The implementation of the Build America, Buy America (BABA) Act has led to widespread construction delays and significant cost increases for affordable housing projects across the United States, according to reports released on March 29, 2026. The law, which requires that all iron, steel, and manufactured products used in federally funded infrastructure projects be produced domestically, is currently impacting developments that rely on subsidies from the Department of Housing and Urban Development (HUD).
Developers and industry groups report that the requirement for manufactured products—defined as having at least 55% of their component costs sourced from U.S. materials—has created a bottleneck in the procurement of essential building supplies. Common items such as HVAC systems, elevators, lighting fixtures, and even basic hardware like sink hooks and ceiling fans are often unavailable from domestic manufacturers in the quantities required for large-scale housing projects.
Financial impacts are substantial. Individual developers have reported spending between $60,000 and $150,000 solely on consultants and administrative labor to verify the origin of materials and navigate the federal compliance process. Total project costs have increased by hundreds of thousands of dollars in several instances, as domestic alternatives often carry higher price tags than imported goods. For example, some developers noted that domestic materials can increase overall project budgets by more than 25%, a threshold that technically allows for a waiver, though the approval process remains slow.
The waiver process at HUD is currently described by industry leaders as being at a near standstill. As of March 29, 2026, the agency is reportedly taking an average of six months or longer to process non-availability waivers. Kaitlyn Snyder, managing director of the National Housing and Rehabilitation Association, stated that the requirements were implemented before a full assessment of domestic manufacturing capacity was completed. Consequently, many projects have reached a standstill while waiting for federal approval to use foreign-made components that have no domestic equivalent.
In response to these challenges, HUD Secretary Scott Turner stated in late March that the agency is closely monitoring the impact on builders and is looking into providing flexibility for certain projects. However, the agency remains committed to the law's goal of supporting the U.S. industrial base. Meanwhile, a bipartisan group in Congress, led by Representative Mike Flood and Representative Emanuel Cleaver II, is pushing the HOME Reform Act of 2025, which seeks to exempt affordable housing from certain BABA requirements to prevent the loss of low-income housing units during the current national shortage.