Build Now Act of 2025
- Sponsor
- Sen. Kennedy, John [R-LA]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Jul 24, 2025
Bottom line
The bill reallocates existing CDBG funds to incentivize local governments to increase housing supply by rewarding areas with high housing growth and penalizing those with low growth, while exempting certain vulnerable communities.
What it actually does
This bill, the 'Build Now Act of 2025,' modifies the allocation formula for Community Development Block Grants (CDBG) by introducing a performance-based adjustment. It rewards metropolitan cities and urban counties that demonstrate significant improvement in their housing growth rates or achieve extremely high growth, providing them with bonus funds. Conversely, it decreases CDBG allocations by 10% for eligible recipients whose housing growth improvement rates fall below a specified median.
Proponents argue
Proponents argue that this bill will directly address the national housing affordability crisis by incentivizing local governments to reduce restrictive zoning and permitting barriers, thereby increasing housing supply. They contend it rewards communities that are proactively working to solve housing shortages and ensures federal funds are directed towards areas demonstrating effective housing policy outcomes.
Opponents contend
Opponents might contend that the bill could unfairly penalize communities facing legitimate, non-policy-related challenges to housing growth, such as limited land availability or economic downturns, potentially diverting crucial CDBG funds from areas with high development needs. They may also argue it represents federal overreach into local zoning authority and could lead to unintended consequences like prioritizing quantity of housing over quality or affordability.
The bill is concise and its core mechanism is clear, making it accessible for an informed reader to evaluate within a reasonable timeframe.
Section 2(3)
Definition of 'Eligible Recipient' and Exemptions
This section defines which 'covered recipients' (metropolitan cities or urban counties receiving CDBG funds) are considered 'eligible recipients' for the purpose of the bill's allocation adjustments. Crucially, it exempts areas with low median rents or home values, high rental vacancy rates, recent major disaster declarations, or those lacking legal authority to enact zoning changes. These exempted areas are not subject to the CDBG allocation adjustments.
Supporters argue
Proponents argue that these exemptions ensure the bill targets areas where housing growth is genuinely constrained by local policy choices, rather than penalizing communities facing market-driven challenges, natural disasters, or inherent limitations in their legal authority. This makes the policy more equitable and politically viable.
Critics contend
Critics might contend that these exemptions could create loopholes, allowing some areas to avoid accountability for slow housing growth even if they could implement policy changes. They might argue it complicates the program and reduces the overall incentive for housing production.
Tradeoffs
The provision balances the desire to create strong incentives for housing growth with the need to protect vulnerable communities or those facing legitimate, uncontrollable barriers to growth, ensuring the policy is applied fairly.
Section 3(b)(1)
Bonus Allocations for High Housing Growth
This provision directs the Secretary of Housing and Urban Development (HUD) to provide additional CDBG funds (a 'bonus amount') to eligible recipients that either have a housing growth improvement rate at or above the median for all eligible recipients, or are classified as 'extremely high-growth recipients' (current annual growth rate of 4% or more). The bonus amount is derived from the funds decreased from other recipients.
Section 3(b)(2)
Decreased Allocations for Low Housing Growth Improvement
This provision mandates that eligible recipients whose housing growth improvement rate falls below the median for all eligible recipients (excluding 'high-growth outliers') will have their CDBG allocation decreased by 10% for that fiscal year. These decreased funds are then used to fund the bonus amounts for high-growth recipients.
Section 6(b)
Implementation Dates and Sunset Clause
This section specifies that the CDBG allocation adjustments (Section 3) will take effect starting with the second full fiscal year after the bill's enactment. It also includes a sunset clause, stating that these adjustments will remain in effect through fiscal year 2042, after which they will expire.
Exempts covered recipients from being considered 'eligible recipients' if they 'lack the legal authority to enact or update zoning and permitting ordinances.' This means such entities would not be subject to the CDBG allocation adjustments.
Section 2(3)(D)
Why it matters:This is standard legislative practice for defining the scope of a bill's applicability. However, it's also politically significant as it shields certain entities from the bill's penalties, potentially broadening support by addressing concerns about federal overreach into local governance where authority is genuinely lacking.
Case for: This exemption is vital for fairness, as it prevents penalizing jurisdictions that genuinely do not possess the legal power to influence zoning and permitting decisions, such as some counties where zoning authority rests solely with incorporated cities within their borders. It ensures the policy targets entities that actually have the capacity to act.
Case against: Critics might argue that the definition of 'lack the legal authority' could be open to interpretation or exploited, potentially allowing some entities to avoid accountability for slow housing growth even if they could indirectly influence or advocate for changes. It could also complicate HUD's implementation by requiring a determination of legal authority.
Estimated impact: This exemption significantly narrows the pool of entities subject to the CDBG allocation adjustments, potentially reducing the overall amount of funds redistributed and focusing the policy on a more specific set of local governments.