This HUD effort would be more minor, something like removing some zoning restrictions in order to get federal dollars. The existing political entities (probably cities) would then have to pass those rules to get the money.
Just because the restrictions on this are not in the federal Constitution doesn't mean they don't exist; just as the federal Constitution has rules on State-Federal power balance, State constitutions often have rules on State-local power balance.
State Constitutions are usually procedurally easier to amend than the federal one, though, so, the barriers, though real, are smaller.
I wonder about a state law creating a new type of township that is totally subordinate to the county (dissolving all functions of the township). Would it be a good thing? What are the pitfalls, etc.
It's not like housing would become more affordable anyway, Seattle only builds luxury housing for the rich (and they're having a hard time filling these units!).
They only build luxury housing because housing supply is restricted and the rich can outbid the poor for that restricted development.
And no, they aren't having a hard time filling units.
Seattle Times says otherwise.
https://www.seattletimes.com/business/real-estate/free-amazo...
Apparently in Boston contrary to concerns luxury high rises didn't act as gentrification locuses but stemmed its tide in other areas instead.
I wish. If that was true I'd be much happier with politics than I am.
Except that, AFAICT, didn't happen. (Though there is a current challenge to the Constitutionality of the Medicare changes, among other things.)
You may be thinking of the mandatory (for continued state participation in Medicaid) expansion of Medicaid portion of the ACA being made optional rather than mandatory by the Supreme Court.
Of course, one could argue that is an example that is arbitrary and, while it certainly evidences judicial limits, is hard to connect to it's Constitutional pretext, as it explicitly requires that both pre-expansion Medicaid are post-expansion Medicaid are Constitutional federal programs, but that Congress is somehow barred from replacing one with the others except by consent of the individual participating state.
The constitution limits the authority of what the Federal government can do in the US and delegates everything else to state and local governments.