The 'Build Now Act' Ties City Funding to Housing Growth: Slow-Growing Areas Face Mandatory 10% Cut

The Build Now Act of 2025 is setting up a new financial incentive—or penalty, depending on where you live—for cities and counties based on how fast they build housing. The bill overhauls how the Department of Housing and Urban Development (HUD) hands out Community Development Block Grant (CDBG) funds, which cities use for everything from fixing streets in low-income areas to running local social programs.

The core idea is simple: if your city's housing growth rate is above the median rate for other eligible cities, you get a bonus chunk of CDBG money. But here’s the kicker: this bonus money isn’t new. It’s funded by a mandatory 10% cut to the CDBG allocation for any city or county whose housing growth rate is below the median (Sec. 3). These new rules, which will be in effect until 2042, are set to kick in starting the second full fiscal year after the law is passed (Sec. 6).

The Housing Growth Report Card: Who Gets a Bonus and Who Gets Cut

This whole system hinges on the “Housing Growth Improvement Rate,” which compares a city’s average annual housing growth over the last five years to its growth in the five years before that (Sec. 2). If your area is building housing faster than its peers, congratulations—you get a slice of the bonus pool. If you’re a large, fast-growing city, you get a bigger slice because the bonus is distributed based on the total number of housing units in your area compared to other bonus recipients (Sec. 3).

However, if your city is growing slower than the median, your local government will see its CDBG funding reduced by 10% (Sec. 3). For a city relying on those funds for essential community programs, that’s a significant hit. The bill essentially sets up a zero-sum game: the money taken from slower-growing areas is immediately transferred to the faster-growing ones.

The Fine Print: When Cities Are Ineligible

Not every city that currently receives CDBG funds will be eligible for this new formula. The Act explicitly excludes certain areas, even before the growth rate is calculated (Sec. 2). For instance, if your city or county doesn't have the legal authority to change its own zoning or building permit rules—perhaps because that power rests with a larger county or state entity—it’s immediately ineligible. This provision could unfairly punish local governments that lack jurisdiction over land use decisions but still need CDBG funding for their residents.

Other exclusions target areas with low housing costs and high vacancy rates. If a city's median rent is at or below the 60th percentile and its median home value is below the national median, it is also deemed ineligible. This means stable, lower-cost communities—the very places that might be successfully meeting affordability goals—could be excluded from participating in the program, regardless of their need for community development funds.

What This Means for Your Town

If you live in a booming metropolitan area, this bill could mean more CDBG funds flowing in, potentially speeding up local infrastructure projects or boosting affordable housing initiatives. The catch is that these areas are already under pressure from rapid growth. The bill attempts to incentivize local governments to cut red tape and simplify permitting by requiring HUD to share guidance on reducing housing supply restrictions (Sec. 6).

But if you live in a smaller, slower-growing city—where CDBG funds might be critical for fixing up local parks or providing services for seniors—your community faces a 10% cut. The bill doesn't consider why growth is slow; it only measures the rate. This could put critical community programs on the chopping block in areas that need federal support the most, simply because their housing market isn't expanding as fast as the national average. The bill mandates that HUD use detailed, block-level data from the Census Bureau and the Postal Service to count housing units, aiming for accuracy but also adding a layer of administrative complexity to the process (Sec. 4).