A federal policy aimed at boosting domestic manufacturing is increasingly being blamed for slowing affordable housing development across the United States, as builders struggle to comply with sourcing requirements and navigate a sluggish waiver process.
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The Build America, Buy America (BABA) provisions require that most materials used in federally funded housing projects — from HVAC systems to fixtures like ceiling fans — be manufactured in the U.S. While the policy is designed to strengthen domestic industry, developers say it has created significant bottlenecks in project delivery.
Many commonly used construction components are still primarily produced overseas, leaving developers scrambling to identify compliant alternatives or apply for waivers. However, those waivers have been slow to materialize, creating delays and driving up project costs during an already critical housing shortage.
“They need to be treating this like the fire that it is,” said Tyler Norod, president of Westbrook Development Corporation.
“We’ve sort of resigned ourselves that we’re just gonna build less units across the entire country during a housing crisis.”
The waiver approval process — managed by the U.S. Department of Housing and Urban Development — has emerged as a key challenge. Developers report waiting months for approvals, with some projects nearing standstill conditions.
“If they take much longer then we’ll come to a standstill,” said Denver-based developer Julie Hoebel, who is awaiting approval for dozens of materials needed for an 85-unit project.
The delays are not only impacting timelines but also increasing costs. Builders must invest heavily in compliance efforts, including hiring consultants and dedicating staff time to verify whether materials meet domestic sourcing requirements.
For many developers, the added costs go beyond sourcing materials. The administrative burden of proving compliance has also become a major expense.
Vermont-based developer Jessica Neubelt estimated spending an additional $150,000 just to verify that iron and steel used in her project met U.S. sourcing requirements.
“I would like every member of Congress to sit in on a construction meeting,” Neubelt said. “The amount of detail that goes into figuring out if a specific thing is compliant or not is enormous.”
As a result, some developers are scaling back projects or avoiding federal funding altogether — even when those funds are critical to making affordable housing financially viable.
While developers are raising concerns, supporters of the policy argue that the long-term benefits outweigh the short-term disruptions. Labor unions and manufacturing advocates say the law ensures taxpayer dollars support domestic jobs and production.
“You’ve got a system in place that leans heavily on using imported materials to make a better profit,” said Scott Paul, president of the Alliance for American Manufacturing. “I don’t know if that serves the public good.”
At the same time, housing policy experts acknowledge that implementation challenges need to be addressed. Jennifer Schwartz of the National Council of State Housing Agencies said the waiver process is “failing,” largely because requirements were introduced before domestic manufacturing capacity could meet demand.
For renters like Diana Lene in North Dakota, the consequences are personal. After years on a waitlist, she continues to struggle with rising housing costs.
“It's just maxing my budget down to pennies,” she said.
“I’m just trying to keep a roof over my head, but it’s getting more and more difficult,” Lene said. “I don’t like to live in fear, and yet sometimes it jumps in there.”
Developers warn that unless the waiver process becomes faster and more transparent, fewer affordable units will be built — worsening the housing crisis nationwide.
“The process isn’t working for affordable housing,” said Jessie Handforth Kome, a former HUD official. “People want to comply, but it’s unclear how to.”
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The situation highlights a growing tension between industrial policy and housing affordability. While BABA aims to rebuild U.S. manufacturing capacity, the transition period is exposing gaps in supply chains — particularly for specialized construction components.
In rural and smaller markets, the challenge is even greater. Limited supplier networks make it harder to source compliant materials, forcing developers to rethink project scopes or abandon federal funding altogether.
Some builders are restructuring projects to fall below federal funding thresholds, effectively bypassing BABA requirements. However, this often results in smaller developments and reduced housing supply — undermining efforts to address affordability at scale.
At the policy level, lawmakers are beginning to debate potential reforms, including targeted exemptions or streamlined waiver processes. Without adjustments, industry stakeholders warn that the law could continue to constrain housing production at a time when demand remains historically high.
Originally reported by CHARLOTTE KRAMON - Associated Press/Report for America in Central Oregon Daily.
