Trump Tariffs Likely to Raise Cost of New York Apartments

The Trump administration’s new tariffs on imported steel and aluminum are making it more expensive to produce the kinds of walls and windows that are found in apartment buildings. Apartment buyers and renters will inevitably feel the resulting pinch in the form of higher apartment prices, numerous suppliers, contractors, construction trade groups, developers and brokers tell the New York Times. 

“It’s still a little early yet,” says Steven Rutter, the director of Stribling Marketing Associates, which has development projects in various stages, “but I think these tariffs could have ripple effects all down the line.” 

The tariffs – 25 percent on foreign steel and 10 percent on foreign aluminum – are intended to level the playing field for international trade by encouraging American companies to buy domestic rather than imported products. But some builders believe that American suppliers can’t currently meet every demand. As a result, the price of steel – which in residential buildings is used for rebar rods that reinforce concrete in walls and floors, supports for cooling towers, and decorative elements – has spiked, steel buyers said. Rebar accounts for most of the steel used in apartment buildings. 

Robert Vogelbacher, the president of Men of Steel Rebar Fabricators, a Pennsylvania company that cuts and shapes rebar for Manhattan apartment buildings, said his prices have gone up 35 percent since the spring. In his talks with construction managers, Mr. Vogelbacher learned that he was expected to shoulder some of the extra costs. His portion will be about half the total, he said, meaning the developer will have to swallow the other half. And that New York-bound half, he said, could wind up on the price tag for a new condo. “It’s a very scary and very weird time,” Vogelbacher says. “I’ve never seen anything like it.” 

“Everybody wants their profit margin, and everybody tries to maintain that margin,” says Christopher Mesbah, the owner of Newark-based CM & Associates Construction Management. “But costs are being passed on, and eventually they will be felt.”