Senator Bill Hagerty, a Republican from Tennessee, has introduced the 'Freedom to Build Act' in an effort to reduce the cost of new single-family homes by addressing what he refers to as the 'bureaucrat tax'—a collection of state and local regulations that add nearly $100,000 to the price of building a new home [1]. The legislation aims to make homeownership more affordable by streamlining regulations and incentivizing deregulation through a voluntary designation. Communities that opt into the Freedom to Build designation would be prioritized for federal grants from the Department of Housing and Urban Development, which are intended to offset construction costs [1].
The push for this legislation comes in the wake of the newly released Economic Report of the President, which highlights the impact of regulatory costs on the housing market. According to the report, the bureaucrat tax constitutes between 24% and 29% of the cost of a new home and has contributed to sharp increases in home prices during periods of strong demand and low interest rates, specifically between 2012 and 2021 [1]. The report states, 'Put even more concretely, the bureaucrat tax adds over $100,000 to the cost of a new single-family home,' and argues that reform at the state and local levels would help supply keep pace with demand [1].
Sen. Hagerty emphasized that excessive regulations have made homeownership unattainable for many Americans, stating, 'My Freedom to Build Act streamlines costly and often redundant regulations to reduce the cost of a new home in our country' [1]. The act is not a federal mandate but rather a voluntary program for communities seeking to benefit from federal support in exchange for regulatory reform [1].
In related legislative action, the Senate recently passed the 21st Century ROAD to Housing Act, a major affordable housing package backed by President Donald Trump, which received bipartisan support [1].
CONCLUSION
Sen. Hagerty's Freedom to Build Act targets regulatory costs that add significant expenses to new homes, aiming to make homeownership more accessible. The initiative, supported by recent economic analysis, could have a meaningful impact on housing affordability if widely adopted by communities. The market may see increased supply and lower costs if these reforms are implemented.