Lumber duties not the cause of housing unaffordability

Lumber duties not the cause of housing unaffordability
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Despite what you might read, softwood lumber pricing is not a driving factor of American homeownership and housing affordability. Sadly, some groups are misstating critical facts about trade law and the actual impact of softwood lumber on home pricing.

Here are the facts.

Lumber makes up less than 2 percent of the cost of a new home. An average new home costs $377,200, and about 16,000 board feet of lumber is required to build a home. As of July 2019, lumber cost $359 per thousand board feet, amounting to a total cost of $5,744 in an average-priced home.

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The real sources of housing unaffordability come from construction worker shortages, higher permitting costs, lack of buildable lots and other factors. Lumber prices have actually remained largely consistent over the past few decades—decreasing in real costs when considering inflation.

Duties on imported Canadian lumber were imposed after a detailed and exhaustive investigation by the U.S. Department of Commerce and the U.S. International Trade Commission, which determined, after months of investigation, that the Canadian Federal and provincial governments subsidize their lumber industry, that Canadian producers dump their product in the U.S. market and that U.S. producers were hurt by these unfairly traded imports.

In response, and in the absence of a trade agreement, the U.S. government followed domestic trade law and imposed countervailing and antidumping duties on imported Canadian softwood lumber that simply offset the unfair advantage provided to Canadian producers.

These duties on Canada’s subsidized and unfairly traded imports create a level playing field for U.S. manufacturers. With fair competition, domestic producers have increased production since 2006 by over two billion board feet of lumber to supply the U.S. housing market.

This means that more U.S. lumber is being produced by U.S. workers and U.S. forestry communities to build U.S. homes—offsetting any Canadian drop in lumber imports.

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I wish more people could see how these duties have worked for communities across the country. I was in Maine and saw firsthand how an even playing field has given the U.S. lumber industry the confidence to continue supporting rural communities through job creation and economic development. Without strong trade policy, these American, private sector jobs would instead flow north across the border.

It’s disheartening to see that some American industries would prefer to align themselves with Canadian interests in order to benefit from the subsidies that for decades have allowed foreign producers to dump artificially cheap softwood lumber in the U.S.

The Canadian government and Canadian industry have not shown any serious interest in negotiating a new trade agreement. When they are ready to have conversations, the U.S. industry will be here to support the U.S. government in negotiations.

At the end of the day, misinformation about the cost of new housing is harmful to American workers and the hundreds of thousands of jobs (350,000+) supported by the U.S. lumber industry. Trade needs to be fair and rules based. As a nation, we should support fair trade for American workers and applaud the fact that since 2016, significantly more U.S. wood is being produced by U.S. workers to supply the U.S. housing market.

Zoltan van Heyningen is executive director of the U.S. Lumber Coalition