Federal “Build America, Buy America” requirements are creating significant challenges for affordable housing developers, driving up construction costs and delaying projects because certain essential building materials and equipment are difficult to source entirely from U.S. manufacturers, Bloomberg reports.
Expanded to HUD-funded housing projects in 2021, the requirements have applied to more than $68 billion in federal funding since 2024, with public housing authorities reporting that compliance increases costs by 15% to 20%.
Developers say HUD’s waiver process is slow and inconsistent, making it difficult to obtain exemptions for products that are not readily available domestically. In New Hampshire, Avesta Housing scrapped plans to install 136 rooftop solar panels worth $194,000 because it could not certify that every component met domestic manufacturing requirements.
In Alaska, another affordable housing project reduced plans for six- and nine-unit buildings to four units each to offset higher compliance costs, particularly for materials more readily sourced from Canada.
While labor unions and domestic manufacturers support the requirements as a way to strengthen U.S. manufacturing, encourage domestic production and create demand for American-made products, housing developers argue that the rules are complicating efforts to address a nationwide affordable housing shortage that some estimates put above 7 million units. HUD says it has cut its backlog of waiver requests in half, assigned additional staff to the issue and reassigned responsibility to an internal department more accustomed to working with developers.
A bipartisan housing bill passed this summer also requires the agency to gather stakeholder feedback on potential improvements, while HUD’s inspector general has called for clearer internal responsibilities and faster decisions. Developers are seeking a standardized waiver process similar to those used by other federal agencies, warning that continued uncertainty threatens project costs, construction schedules and the feasibility of future affordable housing developments.
