How New Tariffs May Impact the Cost of Residential Land Development

Newly announced U.S. tariffs have raised questions about their ripple effects across industries. One sector that may feel the impact is residential land development, particularly in terms of construction costs.

Materials Affected by Tariffs

1. Reinforced Concrete Pipe: Reinforced Concrete Pipe, often used in stormwater systems, relies on steel reinforcement, which remains subject to a 25% tariff, excluding any newly implemented country-specific tariffs that exceed this percentage.  Higher steel costs—compounded by market volatility—translate into increased prices for these essential infrastructure components.

2. Diesel Fuel: Diesel is vital for operating construction equipment and transporting materials. Tariffs on refined products, particularly from Canada and Mexico, have contributed to diesel price increases which is more pronounced in regions heavily reliant on imported fuels. This raises transportation and equipment costs.

3. Asphalt and Stone Materials: Asphalt prices are sensitive to crude oil and refined product tariffs. With Canada supplying nearly three-quarters of the asphalt imported into U.S., new tariffs could limit supply and spike prices.  Similarly, while stone itself isn’t directly tariffed, rising prices for cement and ready-mixed concrete (due to tariffs on related inputs) indirectly raise stone-based product costs.

Long-Term Opportunities:

Naturally, there are long-term opportunities to consider. Tariffs may encourage growth in U.S. manufacturing of goods, create local jobs and reducie reliance on imports. Over time, reshoring production may result in more stable and transparent supply chains for developers and contractors.

Conclusion

Developers should monitor supply chain dynamics closely and prepare for potential budgetary adjustments in upcoming projects. Developers and contractors may face increased costs across multiple fronts—materials, fuel, and logistics. These rising inputs can elevate total project budgets, potentially reducing profit margins or increasing lot prices for builders.