The Build Now Act: how Section 213 ties CDBG money to housing growth

From fiscal year 2029, large cities and urban counties will gain or lose part of their Community Development Block Grant depending on whether their housing growth is speeding up. Places improving less than the median lose 10%; that money is paid out as bonuses to the rest.

Checked against the enacted text of Public Law 119-101 · Updated September 18, 2026

At a glance

What it is: Section 213 of the ROAD to Housing Act. It moves part of the Community Development Block Grant from places whose housing growth is slowing to places whose growth is speeding up.
Who it covers: Metropolitan cities and urban counties that receive CDBG directly, minus four exclusions. States and smaller communities are not affected.
The cut: 10% of the CDBG allocation, for places below the median housing growth improvement rate.
The bonus: Everything cut is paid out to places at or above the median, and to places growing at least 4% a year, in proportion to the homes each added.
When: Fiscal year 2029 allocations through fiscal year 2043. Money appropriated before July 11, 2026 is untouched.
The data: Housing unit counts from the Census Bureau's Master Address File, calculated block by block.
First deadline: HUD had to tell each eligible place its rate within 60 days of enactment, by September 9, 2026.

Who it covers

Metropolitan cities and urban counties that receive CDBG directly from HUD, unless one of four exclusions applies.

A place is left out of the adjustment entirely if any of these is true:

its median Small Area Fair Market Rent is at or below the 60th percentile of covered places and its median home value is below the national median;
its rental vacancy rate is above the national rate for the most recent year the Census Bureau has published;
it was the subject of a major disaster or emergency declaration under the Stafford Act in the three years before HUD allocates CDBG; or
it lacks the legal authority to enact or update zoning and permitting ordinances.

The first test needs both conditions: a place with low rents but home values above the national median stays in. The exclusions describe places where slow housing growth is more likely to reflect weak demand, a disaster or a lack of power over land use than local policy choices.

How the housing growth improvement rate works

It measures whether a place's housing growth is speeding up or slowing down, on a scale from −1 to +1.

HUD computes two growth rates for each place, each the average annual percentage increase in housing units over five years: the current rate over the latest five-year window, and the prior rate over the five years before that. The improvement rate is

(current rate − prior rate) ÷ (|current rate| + |prior rate|)

Dividing by the sum of the two rates keeps the result between −1 and +1, so a small city and a large one are compared on the same scale. Some worked examples:

Housing growth improvement rate for illustrative growth rates, from the formula in Section 213(a)(5).
Place	Prior rate	Current rate	Improvement rate
Speeding up	+1.0% a year	+1.5% a year	+0.20
Steady	+2.0% a year	+2.0% a year	0.00
Slowing, but still growing fast	+3.0% a year	+2.5% a year	−0.09
From shrinking to growing	−0.5% a year	+0.5% a year	+1.00

Two consequences follow. First, the rate rewards acceleration, not volume: the city in the third row is adding housing faster than the first, but scores below zero because it is adding it more slowly than it used to. Second, the penalty is relative. A place loses 10% for falling below the median, so by construction roughly half of the places compared land below it each year, however much housing all of them build.

One group is protected from that. An extremely high-growth place, one whose current rate is at least 4% a year, receives a bonus whatever its improvement rate, and is left out when the median is calculated.

Which years count

Every window runs from the third quarter of one federal fiscal year to the third quarter of another: April through June.

For the first year the adjustments apply, fiscal year 2029, the statute’s definitions work out to:

Current growth rate: from the third quarter of fiscal year 2023 to the third quarter of fiscal year 2028, roughly mid-2023 to mid-2028.
Prior growth rate: from the third quarter of fiscal year 2018 to the third quarter of fiscal year 2023, roughly mid-2018 to mid-2023.
Bonus shares: housing units added between the third quarter of fiscal year 2027 and the third quarter of fiscal year 2028, a single year.

HUD may shift any of these windows by up to two months to line up with the Census Bureau’s data releases. Each later year moves every window forward by one year.

How the money moves

The adjustment redistributes CDBG among covered places; it adds no money and takes none out of the program.

Each eligible place below the median has its allocation cut by 10%. The cuts are pooled, and the pool is divided among every place at or above the median plus every extremely high-growth place, in proportion to the number of housing units each added in the single year before allocation. A large city that added many homes takes a larger share than a small one with a better improvement rate.

Before each year’s allocations, HUD must publish a report giving every eligible place’s improvement rate and listing which places received a bonus and which were cut in the most recent year.

Where the text is unclear

A term used once and never defined. The bonus rule compares a place against the median “for all eligible recipients other than extremely high-growth recipients.” The cut rule compares it against the median “for all eligible recipients other than high-growth outliers,” a phrase that appears nowhere else in the law. The two are almost certainly meant to be the same group, but HUD will have to say so.

A division by zero. A place whose housing count did not change in either five-year window has current and prior rates of zero, and the formula is undefined. The law does not say how HUD should treat it.

Where it stands

HUD's first deadline has passed. As of September 18, 2026, we found no public record that it was met.

Within 60 days of enactment, by September 9, 2026, HUD had to notify each eligible place of its improvement rate and whether it was above, at or below the median, and share guidance on policies that reduce regulatory barriers to housing. Those notices go to each recipient directly, and a search of HUD’s Federal Register notices since July 11, 2026 found nothing published under Section 213. A city’s CDBG office is the place to ask whether its notice arrived.

The adjustments themselves begin with fiscal year 2029 allocations, the third full fiscal year after enactment, and end with fiscal year 2043. They do not apply to any money appropriated before the Act became law.

What it means for converting buildings into housing

The rate counts housing units in the Census Bureau’s address file, not permits or new buildings. Homes created by converting an office building into apartments should enter that count like any other new units, so a city that gets conversions built raises its growth rate, with a lag of up to a year in the bonus calculation.

This site does not calculate Build Now rates: they depend on Census address counts it does not hold. It screens office buildings in San Jose, Denver and Philadelphia for conversion building by building, which is where those homes would have to come from. The other CDBG changes in the Act, including new construction under Section 204, are on the CDBG and HOME page.

Questions

What is the Build Now Act?

Section 213 of the 21st Century ROAD to Housing Act. From fiscal year 2029 through 2043, it adjusts the Community Development Block Grant allocations of large cities and urban counties: places whose housing growth improvement rate is below the median lose 10%, and that money is paid as bonuses to places at or above the median, or growing at least 4% a year, in proportion to the homes they added.

How is the housing growth improvement rate calculated?

HUD takes a place's average annual growth in housing units over the latest five-year window and over the five years before it. The rate is the current growth rate minus the prior one, divided by the sum of their absolute values, so it runs from −1 to +1. It measures whether growth is speeding up, not how fast a place is growing.

Which places are excluded from the Build Now Act?

Places with both low rents (a median Small Area Fair Market Rent at or below the 60th percentile of covered places) and a median home value below the national median; places whose rental vacancy rate is above the national rate; places with a major federal disaster or emergency declaration in the three years before allocation; and places without legal authority over zoning and permitting.

Does a fast-growing city lose CDBG money under the Build Now Act?

It can. The rate rewards acceleration, so a city growing quickly but a little more slowly than before scores below zero and may fall below the median. The exception is a place growing at least 4% a year, which receives a bonus regardless of its improvement rate.

Has HUD notified cities of their Build Now rates?

The law required HUD to notify each eligible recipient of its rate by September 9, 2026. As of September 18, 2026 we found no public record of those notices; they go to each recipient directly, so a city's CDBG office is the place to ask.

Sources

More on the law: The ROAD to Housing Act explained · Environmental review changes · CDBG and HOME changes · Opportunity Zones · The Innovation Fund · Manufactured housing and the chassis rule · How RESIDE grants should be sized