I served as a co-leader on the first Trump Presidential Housing and Urban Development (HUD) Transition team. I had a front row seat to understand what it takes to focus and install a plan to tackle our nation’s housing needs.
So far, President Trump has been delivering.
In his first day in office, President Trump signed a presidential memorandum to remove costly regulations that push up consumer prices. Consistent with that memorandum, HUD Secretary Scott Turner and Interior Secretary Doug Burgum responded by proposing to build a significant number of new homes on federal land — reducing prices by increasing supply.
Despite this encouraging initiative, some confidence indices show that the housing market is “spooked” amid rising fears that the economy will soften. Homebuilders have expressed their thoughts about tariffs which, if not managed correctly, raise the price of construction materials, and immigration restrictions, which could drive up the cost of labor.
The National Association of Homebuilders (NAH) has already criticized the move, warning that over 70% of American softwood lumber imports come from Canada and that tariffs “on lumber and other building materials increase the cost of construction and discourage new development.”
NAH is seeing the forest for the trees. It’s true that the U.S. imports a lot of lumber from Canada. That’s because our neighbor to the north refuses to set logging fees on government-owned land at market rates — a policy that has the same effect as a direct subsidy would. It’s unfair to expect U.S. sawmills and foresters to compete on such an unlevel playing field.
This idea of tariffs to remedy this issue didn’t originate with President Trump, but goes back 45 years - to the 1980s. Even President Biden — whose laughable idea of making housing more affordable was suing a rental pricing software company for giving landlords accurate pricing data about the market — knew better than to remove Trump’s lumber tariffs on Canada. In fact, he increased them.
According to an analysis by the U.S. Lumber Coalition, the Canadian lumber import duties have added only about $212 to the average price of a new home, which the coalition accurately described as “barely visible to the naked eye” when looking at a graph. Considering that average new home prices rose by nearly $100,000 under President Biden, it seems obvious that lumber tariffs were not the main culprit.
That is why, while the Trump administration may spike Biden’s rental pricing software lawsuit, he is standing by the tariffs — because they are working. Although tariffs represent just a rounding error for homebuilders and buyers, for the American lumber industry, they have been a godsend.
Since they went into effect, the U.S. has rapidly expanded its sawmill capacity while increasing the share of lumber that comes from domestic sources. Allowing Canada to rip us off might have saved us a few dollars on wood, but standing up to them has created good-paying American jobs and will reduce home prices over the long-run, as the tariffs push the country to renegotiate its trade terms with the U.S.
That is exactly what happened after the U.S. imposed tariffs on Canadian lumber in the 1980s. In response, the U.S. and Canada negotiated the Softwood Lumber Agreement in 1986.
And yes, homes are cheaper to build when undocumented immigrants do the construction work. But Democrats cannot continue to argue that they stand for the working class while at the same time pushing for an endless supply of cheap, exploitable labor that drives down American wages. As Vice President JD Vance recently said before the National League of Cities, “we want Americans to be able to afford the American dream of home ownership.”
President Trump doesn’t need to embrace open borders or “free trade” to make the American dream of homeownership accessible once again. He just needs to follow through on what he’s already promised to do — slash regulations (which account for nearly 25% of construction costs), provide cheap and abundant energy (because lowering transportation costs lowers the price of everything else), keep inflation under control, and open up federal lands for affordable housing development.
The media will continue hyperventilating about housing market uncertainty because it is an opportunity to undermine the president’s two biggest issues — immigration and trade — and help Democrats build a winning message for the midterms.
President Trump should ignore them. Giving up our national sovereignty won’t fix America’s housing problem.
David Byrd is a former Deputy Assistant Secretary for the Office of Policy Development and Research for the US Department of Housing and Urban Development and served as the Co-Leader of the HUD Agency Action Team during the 2016 Transition.
Join the conversation as a VIP Member