How Trump tariffs and deportations could make Phoenix housing pricier
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President-elect Trump at a Tucson campaign event in September. Photo: Justin Sullivan/Getty Images
"Make housing affordable again" was one of President-elect Trump's key messages to voters, but some economists and real estate experts fear his tariff and deportation plans could make Phoenix's housing market even pricier.
Why it matters: Phoenix's sky-high home prices are largely attributable to the Valley's severe housing shortage, and policies that make labor or supplies more expensive will mean it's harder to build our way out of the affordability crisis, Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University, told Axios.
The big picture: Specifics of Trump's plans are still unknown, but he's made clear that steep tariffs and large-scale deportations are on the docket.
- Homebuilders rely on lumber and other supplies from countries likely to be impacted by tariffs. That will almost certainly increase the cost of building.
- Meanwhile, immigrants make up more than a quarter of the national construction workforce, according to the National Association of Home Builders.
Flashback: You don't have to look far into Phoenix's past to see how tariffs and immigration crackdowns can impact construction, Stapp said.
- Trump instituted tariffs on Canadian softwood lumber during his first term, which President Biden kept intact and increased during his administration. This has contributed to higher construction costs that homebuilders pass on to buyers.
- Strict immigration enforcement laws enacted in the early 2000s, including Arizona Senate Bill 1070 and federal E-Verify requirements, "hobbled the labor market, accelerated residential property price declines, and exacerbated the Great Recession in Arizona," per a report from libertarian think tank the Cato Institute.
What they're saying: Trump's deportation efforts would likely have similar effects on the construction industry, Stapp said.
- "This is not conjecture. We have evidence from previous attempts to do these things," he said.
The other side: Trump has said deportations will bring down home prices because there will be fewer people competing in the housing market.
- Existing Canadian lumber tariffs have increased production of U.S. lumber, which may continue if tariffs are raised.
- "Milling more lumber from American trees by American workers to build American homes also creates more American jobs," the U.S. Lumber Coalition told the Canadian Broadcasting Corp. last month.
Reality check: The housing shortage has "little to nothing to do with the surge of immigration," Mark Zandi, chief economist at Moody's Analytics, told Axios earlier this year.
- A lot of immigrants are living with family members and friends, he said. They may be taking some of the housing stock, but only a marginal amount.
The bottom line: Past immigration and economic policies have had long-term impacts on Phoenix's housing market. Trump's drastic proposals could be felt — in good or bad ways — for decades.