A method for detecting interstory drift and chord drift in buildings is proposed and demonstrated based on the motion of a laser generated cross hair in free space. The beam is projected from ceiling to floor onto an arrangement offour Position Sensitive Detectors (PSD), each with two separate outputs. Every lateral displacement and relative angle between ceiling and floor gives a unique set of detector voltages, so that as floors shift with respect to one another due to wind and earthquake loads, voltages vary, the new beam axis location is determined, and the three-dimensional interstory drift, velocity, and acceleration can be obtained. Experiniental results show excellent linearity and sensitivity of roughly 10 microns for lateral displacement and 0.02 degrees for relative rotation between ceiling and floor.