Amidst the many actions of President Donald Trump that have affected Denver, it would be easy to overlook the tariff imposed on Canadian lumber.
But David Sinkey, president of Boulder Creek Neighborhoods, says it’s already impacting home affordability on the Front Range.
A quick recap of this tariff: On April 24, the Trump administration announced that most Canadian lumber imports would be subject to a 20 percent tax. This came after the administration learned that the lumber was improperly subsidized and failed to negotiate a solution with the Canadians, according to the New York Times.
Sinkey says that tariff has already increased his lumber costs by 10 percent compared to just a few months ago in January and February. With construction projects all the way from Loveland to Stapleton, that affects people across the Front Range.
“We’ve never had a single period increase of over five percent, this is double that,” Sinkey said. “It’s sent a very costly pricing shock through the entire market.”
For example, a small home floorplan that needed $1,700 worth of lumber in January and February now has $1,874 in lumber costs. And in an area struggling to produce affordable homes, every little bit counts.
“In some of the bigger homes, that’s more like $2,500 to $3,000 [of lumber costs]. We’re already struggling as an industry to produce affordable housing, this has not helped that,” Sinkey said.
Plus, the current immigration climate may be affecting the tight local construction labor market as well, Sinkey says. Some of his contractors are now expanding their job postings to multiple states in order to secure candidates.
In addition to affecting the affordable housing available in Colorado, these added costs can determine whether Boulder Valley Homes sells its homes at a loss.
“We’ve already sold a lot of homes to people that haven’t been built yet,” Sinkey said. “When the cost changes so dramatically, but the price to a homeowner is fixed, the true cost can continue to go up.”