S. 4265: Freedom to Build Act

The Freedom to Build Act aims to facilitate housing development by creating a designation called "Freedom to Build" for eligible localities. Here’s a breakdown of what the bill proposes:

1. Establishment of Freedom to Build Designation

The Secretary of Housing and Urban Development (HUD) is required to establish a Freedom to Build designation for localities that voluntarily meet certain criteria. This designation will be effective for five years, with the possibility of renewal.

HUD will maintain an updated public list of localities that have received this designation.

2. Qualification Criteria

Localities can qualify for the Freedom to Build designation in two main ways:

• Adopting Reforms: Localities must adopt a minimum number of specified reforms from three categories, including:
• Unleashing Construction Innovation: Removing barriers to modern construction technologies and materials.
• Fast-tracking Approval Processes: Streamlining permitting processes to reduce time and costs for builders.
• Defending Property Rights and Family Freedom: Eliminating overly restrictive government mandates on building.
• Housing Supply Outcomes: Alternatively, localities can qualify by demonstrating sustained growth in housing supply, meeting a target set by HUD, which considers housing affordability.

3. Periodic Review and Revocation

The bill also mandates HUD to periodically review the established reforms and housing targets, updating them as needed. If a locality fails to maintain the necessary qualifications, its designation may be revoked. Localities will have a transition period to address deficiencies before revocation.

4. Grant Prioritization

Localities with the Freedom to Build designation will receive priority for competitive grants from HUD related to housing development or community improvement. This is based on the understanding that local regulatory barriers contribute to housing supply issues and rising costs, and a supportive regulatory environment enhances the effectiveness of federal funding.

5. Findings and Sense of Congress

The bill includes findings that emphasize the importance of reducing regulatory barriers for housing, suggesting that communities that enable housing development can better utilize federal investments in infrastructure and community services.

Relevant Companies

• PHM - PulteGroup Inc.: As a significant homebuilder, PulteGroup could benefit from streamlined processes and reduced regulatory burdens.
• DHI - D.R. Horton, Inc.: This leading home construction company may see increased project approvals and reduced costs due to the reforms encouraged by the legislation.
• LEN - Lennar Corporation: Similar to other builders, Lennar could experience a positive impact on project timelines and efficiencies from the proposed changes.