operators, recognizing the need for clear, enforceable rules that balance housing stability, neighborhood impacts, and responsible use. Councilwoman Gross first previewed this legislation at a Vacant Property Working Group meeting last year, reflecting ongoing collaboration with community stakeholders.