If it were up to John Anderson, he would have more lumber stockpiled right now.
Anderson’s general contracting company Plumb House Inc. constructs big housing complexes across Massachusetts. As his crew prepped the foundation for a 230-unit building, Anderson walked to one end of the site where wood panels sat in several 15-foot-high stacks. The panels will make up just part of the building’s frame. Anderson is waiting on more panels — worth over $1 million — to be delivered.
The problem is they’re from Canada. With 25% tariffs on imports from America’s northern and southern neighbors possibly retaking effect Wednesday, Anderson says the price of the panels could go up about $200,000 before he’s able to get them.
“We’re going to have to come up with money that we don’t have in the budget to cover those tariffs,” he said. “I don’t want to pay for it all.”
Homebuilders across the state say they’re bracing for this dilemma as the Trump administration imposes more levies on imports in the name of boosting American-made products. They’re not only concerned about prices for wood from Canada rising, but also drywall and HVAC units from Mexico, and appliances like dishwashers and washing machines from China that are now subject to 20% tariffs.
Some contractors and developers say they fear the price increases will be passed around, slowing down housing development across the state. They’ve already seen that chain reaction start for materials subject to President Donald Trump’s initial rounds of tariffs.
Peter Koopman with Koopman Lumber — which has stores across Massachusetts — said his suppliers are sending him multiple messages a day that they need to charge him more for materials from China or that include foreign steel or aluminum. The price increases range from 5% to 20% for products like outdoor decking, staircase railings and nails. Koopman said he’ll have no choice but to raise his own prices in response.
“Everything starts to add up,” Koopman said. “There’s little room to absorb a price increase like this and still be able to pay our staff and keep the lights on.”
Trump has said the trade duties are in part meant to reduce reliance on imports and bolster American manufacturing, which some industries applaud. Many Massachusetts homebuilders say the plan may be fine in theory, but in practice, isn’t always feasible because some products from across the border are irreplaceable.
For example, builders in New England prefer to use certain types of spruce-pine-fir wood that can withstand heavy structural loads. The problem is those trees need especially cold climates and therefore mainly grow in Canada.
“You’re not going to get it to grow in Colorado or Rhode Island,” said David O’Sullivan, president of the Home Builders & Remodelers Association of Massachusetts. “[We’re] at the mercy of whatever is controlled in Washington. It’s kind of helplessness.”
When Anderson, the contractor with Plumb House, heard about the planned tariffs on Canada, he said he immediately called up his Canadian wood panel supplier and asked them to ship as much as possible across the border before the tariffs are expected to take effect. But the lumber factory hasn’t been able to produce the panels quickly enough for him to stockpile more than a few weeks of supply.
Anderson and Matt Grosshandler, a contractor with the company Bald Hill Builders, noted the tariffs are coming at an especially difficult time for the homebuilding industry. High interest rates, expensive land prices and a shortage of construction workers have combined to stress their budgets in recent years.
Grosshandler said he’s already had to delay three housing projects in Massachusetts because of higher-than-planned costs. The looming tariffs are now stalling contract negotiations with developers who’ve hired his company because nobody knows how to factor uncertain material costs into their project plans.
“This stuff keeps me up at night,” he said, noting that his company’s often making a 1% profit after paying for materials and labor. “If all of sudden there’s a cost spike that impacts the job 5%, that’s devastating for me.”
Grosshandler said he’ll have to ask developers to help cover any sudden cost increases resulting from tariffs on building materials. But developers don’t have much money to spare, either.
Phil Cohen with the development firm Boston Communities said it takes years to secure enough loans, grants and tax credits to help pay for just one of his affordable housing projects. If he suddenly has to cover tariffs, he might need to alter construction plans to cut costs, reach into his company’s financial reserves or even delay some projects until he can make up the difference.
Other developers, Cohen said, may shelve their projects entirely or raise rents to recover some of the money — not ideal as Massachusetts tries to address its affordable housing shortage.
“We want to make sure that not only us, but the affordable housing industry in general continues to be able to build housing that the communities we work with seem to really need and want,” Cohen said. “That’s important to have for the success of our entire society.”
For now, he and other homebuilders said all they can mainly do is wait and hope that Trump relents on many of his tariff plans.
