President Trump’s decision to sharply raise tariffs on imported steel and aluminum will likely raise homebuilding costs even further, a cost that would get passed on to consumers.
“Tariffs hurt consumers and harm housing affordability,” said Randy Noel, chairman of the National Association of Home Builders, in a statement following Trump’s decision on Thursday, according to the World Property Journal.“This announcement by the president could not have come at a worse time.”
Homebuilders are already subject to a 20 percent tariff on imported Canadian lumber, which Trump enacted last year. That tax further raised costs for the building material, which was already at a premium because of the damage from wildfires.
Last month, new home construction nationwide was up slightly. In January, news starts stood at 1.33 million, up from 1.24 million in January 2017, according to the Department of Commerce. That was attributed in large part to the rise in residential rental and condominium construction. Still, low supply caused construction prices to rise 6.2 percent, from November 2016 to November 2017.
In Los Angeles, the latest steel and aluminum tariff hike could hit particularly hard, as the city is already grappling with a severe housing crisis. This week, Mayor Eric Garcetti said he would oppose a state bill meant to address the shortage on the grounds that it doesn’t do enough to protect existing homes. SB 827, a transit-oriented bill, was introduced by State Senator Scott Weiner as a way to combat the housing crisis in “the least affordable big city in the country,” according to a UCLA study. [WPJ] — Natalie Hoberman