New 'Housing Innovation Act' Aims to Boost Housing Supply, Cut Commutes with Millions in Grants

The Housing Innovation Act sets up a new Office of Housing Innovation within HUD and dishes out millions in grants to tackle the housing crisis head-on. It's all about pushing for more housing, especially near jobs and transit, and making sure those options fit different needs and budgets.

The bill establishes the Office of Housing Innovation, which will be lead by an assistant secretary appointed by the President. (SEC. 3) It will act as a hub for best practices, encouraging areas struggling with high housing costs and gridlock to try new things. The office will coordinate with other agencies, like the Department of Transportation, to offer a more unified approach to housing solutions. (SEC. 3)

Remodeling Regulations

The core of the act involves a series of grant programs designed to incentivize local governments to rethink their housing strategies. One program, backed by a hefty $90 million annually from 2026-2032 (SEC. 9), offers up to $2 million to individual cities (SEC. 4) to revamp zoning laws and regulations. Think: allowing more multi-family units, micro-apartments, and co-living spaces, particularly near transit stops and employment hubs. (SEC. 4) The goal is to cut down on those brutal commutes and make housing more affordable where people work.

For example, a city might use these funds to streamline the approval process for apartment buildings near a new light rail station, making it easier for developers to build and for residents to find housing close to transit. Or a town could change zoning rules to permit smaller, more affordable housing types in areas previously restricted to single-family homes.

Lab to the Streets

Beyond planning, the act also puts money into researching and piloting innovative housing solutions. Another grant program, funded at $5 million annually, (SEC. 9) supports partnerships between local governments, universities, and nonprofits. (SEC. 5) These grants, capped at $500,000, (SEC. 5) could fund projects like studying the effectiveness of modular construction to lower building costs, or testing new programs that encourage home-sharing for seniors. (SEC. 5) Imagine a university partnering with a local government to pilot a program that helps connect college students with affordable housing options near campus, reducing the need for long commutes.

Spreading the Word

Finally, the act allocates another $5 million per year for education and outreach. (SEC. 9) These grants, up to $200,000 each, (SEC. 6) will go to partnerships that include academic institutions to help educate communities about housing, community development, and regional planning. (SEC. 6) This could mean workshops for residents on new housing options or training programs for local officials on best practices in zoning reform.

Challenges and Accountability

While the bill focuses on solutions, it's important to note the reliance on local governments to implement changes. The success of this act hinges on cities and towns actively participating and using the grant money effectively. To ensure accountability, the Government Accountability Office (GAO) will review the grant programs within three years, reporting its findings to Congress. (SEC. 7) This review will be crucial to see if the money is actually making a difference in boosting housing supply and easing the crunch for everyday people. $50,000,000 is also authorized for the Office of Housing Innovation's salaries and expenses starting in 2026. (SEC. 3)