Why a "Buy America" Rule Is Slowing Down New Affordable Housing

If you are on a Section 8 waitlist or searching for an affordable apartment, you know how long the wait can be. Now there is another reason new affordable homes are taking longer to open: a federal rule that says building materials must be made in the United States.

The rule is called Build America, Buy America, or BABA for short. It sounds simple, but builders say it is adding months, and sometimes years, to projects families need right now. Here is what is happening, what changed this summer, and what you can do while you wait.

What Is the Build America, Buy America Rule?

Congress passed BABA in 2021 as part of a large infrastructure law. It says the iron, steel, building materials, and factory-made products used in federally funded projects must be made in the U.S., according to HUD's Build America, Buy America page. The goal is to support American factories and workers, and the idea has support from both parties.

The rule was written with roads and bridges in mind. But it also covers affordable housing built with money from HUD programs such as HOME, the Housing Trust Fund, and Community Development Block Grants. When a nonprofit builds new affordable apartments with this money, it has to follow the rule.

Why Apartment Buildings Are Harder Than Bridges

A bridge needs a few hundred kinds of materials. Developers told Maine Public that a typical apartment building uses about 1,500 different items. That includes door hardware, elevator parts, lights, fire alarms, plumbing, and heating and cooling systems. For each one, the builder has to find out where it was made and keep proof.

Some items are not made in the U.S. at all, or not in large enough amounts. In an Associated Press report from March, a North Dakota developer said he could not find American-made ceiling fans. A Maine developer told Maine Public that U.S.-made products can raise building costs by 10% to 15%. When costs climb, projects that run on tight budgets can stall.

Real Projects Are Stuck

In Biddeford, Maine, nonprofit developer Tyler Norod plans 45 affordable apartments for older adults on an old industrial site. He hoped to start building in August. Now he says he would be lucky to start by the end of this year, and 2027 is more likely. He estimates the rule will add about $2 million and up to a year to the project. As of early August, no builder in Maine who had to follow the rule had started construction.

In Denver, developer Julie Hoebel asked HUD last November to approve exceptions for about 125 materials in an 85-unit building. She spent more than $60,000 on a consultant just to search for American-made options. As of spring, she was still waiting for answers.

What Is an Exception, and Why Does It Take So Long?

HUD can excuse a project from the rule. HUD calls this a "waiver." According to HUD, it can do this in three cases:

• The product is not made in the U.S. in enough amounts or good enough quality.
• Buying U.S.-made products would raise the total project cost by more than 25%.
• Following the rule would go against the public interest.

Small projects get a break too. The rule does not apply to projects that cost $350,000 or less, and a small share of materials can be left out, up to 5% of material costs or $1 million. Approved exceptions are posted on HUD's page and on MadeInAmerica.gov.

The problem is speed. HUD reviews each request, posts it for public comment, and sends it to a federal office for final approval. Laura Reading, a Maine developer, waited eight months for an exception on a heating and cooling system, even though HUD had approved a similar one for 15 other projects. The AP found that many approvals take at least six months, which is hard on builders facing funding deadlines.

What Has Changed This Summer

Several things have happened, though none has solved the problem yet.

HUD asked for help. On June 18, HUD asked manufacturers, suppliers, and builders to report which housing products can and cannot be found from U.S. makers, according to the Federal Register. The comment period closed on July 20.

A new housing law passed. In July, the 21st Century ROAD to Housing Act became law. It renews the HOME program and tells HUD to study how BABA affects HOME and then update its guidance, according to Enterprise Community Partners. A legal summary from Nixon Peabody says HUD has 180 days to finish that review.

But the help is limited. The new law covers only certain HUD funds. A separate bill in Congress that would exempt affordable housing from the rule has not gained traction, Maine Public reported in August.

People disagree on the fix. HUD Secretary Scott Turner said in January that the agency was looking at more flexibility for some projects. Labor unions that back the rule say the trouble is slow HUD paperwork, not the law, and they have asked HUD to speed up approvals. Maine housing groups want exceptions approved in 30 to 60 days.

What This Means for Section 8 and Waitlists

A Section 8 voucher helps pay rent in a home that already exists, so BABA does not apply to your voucher. The effect is indirect. When fewer new affordable apartments open, there are fewer homes for voucher holders to rent and more people competing for them.

The gap is already large. The National Low Income Housing Coalition's 2026 Gap report found a shortage of 7.2 million affordable, available rental homes for the lowest-income renters. That works out to just 35 homes for every 100 households.

What You Can Do While You Wait

Construction delays are out of your hands, but these steps can help:

• Apply to more than one waitlist. Housing authorities open their lists at different times, so more applications mean more chances.
• Keep your information current. Update your phone number, address, and email so you do not lose your spot, and answer any mail quickly.
• Check in with your local housing authority. HUD's Helping Americans page points you to voucher information and affordable places to live.
• Ask about other help. Some state, local, and nonprofit programs offer rent help.
• Watch for new buildings. Some new developments take applications before construction is finished.

The Bottom Line

Buy America rules were meant to support American workers. For affordable housing, though, the paperwork is slowing down homes that families need. HUD's review of HOME and its feedback from builders could help, but it is too soon to know how much they will speed things up.

Ready to start your search? Visit our partner site, Section8Search.org, to find Section 8 listings, housing authorities, and open waitlists in your area.