Biden asked to exempt housing programs from Buy America rule

A group of affordable housing advocates are calling on the Biden Administration to specify that the Build America, Buy America Act does not apply to certain single-family and multifamily properties.

The Act requires that all of the iron, steel, manufactured products and construction materials used in infrastructure projects be produced in the U.S. BABA is part of the Infrastructure Investment and Jobs Act and the Department of Housing and Urban Development is covered under its provisions.

The letter sent to Pres. Biden asks that the Office of Management and Budget "take no action that could have the unintended consequence of increasing housing costs for all Americans." 

While the OMB's guidance specifies that "Projects consisting solely of the purchase, construction, or improvement of a private home for personal use, for example, would not constitute an infrastructure project,'" it doesn't specifically exempt public housing programs.

 "This rationale should also apply to all affordable housing development and repair, including affordable homeownership repair and development programs and HUD-assisted and USDA-assisted multifamily housing."

The National Housing Conference is the lead signatory among the 24 groups and individuals that sent the letter. Among those that signed on are the Mortgage Bankers Association, the National Association of Realtors, the National Association of Home Builders and former HUD deputy secretary Pam Patenaude, who was recently appointed chair of the Home Builders Institute's board and is at the center of a proxy fight at loanDepot.

"As currently written, the proposed guidance would increase the cost of building affordable housing, reducing the number of units that can be developed using existing federal funding," said David Dworkin, president and CEO of the National Housing Conference, in a press release. "OMB must ensure that the important work of the Biden administration addressing the nation's housing affordability crisis is not undercut."

The Act's requirements could affect efforts to close the minority homeownership gap and put upward pressure on housing costs, which are a major driver of inflation, according to the letter.

"A government-directed shortage of housing supplies would only exacerbate these problems," the letter said.

The OMB should specify that when it comes to buildings and real property, all single-family and multifamily residences are exempted from the requirement to buy American for construction and rehabilitation.

Otherise, recipients of funds from HUD offerings like community development block grants, the HOME Investments Partnerships Program and the Housing Trust Fund would have to observe the requirement. Low Income Housing Tax Credit financed properties, which also could include those getting that funding from the U.S. Department of Agriculture, could also be subject to the requirement.

BABA compliance "will place an enormous administrative burden on builders and developers of affordable housing, restrict the supply of necessary construction materials, and further exacerbate the American housing affordability crisis," the letter stated.