42 USC 19505 - Innovation fund

U.S Code last checked for updates: Jul 31, 2026

§ 19505.

Innovation fund

(a)

Definitions

In this section:

(1)

Attainable housing

(2)

Eligible entity

The term “eligible entity” means—

(A)

a metropolitan city or urban county, as those terms are defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302), that has demonstrated an objective improvement in housing supply growth, as determined by the Secretary, whose methodology for determining such growth is published in the Federal Register to allow for public comment not less than 90 days before the date on which the notice of funding opportunity is made available; or

(B)

a unit of general local government or an Indian tribe, as those terms are defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302), that has demonstrated an objective improvement in housing supply growth, as determined by the Secretary, whose methodology for determining such improvement is published in the Federal Register to allow for public comment not less than 90 days before the date on which the notice of funding opportunity is made available.

(3)

Secretary

(b)

Establishment of a grant program

(1)

Establishment

(2)

List of eligible entities

(3)

Eligible purposes

An eligible entity receiving a grant under this section may use funds to—

(A)

carry out any of the activities described in section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305);

(B)

carry out any of the activities permitted under the Local and Regional Project Assistance Program established under section 6702 of title 49; and

(C)

carry out initiatives of the eligible entity that facilitate the expansion of the supply of attainable housing and that supplement initiatives the eligible entity has carried out, or is in the process of carrying out, as specified in the application submitted under paragraph (4).

(4)

Application

(A)

In general

An eligible entity seeking a grant under this section shall submit to the Secretary an application that provides—

(i)

a description of each purpose for which the eligible entity will use the grant, and an attestation that the grant will be used only for 1 or more eligible purposes described in paragraph (3);

(ii)

data on characteristics of increased housing supply during the 3-year period ending on the date on which the application is submitted, which may include whether such housing—

(I)

serves households at a range of income levels; and

(II)

has improved the quality and affordability of housing in the jurisdiction of the eligible entity;

(iii)

a description of how each eligible purpose described in clause (i) may address a community need or advance an objective, or an aspect of an objective, included in the comprehensive housing affordability strategy and community development plan of the eligible entity under part 91 of title 24, Code of Federal Regulations, or any successor regulation (commonly referred to as a “consolidated plan”); and

(iv)

a description of how the eligible entity has carried out, or is in the process of carrying out, initiatives that facilitate the expansion of the supply of housing.

(B)

Initiatives

Initiatives that meet the criteria described in paragraph (3)(C) include, but shall not be limited to—

(i)

increasing by-right uses, including duplex, triplex, quadplex, and multifamily buildings, in areas of opportunity;

(ii)

revising or eliminating off-street parking requirements to reduce the cost of housing production;

(iii)

revising minimum lot size requirements, floor area ratio requirements, set-back requirements, building heights, and bans or limits on construction that allow for denser and more affordable development;

(iv)

instituting incentives to promote dense development for communities where increased density is needed;

(v)

passing zoning overlays or other ordinances that enable the development of mixed-income housing;

(vi)

streamlining regulatory requirements and shortening processes, increasing code enforcement and permitting capacity, reforming zoning codes, or other initiatives that reduce barriers to increasing housing supply and affordability;

(vii)

eliminating restrictions against accessory dwelling units and expanding their by-right use;

(viii)

using local tax incentives or public financing to promote development of attainable housing;

(ix)

streamlining environmental regulations;

(x)

eliminating unnecessary manufactured-housing or cooperative housing regulations and restrictions;

(xi)

minimizing the impact of overburdensome energy and water efficiency standards on housing costs; and

(xii)

other activities that reduce the cost of construction, as determined by the Secretary.

(5)

Grants

(A)

In general

(B)

Limitations on awards

No grant awarded under this paragraph may be—

(i)

more than $10,000,000; or

(ii)

less than $250,000.

(C)

Priority

When awarding grants under this paragraph, the Secretary shall give priority to an eligible entity that has—

(i)

demonstrated the use of innovative policies, interventions, or programs for increasing housing supply; and

(ii)

demonstrated a marked improvement in housing supply growth, as needed.

(D)

Grant administration and terms

(c)

Rules of construction

Nothing in this section shall be construed—

(1)

to authorize the Secretary to mandate, supersede, or preempt any local zoning or land use policy; or

(2)

to affect the requirements of section 12705(c)(1) of this title.

(d)

Sunset

(e)

Authorization of appropriations

(1)

In general

(2)

Adjustment

(Pub. L. 119–101, title II, § 208, July 11, 2026, 140 Stat. 875.)

cite as: 42 USC 19505