Build Now Act Ties Federal Funding to Local Housing Growth, Penalizing Cities That Don't Build Fast Enough

The “Build Now Act of 2025” is shaking up how cities and counties get their federal Community Development Block Grant (CDBG) money—the funds local governments use for everything from affordable housing projects to fixing up community centers. Essentially, this bill creates a high-stakes competition where your city’s CDBG allocation is now tied directly to how quickly its housing supply is growing.

The Housing Growth Report Card

Starting a few years after enactment (specifically, the third full fiscal year), the Secretary of Housing and Urban Development (HUD) will rank eligible cities and counties based on their housing growth improvement rate. This rate is a complex calculation that compares the average annual increase in housing units over the most recent six years against the six years before that. Think of it as a momentum check: it’s not just about how much you built, but how much better you built compared to your own recent past.

If your city’s improvement rate is at or above the national median for all eligible recipients, you get a bonus. If your city is already an “extremely high-growth recipient” (meaning 4% or more annual growth), you also get a bonus automatically. But here’s the kicker: if your city falls below the median improvement rate, its standard CDBG allocation is cut by 10 percent (Sec. 3). All the money saved from those 10% cuts is then pooled and redistributed as bonuses to the cities that met or exceeded the growth targets.

Who Gets to Play and Who Gets Left Out?

This bill doesn’t apply to every city that currently gets CDBG funds. It sets up strict criteria for who counts as an “eligible recipient” (Sec. 2). Some cities are automatically disqualified, even if they have housing needs. For example, if a city’s median rent is low and its median home value is below the national median, it’s out. Same goes for cities with a higher-than-average rental vacancy rate or those recently hit by a major disaster. The idea seems to be focusing the incentives on areas facing supply shortages and high costs, but it also means that areas that are already affordable or are struggling to recover from an emergency might not be able to participate in the bonus competition.

Crucially, a city is also disqualified if it “lacks the legal authority to enact or update zoning and permitting ordinances.” This provision (Sec. 2) seems designed to exclude jurisdictions that have ceded their zoning authority, forcing local governments to retain control over—and responsibility for—housing regulation if they want to be eligible for these funds. For cities dependent on CDBG funds for vital services, losing eligibility could mean a significant hurdle in supporting their low-income communities.

The Real-World Cost of Slow Growth

For the average person, the immediate impact is on local services. CDBG funds are often the backbone of local community development. If your city has a below-median growth improvement rate, that 10% cut is a direct hit to local programs. Imagine a city where the CDBG budget pays for a local job training center or repairs to senior housing. If that city isn’t passing the housing growth test, those programs could see their funding reduced. This creates a powerful financial incentive for local governments to push hard on reducing regulatory barriers and speeding up construction, even if local politics make that difficult.

On the flip side, cities that successfully streamline their permitting and approve more units could see a substantial increase in federal funds, allowing them to expand local development projects. HUD is even required to share guidance on best practices for reducing regulatory barriers (Sec. 6), signaling a clear federal push toward local deregulation in housing.

However, the complexity of the math—requiring HUD to use specific Census data and calculate growth rates over two different six-year periods (Sec. 4)—means that cities will need sophisticated planning departments just to track their standing. The Secretary of HUD also gets the power to adjust the calculation periods by up to two months, which could subtly influence which cities hit the targets in a given year. Ultimately, this bill transforms a traditional community grant into a performance-based reward system, putting major pressure on local officials to build, build, build.