NAHB: The Government Understands the Lumber Crisis

National Association of Homebuilders Chief Lobbyist Jim Tobin said in a recent NAHB podcast he is optimistic the government is going to try to do the right thing to solve the lumber crisis.

Tobin said his optimism comes after recent communications among NAHB officials which included a meeting with association executives and Commerce Secretary Gina Raimondo a couple of weeks ago.

“They clearly understand the crisis. Clearly, they understand domestic supply is not meeting demand. The meeting struck all the right tones. I think she really wants to solve this problem. She knows lumber is really a drag on us right now,” said Tobin who praised Raimondo for her data savvy, her good relationship with the industry in Rhode Island where she had been governor and for taking notes during the meeting.

Speaking to NAHB’s effort to have a summit including representatives from the government and all of the stakeholders in the home building industry, Tobin said there has to be continuing pressure on the administration to hold the meeting: “The enemy right now is time.”

Looking at the second half of the year, Tobin said the flood insurance program which expires at the end of September should be renewed by Congress without any problem.

He predicted Congress will pass a modest infrastructure package which should help the industry, but short of the $4 trillion President Joe Biden originally sought. At the same time, Tobin said the Trump tax cuts will not be repealed.

He voiced pessimism that the strong construction market will continue.

“The American consumer is going to hit the pause button. I’m hearing stories across the country about builders cutting back,” said Tobin.

He added appraisals are a real killer, that banks are asking for second liens because of the high costs the increased prices of lumber are adding to construction,

Despite the praise for the administration, the relationship hasn’t been entirely rosy.

In May, the group took aim at the Commerce Department’s desire to double lumber tariffs on Canadian lumber shipments into the US from 9% to 18.32%. 

“At a time when soaring lumber prices have added nearly $36,000 to the price of a new home and priced millions of middle-class households out of the housing market, the Biden administration’s preliminary finding on Friday to double the tariffs on Canadian lumber shipments into the US shows the White House does not care about the plight of American home buyers and renters who have been forced to pay much higher costs for housing,” NAHB Chairman Chuck Fowke said in a statement on its website.

The group is emphasizing the summit needs to be about more than lumber.

Earlier this month, it reported that material shortages are now more widespread than at any time since it began tracking the issue in the 90’s. Overall, more than 90% of builders report shortages of appliances, framing lumber and OSB.