Posts Tagged Construction

Trump’s tariffs will make the housing industry slowdown even worse

According to some misguided narratives, Donald Trump thrives in a chaotic environment, purposely sowing confusion and discord with each heavy-handed pronouncement.

Those wishing to craft some reason for Trump’s behavior are every bit as hungry to assign a strategy to his actions where there is little more than erratic doodles on the page, the kind you might find in the notebook of a pre-teen girl where loopy love notes to “Tiger Beat”-boy of the year Johnny Orlando are written alongside hurried sketches of Hello Kitty, rainbow riding unicorns, and a flood of hearts capable of drowning the pharaoh’s army.

When it comes to public policy, Trump isn’t so much a bull in the china shop as an attention-deficit toro who isn’t even aware he’s in a china shop, despite the sound of crashing plates, the sharp shards cutting into his shanks, and the display cabinets filled with rows of porcelain finery. It’s all right there before his eyes and yet he simply doesn’t see it.

This is not a plan. It’s a problem.

And few industries are beginning to be impacted by Trump’s room-wrecking taurus then the housing industry.

Although the industry has bounced back from the disastrous days of the Great Recession, it still hasn’t reach the highs of the reckless Fannie Mae and Freddie Mac era, when loans were thrown out as wantonly as condoms at the Olympic village — the chief difference between the two: in one case the customer was protected, in the other … not so much.

While 2017 was a reasonably good year — new home starts jumped from 1.17 million to 1.2 million — 2018 isn’t off to a good start.

According to the U.S. Commerce Department, single-family home sales were down 7.8 in January 2018, followed by an additional drop of 0.6 in February. The price of homes has also gone up 0.6 from January and 9.7 percent from February 2017.

One significant factor at play here: the lack of skilled laborers. As a result, houses are taking longer to be finished and costing more to build.

These aren’t bad jobs, of course. They’re well-paying, and although physically demanding, good honest work, the kind that the American dream is built on, the kind that sent scores of kids to college, the kind that built the suburbs where so many of us live.

Today, many of those jobs are increasingly held by foreign-born workers, many who are targets of the Trump administration.

According to the National Association of Home Builders, immigrants made up 24.4 percent of laborers in the construction industry in 2016, a number that has risen steady from 19.9 in 2004. Even at the construction peak before the Great Recession, the percentage of the immigrant workforce topped out at 22.8.

According to the Bureau of Labor Statistics, 15.1 of male foreign-born workers are involved in the construction business, compared to 8.1 of native-born male citizens.

All of this is why the NAHB has called for measures that are more in line with the look-the-other-way, laissez faire attitudes of the pre-Great Recession era and less like the nationalistic, build-a-wall and deport-them-all policies of the Trump administration. Simply put, the association wants more immigrant workers and they want to make it easier for them to work in the U.S.

Even though the NAHB repeatedly claims they want to protect the nation’s borders — they never actually say how — if you read between the lines, you’ll see the builders association really doesn’t want much reform at all. In fact, they want to make sure that employers remain only responsible for the immigration status of their direct employees, not their subcontractors. This, of course, allows big contractors to ignore the vast of number of unauthorized workers on their sites while they put on a Make America Great Again cap to block out the hot summer sun.

With Trump in office, and his rhetoric remaining fiercely antagonistic toward the immigrant labor force, you can bet that current worker shortage is only going to get worse. It doesn’t take a genius to realize that fewer and fewer skilled hands are willing to risk traveling to a nation which has branded them murderers, drug dealers, and rapists and where white nationalism is dangerously on the rise.

But that’s that only part of how Trump policies are harming the home building biz. Trump’s recent softwood tariff has made lumber prices skyrocket, while the new tariffs on steel and aluminum are sure to take off as well.

According to the Associated Builders and Contractors, the price of softwood lumber has increased 15.6 percent since February 2017 while iron and steel are up 7.1 percent for the same period — and the tariffs have only recently gone into effect.

As a developer, you’d think that Trump understands just how important a system favorable to immigrants and lower tariffs are to the continued vitality of the construction business. And you know what, he probably does.

But he’d rather appeal to his base than help a vital American industry and the men and women who desperately want to move into a new home without breaking the bank.

Chris Haire is a political columnist for the Charleston City Paper who sheepishly admits that brisket is better than pulled-pork barbecue.

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