Startup Act 3.0

The Build Housing with Care Act of 2025 (S.310) establishes a competitive grant program to fund the design, planning, construction, acquisition, renovation, or support of new or existing housing facilities that include co-located childcare providers. This directly addresses the dual crises of affordable housing and childcare access. The bill defines "co-location facility" as a housing facility with an eligible childcare provider within, on the premises of, or nearby, serving residents. This legislative action creates a new market segment for integrated housing and childcare solutions. The Department of Housing and Urban Development (HUD) will award these grants to eligible entities, including community development financial institutions, public housing authorities, licensed childcare providers, government entities, housing developers, and consortia. This mechanism channels federal funds directly into development projects. Real estate developers, particularly those focused on multi-family and community-oriented projects, are positioned to receive these grants. Companies like Lennar Corporation ($LEN), D.R. Horton ($DHI), Toll Brothers ($TOL), KB Home ($KBH), and Meritage Homes ($MTH) can expand their project scope to include childcare facilities, leveraging federal grants to enhance project viability and appeal. Childcare providers, both independent and larger chains, will benefit from integrated facilities and increased demand from residents. Historically, federal initiatives supporting specific housing types have spurred development. For example, the Low-Income Housing Tax Credit (LIHTC) program, enacted in 1986, has consistently driven the development of affordable housing. While not a direct comparison in scale, the LIHTC program's success demonstrates how federal incentives can stimulate specific real estate markets. When the American Rescue Plan Act of 2021 allocated significant funds for childcare, companies like Bright Horizons Family Solutions ($BFAM) saw increased enrollment and demand, though this bill focuses on infrastructure rather than direct subsidies. This bill's focus on co-location is a novel approach that combines two critical needs. Specific winners include large-scale residential developers capable of integrating childcare facilities into their projects, such as Lennar Corporation ($LEN), D.R. Horton ($DHI), and Toll Brothers ($TOL). These companies possess the scale and expertise to bid for and execute such grant-funded projects. Real estate investment trusts (REITs) focused on residential or mixed-use properties, such as Prologis ($PLD) or Equinix ($EQIX) (though less direct), could see increased demand for land or existing properties suitable for conversion. Childcare providers, both local and national, will benefit from new, purpose-built facilities and increased demand. Losers are not directly identifiable, but companies solely focused on traditional, standalone housing developments without adapting to this integrated model may miss out on new growth opportunities. The bill has been introduced in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs. The next step involves committee hearings and potential markups. If it passes committee, it moves to a full Senate vote. Given the bipartisan co-sponsorship (Sen. Wyden [D-OR] and six other Democrats), it has moderate legislative momentum. The timeline for passage is uncertain but could move through the Senate within the current session, potentially reaching the House in late 2025 or early 2026.