Page 14 - BB_May_2018

Rising Lumber
Prices Hit Home
John C. “Jack” Dawley got an unwelcomed surprise
recently when he opened an email from the
company that supplies the white cedar shingles
for the homes in an active-adult development he’s
building in New England.
The shingles are imported from Canada, and as
of March 14 are subject to an immediate 20.8%
duty that the U.S. imposed as part of its ongoing
softwood lumber trade dispute.
That translated into an additional cost of $1,400
per unit for the 12 homes planned for the next
phase of construction – and half had already been
sold.
“For most people, including me, the topic of
tariffs and their impact is abstract,” said Dawley,
president and CEO of Northland Residential
Corp., a builder-developer focused on high-end
single-family and condo communities in eastern
Massachusetts. “It was instantly clarified with this
message.”
Coniferous shingle and shake products had not
previously been subject to tariffs because there is
so little production in the United States and thus
not competing with similar American products.
Further, there had been no accusations of
improper conduct levied against Canadian shake
and shingle manufacturers, his supplier explained.
“What Americans and our administration need
to understand is that, at a minimum, a third of the
U.S. supply of dimensional framing lumber and
100% of red and white cedar shingles come from
14 MAY 2018 | GREATER SAN ANTONIO BUILDERS ASSOCIATION
Canada,” Dawley said.
“The simple fact is that U.S. simply does not
produce what it consumes, and its economy relies
on the rational importation of certain goods. In
the case of home building, taxing such goods via
a tariff simply drives up the cost of production,” he
said.
The prices on softwood lumber imports
skyrocketed after the 2017 hurricane season and
were up 30% from the four months leading to
January 2018. By April 6, the Random Lengths
Framing Lumber Composite price hit $492, up
from $414 a year earlier.
A study by NAHB economists shows that the
increase in the cost of lumber since the beginning
of 2017 has been enough to drive up the price of an
average new single-family home by $6,388, and
the market value of an average new multifamily
housing unit by $2,430.
The study also shows that while they were
designed to boost employment in the U.S., the
tariffs on Canadian softwood lumber will instead
result in the net loss of 9,370 jobs in 2018.
While there is an expected increase of 1,193 jobs
in U.S. sawmills, there is an expected loss of 10,563