On January 29, 2026, the Small Business Administration (SBA) issued an interim final rule preempting state and local building requirements that the agency determined delayed disaster rebuilding efforts. As a result, states and local governments may be unable to enforce their building codes and other health and safety requirements following a disaster.
SBA published its rule without first providing an opportunity for public comment and offered only four sentences of legal analysis to justify its preemption authority. The rule also cites minimal evidence to support its repeated assertions that state and local building requirements materially delay disaster rebuilding efforts — a key factual premise for both its claimed preemption authority and its decision to bypass standard notice-and-comment rulemaking procedures.
This analysis summarizes SBA’s Disaster Loan Program, explains the new preemption framework, and describes the legal risks that may be raised if it is challenged in court.