A federal law designed to put Americans to work is quietly strangling affordable housing construction and the agency responsible for fixing it can barely keep the lights on.
The Build America, Buy America Act (BABA), signed in 2021, requires that nearly every material used in federally funded housing projects from HVAC units and lighting to ceiling fans and sink hooks must carry a Made in the USA label. The problem: many of those products simply aren't manufactured in America, or aren't available at a price that makes projects viable.
Builders can apply for waivers, but the Department of Housing and Urban Development, whose staff has been cut sharply by the Trump administration, has approved only a handful. Many waiver requests have sat in limbo for six months or longer.
Denver developer Julie Hoebel says she spent more than $60,000 just on a consultant to search supplier websites and make calls verifying whether materials qualified — before HUD had even reviewed her application. She submitted waivers for roughly 125 materials in an 85-unit building in November. None have been approved.
"If they take much longer, then we'll come to a standstill," Hoebel said.
Vermont developer Jessica Neubelt estimates she spent an additional $150,000 verifying iron and steel compliance on a single project — costs that have nothing to do with actually building homes.
"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."
In Kentucky, developer Scott McReynolds has changed his entire business strategy because of the law. Instead of applying for federal grants to build 20 to 30 affordable homes, he now plans to build two four-unit projects — small enough to fall below the BABA threshold. He says American-made materials are nearly impossible to find near the rural communities he serves.
Jennifer Schwartz, director of tax and housing advocacy at the National Council of State Housing Agencies, says the waiver process is "failing" — requirements were put in place before anyone assessed whether enough domestic suppliers actually existed to meet demand.
HUD Secretary Scott Turner said in January that the agency was "looking into" granting flexibility for certain projects, but has provided no specifics. The housing bill that passed the Senate in March did not require HUD to address the bottleneck.
What construction owners need to know: If you're bidding on or developing federally funded affordable housing, build BABA compliance review into your pre-construction timeline and budget. The waiver process is running at least six months behind. Start your materials verification early, document everything, and consult legal or compliance counsel before submitting applications to HUD.
Originally reported by Daily Journal
