Build America Buy America Law Stalls Construction as Housing Crisis Deepens
A law requiring that most materials in federally funded affordable housing are made in America is fully kicking in. But it is wreaking havoc on affordable developments. Developers are reporting delays, higher costs and hundreds of hours spent figuring out how…
A Build America, Buy America law is causing construction delays amid the US housing crisis
A federal law designed to boost American manufacturing is creating unexpected turmoil in the affordable housing sector, as developers across the country grapple with strict new requirements that most materials used in federally funded projects must be sourced domestically. The Build America, Buy America Act, which was signed into law as part of the 2021 Infrastructure Investment and Jobs Act, has been phasing in over the past several years, but its full implementation is now hitting affordable housing developments with particular force. Developers say the mandate is adding significant costs, delaying construction timelines and forcing them to spend hundreds of hours navigating complex compliance paperwork at a time when the nation desperately needs more affordable units.
The law requires that iron, steel, manufactured products and construction materials used in projects receiving federal funding be produced in the United States. While the intent is to strengthen domestic supply chains and support American workers, affordable housing developers say the reality on the ground is far more complicated. Many specialized building components, from certain types of electrical equipment to specific plumbing fixtures, are either not manufactured domestically or are available from only a handful of American suppliers, driving up prices and creating bottlenecks. Some developers report cost increases of 10 to 20 percent on affected projects, expenses that are difficult to absorb in an industry already operating on razor-thin margins.
The timing of the law's full implementation could not be worse, housing advocates say. The United States is facing a shortage of millions of affordable housing units, and rising construction costs, high interest rates and limited public funding have already made it increasingly difficult to build new developments. Organizations such as the National Council of State Housing Agencies and the National Association of Home Builders have urged the federal government to issue broader waivers for affordable housing projects, arguing that the compliance burden is effectively reducing the number of homes that can be built with available funds. Some projects have been delayed by months as developers work to identify compliant materials or apply for individual waivers, a process that itself can take considerable time.
Federal officials have acknowledged the challenges and said they are working to streamline the waiver process and provide clearer guidance to developers. The Office of Management and Budget has issued some project-specific exemptions, but housing industry leaders say a more comprehensive solution is needed. Supporters of the law maintain that short-term disruptions are worth the long-term benefits of rebuilding American manufacturing capacity and reducing dependence on foreign supply chains. However, critics counter that the most vulnerable Americans are paying the price, as desperately needed affordable housing sits in bureaucratic limbo while developers struggle to reconcile the competing goals of building quickly, building affordably and building with American-made materials.