Freedom to Build Act
- Sponsor
- Sen. Hagerty, Bill [R-TN]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Mar 26, 2026
Bottom line
The bill incentivizes local governments to reduce housing regulations or increase housing supply by offering preferential access to federal competitive grants.
What it actually does
This bill directs the Secretary of Housing and Urban Development (HUD) to establish a voluntary "Freedom to Build" designation for localities. Localities can qualify by adopting a minimum number of housing regulatory reforms across three categories (construction innovation, approval process, property rights) or by demonstrating sustained housing supply growth. Designated localities would receive priority for competitive HUD grants related to housing and community development, and other federal agencies are encouraged to consider the designation as a positive factor in their grant programs.
Proponents argue
Supporters argue that this bill will address the national housing affordability crisis by encouraging localities to remove burdensome regulations that restrict housing supply and drive up costs. They contend that by prioritizing federal funds for pro-building communities, the bill will maximize the impact of federal investments and foster economic growth, homeownership, and a more robust workforce by ensuring housing is available where jobs are created.
Opponents contend
Critics may argue that the bill represents federal overreach into local zoning and land-use decisions, which are traditionally state and local prerogatives. They might also contend that some of the specific reforms encouraged, such as limiting impact fees or prohibiting rent control, could undermine local revenue streams for essential services or reduce protections for tenants and vulnerable populations, potentially leading to unintended negative consequences for communities.
The bill is concise and clearly structured, making it accessible for an informed reader to understand its core provisions and implications within a reasonable timeframe.
Section 2(a)
Establishment of Freedom to Build Designation
This provision requires the Secretary of Housing and Urban Development (HUD) to create a "Freedom to Build" designation for localities that voluntarily meet certain criteria. HUD must maintain a public list of designated localities, and the designation will last for a 5-year period, renewable upon continued qualification. The designation is explicitly voluntary, meaning no locality is required to apply.
Supporters argue
Proponents argue that establishing a clear, voluntary designation provides a strong incentive for localities to adopt pro-housing policies without imposing federal mandates, respecting local control while encouraging beneficial reforms.
Critics contend
Opponents might argue that even a voluntary designation could create pressure on localities to conform to federal preferences, potentially undermining genuine local decision-making processes regarding housing and development.
Tradeoffs
The provision balances the desire to encourage local housing reforms with the principle of local autonomy, using incentives rather than direct federal mandates.
Section 2(b)
Qualification by Reform Adoption
A locality can qualify for the designation by certifying it has adopted a minimum number of reforms from three categories: unleashing construction innovation (e.g., aligning codes with national standards, permitting new materials), fast-tracking the approval process (e.g., by-right approval, binding timelines, limiting impact fees), and defending property rights and family freedom (e.g., prohibiting rent control, limiting mandates on energy sources or workforce composition). HUD will define specific reforms and minimum thresholds (at least 3 per category) through rulemaking.
Section 2(c)
Qualification by Housing Supply Outcomes
As an alternative to adopting specific reforms, a locality can qualify by demonstrating sustained housing supply growth that meets an affordability-adjusted target. HUD will establish a formula for this target through rulemaking, which will set higher targets for areas with high and rising housing costs and lower targets for affordable markets. The formula will consider metropolitan-level housing costs and allow for regional housing production compacts to meet targets.
Section 2(e)
Revocation of Designation
The Secretary of HUD may revoke a Freedom to Build designation if a locality materially reverses qualifying reforms or ceases to meet its housing supply growth target. Before revocation, HUD must provide written notice and a 180-day period for the locality to correct the deficiency.
Section 3(b)
Priority for Freedom to Build Communities in Competitive HUD Grants
This provision mandates that the Secretary of HUD prioritize applicants located in or primarily serving communities with a current Freedom to Build designation. This prioritization applies to any competitive grant administered by HUD that relates to housing development, community development, or the construction, modification, rehabilitation, or preservation of housing.
Section 3(c)
Sense of Congress for Other Federal Agencies
This provision expresses the Sense of Congress that other federal agencies, including the Department of Transportation (DOT), the Environmental Protection Agency (EPA), and the Department of Agriculture (USDA), should consider a locality's Freedom to Build designation as a positive factor when evaluating applications for competitive grants related to infrastructure, transportation, and community development, where housing supply or community development is relevant to the program's objectives.
The prohibition on rent control or rent stabilization explicitly 'may exempt existing dwellings, for which a certificate of occupancy is first issued after the date of designation'.
Section 2(b)(2)(C)(i)
Why it matters:This nuance is likely included to address concerns about retroactively applying new rules to existing housing stock, which can be politically sensitive and legally complex. It allows for a more palatable transition.
Case for: Proponents would argue this exemption makes the rent control prohibition more politically feasible and avoids disrupting existing housing arrangements, focusing reforms on future supply.
Case against: Critics might argue that exempting existing dwellings significantly limits the impact of the rent control prohibition on current affordability challenges, as new construction often represents a smaller portion of the overall housing stock.
Estimated impact: This provision would limit the application of any rent control prohibition to newly constructed dwelling units after a locality receives the designation, potentially reducing its immediate impact on the broader rental market.
The prohibition on mandatory below-market set-asides in new development includes a critical exception: 'unless the requirement is fully offset by a density bonus, fee waiver, or equivalent incentive voluntarily accepted by the builder'.
Section 2(b)(2)(C)(iii)
Why it matters:This conditionality is crucial for making the reform more palatable to localities and developers. It acknowledges that while direct mandates are discouraged, incentivized affordable housing provisions can still exist if they don't unduly burden builders.
Case for: Proponents would argue this allows for market-friendly approaches to affordable housing, where incentives rather than mandates drive production, ensuring that affordable units are built without deterring overall development.
Case against: Critics might argue that requiring full offsets could make it harder for localities to implement robust affordable housing policies, as the cost of such incentives might be prohibitive or difficult to quantify, potentially reducing the number of affordable units built.
Estimated impact: This provision would shift the approach to affordable housing requirements from direct mandates to incentive-based systems in qualifying localities, potentially impacting the volume and funding mechanisms for affordable units.
The prohibition on regulatory layering (State adding to Federal, local adding to State) includes an exception: 'unless justified by documented jurisdiction-specific health or safety characteristics'.
Section 2(b)(2)(C)(ix)
Why it matters:This clause is likely included to provide a necessary safety valve, allowing localities to maintain stricter standards where genuinely unique local conditions (e.g., seismic activity, specific environmental hazards) warrant them, preventing an absolute preemption of local safety concerns.
Case for: Proponents would argue this ensures that while unnecessary regulatory burdens are removed, localities retain the ability to protect their residents from specific, documented health or safety risks unique to their area.
Case against: Critics might argue that this exception could be broadly interpreted or exploited by localities to maintain existing regulations that are not strictly necessary for health or safety, thereby undermining the intent of reducing regulatory layering.
Estimated impact: This provision would allow localities to retain or implement regulations that exceed state or federal requirements, provided they can provide documented, jurisdiction-specific health or safety justifications, potentially limiting the scope of regulatory streamlining.
A 'Sense of Congress' statement that other federal agencies (DOT, EPA, USDA) *should consider* the Freedom to Build designation as a positive factor in their competitive grant programs.
Section 3(c)
Why it matters:This is a standard legislative technique to express congressional intent or encourage action without creating a legal mandate. It allows for broader influence without direct statutory requirements, which might face greater opposition.
Case for: Proponents would argue this provision signals a unified federal approach to housing affordability, encouraging inter-agency coordination and maximizing the impact of the Freedom to Build designation across various federal programs.
Case against: Critics might argue that because it's non-binding, this provision may have limited practical effect on other agencies' grant decisions, or that it represents an attempt to exert political pressure without proper legislative process.
Estimated impact: This provision has no direct legal force but could influence how other federal agencies weigh applications, potentially expanding the benefits of the Freedom to Build designation beyond HUD grants, depending on agency discretion.