H.R. 9625: Freedom to Build Act

This bill would direct the Department of Housing and Urban Development (HUD) to create a voluntary “Freedom to Build” designation for local governments that adopt certain housing-related reforms or show strong housing supply growth over time.

What the designation is

Within 18 months of enactment, HUD would have to set up the designation and keep a public list of localities that receive it. The designation would last for 5 years and could be renewed if the locality still qualifies. Local governments would not be required to apply for it.

How a locality could qualify

A locality could qualify in one of two ways:

• By adopting reforms in three categories of housing policy, with HUD later setting the minimum number of reforms needed in each category.
• By showing housing supply growth that meets a HUD-defined target adjusted for local housing affordability and price trends.

Reform categories HUD would define

HUD would use a rulemaking process to identify specific reforms within three broad areas:

• Construction innovation: lowering barriers to modular, prefabricated, panelized, and other off-site construction methods; aligning local rules with nationally recognized standards; and limiting local code changes that add cost without a specific safety reason.
• Faster approval processes: allowing projects that meet zoning and building codes to be approved automatically; setting maximum timelines for permits and inspections; requiring disclosure of fees and requirements; limiting some impact fees to project-related costs; allowing third-party inspectors; protecting approved plans from later code changes; narrowing who can challenge approved projects; and creating an expedited appeals process for denials and delays.
• Property rights and family freedom: limiting certain local rules that restrict what can be built, how it is built, or what energy sources it uses, unless needed to prevent physical injury. This category could include restrictions on rent control for newly built units, mandatory below-market set-asides unless offset by incentives, local wage or workforce mandates beyond state law, some local energy code additions, bans on certain energy choices, growth moratoria, and rules that penalize housing because it is car-dependent.

Housing supply alternative

Instead of adopting those reforms, a locality could qualify by meeting a HUD-set housing production target based on local market conditions. The bill says the target should be higher where housing is expensive and rising quickly, and lower where housing is already affordable and stable. HUD would use publicly available data and could measure performance using regional housing markets rather than only city boundaries.

Review and loss of designation

HUD would have to review and update the reform list and supply-growth formula at least every 5 years. HUD could revoke a designation if a locality rolls back qualifying reforms or no longer meets its housing growth target, but only after giving at least 180 days to fix the problem.

Effect on federal grants

The bill would require HUD to prioritize applicants from Freedom to Build localities for certain competitive grants related to housing, community development, and housing preservation. It also says other federal agencies, such as the Department of Transportation, EPA, and USDA, should consider the designation favorably when housing or community development is relevant to grant decisions.

Relevant Companies

None found.