I 118th CONGRESS 2d Session H. R. 10171 IN THE HOUSE OF REPRESENTATIVES November 19, 2024 Mr. Smith of Washington introduced the following bill; which was referred to the Committee on Financial Services , and in addition to the Committees on Ways and Means , and Science, Space, and Technology , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To encourage local government reform of zoning and permitting to enhance housing affordability and economic growth, and for other purposes.

I Zoning and permitting reform 1. Short title This Act may be cited as the Prefabricated Housing and Zoning Enhancement Act of 2024 . 2. Zoning and permitting reform incentive grant program (a) Congressional findings The Congress finds that— (1) restrictive zoning and permitting processes contribute to housing shortages and inflated housing costs, and hinder economic development; and (2) encouraging local governments to reform zoning and permitting practices can increase housing supply, improve affordability, and stimulate local economies. (b) Establishment The Secretary of Housing and Urban Development shall, not later than 1 year after the date of the enactment of this section, establish and carry out a grant program to provide financial incentives to units of local government that implement zoning reforms and permitting reforms. (c) Eligibility (1) In general To be eligible to receive a grant under this section, a unit of local government shall— (A) enact zoning and permitting reforms during the 18-month period before the date of application; and (B) submit an application at such time and in such manner as the Secretary may reasonably require that includes a description of— (i) any zoning and permitting reforms enacted by such unit of local government in the previous 18 months; (ii) how such reforms are expected to increase housing supply and make the housing supply more affordable; and (iii) how the unit of local government intends to monitor the impacts of such zoning and permitting reforms. (2) Approval by Secretary The Secretary may only award grants under this section to a unit of local government with zoning and permitting reforms that the Secretary determines will actively increase housing supply and make the housing supply more affordable. (d) Priority The Secretary shall give priority to applicants based on the extent to which— (1) the zoning and permitting reforms adopted by an applicant— (A) significantly increase the potential for development of affordable housing and housing for middle-income households; (B) reduce barriers to the conversion of non-residential buildings to residential use; (C) implement expedited permitting processes for housing developments; and (D) encourage mixed-use development and higher-density zoning near transportation hubs; and (2) the applicant has— (A) established partnerships with community land trusts; (B) provided funding, land, or other support for community land trust initiatives; and (C) used innovative methods to integrate community land trust models into housing and community development strategies, including inclusionary zoning policies that facilitate community land trust projects and tax incentives for land donations to community land trusts. (e) Use of grant amounts Amounts from a grant under the program under this section may be used by a unit of local government only for— (1) infrastructure improvements related to increased housing development; (2) technical assistance and capacity building for local planning and development agencies; and (3) establishing or enhancing community engagement and consultation processes related to zoning and permitting reforms. (f) Technical assistance The Secretary shall provide technical assistance to units of local government awarded grants under this section to assist such units of local government in— (1) fostering successful partnerships with community land trusts; (2) developing projects; and (3) engaging with the community. (g) Supplemental community land trust amounts (1) In general Each unit of local government awarded a grant under this section shall be eligible to receive additional amounts from the Secretary to be used by the unit of local government to support the establishment and expansion of community land trusts. (2) Use of amounts Supplemental amounts provided under this subsection may only be used for— (A) local capacity building activities of a local community land trust; (B) land acquisition by a local community land trust; (C) project development by local community land trust; or (D) other operation needs of a local community land trust. (3) Priority When providing supplemental amounts under this subsection, the Secretary shall give priority to units of local government that can demonstrate a history of supporting and collaborating with community land trusts. (4) Authorization of appropriations (A) In general There is authorized to be appropriated to the Secretary such sums as are necessary to provide supplemental amounts under this subsection. (B) Availability of amounts Any amounts appropriated pursuant to this paragraph shall remain available until expended. (h) Reports (1) In general Each unit of local government that receives a grant under this section shall, each year, submit a report to the Secretary that includes such information as the Secretary determines necessary to evaluate the impacts of the zoning and permitting reforms enacted by the unit of local government. (2) Additional requirement Each unit of local government that receives supplemental amounts under subsection (g) shall include, in the annual report required under this section, information about the efforts of such unit of local government to promote and collaborate with community land trusts, the outcomes of such efforts, and any barriers encountered by such unit of local government. (3) Report to Congress The Secretary shall compile the reports submitted pursuant to paragraph (1) and submit a compilation of such reports to the Congress each year that includes— (A) an evaluation of efforts of community land trust initiatives supported with amounts provided under subsection (g) and how such efforts promote long-term affordable housing and sustainable community development; and (B) any recommendations the Secretary may have for further legislative or administrative action to encourage zoning and permitting reform. (i) Best practices The Secretary shall disseminate best practices and guidelines to units of local government that receive grants under this section relating to the integration of community land trust models into local housing strategies, including mechanisms for ensuring long-term affordability and community stewardship of land. (j) Authorization of appropriations (1) In general There is authorized to be appropriated for grants under this section $10,000,000,000 for fiscal year 2025 and each fiscal year thereafter. (2) Availability of amounts Any amounts appropriated pursuant to this subsection shall remain available until expended. (k) Definitions For purposes of this section, the following definitions shall apply: (1) Community land trust The term community land trust means a nonprofit organization that— (A) acquires and holds land for the benefit of the community and operates under community governance to ensure long-term stewardship of land; and (B) provides affordable housing opportunities through long-term ground leases, which are subject to community accountability measures and deed restrictions to maintain affordability and compliance with community objectives. (2) Permitting reform The term permitting reform means a modification of permit-related processes that has the effect of significantly decreasing the amount of time associated with obtaining construction or development approvals from a unit of local government. (3) Secretary The term Secretary means the Secretary of Housing and Urban Development. (4) Unit of local government The term unit of local government means any city, county, town, township, parish, village, or other general purpose subdivision of a State. (5) Zoning reform The term zoning reform means a modification to local land use regulations that has the effect of increasing housing capacity and diversity of housing ownership. II Prefabricated housing incentives programs 201. Grant program (a) In general The Secretary of Housing and Urban Development shall, not later than 1 year after the date of the enactment of this title, establish a grant program to provide financial assistance to eligible entities. (b) Eligible entity The term eligible entity in this section means— (1) a company that manufactures modular housing, panelized housing, or manufactured housing components; (2) a developer utilizing prefabricated housing in their projects; or (3) an organization supporting the prefabricated housing supply chain. (c) Use of amounts Amounts awarded under this section shall be used by an eligible entity for 1 or more projects that will— (1) demonstrate the potential to increase affordable housing stock; (2) utilize sustainable building practices; (3) create jobs in the prefabricated housing sector; and (4) contribute to the advancement of prefabrication technologies. (d) Application process (1) Submission To be eligible to receive amounts under this section, an eligible entity shall submit an application to the Secretary, at such a time and in such a manner as the Secretary may reasonably require, that describes the scope, objectives, budget, timeline, and expected outcomes of the project for which such eligible entity shall use any amounts provided under this section. (2) Review and approval Each application received by the Secretary shall be reviewed by a panel of experts, to be selected by the Secretary, who shall evaluate such applications on criteria including— (A) innovation; (B) feasibility; (C) impact on affordable housing; and (D) alignment with the goals of the programs under this title. (e) Authorization of appropriations (1) In general There is authorized to be appropriated to the Secretary $30,000,000,000 for grants under this section. (2) Availability of amounts Any amounts appropriated pursuant to this subsection shall remain available for a period of 10 years. (f) Reporting and accountability (1) Progress reports Each eligible entity that receives amounts under this section shall submit quarterly progress reports to the Secretary detailing the— (A) use of funds; (B) project developments; and (C) any challenges encountered. (2) Audits The Secretary shall conduct regular audits to ensure compliance with grant terms and the effective use of funds. 202. Manufactured housing tax credit (a) In general Subpart E of part IV of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code of 1986 is amended by inserting after section 48E the following new section: 48F. Manufactured housing credit (a) In general For purposes of section 46, the manufactured housing credit for any taxable year is an amount equal to 20 percent of the qualified investment for such taxable year with respect to any qualified manufactured housing project of the taxpayer. (b) Qualified investment (1) In general For purposes of subsection (a), the term qualified investment means— (A) with respect to a project described in subsection (c)(1)(A), the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of a qualified housing manufacturing facility, and (B) with respect to a project described in subsection (c)(2)(A), the sum of the following amounts which are paid or incurred by the taxpayer during the taxable year in carrying on any trade or business of the taxpayer with respect to qualified research and development: (i) in-house research expenses (as defined in section 41(b)(2)), and (ii) contract research expenses (as defined in section 41(b)(3)). (2) Certain qualified progress expenditure rules made applicable Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section. (3) Limitation The amount which is treated as the qualified investment for all taxable years with respect to any qualified housing manufacturing facility or qualified research and development shall not exceed the amount designated by the Secretary as eligible for the credit under this section. (c) Definitions For purposes of this section— (1) Qualified manufactured housing project The term qualified manufactured housing project means a project, any portion of the qualified investment of which is certified by the Secretary under subsection (e) as eligible for a credit under this section— (A) which equips, expands, or establishes a qualified housing manufacturing facility, or (B) which facilitates qualified research and development. (2) Qualified property (A) In general The term qualified property means property— (i) which is tangible property, (ii) which is— (I) constructed, reconstructed, or erected by the taxpayer, or (II) acquired by the taxpayer if the original use of such property commences with the taxpayer, and (iii) which is integral to the operation of the qualified housing manufacturing facility. (B) Buildings and structural components (i) In general The term qualified property includes any building or its structural components which otherwise satisfy the requirements under subparagraph (A). (ii) Exception Clause (i) shall not apply with respect to a building or portion of a building used for offices, administrative services, or other functions unrelated to manufacturing. (3) Qualified housing manufacturing facility The term qualified housing manufacturing facility means a facility the primary purpose of which is the manufacturing of— (A) manufactured housing, (B) modular housing, (C) panelized housing, or (D) prefabricated housing. (4) Manufactured housing, modular housing, panelized housing, prefabricated housing The terms manufactured housing , modular housing , panelized housing , and prefabricated housing have the respective meanings given such terms in section 207 of the Prefabricated Housing and Zoning Enhancement Act of 2024 . (5) Qualified research and development The term qualified research and development means research and development activities relating to— (A) new methods or materials for prefabricated housing, manufactured housing, modular housing, or panelized housing, which enhance durability, efficiency, or cost-effectiveness in manufacturing, (B) sustainable building practices and materials which reduce the environmental impact of such housing, and (C) the use of advanced technologies, including automation, robotics, and smart home systems, in the manufacturing process. (d) Special rules (1) Denial of double benefit A credit shall not be allowed under this section for any qualified investment for which a credit is allowed under section 41 or 48D. (2) Coordination with rehabilitation credit The qualified investment with respect to any advanced manufacturing facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)). (e) Qualified manufactured housing investment program (1) Establishment (A) In general Not later than 365 days after the date of enactment of this section, the Secretary shall establish a qualified manufactured housing investment program to consider and award certifications for qualified investments eligible for credits under this section. (B) Limitation The total amount of credits that may be allocated under the program shall not exceed $3,000,000,000. (2) Certification (A) Application period Each applicant for certification under this paragraph shall submit an application containing such information as the Secretary may require during the 1-year period beginning on the date the Secretary establishes the program under paragraph (1). (B) Time to meet criteria for certification Each applicant for certification shall have 1 year from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the requirements of the certification have been met. (C) Period of issuance An applicant which receives a certification shall have 3 years from the date of issuance of the certification in order to place the project in service and if such project is not placed in service by that time period, then the certification shall no longer be valid. (3) Selection criteria In determining which projects to certify under this section, the Secretary shall— (A) take into consideration only those projects where there is a reasonable expectation of commercial viability, and (B) prioritize projects that— (i) increase affordable housing stock, particularly for low- and moderate-income families, (ii) incorporate advanced manufacturing technologies and innovations that improve efficiency, reduce costs, or increase the quality of manufactured housing, (iii) align with local efforts to streamline zoning and permitting processes or those that comply with new local zoning reforms, (iv) demonstrate the ability to make use of additional private or public funding, (v) are ready to begin construction or implementation within a short time frame, and (vi) use replicable, scalable construction methods that can align with varying regional building code requirements. (4) Review and redistribution (A) Review Not later than 1 year after the date of enactment of this section, the Secretary shall review the credits allocated under this section as of such date. (B) Redistribution and reallocation Rules similar to the rules of subparagraphs (B) and (C) of section 48C(d)(4) shall apply. (5) Disclosure of allocations The Secretary shall, upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant. (f) Regulations and guidance The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section. . (b) Conforming amendments (1) Section 46 of such Code is amended in paragraph (6) by striking and at the end, in paragraph (7) by striking the period at the end and inserting , and , and by adding at the end the following new paragraph: (8) the manufactured housing credit. . (2) The table of sections for subpart D of part IV of subchapter A of chapter 1 of subtitle A of such Code is amended by adding at the end the following new item: Sec. 48F. Manufactured housing credit. . (c) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. 203. Innovation Centers (a) Innovation Centers The Secretary, in coordination with relevant partners as determined by the Secretary, shall establish a network of National Prefabricated Housing Technology Centers (hereafter referred to as Centers ) to promote research and development in prefabrication technologies, materials, and processes. (b) Goals of the Centers The goals of the Centers shall include the following: (1) Developing and refining new methods and materials for prefabricated housing to enhance durability, efficiency, and cost-effectiveness. (2) Researching sustainable building practices and materials to reduce the environmental impact of prefabricated housing. (3) Investigating and implementing advanced technologies like automation, robotics, and smart home systems in the prefabricated housing manufacturing process. (4) Providing training programs and certifications for builders, architects, and engineers in prefabricated housing techniques and technologies. (5) Educating the public on the benefits and options available in prefabricated housing to increase acceptance and adoption. (6) Funding vocational training programs and partnerships with community colleges to create a skilled workforce proficient in prefabricated and modular construction methods, including— (A) coursework on modern construction techniques; (B) improving safety practices; and (C) the use of advanced manufacturing equipment. (7) Fostering partnerships with construction companies, manufacturers, academic institutions, and government agencies to drive innovation and share knowledge. (8) Working with policymakers to develop and promote regulations and incentives that support the growth of the prefabricated housing industry. (9) Developing and promoting industry standards and best practices to ensure high-quality, safe, and reliable prefabricated housing products. (10) Establishing testing and certification programs to guarantee that prefabricated housing units meet or exceed regulatory and industry standards. (11) Promoting prefabricated housing as a viable solution for affordable housing that addresses the housing shortage in various communities. (12) Supporting job creation within the prefabricated housing sector through training and development programs. (13) Creating a central database of research, case studies, and best practices, to be accessible to industry stakeholders and the public. (14) Supporting startups and small businesses in the prefabricated housing sector by providing resources, mentorship, and funding opportunities. (15) Regularly assessing, benchmarking, and comparing the activities the center engages in with global standards to ensure it remains at the forefront of the industry. (16) Supporting the use of sustainable materials and energy-efficient designs in prefabricated housing. (17) Supporting the integration of resilient construction practices to ensure that prefabricated housing can withstand natural disasters and other challenges. (c) Authorization of appropriations There is authorized to be appropriated to the Secretary $1,000,000,000 to carry out this section. 204. Research and development grants (a) In general The Secretary shall, not later than 1 year after the date of the enactment of this title, establish a grant program to provide financial assistance to eligible entities. (b) Eligible entity The term eligible entity in this section means a— (1) university; (2) private company; (3) government agency; or (4) collaborative partnership. (c) Use of amounts Amounts awarded under this section shall be used by an eligible entity for a project that will focus on the development of— (1) new prefabrication technologies; (2) sustainable materials; or (3) advanced manufacturing techniques that enhance the quality, affordability, and environmental performance of prefabricated housing. (d) Application process (1) Submission To be eligible to receive amounts under this section, an eligible entity shall submit an application to the Secretary, at such a time and in such a manner as the Secretary may reasonably require, that describes the scope, objectives, budget, timeline, and expected outcomes of the project for which such eligible entity shall use any amounts provided under this section. (2) Review and approval Each application received by the Secretary shall be reviewed by a panel of experts, to be selected by the Secretary, who shall evaluate such applications on criteria including— (A) innovation; (B) feasibility; (C) impact on affordable housing; and (D) alignment with the goals of the programs under this title. (e) Authorization of appropriations (1) In general There is authorized to be appropriated to the Secretary $1,000,000,000 for grants under this section. (2) Availability of amounts Any amounts appropriated pursuant to this section shall remain available for a period of 10 years. (f) Reporting and accountability (1) Progress reports Each eligible entity that receives amounts under this section shall submit quarterly progress reports to the Secretary detailing the— (A) use of funds; (B) project developments; and (C) any challenges encountered. (2) Audits The Secretary shall conduct regular audits to ensure compliance with grant terms and the effective use of funds. 205. Technical support (a) In general The Secretary shall provide technical assistance to State and local governments with respect to— (1) streamlining the permitting process for prefabricated and modular housing projects; (2) reducing bureaucratic hurdles; and (3) accelerating project timelines. (b) Development of model codes and processes The Secretary shall, not later than 1 year after the date of the enactment of this section, convene a panel of expert to develop and provide technical assistance on— (1) a model permitting process for construction using prefabricated construction methods; and (2) a model building codes that support the use of prefabricated construction methods. 206. Community and affordable housing development (a) In general The Secretary shall, not later than 1 year after the date of the enactment of this title, establish a grant program to provide financial assistance to eligible entities. (b) Eligible entity The term eligible entity in this section means a— (1) nonprofit organization; (2) local government; (3) housing authority; or (4) developer. (c) Use of funds Amounts awarded under this section shall be used by an eligible entity on projects that— (1) serve low-income and moderate-income households; (2) address specific community needs; (3) utilize prefabricated and modular constructions methods; and (4) involve communities in planning and development processes, ensuring that prefabricated housing projects meet local needs and preferences, including through conducting— (A) public meetings for community members to voice opinions, ask questions, and provide feedback on proposed affordable housing developments; (B) surveys, in multiple languages, to gather opinions and suggestions from community members about planning and development processes; and (C) neighborhood walkthroughs and site visits to allow community members to see potential housing development sites and discuss concerns and suggestions. (d) Priority The Secretary shall give grant priority to projects that demonstrate the potential to— (1) increase affordable housing stock; (2) utilize sustainable building practices; and (3) create community benefits. (e) Application process (1) Submission To be eligible to receive amounts under this section, an eligible entity shall submit an application to the Secretary, at such a time and in such a manner as the Secretary may reasonably require, that describes the scope, objectives, budget, timeline, and expected outcomes of the project for which such eligible entity shall use any amounts provided under this section. (2) Review and approval Each application received by the Secretary shall be reviewed by a panel of experts, to be selected by the Secretary, who shall evaluate such applications on criteria including— (A) innovation; (B) feasibility; (C) impact on affordable housing; and (D) alignment with the goals of the programs under this title. (f) Authorization of appropriations (1) In general There is authorized to be appropriated to the Secretary $15,000,000,000 for grants under this section. (2) Availability of amounts Any amounts appropriated pursuant to this subsection shall remain available for a period of 10 years. (g) Reporting and accountability (1) Progress reports Each eligible entity that receives amounts under this section shall submit quarterly progress reports to the Secretary detailing the— (A) use of funds; (B) research developments; and (C) any challenges encountered. (2) Audits The Secretary shall conduct regular audits to ensure compliance with grant terms and the effective use of funds. 207. Definitions In this title: (a) Affordable housing The term affordable housing has the meaning of the term section 215 of title 2 in the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 12745 ). (b) Manufactured housing The term manufactured housing means housing that is built entirely in a factory, transported to a site, and installed on a permanent chassis. (c) Modular housing The term modular housing means housing that is built in sections in a factory setting and then transported to the construction site for assembly. (d) Panelized housing The term panelized housing means to housing where panels, such as walls and floors, are prebuilt in a factory and then assembled on-site. (e) Prefabricated housing The term prefabricated housing means housing that is manufactured offsite, in advance, usually in standard sections, that can be easily shipped and assembled, and includes— (1) modular housing; (2) panelized housing; and (3) manufactured housing. (f) National Prefabricated Housing Technology Center The term National Prefabricated Housing Technology Center means a comprehensive, multidisciplinary institution dedicated to advancing the technology, innovation, and adoption of prefabricated housing, serving as a central hub for research, development, education, and collaboration in the prefabricated housing industry. (g) The Secretary The term Secretary means the Secretary of Housing and Urban Development. III National Building Code for affordable housing 1. The National Building Code (a) Authority The Secretary of Housing and Urban Development (hereafter referred to as the Secretary ) shall, in consultation with relevant Federal, State, Tribal, and local agencies not later than 3 years after date of the enactment of this section, develop a National Building Code for Affordable Housing (hereafter referred to as the Code ). (b) Objectives The Code to be developed under subsection (a) shall do the following: (1) Streamline the building approval process to reduce delays and costs associated with housing construction. (2) Promote the use of modern construction techniques and materials that enhance affordability, durability, and energy efficiency. (3) Standardize building codes across States to minimize regulatory discrepancies and facilitate interstate housing development. (4) Ensure that the building code supports the development of a diverse range of housing types, including single-family housing, multi-family units, and manufactured housing. (c) Stakeholder input The Secretary shall, when developing the code under subsection (a), solicit feedback from stakeholders, including— (1) State, local, and Tribal government officials; (2) private-sector stakeholders, such as developers, homebuilders, creditors, real estate professionals, manufacturers, and academic researchers; and (3) renters, advocates, and homeowners. 2. Grant Program Implementation (a) In general The Secretary shall, on the date that the Code is developed under section 1, establish a grant program to incentivize the adoption of the Code by units of State and local government. (b) Authorization of appropriations (1) In general There is authorized to be appropriated to the Secretary $10,000,000,000 for grants under this section. (2) Availability of amounts Any amounts appropriated pursuant to this subsection shall remain available for a period of 10 years. 3. Reporting and evaluation (a) Annual report The Secretary shall submit an annual report to Congress on the implementation and impact of the Code, including— (1) the number of States and localities that have adopted the code; (2) the impact of the Code on housing affordability and supply; and (3) recommendations for further improvements to the Code. (b) Evaluation Not later than 5 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit a report to Congress on the effectiveness of the Code in reducing housing costs and increasing housing supply. IV Other matters 101. Effective dates (a) Title I Title I shall take effect on the date of the enactment of this Act. (b) Title II Title II shall take effect 90 days after the date of the enactment of this Act. (c) Title III Title III shall take effect on the date of the enactment of this Act. 102. Compliance with the Davis-Bacon Act All laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part by amounts provided under this Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code.