H.R. 5938: Innovation Fund Act

The Innovation Fund Act is a proposed piece of legislation aimed at enhancing the supply of attainable housing across various communities. Here’s a summary of what the bill involves:

Definition of Attainable Housing

The bill defines "attainable housing" as housing that is affordable to a significant number of households, specifically:

• Households with incomes not exceeding 80% of the area median income (AMI) and those not exceeding 100% of AMI, or
• Households with incomes not exceeding 60% of AMI and those not exceeding 120% of AMI.

Eligible Entities

Eligible entities that can apply for grants under this program include:

• Metropolitan cities or urban counties with a proven record of increasing housing supply, as assessed by the Secretary of Housing and Urban Development.
• Units of general local government or Indian tribes that also demonstrate similar improvements in housing supply.

Establishment of a Grant Program

Not later than one year after the enactment of this Act, the Secretary of Housing and Urban Development is required to establish a competitive grant program. This program aims to:

• Award grants to eligible entities that have successfully increased their local housing supply.
• Publicly disclose a list of entities eligible to apply for these grants.

Grant Usage

Those receiving grants can use the funds for various eligible purposes, including:

• Activities that improve housing supply as outlined in the Housing and Community Development Act of 1974.
• Supporting local development programs that align with the goals of increasing housing availability.
• Initiatives that directly facilitate the expansion of the housing supply and are relevant to local needs.

Application Process

To obtain a grant, eligible entities must submit an application that includes:

• A description of how the funds will be used and confirmation that the funds will address eligible purposes.
• Data on the local housing supply situation over the last three years.
• Details on how the proposed actions meet community needs and align with regional housing strategies.

Types of Initiatives

Initiatives that may be funded include:

• Encouraging the development of duplexes, triplexes, and other multi-family housing.
• Altering regulations around parking and lot sizes to encourage denser construction.
• Implementing tax incentives or public financing to support the building of attainable housing.
• Streamlining regulatory processes to reduce barriers to new housing developments.

Grant Distribution

The bill stipulates that:

• A minimum of 25 grants will be awarded annually, with amounts ranging from $250,000 to $10 million.
• Preference will be given to entities that have showcased innovative policies or significant improvements in housing supply.

Rules and Limitations

The Act clarifies that it does not allow the Secretary to enforce or override local zoning or land use policies. Additionally, it authorizes $200 million each year for five years to support the fund, with adjustments for inflation included.

Authorization of Appropriations

The total funding authorized is aimed at bolstering the housing initiatives covered by this bill, thus striving to make housing more accessible for various income levels.

Relevant Companies

• PHM - PulteGroup, Inc.: A home builder that may benefit from increased housing demand due to additional funding for attainable housing projects.
• DHI - D.R. Horton, Inc.: Another major home builder likely to see increased business opportunities as municipalities ramp up housing supply efforts.