The $546,000 Door
Build America, Buy America has the right goal. For affordable housing, it raises costs deals can’t absorb and stalls the homes America needs. Here’s the fix.
By Mike Kingsella, CEO of Up for Growth, and Chris LaGrand, Senior Vice President at Woda Cooper Companies
A long-awaited 52-unit affordable senior community is finally being built in Davenport, Iowa. Getting there meant clearing a milestone that a market-rate developer would never recognize: purchasing a collection of standard building components. Over six months, the construction team filed nine federal waivers, for electrical switchgear, HVAC equipment, the elevator, and door hardware. In each case the product they needed was either not made by a domestic supplier or not available at a price an affordable community could carry. Each one became a waiver, a cost increase, or both. We wish we could tell you this was one project’s bad luck. It isn’t. It’s happening to affordable housing across the country.
A relatively new law, “Build America, Buy America” was passed in 2021, inside the bipartisan infrastructure package. It requires that the iron, steel, manufactured products, and construction materials in any federally funded infrastructure project be made in America. Housing built with federal dollars counts as infrastructure, so HUD programs like HOME, CDBG, and the Housing Trust Fund are covered.
Since HUD knew the supply chain was not ready when the law as passed, it waived the rules for its own programs and phased them in. Those waivers have now expired and the affordable deals reaching construction this year are the first to feel the effects of this requirement at full force. And, as luck would have it, they are doing so just as HUD’s waiver process has slowed to a crawl.
The goal of the law is sound: public dollars should strengthen domestic manufacturing and put Americans to work. But applied to affordable housing, the rule is inflationary: it makes homes more expensive to build at the moment the country needs them most. And on an affordable deal, those added costs have nowhere to hide.
Nowhere to go but up
A market-rate developer hit with a higher bill has somewhere to put it. They can raise rents, or if the market won’t bear it, walk away from a deal that no longer makes sense. An affordable developer has no such room. The rents are capped by law, the subsidy is a fixed award, and the financing was locked in months earlier on the assumption that costs would hold. You can’t build more units to increase revenue because the regulations associated with building the units are what is driving the cost. That leaves only two options: build fewer units or a watch the deal fall apart.
Multiply this across every affordable deal now confronting this rule, and it stops being one project’s problem. It becomes a problem that is constraining new supply from reaching the market and it is increasing the cost of building the ones that doe. This, in a country that is already short 4 million homes. And the people who end up bearing the cost are those that can least afford it pay for it, in higher rents and longer waits for housing supply that now no longer exists.
One developer we know ran that math and decided to hand back their federal grant because complying with Buy America would have cost more than the grant was worth. Somehow the law we created to build more homes has now become one more reason not to build more homes.
To the people who finance and build this housing, a rule about door hardware and light fixtures is not just a paperwork nuisance. It is a cost with no benefit. It makes it harder to get affordable housing built. It makes it harder for hard-working people to afford to live in the communities where they go to work.
Build America, Buy America was meant to strengthen American supply chains. Applied to housing, it not only weakens the supply of affordable housing. It weakens the financial stability of our most important natural resource: the people who actually build America.
What it actually costs
The numbers from real projects make the case better than any argument can.
Door hardware. Outfitting a 40-unit building with standard imported door sets runs about $67,000. The only American-made equivalent is a hospital-grade product built to keep germs off surfaces in an operating room, and it is priced like one: $546,000. More than eight times the cost, to open and close the same doors.
The elevator. On the Davenport job, the only compliant elevator the team could find cost about $75,000 more than the standard unit. The switchgear and the HVAC told the same story: the American product existed, but only at a premium.
The hidden labor. For months, the project manager and a coordinator each spent half their time tracking down compliant parts and documenting them. Subcontractors carry the same load, pricing out and certifying every component the rule touches. On a newer Iowa job, some of the most reliable subcontractors are now refusing to bid at all, because they have seen what a Buy America project demands.
The rule even builds in a small cushion, a sliver of cost a project can cover without filing paperwork. On the Davenport job that cushion is about $150,000, and the team has already spent $125,000 of it, simply to cover parts it could not buy American. The margin the rule allowed for is nearly gone before the building is finished.
And this is not one team’s bad luck. In a 2025 survey by the National Association of Home Builders, 26% of builders using HOME or CDBG said Buy America would push them to abandon some affordable projects, and nearly one in five said they would have to raise rents to cover the cost. Either the homes do not get built, or the families who need them must pay more.
A rule built for roads, not homes
This is what happens when a rule written for highways and bridges is stamped onto housing policy. The mandate does not account for the fact that an affordable housing development is financed differently than typical infrastructure projects. There are no doors or fire alarms in a freeway. There are no ceiling fans or elevators in a bridge. Unfortunately, the Build America, Buy America mandate does see the difference. As a result, Affordable housing project managers keep hitting the same dead ends that increase the cost of doors, cabinets, fire alarms, switchgears, light fixtures, ceiling fans, and access controls.
Both goals can win
Making things in America matters. The pandemic showed how fragile global supply chains had become, and decades of decline in our manufacturing base have hollowed out towns that once were homes to people who made those things. Public money should be spent with that in mind, but it must make sense. Because the people who make things need an affordable place to live. And, today, we don’t have enough affordable housing. Of the roughly $75 billion a year in federal funding for affordable housing programs that the Build America, Buy America law impacts, most goes to rent and operating support. Only eight to ten billion (a little more than 10%) pays for actual construction. 10% is small percentage of total outlays, but the unintended consequence of the new law is that it makes the remaining 90% of federal funds less effective. This is the hidden cost of these new sourcing and compliance regulations - they make all of our efforts less effective.
The encouraging part is that the fix does not require weakening the original law. It simply requires that we apply it with affordable housing in mind.
Give developers a fast, predictable way to get a waiver when a compliant part does not exist, instead of an open-ended wait.
Focus the rule on the major inputs where American sourcing delivers real benefit, not the trim and hardware where the cost dwarfs the point.
Publish a shared list of parts that genuinely cannot be sourced here, so most waivers never need to be filed.
Phase the rules in by category, giving American suppliers time to catch up before the mandate bites.
Congress does not have to start over. A bipartisan bill, the Build Housing Affordably Act, would pause Buy America for these housing programs while HUD studies the real effects, and would require a decision on every waiver to be made within 90 days, or else get approved automatically1. It is narrow, it is sensible, and it deserves to pass.
Get it right
A policy that makes American homes cost more, take longer, or simply fall apart is not good industrial policy. It is not good housing policy. And it is not a good way to spend public taxpayer money.
We support the goal. Rebuild American manufacturing, back American workers, build dependable supply chains. But start from the fact that keeps getting lost: our homes are already built in America, by American companies and American workers2. The only question is whether the parts that go into them can be bought without grinding the whole project to a halt.
If we get it right, the Build America law and increasing the supply of affordable housing can pull in the same direction. Get it wrong, and we will keep spending public dollars to build fewer and fewer homes. The senior community in Davenport is still on schedule. The next one should not need six months and nine waivers to do the same.
Mike Kingsella is the CEO of Up For Growth, a national, cross-sector member network committed to solving the housing shortage and affordability crisis through data-driven research and evidence-based policy.
Chris LaGrand is the Senior Vice President at Woda Cooper Companies, an employee-owned affordable housing firm that owns and operates over 19,000 affordable housing units across the United States.
Think of it as a 90 day shot clock.
Who are right now struggling to afford a place to live.