Must I pay Zakat this year, given that I am building a secondary home and this has affected my possession of the Nisab? And is it permissible to pay Zakat on cash in the form of food items given to the poor?

If you spent your money on building a house before a full year passed (hawl), and you no longer possess the minimum amount (nisab), then zakat is not obligatory for you. This is because it is a condition that the wealth reaches the nisab at the time the year is completed (hawlan al-hawl) and remains so throughout the year.

As for giving out monetary zakat in the form of foodstuff, the general principle is that zakat should be given from the same type of wealth being purified. Therefore, it is not permissible to give food instead of money; rather, money should be given to them. However, it is permissible to give it as food if that is more beneficial for the poor person.