HR1133

HR1133, the Repeal Community Development Block Grants Act of 2025, was introduced on February 7, 2025 by Rep. McClintock (R-CA) with one cosponsor. The bill would repeal Sections 101 and 103-122 of Title I of the Housing and Community Development Act of 1974, eliminating CDBG grants that fund local infrastructure, affordable housing, and economic development. The bill was referred to the House Committee on Financial Services on the same day and has seen no further action in over 14 months. The money trail is straightforward: CDBG grants are direct appropriations to states and localities—approximately $4.5–5 billion annually in recent years. Repealing authorizing language does not itself eliminate appropriated funds; a separate appropriations bill would need to defund the program. The effective date of October 1, 2025 has passed, but with no movement the bill is essentially inactive. Structural winners and losers: For homebuilders like LEN, DHI, and KBH, CDBG grants reduce the cost of land development through infrastructure improvements. Their loss would increase development costs, particularly for entry-level communities where margins are thinner. Toll Brothers (TOL) is less exposed given its luxury positioning. Financial institutions JPM, BAC, WFC may see increased private financing demand if public grants vanish, but the market for subsidized multi-family development is a small fraction of their lending. Real market data confirms broad weakness in homebuilding stocks over the past 7 days: LEN -5.81% to $88.71, DHI -7.65% to $151.65, TOL -6.49% to $139.57, KBH -6.84% to $52.30. However, the 30-day picture shows all four names are positive (LEN +4.51%, DHI +14.43%, TOL +6.98%, KBH +3.54%), indicating the weekly decline is likely driven by broader interest rate or housing data rather than this dormant bill. Timeline: No hearings, no markups, no committee report, no companion Senate bill. For HR1133 to become law, it would need to pass committee, the full House, the Senate, and be signed by the President. With zero legislative momentum over 14 months, the probability of enactment is near zero in the 119th Congress.