Uncertainty about which imports will be socked with new tariffs and when they’ll go into effect has thrown a cloud over home builders and other real estate developers trying to pay for new construction throughout Southern California, including neighborhoods scorched by the January wildfires.
Many builders are trying to budget for rising costs but are frustrated because they don’t know what construction materials and appliances, such as stoves and air conditioners, will cost in the months ahead.
Questions surrounding the tariffs are already forcing contractors to make quick purchasing decisions, especially for windows, doors, plumbing and lighting fixtures and other materials made or manufactured in China, which are subject to duties of 145%. Prices for their customers are already going up.
“I think this will be the first to be done,” said Cory Singer, co-owner of Dolan Design, while overseeing construction of the first home being built in the fire zone at 15256 De Pauw St. in Pacific Palisades on April 15, 2026. Dolan Design is overseeing the rebuild.
(Genaro Molina/Los Angeles Times)
“We’re padding a 5% to 10% contingency for what we’re calling ‘market volatility’ into the budget,” said Cory Singer, a general contractor working on 10 rebuild projects in Pacific Palisades, including the first home under construction there since fire tore through the neighborhood.
He said a tile supplier told him last week that if he didn’t place an order immediately the new price would be 10% higher, and Singer is telling rebuilding homeowners to prepare for higher costs.
The wildfires — which burned an estimated 16,000 homes, businesses and other structures — will ignite a massive construction boom around Los Angeles.
But builders were already bracing for material shortages and potentially higher costs for such items as lumber and bathtubs.
Singer said some of his clients are considering putting containers on their properties so they can buy materials over the next few weeks and store them until they’re needed.
Architects, developers and contractors working in fire-affected areas said the most worrying part of the tariff debate is not knowing which levies will remain as they take on one of the largest rebuilding projects in L.A. history.
“It’s scaring the crap out of me,” said Bryan Wong, chief executive of San Gabriel Valley Habitat for Humanity. Wong’s nonprofit recently received the first permit to rebuild in Altadena and is in conversations with an additional two dozen low-income property owners looking for assistance.
Frequent changes in Trump administration policy and retaliatory responses from other countries mean the effects of the tariffs are hard to predict, he said.
“I don’t think there’s a single person out there alive who thinks we’re done with this conversation,” Wong said. “This list is going to grow and is going to change.”
Frustration in the real estate industry is widespread, said Anirban Basu, chief economist for Associated Builders and Contractors, a national trade group.
“Coming into this year, the outlook was quite positive,” he said, with lower mortgage rates, growing inventory of homes for sale and a stabilizing office leasing market as many employers tightened their work-from-home policies. Strong consumer spending suggested construction of more shopping centers was likely.
The construction site at 15256 De Pauw St.
(Genaro Molina/Los Angeles Times)
Trump’s election had also raised expectations of an upward economy, he said, adding: “On Jan. 20 during inauguration, American business was in high spirits.”
Since then, some prices have fallen, significantly including the price of oil, but as the global economic picture has weakened in recent months, “the construction outlook today is not nearly as sanguine as it was seven or eight weeks ago,” Basu said.
Tariff impacts are at the heart of construction industry concerns, but the Trump administration’s immigration and deportation policies are also worrying to employers who have struggled to find labor in recent years, he said.
“Construction makes outsized use of foreign-born workers,” Basu said, and “sometimes the data aren’t clear about whether these foreign-born workers are documented or undocumented.”
Two workers at the site.
(Genaro Molina/Los Angeles Times)
The construction labor force has already been shrinking for various reasons, he said, and now “many of these would-be workers are scared by these high-profile deportations.”
The impacts of the Trump administration tariffs are still “relatively muted” on the operations of industrial real estate developer and operator Dedeaux Properties, but they’re helping put tenants and potential tenants on edge, said Alon Kraft, chief operating officer of the Santa Monica company.
“The way these tariffs have been rolled out has really created a lot of uncertainty and that really makes it a challenge to plan,” he said. “We’re expecting a pause in a lot of major decision-making until there’s at least some sense of where things might be headed” in terms of tariff costs and how they will impact their business.
Businesses that use industrial buildings for shipping, receiving and manufacturing are going to take more time to decide whether to lease more space or expand the size of their operations. Investors will be more cautious about buying buildings if the future of the economy remains uncertain.
Last week, Trump authorized a 90-day pause for more than 75 countries facing tariff hikes, including Mexico but excluding China.
“It still just pushes off the uncertainty for 90 days,” Kraft said. “What’s going to happen on the back side? We don’t know which countries will come to the table and which won’t.”
There are potential tenants in the marketplace looking for space to rent, he said, but they’re taking longer to make decisions about whether to make a move.
“Real estate doesn’t react at the speed of the stock market,” Kraft said, as investors and landlords pause to see how the tariffs will play out. “Fingers crossed it’s not as bad as we fear.”
According to the National Assn. of Home Builders, scarcity and an acute, sustained rise in building material costs — for items as diverse as softwood lumber and electricity distribution transformers — are driving up the cost to construct homes and harming housing affordability. Tariffs stand to aggravate the situation.
NAHB estimates that $204 billion worth of goods were used in the construction of both new multifamily and single-family housing in 2024. About $14 billion of those goods were imported, the trade group said, meaning about 7% of all goods used in new residential construction originate from a foreign nation.
Tariffs mean importers must pay additional costs for importing items from other countries. Price increases are typically absorbed by the importer or passed on to the end consumer of the good, usually in some combination.
(Genaro Molina/Los Angeles Times)
For example, if a retailer imports a $500 washing machine from a country subject to a 25% tariff, the retailer will owe $125 in tariffs to the U.S. government, the trade group said.
For most goods, the costs are passed on to consumers, NAHB said, “so tariffs on building materials raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices.”
Singer, the contractor, and others said current price hikes do not threaten the viability of rebuilding Los Angeles County homes damaged by the wildfires. To varying degrees, they said, different issues — such as local government permitting, restricted access to sites in the Palisades and the Trump administration’s immigration policies affecting availability of labor — rated as greater concerns than tariffs.
Andrew Slocum, who is working on 14 home rebuilds in the Eaton fire area, said builders were used to uncertainty from supply chain problems that emerged during the COVID-19 pandemic.
“We’re not seeing so much pain right now,” said Slocum, chief executive of Green Development Co. of Pasadena. “We’re worried about what could happen.”