The Missing Middle of Innovation: Exploring the Case for a DARPA for Housing

The U.S. Housing Crisis and the Innovation Bottleneck

Barriers to New Housing Solutions

The U.S. housing crisis isn’t just about a lack of supply, it’s about how hard it is to get new ideas off the ground. Whether it’s modular construction, faster permitting, or alternative financing models, promising innovations often get stuck in a frustrating loop: too new to be widely adopted, but too untested to prove their value in the market. That is the innovation bottleneck. 

The Housing Lab Gap

Compounding the problem is the “housing lab” gap – we don’t have consistent real-world testing grounds where new approaches can be tried at scale, across systems like zoning, finance, and building codes. Innovation in housing isn’t just about new technology, it’s about navigating fragmented policies, entrenched processes, and a lack of coordination. 

So what would it take to fix that? 

A Solution: The Housing Innovation Hub

Learning from Successful Innovation Models

One idea gaining traction is the creation of a Housing Innovation Hub – a focused initiative modeled after successful federal programs like DARPA (Defense Advanced Research Projects Agency, which helped create the internet) or ARPA-E (Advanced Research Projects Agency-Energy, accelerating breakthroughs in clean energy). These hubs work by funding high-impact ideas early, supporting rapid experimentation, and coordinating across sectors to turn prototypes into reality. 

How a Housing Innovation Hub Could Work

In housing, such a hub could serve as both a fast track and a proving ground. It could support pilot projects in areas like modular construction, AI-driven permitting, or new ownership models - helping to surface what works, what doesn’t and what can scale. It could help local governments test and iterate zoning or building code reforms in real-world conditions, instead of waiting years for policy change. 

A Small, Agile, and Impactful Approach

To be effective, a Housing Innovation Hub wouldn’t need to be a large bureaucracy. It would be small, agile, and focused, built around public-private partnerships with clear goals and accountability. The goal wouldn’t be to control the market, but to help accelerate the innovations already happening in startups, nonprofits, and forward-thinking cities and states. 

Bridging the Gap Between Ideas and Implementation

Turning Innovation into Scalable Impact

The truth is, we don’t have a shortage of good ideas— the Ivory Prize for Housing Affordability is a testament to that.  What  we have is a shortage of places and processes to test them. A Housing Innovation Hub could fill that gap, helping to translate promising solutions into real, scalable impact. In a moment where urgency is high but coordination is low, that kind of focus might be exactly what is needed.