The Build Now Act of 2025 amends the Community Development Block Grant (CDBG) allocation process under section 106 by creating a housing-growth performance adjustment. HUD must compute a housing growth improvement rate for each metropolitan city and urban county that receives section 106 funds and use that metric to award bonus funds to faster-growing jurisdictions and to cut allocations for slower growers.
Practically, the bill creates winners and losers among current CDBG recipients: jurisdictions with above-median improvement (or classified as extremely high-growth) receive a bonus drawn from aggregate reductions, while jurisdictions below the median face an automatic 10% allocation cut. HUD gets new data duties (block-level Master Address File counts, coordination with Census and USPS) and must publish annual reports and provide recipients guidance on reducing regulatory barriers to housing.
The change reprioritizes a needs-based grant toward an incentive for local housing supply expansion, with predictable distributional and administrative consequences for cities, counties, HUD, and service providers.
At a Glance
What It Does
The bill requires HUD to calculate a housing growth improvement rate — the ratio of recent to prior annual housing-unit growth — for each metropolitan city and urban county receiving CDBG funds, and to adjust section 106 allocations accordingly. Recipients at or above the median improvement (and those with current growth ≥4%) receive bonus shares funded by reductions; recipients below the median lose 10% of their section 106 allocation.
Who It Affects
Metropolitan cities and urban counties that receive CDBG (section 106) allocations; HUD’s program staff and data teams; the Census Bureau and USPS as data providers; local builders and affordable-housing practitioners who rely on CDBG-supported programs. State and local permitting authorities will be indirectly implicated by the law’s incentive structure.
Why It Matters
This is a substantive reprioritization of a long-standing federal grant program: it ties federal community-development dollars to housing production performance and creates a recurring, data-driven redistribution of funds. Compliance, data integrity, and the law’s exclusions will determine which high-need places lose support and which fast-growing places gain it.
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What This Bill Actually Does
The bill creates a new, data-driven modification to HUD’s section 106 CDBG allocations. HUD must compute two multi-year average annual housing-unit growth rates for each covered recipient: a recent period (the five-year window ending in the third quarter of the fiscal year before allocations) and an earlier comparable period.
The housing growth improvement rate equals the recent rate divided by the prior rate; the Secretary then compares those improvement rates across eligible recipients.
Not every covered recipient is eligible for adjustments. HUD must exclude jurisdictions that meet several conditions indicating lower housing cost pressure or special circumstances: those with small area fair market rents at or below the 60th percentile combined with below-median home values; areas with higher-than-national rental vacancy rates; jurisdictions recently subject to major disaster or emergency declarations; and places that lack legal authority to change zoning or permitting rules.If an eligible recipient’s improvement rate is at or above the median (excluding very high-growth outliers), HUD awards that jurisdiction a bonus allocation.
Extremely high-growth jurisdictions — defined as current annual growth of 4 percent or more — automatically qualify for bonus treatment. The bonus pool comes from the aggregate of reductions HUD applies under the bill.
HUD determines each bonus share based on the jurisdiction’s share of total housing units among bonus recipients.Conversely, any eligible recipient with an improvement rate below the median (with certain outliers excluded by the bill’s language) faces an automatic 10 percent cut to the section 106 allocation that would otherwise be owed. To support execution, HUD must calculate housing-unit counts at the Census block level using the Census Master Address File and related products, may adjust calculation windows by up to two months to align with data, and can request data from the Census Bureau and USPS.
HUD must publish an annual report of improvement rates and list winners and losers before making allocations and must notify each eligible recipient of its rate and status within 60 days of enactment, along with guidance on reducing regulatory barriers to housing. The adjustment regime starts the second full fiscal year after enactment and runs through fiscal year 2042.
The Five Things You Need to Know
The bill imposes an automatic 10% reduction to section 106 CDBG allocations for eligible recipients whose housing growth improvement rate falls below the applicable median.
Jurisdictions with a current annual housing growth rate of 4% or higher are treated as extremely high-growth and automatically qualify for bonus allocation treatment.
Bonus funding is not additive new money: HUD funds bonuses from the aggregate of the allocation decreases and divides that pool among qualifying recipients by each recipient’s share of total housing units.
HUD must use the Census Master Address File and Current Address Count Listing Files and perform block-level housing-unit calculations; the Census Bureau and USPS must provide requested data to HUD.
The statute takes effect the second full fiscal year after enactment and sunsets after fiscal year 2042; HUD must publish an annual report and notify recipients within 60 days of enactment with guidance on reducing regulatory barriers.
Section-by-Section Breakdown
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Definitions and eligibility filters
This section defines key terms — covered recipient, eligible recipient, current and prior annual growth rates, housing growth improvement rate, extremely high-growth recipient, and Secretary. It also establishes four exclusion tests that remove a covered recipient from eligibility for adjustments: a combined low-rent/low-home-value test, a higher-than-national rental vacancy test, recent Stafford Act disaster or emergency declarations, and lacking legal authority over zoning and permitting. Practically, those filters narrow the pool of jurisdictions subject to the bonus/penalty mechanism and attempt to protect some low-cost or disrupted markets from cuts.
Formula for bonuses and penalties to section 106 allocations
This is the operational core. HUD must compute each eligible recipient’s housing growth improvement rate and compare it to the median among eligible recipients (with outliers set aside). If a jurisdiction’s improvement rate is at-or-above the median or the jurisdiction is extremely high-growth, HUD awards a bonus; if below the median, HUD reduces that jurisdiction’s allocation by 10%. The bonus pool equals the aggregate of all reductions, and HUD apportions it to qualifying recipients by each jurisdiction’s share of total housing units measured in the third quarter preceding the allocation year. The provision creates a zero-sum redistribution among eligible recipients rather than new federal spending.
Data inputs and calculation rules
HUD must use the Census Master Address File and Current Address Count Listing Files, perform block-level calculations, and use the most current boundaries available. The Secretary can shift the multi-year calculation endpoints by up to two months to align with Census data releases. The Census Bureau and USPS are required to provide relevant data on request. These rules raise the technical bar for HUD’s allocation work, require new interagency data flows, and make the allocation sensitive to address-level counting practices.
Annual transparency report
Before allocating section 106 funds each year, HUD must publish a report listing each eligible recipient’s housing growth improvement rate and identifying which jurisdictions received bonuses and which suffered allocation decreases for the most recent fiscal year. The report provides a public accountability mechanism and creates advance notice of winners and losers, but also formalizes HUD’s role in publishing potentially politically sensitive redistribution outcomes.
Notifications, guidance, and implementation timeline
HUD must notify each eligible recipient of its improvement rate and median-status within 60 days of enactment and provide guidance and best practices on removing regulatory barriers to housing. The adjustment regime starts on the second full fiscal year after enactment and remains in effect through FY2042. That schedule gives HUD time to set up data systems but locks in a long multi-year pilot that will materially reshape section 106 distributions during its span.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Metropolitan cities and urban counties with accelerating housing-unit growth: they gain bonus CDBG dollars proportionate to their housing-unit share among qualifying winners, increasing local funding for housing and community development programs.
- Local developers and housing producers in bonus jurisdictions: additional CDBG dollars can subsidize infrastructure, site remediation, or local gap financing that smooths new construction and lowers developer risk.
- Municipalities that can change zoning/permitting quickly: places with local authority to reform land use regulations are positioned to benefit because the law excludes jurisdictions that lack that legal authority, creating an advantage for reform-capable governments.
Who Bears the Cost
- Lower-growth CDBG recipients (eligible jurisdictions below the median): they face an immediate 10% reduction in their section 106 allocation, shrinking funds for services, rehabilitation, and affordable-housing programs.
- HUD program and data teams: the department must build block-level counting workflows, maintain interagency data requests with Census and USPS, produce annual reports, and manage notification and guidance activities—an administrative and technical burden.
- Community service providers in cut jurisdictions: nonprofits and local agencies that rely on CDBG-funded programs risk reduced capacity where allocations are decreased, potentially undermining services for low-income residents.
- The Census Bureau and USPS: both agencies must provide data on request and may face additional operational demands to support HUD’s calculations.
Key Issues
The Core Tension
The central dilemma is between incentivizing local housing production with federal dollars and preserving CDBG’s original focus on directing funds to places with persistent need; the bill forces a trade-off where boosting supply in some jurisdictions comes at the direct expense of funding for slower-growing, often higher-need communities.
The bill shifts part of a needs-based grant program to a supply-side performance metric. That creates several practical tensions.
First, housing-unit growth is an imperfect proxy for community need: fast construction can coexist with rising displacement and affordability problems, while slow-growth places often have entrenched poverty and housing distress that larger allocations currently target. Second, the redistribution is zero-sum and mechanically tied to HUD’s chosen median and exclusion rules; small changes in how HUD classifies outliers or defines the calculation window can swing material sums between jurisdictions.
Implementation hinges on reliable address-level counts and consistent boundary treatment. Master Address File practices, block-level edits, and differential rates of new-construction reporting could produce winners or losers independent of actual housing affordability improvements.
The law also leaves ambiguous language (for example, differing uses of terms like “extremely high-growth” and “high-growth outliers”) that will require administrative interpretation. Finally, the incentive design risks gaming: jurisdictions might pursue short-term unit counts or reclassify housing types to improve measured growth without securing long-term affordable outcomes.
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