S. 4265

[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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