Inventory, affordability take center stage in House hearing

U.S. Rep. Mike Flood (R-Neb.) pressed federal housing officials Wednesday on what he described as costly and counterproductive red tape, using a House Financial Services Committee hearing to highlight regulations he feels are worsening the national housing shortage.

The hearing focused heavily on interpretations of Build America, Buy America (BABA) requirements and their impacts on affordable housing development.

Flood opened his remarks by stressing the urgency of bolstering housing supply.

“There are many factors that have led to our current environment where housing supply has failed to keep up with demand,” he said. “While some of those factors are beyond the remit of Congress, there is a universe of federal barriers to housing supply that we are working on addressing in this committee.”

BABA requirements

Enacted within the 2021 Infrastructure Investment and Jobs Act, BABA mandates the use of U.S.-produced iron, steel, manufactured products and construction materials in federally funded infrastructure projects.

Flood argued that while this may be appropriate for infrastructure work, applying the same rules to housing projects has created severe cost spikes and delays.

He said this expansion has created real-world consequences for developers, nonprofits and public housing agencies navigating the federal funding process.

“Sadly, that decision has had disastrous effects,” he said. “While a hard and fast BABA requirement may make sense when building a bridge made of steel and concrete, it makes less sense when you think about all the different components that go into building a home. And fundamentally, this policy betrays a basic reality of federal housing programs.

“If we are aiming to take finite federal resources and use them to build housing, we need to be able to scale those dollars as efficiently as possible to make it work.”

Developers cite cost increases

Flood backed his claims with examples submitted to his office from housing developers nationwide.

The anecdotes included projects in the Southwest, Massachusetts, Wisconsin, California and Montana — each citing six-figure cost hikes tied to BABA compliance, consultant requirements, documentation burdens or difficulties sourcing U.S.-made materials.

He quoted developers describing compliance costs topping $250,000 on a 60-unit project, BABA-driven material increases of nearly 18% in Massachusetts and more than $400,000 added to a Wisconsin development.

“While the BABA rules were well intended, and I think meant for larger infrastructure, the reality is when builders get stuck waiting for waivers or searching for substitutes or having to pay higher prices, the impact goes right down to the end consumer,” Kevin Sears, immediate past president of the National Association of Realtors, said in response to Flood’s queries.

In California, one 80-unit project saw a $1.3 million jump. In Montana, BABA delays caused a housing trust fund award to expire before contractors could secure U.S.-made utility components, according to Flood.

“I could go on and on and on,” he said. “But the reality is that however well-intentioned it may be, BABA is driving up the cost of projects, wasting federal dollars that could be going to building more housing and, in some cases, it’s even killing projects entirely.”

Legislative push

The hearing also featured discusson of six Flood-backed bills — including his HOME Reform Act of 2025.

Additional measures included his Housing Supply Frameworks Act, the Identifying Regulatory Barriers to Housing Supply Act, the Unlocking Housing Supply Through Streamlined and Modernized Reviews Act, and H.R. 5263 — all aimed at reducing federal delays.