S. 3067: Innovation Fund Act

The Innovation Fund Act aims to create a grant program designed to increase the local housing supply across various communities in the United States. This summary outlines the key elements of the bill.

Definitions

Key terms defined in the bill include:

• Attainable Housing: Housing available to households with incomes at different income levels, primarily targeting those earning less than or equal to 80% or 100% of the area median income.
• Eligible Entity: Refers to metropolitan cities, urban counties, or tribal units of government that have demonstrated an improvement in housing supply growth.
• Secretary: The term refers to the Secretary of Housing and Urban Development (HUD).

Grant Program Establishment

The Secretary of HUD is required to establish the grant program within one year of the bill becoming law. The grant program will award funds to eligible entities that have shown an increase in their local housing supply.

Application Process

Entities wishing to apply for grants must submit an application that includes:

• A description of how the funds will be used.
• Data demonstrating increased local housing supply over the past three years.
• A description of how the proposed uses meet community needs and goals.
• Details on past or ongoing initiatives that support housing supply expansion.

Eligible Uses for Grant Funds

Grants received can be used for various purposes to facilitate housing development, including:

• Activities from the Housing and Community Development Act of 1974.
• Efforts under the Local and Regional Project Assistance Program.
• As matching funds for related environmental grant programs.
• Any specific initiatives to expand the supply of attainable housing as detailed in their grant application.

Grant Awards

The bill specifies that a minimum of 25 grants will be awarded annually to eligible entities, provided that funds are available. Grant amounts will range between $250,000 and $10 million. Priority will be given to entities that have implemented innovative policies and shown marked improvements in housing supply growth.

Limitations and Conditions

The Secretary is prohibited from overriding local zoning and land use policies through the grants, and these awards cannot be used to circumvent existing housing law requirements.

Funding Authorization

The bill authorizes $200 million per year for fiscal years 2027 to 2031, with adjustments for inflation based on the Consumer Price Index.

Relevant Companies

• KB Home (KBH): A homebuilding company that may benefit from increased housing development due to more accessible funding for local governments promoting housing supply.
• D.R. Horton, Inc. (DHI): Another home construction company that could see impacts from streamlined processes and increased property development opportunities tied to the grant incentives.
• Toll Brothers, Inc. (TOL): This luxury home builder may benefit from expanded housing initiatives, enhancing the overall housing market landscape.