Biden's 'Build America, Buy America' Law Stalls Affordable Housing: More Costs?

The Build America, Buy America Act, signed by President Biden in 2021, aims to boost American manufacturing, but it's creating a bottleneck in the construction of affordable housing.

The law requires that almost all materials, from HVAC systems to ceiling fans, used in affordable housing projects funded with federal money, carry the 'Made in the USA' label.

However, many products, traditionally imported due to lower labor costs, do not meet this requirement, forcing builders to apply for waivers.

The waiver application process has stalled, as the Department of Housing and Urban Development (HUD), with staff reduced by the Trump administration, has only approved a handful of projects.

This has caused construction delays and significant additional costs, at a time when the country is facing an affordable housing crisis.

Tyler Norod, president of Westbrook Development Corporation, says they have resigned themselves to building fewer units across the country due to this situation.

Diana Lene, 75, has been on affordable housing waiting lists for five years, and her situation reflects the problem.

The BABA law, part of the Infrastructure Investment and Jobs Act, applies to infrastructure projects funded by federal agencies, not just affordable housing.

Developer Julie Hoebel has spent over $60,000 just on consulting to find American-made materials, without having the requested exemptions approved yet.

HUD takes at least six months to approve many waivers, which has generated criticism about the slowness of the process.

Even BABA advocates agree that HUD must expedite exemptions and give clearer instructions to the industry.

Scott Paul, president of the Alliance for American Manufacturing, notes that the system favors the use of imported materials for greater profits, questioning whether this benefits the public.

Jennifer Schwartz, from the National Council of State Housing Agencies, points out that there is no national data on the increase in costs due to BABA, and that the exemption process is failing.

Kaitlyn Snyder, from the National Housing and Rehabilitation Association, indicates that it will take time for manufactured products, such as appliances, to become available.

Jessica Neubelt, a developer, estimates that she spent an additional $150,000 just to verify that the steel used in a project was American-made, frustrated by the complexity of the process.

Congressman Mike Flood has advocated for exempting some HUD funds from BABA, arguing that any additional cost hinders the American dream of owning a home.

Roy Houseman, legislative director at United Steelworkers, considers the complaints about the increase in costs to be exaggerated.

Some developers are looking for ways to avoid federal funds, as American-made materials are especially difficult to find in rural areas.