How Much Will These Tariffs Hurt New Development?
See title - curious developers thoughts on these tariffs that, to me, don't seem to be a negotiating tactic; rather ends and not means to DJT.
Construction costs were nonsensical pre-Tariffs. Tariffs ain’t bringing them down.
They seem pointless too which makes this all the more infuriating
Don’t see how stopping the flow of illegal drugs/criminals and bringing back manufacturing to the United States is bad but okay
How many illegal immigrants or how much fentanyl was coming through Canada? Far less than their lumber.
Also, most American manufacturing jobs were lost because of automation, increasing tariffs are never bringing those back.
If Donald Trump threatened to fart on Claudia Sheinbaum it would have about the same effect on "the flow of illegal drugs".
I mean, for chrissakes, do you ever think about the drivel he force feeds you, or is it just you gulping it down and asking for more as quickly as possible?
If Mr Trump had any spine whatsoever, he'd try stopping the drugs where it matters - by stopping people from doing them. Drugs will always get into the country as long as there is a market for it.
And illegal immigration is an easy fix. Just make it simpler to migrate legally and you solve the problem.
My WAG? I don't think it changes a ton initially up to the extent that they were expected (I think we're still within the expectations of people who were watching personally), the industry was already bracing for this and over purchasing inventory in anticipation. From there? Who knows, we could have these resolved in the next month and a half if Mexico and Canada can get their borders under control in Trump and his team's eyes. Or, they could last a year and product could get really tight.
I do think it provides an easy excuse for everyone (suppliers, subs, GCs) to raise their prices, but all that really means is development will continue to not happen in most areas.
I know you don’t have a crystal ball, when do you see development “coming back”?
I know higher rates are here to stay and that’s something I’ve understood since Marks put out “Sea Change” and “Further Thoughts on Sea Change”, but I’m just trying to plan some career moves and get an idea when more experienced guys think development will ramp up again.
My Crystal ball? It's going to vary by market, but I would guess most multifamily development (can't really comment on the others) is paused for 1-2 years. End of 2026 you'll start to see first movers ramp up a bit and it gets into swing in 2027.
That's a total guess by the way, but most people see rent growth starting second half/Q4 2025 and you'll need some decent growth in order to get rents to a place to justify the development. The guys that start end of 2026 will probably make a killing.
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