There is uncertainty about which imports will have new tariffs in socks, and when imports will come into effect, casting clouds on home builders and other property developers looking to pay for new construction across Southern California, including neighborhoods where the January wildfire is burning.
Many builders are trying to budget for rising costs, but are frustrated because they don’t know what costs will be in the coming months for construction materials and appliances such as stoves and air conditioners.
Questions surrounding customs have already forced contractors to force a prompt purchase decision, particularly for windows, doors, plumbing, lighting fixtures, and other materials manufactured or manufactured in China. Customer prices have already risen.
“I think this will be the first thing to do,” said Corey Singer, co-owner of Dolan Design, overseeing the construction of the first home, which is being built at 15256 de Pauw St., Pacific Pallisard, on April 15, 2026, while Dolan Design oversees the reconstruction.
(Genaro Molina/Los Angeles Times)
“We’re packing 5% to 10% of contingencies into our budget for what we call ‘market volatility’,” said the general contractor singer, working on 10 reconstruction projects in Pallisard, the Pacific.
He said last week that the tile supplier said that if they didn’t order him immediately, the new price would rise by 10%.
The wildfire, which burned an estimated 16,000 homes, businesses and other structures, sparks a massive construction boom around Los Angeles.
However, builders were already prepared due to lack of materials and the potentially high costs of items such as materials and bathtubs.
Singer said some of his clients are considering putting containers in their properties so that they can purchase the materials over the next few weeks and store them until they need them.
Architects, developers and contractors said they work in areas affected by the fire, saying the most worrying part of the tariff debate is not knowing which taxes will remain, as they take on one of the biggest reconstruction projects in LA history.
“It scares me of crap,” said Brian Wong, CEO of San Gabriel Valley Habitat for Humanity. The Wong nonprofit recently received its first permission to rebuild at Altadena and has been in conversation with another two dozen low-income owners seeking support.
Frequent changes in the Trump administration’s policies and retaliatory responses from other countries mean that the impact of tariffs is difficult to predict, he said.
“I don’t think there’s one alive who thinks we’ve finished this conversation,” Wong said. “This list grows and changes.”
The real estate industry’s complaints are widespread, said Anirvan Basu, chief economist for related builders and contractors, a national trade group.
“The outlook has been very positive this year,” he said. He said in the stable office lease market as mortgage rates declined, home inventory for sale expanded, and many employers tightened their policies from working from home. Strong consumer spending suggested that more shopping centres were likely to be built.
Construction site at 15256 de Pauw St.
(Genaro Molina/Los Angeles Times)
Trump’s election also raised expectations for a positive economy, he said, “On January 20th, when he was in office, American businesses were doing well.”
Since then, some prices have fallen, including oil prices, but with the global economic situation weakened in recent months, “Today’s construction outlook is less optimistic than it is seven to eight weeks ago,” Basu says.
The impact of tariffs is at the heart of concern in the construction industry, but he said the Trump administration’s immigration and deportation policies are also worrying to employers who have struggled to find work in recent years.
“Construction makes great use of foreign-born workers,” Basu said, “sometimes the data is unclear as to whether these foreign-born workers are documented or not.”
Two workers on the site.
(Genaro Molina/Los Angeles Times)
The construction workforce has already been shrinking for a variety of reasons, he said, and now “many of these workers are scared of these famous deportations.”
Aroncraft, chief operating officer of the Santa Monica Company, said the impact of the Trump administration’s tariffs remains “relatively restricted” by the operation of industrial property developers and operators Dedeaux.
“The way these tariffs were deployed actually creates a lot of uncertainty, so planning is a real challenge,” he said. “We expect a pause at many key decisions until we have at least some sense of where things are heading.”
Companies that transport, receive and manufacture industrial buildings take more time to decide whether to lease more space or scale their operations. If the future of the economy remains uncertain, investors will be more cautious about purchasing buildings.
Last week, Trump allowed a 90-day suspension in more than 75 countries facing tariff hikes, including Mexico but excluding China.
“It’s just pushing away uncertainty for 90 days,” Kraft said. “What happens behind the scenes? I don’t know which country will come to the table and which isn’t.”
He said there are potential tenants in the market looking for space to rent, but they take time to decide whether to make the move or not.
“Real estate doesn’t respond at the speed of the stock market,” Kraft said to see how the tariffs develop with investors and landlords pause. “Fingers crossed isn’t as bad as we fear.”
According to the national assn. Rareness and sharp, enduring rise in the material costs of home builders – a variety of items like coniferous wood and electricity sales transformers are increasing the costs of building homes and damaging the affordability of homes. Tariffs are in a position to make the situation worse.
NAHB estimates that $204 billion worth of products were used in 2024 to build both new multi-family and single-family homes. About $14 billion of these items have been imported, and the trade group has about 7% of all the items used in new home construction originated from abroad.
Customs duties means that the importer must pay additional fees to import items from other countries. Price increases are usually absorbed by importers or usually in some combination, and passed on to the end consumer of good.
(Genaro Molina/Los Angeles Times)
For example, if a retailer imports a $500 washing machine from a country that is taking a 25% tariff, the retailer owe the US government a $125 tariff, the trade group said.
For most products, the cost is passed to the consumer, saying, “The tariffs on building materials increase the cost of the home, and consumers pay the tariffs in the form of higher home prices.”
Singers, contractors and others said the current price hikes do not threaten the viability of rebuilding a Los Angeles County home that was damaged by a wildfire. To varying degrees, they said a range of issues were rated as greater concern than tariffs, including local authorities permits, the Trump administration’s immigration policy that restricts access to Pallisard’s sites and affects the availability of labor.
Andrew Slocum, who is working on rebuilding 14 homes in the Eton Fire Area, said builders were used to uncertainty from supply chain issues that emerged during the Covid-19 pandemic.
“We’re looking forward to seeing you in the future,” said Slocum, CEO of Green Development, Pasadena. “We’re worried about what will happen.”
Source link
