SPUR Housing Act Proposes $300 Million Annual Fund to Cut Construction Costs and Boost Affordable Units

The SPUR Housing Act aims to jumpstart residential construction by having the federal government pick up part of the bill for state and local taxes and impact fees. Starting in 2027, the Department of Housing and Urban Development (HUD) would launch a grant program authorized at $300 million per year through 2031. For developers, this means a potential federal subsidy of up to $150,000 annually for five years to offset the 'impact fees'—those hefty charges cities levy to pay for the new roads, sewers, and schools a new building requires. By lowering these upfront hurdles, the bill seeks to make projects that are currently stuck on the drawing board financially viable.

The Local Buy-In Requirement

To get a piece of this federal pie, developers have to do more than just show up with a blueprint. Section 2 of the bill requires that developers first secure a commitment from their local or state government to slash the project's property taxes by at least 50%. This creates a 'skin in the game' scenario: for a project to receive federal cash, the local city council or county commission must already be on board with significant tax breaks. For a resident, this could mean a surge in local construction, but it also means your local government is agreeing to collect less tax revenue from these new properties for at least five years in exchange for the growth.

Who Gets to the Front of the Line?

HUD isn't just handing these out on a first-come, first-served basis. The bill sets strict priorities for who gets funded. High marks go to 'transit-oriented' developments—think apartments right next to the light rail or bus hubs—and 'infill' sites, which are those empty lots in already-developed urban areas. If you’re a senior looking for accessible housing or a worker struggling to find a place near your job, this bill is looking at you; it specifically prioritizes senior-friendly units and 'workforce housing' aimed at middle-income earners who often make too much for subsidies but too little for luxury rents.

Practical Hurdles and Real-World Math

While $150,000 a year sounds like a lot, in the world of high-rise construction or large-scale rehabilitation, it may only cover a fraction of the total costs. The bill caps the grant at the lesser of $150,000 or 50% of the eligible taxes and fees. For a developer in a high-cost city where impact fees alone can run into the millions, this grant might be more of a nudge than a shove. Additionally, because the bill relies on American Community Survey data to identify 'priority housing areas,' the actual impact will depend heavily on how HUD draws those maps. If your neighborhood is seeing rising costs but doesn't meet the 'severe burden' threshold in the data, local developers might still find themselves on the outside looking in.