Tariffs hit housing market

New and planned tariffs set by the Trump administration on imported construction materials have Clark County builders worried about rising costs and slowing housing production.

Steep tariffs on steel — often used in mid- to high-rise housing — and next month’s planned tariffs on certain Mexican and Canadian imports, including lumber, are already causing the prices on construction materials to rise, according to the National Association of Home Builders.

Canadian lumber, specifically, is something homebuilders in Clark County rely on heavily, said Noelle Lovern, executive officer of Building Industry Association of Clark County.

“When the input is more expensive, the output is more expensive,” Lovern said. “It will really be up to the market to determine how far it’s willing to flex.”

The National Association of Home Builders projects tariffs will raise the cost of a single-family home in the U.S. by $7,500 to $10,000.

“If tariffs increase costs to a point where it forces developers or builders to charge more for the completed housing, and the consumer is not willing to pay that cost, the builders and developers will quickly slow down future construction activity,” said Patrick Ginn, CEO of development company Ginn Group.

Ginn suspects some developers are going to hold off on acquisitions and projects until they have more certainty on prices to avoid financial losses.

“Each developer that decides to wait results in less production of housing, at least in the short term,” he said.

Although tariffs are not having a direct impact on current projects yet, Ginn said the company is “being more cautious at all levels of development” and preparing for the possibility of higher costs.

The Vancouver Housing Authority, which builds publicly funded affordable housing in Clark County, is also struggling with the lack of certainty.

VHA CEO Andy Silver said it’ll be a problem if tariffs are imposed in the middle of a project’s construction, thereby raising prices.

“The more it costs to build, the more public money is needed to make an affordable housing project work,” he said.

Costs can’t be recouped by the VHA by raising rents because they have to meet affordability levels set by the government agencies funding the projects, Silver said.

However, rising costs due to tariffs could raise rents in new, private multifamily housing, just as the costs for purchasing new homes may increase, Ginn said.

“At this point, I think it’s hard to bank on consumers absorbing the price. … At some point they’re going to say, ‘No, we can’t pay anymore for housing,’ ” Ginn said.

Mike Lamb, a broker with Windermere Stellar, said it’s likely fewer people in Clark County will be able to buy homes if prices go up because of tariffs.

“Every time the cost of a house increases, the pool of buyers for that house is smaller than before,” Lamb said.

However, that might not dampen demand for new homes in the region. Clark County is a desirable area for people across the West, where average homes may be more expensive in areas such as the California Bay Area or Seattle, Lamb said.

“It’s different people,” Lamb said.

Alexis Weisend: 360-735-4536; alexis.weisend @columbian.com; twitter.com/weisend_alexis

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