The Innovation Fund Act establishes a federal grant program to encourage cities and communities to increase their housing supply by rewarding those that have already demonstrated success in building more homes. The Department of Housing and Urban Development would award at least 25 competitive grants annually—ranging from $250,000 to $10 million each—to eligible municipalities, counties, and tribal governments that have shown measurable improvements in housing growth. Grant recipients can use the funds for community development activities, infrastructure projects, or initiatives that expand affordable and attainable housing, such as loosening zoning restrictions, reducing parking requirements, streamlining permitting processes, or allowing more multi-family buildings. The bill prioritizes communities that have adopted innovative housing policies and demonstrated significant housing supply growth, with consideration given to ensuring grants are distributed across different geographic regions and rural, suburban, and urban areas. The legislation authorizes $200 million annually for fiscal years 2027 through 2031 to support these grants, with amounts adjusted for inflation.
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