Current State of Los Angeles Housing Availability & How It’s Affected by Tariffs

Los Angeles has always faced an affordable housing crisis, but that problem has worsened over the past year. Even though the demand for homes might seem to offer opportunities for Los Angeles developers, it’s not as advantageous as the average person might think. A closer look at the role tariffs play demonstrates why the housing crisis will get worse. 

Tariffs on Building Materials Affect New Home Construction Costs Directly

We already saw how tariffs affect the cost to build new homes when tariffs were placed on softwood, raising the cost to build in Los Angeles. The cost of building a single-family home rose by $9,000 as the United States levied tariffs against Canadian softwood lumber. 

Tariffs on imported steel pose similar financial difficulties. Even with a simple single-family home design, builders use steel for roofing and framing.

Developers and Property Owners Face Higher Housing Costs

Tariffs affect the costs of building new homes for Los Angeles developers and property owners. Higher importing costs will ultimately raise the costs for builders and sellers. This leads to higher home costs for buyers, chasing them away from the market.

Developers Scale Back Their Projects

As developers watch the skittish behavior of buyers in this market, they start scaling back the scope of their projects. They’ll feel less hopeful when tariffs unnecessarily raise the costs of new home construction. They know buyers won’t enter a market with higher demand for homes. 

Renters Face Challenging Times

Fewer new homes on the market often leads to lower rental availability. People who exit the buyer’s market still need a place to live, and greater rental demand raises the rental rates. The greater demand for rentals adds to the problem of affordable housing. In this way, tariffs contribute to the housing crisis in Los Angeles. 

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When you partner with Advanced Builders & Contractors, you’ll benefit from our expertise and network of industry professionals. We can use our industry contacts and experience to keep your project’s costs down. Contact us to discuss your project today.