Build Now Act of 2025
- Sponsor
- Rep. McClain, Lisa C. [R-MI-9]
- Committees
- Oversight and Government Reform Committee (primary)
- Last action
- Dec 2, 2025
Bottom line
This bill seeks to leverage federal housing grants to encourage local governments to increase their housing supply by financially rewarding communities that demonstrate significant housing growth or improvement in growth, and penalizing those that do not.
What it actually does
The "Build Now Act of 2025" proposes to adjust Community Development Block Grant (CDBG) allocations for eligible metropolitan cities and urban counties. It would provide bonus funds to communities demonstrating high housing growth improvement rates or extremely high overall housing growth, while decreasing allocations by 10% for those with below-median improvement rates. The bill aims to incentivize local jurisdictions to reduce regulatory barriers and increase housing supply.
Proponents argue
Proponents argue that tying CDBG funding to housing growth will incentivize local governments to address housing shortages, reduce exclusionary zoning, and streamline permitting processes, thereby making housing more affordable and accessible. They believe this approach uses existing federal funds effectively to tackle a critical national issue without requiring new appropriations.
Opponents contend
Opponents might argue that this approach could disproportionately penalize communities facing unique challenges in housing development, such as limited land, environmental constraints, or strong community opposition to new construction, regardless of their efforts. They may also contend that a 10% reduction in CDBG funds could harm essential community development projects in areas already struggling, potentially exacerbating existing inequalities.
The bill is concise and clearly structured, allowing for a thorough understanding within a reasonable timeframe, especially given its focused scope.
Section 2
Establishment of Key Definitions for CDBG Allocation Adjustments
This section defines critical terms for the bill's operation, including "covered recipient" (metropolitan cities and urban counties receiving CDBG funds) and "eligible recipient" (covered recipients not meeting specific exemption criteria). It also establishes the calculation methodologies for "current annual growth rate," "prior annual growth rate," and the central metric, "housing growth improvement rate," which measures the change in housing unit growth over time. An "extremely high-growth recipient" is also defined as a community with a current annual growth rate at or above 4 percent.
Supporters argue
Supporters argue that clear, data-driven definitions ensure fairness and transparency in how CDBG funds are adjusted, focusing incentives on areas where housing growth is most needed and feasible. The included exemptions protect vulnerable communities or those with legitimate reasons for slower growth, such as recent disasters or lack of zoning authority.
Critics contend
Critics might contend that the definitions, particularly for "eligible recipient," could still overlook unique local circumstances not explicitly covered by the exemptions, potentially leading to unfair penalties. The complexity of the growth rate calculations might also be seen as an administrative burden for both HUD and local governments.
Tradeoffs
The provision balances the desire for broad applicability of housing growth incentives with the need to protect communities facing specific economic, environmental, or disaster-related challenges from unintended penalties, by carving out specific exemptions.
Section 3
Implementation of Performance-Based CDBG Allocation Adjustments
This is the core operative section of the bill, mandating that the Secretary of HUD adjust CDBG allocations. Communities with a housing growth improvement rate at or above the median for all eligible recipients (excluding extremely high-growth outliers), or those classified as "extremely high-growth recipients," will receive a bonus amount. This bonus is funded by a 10% decrease in CDBG allocations for communities whose housing growth improvement rate falls below the median for all eligible recipients (excluding high-growth outliers).
Section 4
Standardization of Housing Unit Calculation Methods
This section mandates that the Secretary of HUD use specific data sources for calculating housing units: the Bureau of the Census's Current Address Count Listing Files and other relevant data products. Calculations must be made at the block level, reflecting the most current boundaries. The Census Bureau and the U.S. Postal Service are required to provide necessary data to the Secretary upon request. The Secretary is also granted flexibility to adjust calculation periods by up to two months to align with data availability from the Census Bureau.
Section 5
Public Reporting on Housing Growth Performance and Allocations
Before allocating CDBG funds for each fiscal year, the Secretary of HUD is required to publish a report. This report must include the housing growth improvement rate for every eligible recipient. Additionally, it must list, for the most recent fiscal year, which eligible recipients received a bonus amount under the bill's provisions and which had their CDBG allocations decreased.
Section 6
Notification, Guidance, and Effective Dates for CDBG Adjustments
This section outlines the administrative timeline and support mechanisms for the bill. It requires the Secretary to notify each eligible recipient of their housing growth improvement rate and their status (above, at, or below the median) within 60 days of the Act's enactment. As part of this notification, HUD must also share guidance and resources on best practices and recommendations for reducing regulatory barriers to housing and increasing supply. Crucially, the CDBG allocation adjustments specified in Section 3 will not take effect immediately but will begin in the third full fiscal year after the Act's enactment and remain in effect through fiscal year 2043.
This subsection defines "eligible recipient" by listing specific conditions under which a "covered recipient" (a CDBG recipient) is *not* considered "eligible" and is therefore exempt from the CDBG allocation adjustments. These exemptions include communities with low median Small Area Fair Market Rents and median home values, high rental vacancy rates, recent major disaster declarations, or lacking the legal authority to enact or update zoning and permitting ordinances.
Section 2(3)
Why it matters:This is standard legislative practice to define the scope and applicability of a bill within a definitions section. It is not necessarily evasive but requires careful reading to understand the full reach and limitations of the bill's incentive structure.
Case for: Proponents argue these exemptions are critical for fairness, ensuring that communities facing genuine economic hardship, recovering from disasters, or lacking the legal tools to influence housing growth are not unfairly penalized by the new allocation system. This broadens political support by protecting vulnerable areas.
Case against: Critics might contend that some exemptions could be exploited or that they create loopholes, potentially reducing the overall effectiveness of the bill's incentive structure in addressing housing supply issues across a broader range of communities where growth is still needed.
Estimated impact: Exempts a potentially significant subset of CDBG recipients from the performance-based adjustments, altering the pool of communities subject to bonuses or penalties and influencing the overall financial redistribution.
The bill specifies that the "bonus amount" allocated to high-performing eligible recipients is equal to "the aggregate amount by which allocations to eligible recipients are decreased under paragraph (2) for that fiscal year." This means the bonus funds received by communities with high housing growth improvement are directly drawn from the 10% reductions applied to communities with below-median improvement rates.
Section 3(b)(1)(B)(i) and (2)
Why it matters:This is a technical detail of how the funding mechanism operates, rather than a primary policy statement. It's common for such interdependencies to be specified in the calculation subsections of legislative text.
Case for: Proponents would argue that this self-funding mechanism ensures the bill is budget-neutral regarding the CDBG program, avoiding the need for new appropriations. It directly reallocates existing funds to reward performance, reinforcing the incentive structure without increasing federal spending.
Case against: Critics might contend that this creates a "robbing Peter to pay Paul" scenario, where communities already struggling with housing growth (and likely other challenges) are further disadvantaged to benefit those already performing better. This could exacerbate inequalities rather than lifting all communities.
Estimated impact: The total amount of CDBG funds redistributed annually could be substantial, depending on how many communities fall below the median housing growth improvement rate, directly impacting the budgets of hundreds of communities.