Freedom to Build Act

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4265 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 4265

To require the Secretary of Housing and Urban Development to establish
         a Freedom to Build designation for certain localities.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 26, 2026

  Mr. Hagerty introduced the following bill; which was read twice and
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

To require the Secretary of Housing and Urban Development to establish
         a Freedom to Build designation for certain localities.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Freedom to Build Act''.

SEC. 2. FREEDOM TO BUILD DESIGNATION.

    (a) Establishment.--
            (1) In general.--Not later than 18 months after the date of
        enactment of this Act, the Secretary of Housing and Urban
        Development shall establish a ``Freedom to Build'' designation
        for eligible localities that voluntarily qualify under
        subsection (b) or subsection (c).
            (2) List.--The Secretary of Housing and Urban Development
        shall maintain and publish on a publicly accessible website a
        list of all localities that have received a Freedom to Build
        designation, updated not less frequently than annually.
            (3) Duration.--A Freedom to Build designation shall be
        effective for a 5-year period beginning on the date on which
        the designation is made and shall be renewable upon a
        demonstration of continued qualification under subsection (b)
        or subsection (c).
            (4) Rule of construction.--Nothing in this subsection shall
        be construed to require any locality to apply for or obtain a
        Freedom to Build designation.
    (b) Qualification by Reform Adoption.--
            (1) In general.--A locality may qualify for a Freedom to
        Build designation by certifying to the Secretary of Housing and
        Urban Development that the locality has adopted not fewer than
        the minimum number of reforms specified by the Secretary under
        paragraph (3) from each of the 3 categories described in
        paragraph (2).
            (2) Categories of reform.--The Secretary of Housing and
        Urban Development shall, through notice-and-comment rulemaking,
        identify specific reforms within each of the following
        categories:
                    (A) Unleashing construction innovation.--Reforms
                that remove regulatory barriers to the use of modern
                construction technologies, materials, and methods,
                including modular, pre-fabricated, panelized, and other
                off-site construction techniques, by aligning local
                requirements with nationally recognized standards and
                prohibiting differential treatment based on mode of
                construction. Such reforms may include--
                            (i) aligning local codes governing off-site
                        construction with nationally recognized
                        standards, including standards published by the
                        International Code Council;
                            (ii) permitting emerging construction
                        materials and methods without differential
                        treatment based on whether or how a dwelling is
                        fabricated; and
                            (iii) prohibiting local amendments to the
                        model building code that add cost beyond what
                        the nationally recognized code requires, unless
                        the locality demonstrates a specific safety
                        basis for such amendment.
                    (B) Fast-tracking the approval process.--Reforms
                that reduce the time, cost, and uncertainty of the
                development approval process and provide builders with
                meaningful recourse when the process fails. Such
                reforms may include--
                            (i) by-right approval for projects that
                        conform to applicable zoning and building
                        codes, without discretionary review;
                            (ii) binding maximum timelines for permit
                        decisions and inspections, with clear remedies
                        for the applicant, which may include deemed
                        approval or immediate administrative appeal,
                        when deadlines are not met;
                            (iii) full public disclosure of all
                        permits, approvals, inspections, and associated
                        fees that may be required, and prohibition of
                        undisclosed requirements or mid-process cost
                        increases;
                            (iv) limiting the impact fees and offsite
                        charges to costs with a reasonable nexus to the
                        specific development project;
                            (v) authorizing builders to use qualified
                        third-party inspectors for required inspections
                        and to select licensed professionals of their
                        choice for required studies;
                            (vi) protecting approved development plans
                        from the retroactive application of code
                        changes adopted after the date on which
                        approval was granted;
                            (vii) limiting standing to challenge an
                        approved development to parties who can
                        demonstrate that the development would create a
                        common-law nuisance or an immediate threat to
                        health, safety, or welfare; and
                            (viii) an expedited dispute resolution
                        process for denials and delays, under which the
                        jurisdiction bears the burden of demonstrating
                        that its action is necessary to protect
                        substantial public health, safety, or welfare
                        interests, and under which the builder may
                        recover costs and damages for unreasonable
                        delay.
                    (C) Defending property rights and family freedom.--
                Reforms that eliminate government mandates that
                restrict what may be built, how it may be built, who
                may build it, what energy sources it may use, or what
                owners and tenants may do with their property, where
                such mandates exceed what is demonstrably required for
                prevention of physical injury. Such reforms may
                include--
                            (i) prohibiting rent control or rent
                        stabilization on dwelling units, which may
                        exempt existing dwellings, for which a
                        certificate of occupancy is first issued after
                        the date of designation;
                            (ii) protecting the ability of property
                        owners to promptly address nonpayment, lease
                        violations, fraud, and unauthorized occupancy;
                            (iii) prohibiting mandatory below-market
                        set-asides in new development unless the
                        requirement is fully offset by a density bonus,
                        fee waiver, or equivalent incentive voluntarily
                        accepted by the builder;
                            (iv) prohibiting wage, residency, or
                        workforce-composition mandates on housing
                        development projects beyond those imposed by
                        generally applicable State law;
                            (v) requiring that local building code
                        provisions be consistent with evidence-based
                        standards promulgated by the Secretary of
                        Commerce, the Secretary of Agriculture, the
                        Secretary of Housing and Urban Development, the
                        National Institute of Standards and Technology,
                        or any other Federal agency, and eliminating
                        non-safety-related local additions;
                            (vi) authorizing builders to comply with a
                        Federally recognized energy rating index as an
                        alternative to prescriptive energy efficiency
                        codes, and prohibiting mandates for electric-
                        vehicle charging infrastructure or on-site
                        renewable energy generation;
                            (vii) prohibiting local ordinances that ban
                        or effectively eliminate the choice of a
                        property owner of a residential energy source;
                            (viii) authorizing builders to design to
                        any version of the applicable building or
                        energy code adopted within a reasonable period,
                        as determined by the Secretary of Housing and
                        Urban Development, at the time of plan
                        submission, rather than only the most recently
                        adopted edition;
                            (ix) limiting regulatory layering,
                        including prohibiting State requirements that
                        add to project costs beyond applicable Federal
                        requirements, and prohibiting local
                        requirements that add to project costs beyond
                        applicable State requirements, unless justified
                        by documented jurisdiction-specific health or
                        safety characteristics;
                            (x) prohibiting growth moratoria,
                        construction caps, or geographic containment
                        boundaries that restrict where new housing may
                        be built; and
                            (xi) prohibiting rules or policies that
                        penalize or increase the cost of a housing
                        development on the basis that it is primarily
                        accessible by automobile.
            (3) Minimum thresholds.--The Secretary of Housing and Urban
        Development shall, through notice-and-comment rulemaking,
        establish the minimum number of reforms from each category
        described in paragraph (2) that a locality must adopt to
        qualify for a Freedom to Build designation. The minimum number
        shall be not fewer than 3 reforms from each category.
    (c) Qualification by Housing Supply Outcomes.--
            (1) In general.--As an alternative to qualification under
        subsection (b), a locality may qualify for a Freedom to Build
        designation by demonstrating sustained housing supply growth
        meeting an affordability-adjusted target established by the
        Secretary of Housing and Urban Development under this
        subsection.
            (2) Affordability-adjusted target.--The Secretary of
        Housing and Urban Development shall, through notice-and-comment
        rulemaking, establish a formula for determining the supply
        growth target applicable to each locality. The formula shall--
                    (A) set a higher supply growth target for
                localities in housing markets in which housing costs
                are high and rising, and a lower target, which may be
                zero, for localities in housing markets in which
                housing costs are affordable and stable;
                    (B) account for both the level of housing costs,
                such as the ratio of median home price to median
                household income, and the trajectory of housing costs,
                such as the rate of home price or rent appreciation;
                    (C) measure housing costs at the level of the
                metropolitan statistical area or the housing market
                area defined by the Secretary, rather than at the level
                of the individual locality, to prevent a locality from
                avoiding a supply growth target applicable to its
                region;
                    (D) measure supply growth relative to the
                affordability-adjusted target rather than by raw
                production volume; and
                    (E) permit the supply growth target to be met by an
                individual locality or through documented participation
                by the locality in a regional housing production
                compact with one or more other localities.
            (3) Data sources.--In establishing the formula under
        paragraph (2), the Secretary of Housing and Urban Development
        shall use existing, publicly available data, which may include
        the House Price Index published by the Federal Housing Finance
        Agency, the American Community Survey of the Bureau of the
        Census, Fair Market Rents published by the Department of
        Housing and Urban Development, and housing unit counts from the
        decennial census or the American Community Survey.
    (d) Periodic Review.--The Secretary of Housing and Urban
Development shall review, and if appropriate update through notice-and-
comment rulemaking, the specific reforms identified under subsection
(b)(2) and the formula established under subsection (c)(2) not less
than once every 5 years after the date on which the regulations are
promulgated.
    (e) Revocation.--
            (1) In general.--The Secretary of Housing and Urban
        Development may revoke the Freedom to Build designation of a
        locality upon a finding that the locality has--
                    (A) materially reversed 1 or more qualifying
                reforms adopted under subsection (b); or
                    (B) ceased to meet the supply growth target under
                subsection (c), as applicable.
            (2) Notice.--Before revoking a designation under paragraph
        (1), the Secretary of Housing and Urban Development shall
        provide the locality with written notice and a period of not
        less than 180 days to cure the deficiency.

SEC. 3. PRIORITIZATION OF FREEDOM TO BUILD DESIGNATED LOCALITIES IN
              COMPETITIVE GRANTS.

    (a) Findings.--Congress finds the following:
            (1) Local regulatory barriers, including restrictive
        zoning, burdensome permitting processes, and cost-increasing
        mandates, are a significant contributor to housing-supply
        constraints and rising housing costs across the United States.
            (2) Federal investments in infrastructure, transportation,
        and community development generate greater public benefit when
        the surrounding regulatory environment permits the construction
        of housing in response to improved accessibility and economic
        opportunity.
            (3) Communities that remove regulatory barriers to
        homebuilding serve national economic, workforce development,
        and housing affordability objectives.
            (4) Federal tax incentives for housing production and
        investment, including the low-income housing tax credit under
        section 42 of the Internal Revenue Code of 1986, qualified
        opportunity zone incentives under section 1400Z-2 of such Code,
        and the new markets tax credit under section 45D of such Code,
        generate greater returns for taxpayers and produce more housing
        when deployed in communities with pro-building regulatory
        environments.
            (5) Federal housing, transportation, and community
        development funds achieve greater impact when directed to
        communities where the regulatory environment enables those
        investments to produce their intended results. Directing such
        funds to communities that simultaneously maintain regulatory
        barriers to the construction those programs are designed to
        support diminishes the effectiveness and return on the Federal
        investment.
            (6) An adequate and growing supply of housing allows demand
        growth from rising incomes and declining interest rates to
        result in expanded homeownership rather than higher home
        prices, property taxes, and homeowner insurance premiums,
        thereby protecting the affordability and value of homeownership
        for current and prospective homeowners.
            (7) The Freedom to Build designation established under
        section 2 provides a reliable and verifiable indicator that a
        community has committed to a regulatory environment supportive
        of housing supply growth.
    (b) Priority for Freedom To Build Communities.--The Secretary of
Housing and Urban Development shall prioritize applicants that are
located in or primarily serve communities with a current Freedom to
Build designation under section 2 for any competitive grant
administered by the Department of Housing and Urban Development that
relates to housing development, community development, or any other
competitive grant relating to the construction, modification,
rehabilitation, or preservation of housing.
    (c) Sense of Congress.--It is the sense of Congress that Federal
agencies administering competitive grant programs for infrastructure,
transportation, and community development, including the Department of
Transportation, the Environmental Protection Agency, and the Department
of Agriculture, should consider whether an applicant is located in a
locality with a current Freedom to Build designation under section 2 as
a positive factor in evaluating applications for such grants where
housing supply or community development is relevant to the objectives
of the program.
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