[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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