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The Innovation Fund, city by city: reforms on the books, and proposals

The Innovation Fund rewards local governments for reforms that add housing, and the law names twelve kinds. Here is what San Jose, San Francisco, Denver, Boston, Philadelphia and New York City have already enacted, sorted under those twelve, with the housing each has permitted since 2020. Proposals and state authorizations not yet in effect locally are listed separately. HUD has not yet said how it will judge applicants, so this is a record of what is on the books, not a ranking.

Checked against the enacted text of Public Law 119-101 · Updated

At a glance

  • Parking: San Jose, San Francisco, Denver, Boston and New York City have enacted parking reforms of their own.
  • Tax incentives and public financing: San Jose, San Francisco, Boston and Philadelphia have local tax breaks or fee waivers for housing, most of them written for office-to-housing conversions. Section 208 names incentives that promote attainable housing, and these programs’ affordability terms vary, so each is only potentially relevant.
  • Not settled: how HUD will measure “improvement in housing supply growth,” which decides who can apply. As of October 26, 2026, it had published nothing under Section 208.
  • Our reading: which of the twelve categories a measure falls under is our judgment, from the statute’s wording. HUD will make its own.

The twelve reforms Section 208 names

From Section 208(b)(4)(B). The list “shall not be limited to” these.

  1. More housing allowed by right. Allowing more by right, including duplexes, triplexes, fourplexes and apartment buildings, in areas of opportunity.
  2. Parking requirements. Revising or eliminating off-street parking requirements to reduce the cost of building housing.
  3. Lot size, floor area, setbacks and height. Revising minimum lot sizes, floor area ratios, setbacks, height limits and construction bans or caps to allow denser, more affordable development.
  4. Density incentives. Incentives for dense development where a community needs more density.
  5. Mixed-income zoning. Zoning overlays or other ordinances that enable mixed-income housing.
  6. Faster approvals and permitting. Streamlining regulation and shortening approvals, adding code enforcement and permitting capacity, and reforming zoning codes.
  7. Accessory dwelling units. Removing restrictions on accessory dwelling units and allowing them by right.
  8. Tax incentives and public financing. Local tax incentives or public financing that promote attainable housing.
  9. Environmental streamlining. Streamlining environmental regulations.
  10. Manufactured and cooperative housing. Removing unnecessary restrictions on manufactured and cooperative housing.
  11. Energy and water standards. Limiting the effect of overly burdensome energy and water efficiency standards on housing costs.
  12. Other construction cost cuts. Other ways of reducing construction costs that HUD accepts.

Category 8 is narrower than it looks. It covers incentives and financing that promote attainable housing, which the Act defines as housing for households earning up to 120% of area median income, where most of the homes are affordable to households earning up to 60%. Many local tax breaks and fee waivers carry no such requirement, so the tax and financing measures below are tagged as only potentially relevant to it.

An application must describe the initiatives the applicant has carried out or is carrying out to expand its housing supply, and include data on the housing added over the three years before it applies. The measures below are the kind of record a city would draw on.

San Jose

Building by building: Downtown San Jose office buildings.

San Francisco

  • Ordinance No. 311-18 · City · 2018
    Eliminates minimum off-street parking requirements citywide. Ordinance No. 311-18 (File No. 181028).
    2. Parking requirements
  • Ordinance No. 20-25 · City · Passed March 4, 2025
    Waives development impact fees and the inclusionary housing requirement for conversions of non-residential space to housing in the C-3 districts and part of C-2, on the first 7 million square feet approved. Ordinance No. 20-25 (File No. 240927).
    8. Tax incentives and public financing (potentially relevant)12. Other construction cost cutsPotentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.
  • Proposition C · Voters · Approved March 5, 2024
    Exempts the first transfer after a qualifying commercial-to-residential conversion from the real property transfer tax, on up to 5 million square feet. A project needs final planning approval before January 1, 2030 and its first construction document within three years of approval, and the first transfer must happen before January 1, 2055. Real Estate Transfer Tax Exemption and Office Space Allocation: Economic Impact Report; Proposition C ordinance text (Business and Tax Regulations Code Section 1108.7).
    8. Tax incentives and public financing (potentially relevant)Potentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.
  • Downtown Revitalization Financing District · City · In effect February 12, 2026
    Pays an enrolled conversion an annual incentive for up to 30 years from the property-tax growth it creates; enrollment is open through 2032. Mayor Lurie Signs Legislation to Accelerate Downtown Housing Creation.
    8. Tax incentives and public financing (potentially relevant)Potentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.
  • Office to Housing Conversion Act (AB 507) · State law · In effect July 1, 2026
    California law making qualifying conversions a use by right, reviewed on fixed clocks without CEQA review. California's Office to Housing Conversion Act.
    1. More housing allowed by right9. Environmental streamlining

Building by building: Downtown San Francisco office buildings.

Denver

Building by building: Greater Downtown Denver office buildings.

Boston

  • Office to Residential Conversion Program · City · Launched October 2023; extended December 12, 2025
    Abates an average of up to 75% of a converted building's property tax for up to 29 years. Applications close December 31, 2026, and approved projects must start construction by December 31, 2027. Office to Residential Conversion Program extended as it surpasses 1,500 new homes.
    8. Tax incentives and public financing (potentially relevant)Potentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.
  • Parking minimums removed for affordable housing · City · In Zoning Code Section 23-1 as of April 2026
    No off-street parking minimum for residential developments where at least 60% of the homes are income-restricted at or below 100% of area median income. Text amendment petition filed April 13, 2026, quoting the current Section 23-1 text.
    2. Parking requirements

Proposed or authorized, not in effect locally

Building by building: Downtown Boston office buildings.

Philadelphia

  • Real estate tax abatements · City · Current terms for applications after December 31, 2021
    Ten-year abatements on the added assessment: 100% falling 10 points a year for new residential construction, 90% a year for improvements to commercial and industrial property and 100% for improvements to existing residential property. A separate 30-month abatement covers conversions to residential use while construction is under way. Real Estate Tax regulations (May 2025); Get a property tax abatement. Philadelphia's 20-year tax abatement.
    8. Tax incentives and public financing (potentially relevant)Potentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.

Proposed or authorized, not in effect locally

  • Act 45 of 2025, 20-year conversion abatement (not in effect) · State law · Authorized 2025; no city bill as of September 25, 2026
    Pennsylvania law lets Philadelphia abate taxes for 20 years on buildings converted to housing. It takes a city ordinance to use it. HB 416 (Act 45 of 2025). Philadelphia's 20-year tax abatement.
    8. Tax incentives and public financing (potentially relevant)Potentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.

Building by building: Center City Philadelphia office buildings.

New York City

  • City of Yes for Housing Opportunity · City · Approved by the City Council December 5, 2024
    Citywide zoning changes: no parking mandates in the Manhattan Core, Long Island City and the Inner Transit Zone, reduced ones in a second zone; one accessory dwelling unit of up to 800 square feet allowed per one- or two-family home whose owner lives there, with limits in flood zones and historic districts; and conversion of offices and other non-residential buildings to housing allowed citywide, with the eligibility date moved from 1961 or 1977 to 1991. City of Yes for Housing Opportunity: final plan.
    1. More housing allowed by right2. Parking requirements7. Accessory dwelling units
  • Real Property Tax Law § 467-m · State law · Enacted 2024
    A state property tax exemption for converting non-residential buildings in New York City to housing with affordable homes, administered by the city. Real Property Tax Law § 467-m. New York's 467-m conversion tax break.
    8. Tax incentives and public financing (potentially relevant)Potentially relevant to category 8; its affordability terms may not match Section 208’s attainable housing.

Building by building: New York's 467-m conversion tax break.

Housing permitted, city by city

New housing units authorized by building permits each year, per 1,000 residents, 2020 to 2025.

Housing units permitted per 1,000 residents, 2020–2025

City202020212022202320242025
San Jose1.40.72.12.72.03.3
San Francisco2.33.12.51.40.91.7
Denver7.014.011.67.95.46.4
Boston5.35.36.03.12.73.1
Philadelphia3.515.92.02.51.92.1
New York City2.22.43.93.83.22.3

Housing units permitted, 2020–2025

City202020212022202320242025
San Jose1,3696582,0032,6501,9983,313
San Francisco2,0042,5192,0141,1367701,444
Denver5,05910,0008,2965,7253,9944,727
Boston3,5323,5123,9352,0511,7892,107
Philadelphia5,66525,2573,2233,8632,9623,366
New York City19,40719,92332,83731,96527,24119,763

Permits are a count of homes authorized, not homes finished, and a single year can swing with a deadline. Philadelphia permitted 25,257 units in 2021, more than 7 times its 2022 count; applications made after December 31, 2021 got a smaller tax abatement on new residential construction. The survey counts new buildings only: homes created inside an existing building, including every office-to-housing conversion, are not in these figures.

These figures do not measure the effects of the listed reforms. Some took effect partway through the 2020–2025 period, and several, including San Jose’s conversion incentives and California’s AB 507, took effect after it ended.

Units in all new privately owned residential buildings, from the Census Bureau’s Building Permits Survey annual place files (reported plus imputed), divided by the Census Bureau’s Vintage 2025 population estimate for the same year. New York City is the sum of its five boroughs. Denver reported 11 of 12 months in 2025; the survey imputed the rest. Philadelphia reported 6 of 12 months in 2020; the survey imputed the rest. Retrieved 2026-10-26.

What HUD still has to decide

Eligibility turns on “an objective improvement in housing supply growth, as determined by the Secretary.” HUD could measure permits, completions or the change in housing units, over any window, and could compare a city with itself or with others. The Build Now Act writes a growth formula into the statute for CDBG; Section 208 does not borrow it.

Reforms are not eligibility. A city with every reform on this page could still fall outside HUD’s test, and the law lets HUD fund initiatives beyond the twelve. HUD must also weigh an even spread of rural, suburban and urban places.

Questions

Which cities are eligible for the Innovation Fund?

No one can say yet. Section 208 makes eligible the metropolitan cities, urban counties, other local governments and Indian tribes that have demonstrated an objective improvement in housing supply growth, as HUD determines. HUD must publish its method in the Federal Register for comment at least 90 days before the funding notice. As of October 26, 2026, it had published neither.

What local reforms does the Innovation Fund reward?

Section 208(b)(4)(B) lists twelve, and says the list is not exhaustive: allowing more housing by right; revising or eliminating parking requirements; revising lot size, floor area, setback and height limits; density incentives; mixed-income zoning; faster approvals and permitting; accessory dwelling units; local tax incentives or public financing; environmental streamlining; manufactured and cooperative housing; energy and water standards; and other ways of cutting construction costs that HUD accepts.

Which of these cities have removed parking minimums?

Among the six on this page, San Jose, San Francisco, Denver, Boston and New York City have enacted parking reforms, as of October 26, 2026. San Jose, San Francisco and Denver removed minimums citywide; New York City removed them in its densest, most transit-served areas and cut them in a second zone; Boston removed them for income-restricted housing, and a citywide repeal was proposed in April 2026.

Do state laws count toward a city's Innovation Fund application?

The law asks each applicant to describe the initiatives it has carried out or is carrying out. State laws such as California's AB 507 or New York's 467-m apply in the city, but they are the state's reforms. Whether HUD credits a city for them is not settled, so this page lists them separately.

Do building permits decide Innovation Fund eligibility?

Not necessarily. HUD has not said what it will measure. Permits are a common public count of new housing and are shown here as context. An application must include data on the housing added over the three years before it applies, which HUD may judge on completions or other measures rather than permits.

Sources

  1. U.S. Government Publishing Office, “Public Law 119-101, Section 208”
  2. U.S. Census Bureau, “Building Permits Survey, annual place files”
  3. U.S. Census Bureau, “City and town population estimates, Vintage 2025”
  4. City of San José, Planning, Building and Code Enforcement, “Parking and Transportation Demand Management (TDM) Ordinance Update”
  5. City of San José, “City Council agenda, January 27, 2026, item 8.2 (File 26-074)”
  6. City of San José, “Housing Department memorandum, February 19, 2026 (Resolution No. RES2026-20, File 26-282)”
  7. Local News Matters, “San Jose expands incentives for office-to-housing conversions”
  8. San Francisco Board of Supervisors, “Ordinance No. 311-18 (File No. 181028)”
  9. San Francisco Board of Supervisors, “Ordinance No. 20-25 (File No. 240927)”
  10. City and County of San Francisco, Office of the Controller, “Real Estate Transfer Tax Exemption and Office Space Allocation: Economic Impact Report”
  11. San Francisco Planning, “Proposition C ordinance text (Business and Tax Regulations Code Section 1108.7)”
  12. Office of the Mayor, City and County of San Francisco, “Mayor Lurie Signs Legislation to Accelerate Downtown Housing Creation”
  13. Denver City Council, “Council Bill 25-0684”
  14. City and County of Denver, Community Planning and Development, “Modernizing Parking Requirements”
  15. City and County of Denver, Community Planning and Development, “Adaptive Reuse in Denver (Planning Board, December 2023)”
  16. City and County of Denver, Community Planning and Development, “2025 Denver Building & Fire Code, Denver Energy Code Section C505.1 and Table C505.1 (2nd printing, November 2025)”
  17. City and County of Denver, Community Planning and Development, “Adaptive Reuse Program Regulatory Summary, revised April 11, 2025”
  18. City of Boston, “Office to Residential Conversion Program extended as it surpasses 1,500 new homes”
  19. Boston City Council, “Text amendment petition filed April 13, 2026, quoting the current Section 23-1 text”
  20. City of Boston, “City Council Committee on Planning, Development, and Transportation hearing on Docket #0809”
  21. City of Philadelphia, Department of Revenue, “Real Estate Tax regulations (May 2025)”
  22. City of Philadelphia, “Get a property tax abatement”
  23. Pennsylvania General Assembly, “HB 416 (Act 45 of 2025)”
  24. NYC Department of City Planning, “City of Yes for Housing Opportunity: final plan”
  25. New York State Senate, “Real Property Tax Law § 467-m”

More on the law: The ROAD to Housing Act explained · Environmental review changes · CDBG and HOME changes · Opportunity Zones · The Innovation Fund · The Build Now Act · Manufactured housing and the chassis rule · Chassis-free manufactured homes by state · RESIDE Act funding status · How RESIDE grants should be sized · The ban on large investors buying homes