S. 2390 — Unlocking Housing Supply Through Streamlined and Modernized Reviews Act

This section defines key terms for purposes of the Act, including "infill project" as a project within a municipality's limits that (1) is adequately served by existing utilities and public services; (2) is on previously disturbed land of not more than 5 acres substantially surrounded by residential or commercial development; (3) repurposes a vacant or underutilized parcel or dilapidated or abandoned structure; and (4) serves a residential or commercial purpose. It also defines "Secretary" as the Secretary of Housing and Urban Development.

This section directs the Secretary of Housing and Urban Development (HUD) to issue regulations, in accordance with notice-and-comment rulemaking procedures, expanding and reclassifying specified housing-related activities into existing categorical exclusions under HUD's National Environmental Policy Act (NEPA) implementing regulations (24 CFR parts 50 and 58, as in effect on January 1, 2025). (As background, these categorical exclusions exempt qualifying activities from full NEPA environmental reviews or limit reviews to specified federal laws, thereby expediting HUD-assisted housing development, rehabilitation, and supportive services such as tenant-based rental assistance under section 8(o) of the U.S. Housing Act of 1937 (42 U.S.C. 1437f(o)).) (1) Activities reclassified as "exempt" (equivalent to 24 CFR 58.34), including tenant-based rental assistance, supportive services (e.g., health care, day care, short-term rent payments), operating costs (e.g., maintenance, utilities), economic development not involving construction, homebuyer assistance for existing or under-construction units, affordable housing predevelopment costs with no physical impact, supplemental assistance for previously approved projects, and emergency repairs to HVAC or utilities. (2) Activities reclassified as categorical exclusions not subject to compliance with 24 CFR 58.5 or specified federal laws (equivalent to 24 CFR 58.35(b) and 50.19)—if they do not materially alter environmental conditions or exceed the project's original scope—including rehabilitation of public facilities or 1-to-4 unit residential buildings and infrastructure (with in-place facilities retaining the same use and no more than 20% change in size or capacity), new construction or similar actions on up to 4 scattered-site dwelling units (maximum 4 units per site), and acquisitions, leasing, dispositions, or equity loans on existing structures or vacant land (retained for the same use). (3) Activities reclassified as categorical exclusions subject to 24 CFR 58.5 and specified federal laws (equivalent to 24 CFR 58.35(a) and 50.20)—if they do not materially alter environmental conditions or exceed the project's original scope—including acquisitions of open space or residential property (retained for the same use or converted to open space for relocation from HUD-designated high-risk areas), conversion of office buildings to residential use (maximum units and no more than 20% change in building size, as determined by the Secretary), new construction or similar actions on 5 to 15 dwelling units (maximum 15 units per site) or 15 or more units on scattered sites (maximum 15 units per site and sites separated by a distance set by the Secretary), rehabilitation of 5-to-15 unit residential buildings (no density increase beyond 15 units and no land use change), infill residential projects, and buyouts of properties in floodways, floodplains, or disaster-impacted areas.

This section directs the Secretary to submit an annual report to the chairs and ranking members of the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services during the 5-year period beginning 2 years after enactment. The report summarizes findings on reductions in review times and administrative costs—particularly in the affordable housing sector—resulting from this Act's actions, along with any Secretary recommendations for congressional revisions to categorical exclusions or exemptions under title 24, Code of Federal Regulations.