This bill, known as the "Unlocking Housing Supply Through Streamlined and Modernized Reviews Act," mandates the Secretary of Housing and Urban Development (HUD) to reclassify the application of certain requirements under the National Environmental Policy Act of 1969 (NEPA). The primary goal is to expand and streamline environmental review processes for a wide range of housing-related activities, aiming to reduce administrative burdens and accelerate project approvals, particularly within the affordable housing sector.

The legislation directs HUD to categorize housing activities into three main groups based on their environmental review intensity. Several activities, such as tenant-based rental assistance and certain pre-development costs without physical impact, will be reclassified as exempt from NEPA review. Smaller-scale projects, including the rehabilitation of 1-to-4 unit residential buildings or the acquisition of existing structures, will fall under categorical exclusions not subject to extensive federal environmental laws, provided they do not materially alter environmental conditions. More substantial activities, like the conversion of office buildings to residential use, new construction of 5 to 15 dwelling units, and infill projects, will be designated as categorical exclusions subject to specific federal environmental laws. An "infill project" is defined as a residential or commercial development on previously disturbed land of up to 5 acres within a municipality, served by existing utilities, and surrounded by development.

To ensure accountability and evaluate effectiveness, the bill requires the Secretary to submit annual reports for five years, beginning two years after enactment. These reports will summarize reductions in review times and administrative costs, with a specific focus on the affordable housing sector, and provide recommendations for future congressional action regarding categorical exclusions or exemptions.