Build America Rules Stall Affordable Housing Projects
Domestic sourcing requirements for federally funded housing are raising costs and forcing developers to scale back or scrap projects.
Updated on Nov. 10, 2026 in Construction
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Build America, Buy America requirements, expanded to HUD-funded housing projects in 2021, are increasing costs and delaying affordable housing developments nationwide. Public housing authorities report compliance adds 15% to 20% to project costs.
Why it matters
The requirements apply to more than $68 billion in federal funding since 2024, and a national affordable housing shortage estimated at 7 million units means added costs directly reduce the number of homes that can be built. Labor unions and domestic manufacturers support the rules as a way to strengthen U.S. production.
Public housing authorities report compliance adds 15% to 20% to project costs, and the requirements have applied to more than $68 billion in federal funding since 2024. The reporting does not separate how much of that increase comes from sourcing limits versus slow waiver approvals.
The players
U.S. Department of Housing and Urban Development (HUD)
The federal agency that administers the housing programs subject to the requirements and processes the waiver requests developers file.
The details
Some essential building materials and equipment are difficult to source entirely from U.S. manufacturers, forcing developers to either pay more or seek waivers. Avesta Housing scrapped plans for 136 rooftop solar panels worth $194,000 in New Hampshire because it could not certify that every component met domestic requirements, and an Alaska project cut six- and nine-unit buildings to four units each.
Timeline
2021: Build America, Buy America requirements were expanded to HUD-funded housing projects.
2024: The requirements began applying to more than $68 billion in federal funding.
This summer (2026): A bipartisan housing bill passed requiring HUD to gather stakeholder feedback on potential improvements.
Roadmap
The Build America, Buy America Act was expanded to HUD-funded housing projects in 2021, extending domestic sourcing rules into a sector that had previously been less affected. Developers now face the operational consequences of that expansion as waiver processing and material availability constrain project timelines.
Higher construction costs from compliance can slow or shrink affordable housing projects, reducing the number of units available to renters and buyers in those communities. Households waiting on new affordable developments may face longer delays before units come online.
The takeaway
Federal domestic sourcing rules are a tradeoff between supporting U.S. manufacturing and keeping affordable housing affordable to build. Watching how the stakeholder feedback required by the new bill shapes HUD's waiver process will show whether developers get relief.
Further reading
Explore more on construction policy and how federal rules shape building costs across the country.
Source note: This article includes information reported by Baton Rouge Business Report.
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Should federal rules requiring American-made materials apply to publicly funded housing projects?
